    [Senate Hearing 112-839]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 112-839

                                                            Senate Hearings

                                     Before the Committee on Appropriations

    _______________________________________________________________________

                                                           Energy and Water

                                                                Development

                                                             Appropriations

                                                           Fiscal Year 2013

                                             112th CONGRESS, SECOND SESSION

                                                          H.R. 5325/S. 2465

    DEPARTMENT OF DEFENSE--CIVIL
    DEPARTMENT OF ENERGY
    DEPARTMENT OF THE INTERIOR
    NONDEPARTMENTAL WITNESSES

                                                            S. Hrg. 112-839

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED TWELFTH CONGRESS

                                 SECOND SESSION

                                       ON

                               H.R. 5325/S. 2465

     AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2013, AND FOR OTHER PURPOSES

                                   __________

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

                                   __________

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                          COMMITTEE ON APPROPRIATIONS

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

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

                  Subcommittee on Energy and Water Development

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

                               Professional Staff

                                   Doug Clapp
                                 Roger Cockrell
                                Leland Cogliani
                        Carolyn E. Apostolou (Minority)
                             Tyler Owens (Minority)
                              Tom Craig (Minority)

                             Administrative Support

                              Molly Barackman-Eder
                           LaShawnda Smith (Minority)

                                C O N T E N T S

                                  ----------

                           Wednesday, March 14, 2012

                                                                       Page

    Department of Energy.............................................     1

                           Wednesday, March 21, 2012

    Deparment of Energy: National Nuclear Security Administration....    63

                           Wednesday, March 28, 2012

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   123
    Department of the Interior: Bureau of Reclamation................   142

                           Nondepartmental Witnesses

    Department of Defense--Civil: Department of the Army: Corps of
      Engineers--Civil...............................................   221
    Department of Energy.............................................   241
    Department of the Interior: Bureau of Reclamation................   313

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

                           WEDNESDAY, MARCH 14, 2012

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

                              DEPARTMENT OF ENERGY

                            Office of the Secretary

    STATEMENT OF HON. STEVEN CHU, SECRETARY

                 opening statement of senator dianne feinstein

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

                      statement of senator lamar alexander

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

                      summary statement of hon. steven chu

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

                               prepared statement

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

                                   MESOSCALE

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

            FUSION--INTERNATIONAL THERMONUCLEAR EXPERIMENTAL REACTOR

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

                          WASTE ISOLATION PILOT PLANT

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

                      NUCLEAR PROJECTS AND WASTE CLEAN UP

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

        ENERGY EFFICIENCY AND RENEWABLE ENERGY INCREASE--WIND TECHNOLOGY

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

                                    BIOFUELS

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

                             WASTE TREATMENT PLANT

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

     FEDERAL ENERGY REGULATORY COMMISSION--BONNEVILLE POWER ADMINISTRATION

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

                                   OIL PRICES

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

                               HYDRAULIC FRACKING

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

                            WEATHERIZATION PROGRAMS

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

                                 TECH TRANSFER

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

                                   FUEL CELLS

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

             BONNEVILLE POWER ADMINISTRATION--PUMPED STORAGE HYDRO

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

                                 YUCCA MOUNTAIN

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

                             NUCLEAR REACTOR LOANS

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

                                    OIL/GAS

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

                                 WEATHERIZATION

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

                        RESEARCH AND DEVELOPMENT EFFORTS

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

                                    OIL/GAS

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

                                 NUCLEAR SAFETY

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

                       NUCLEAR WASTE STORAGE AND DISPOSAL

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

                               ADVANCED COMPUTING

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

                             EFFICIENT AUTOMOBILES

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

                                 OFFSHORE WIND

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

                     BLUE RIBBON COMMISSION RECOMMENDATIONS

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

                         ADDITIONAL COMMITTEE QUESTIONS

        Secretary Chu. I think we had a great session in your
    office, and I would love to continue that because we were
    exploring our ideas in that session.
        Senator Feinstein. Okay.
        No other questions?
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                  Questions Submitted by Senator Patty Murray
                          health, safety, and security
        Question. Secretary Chu, you are proposing to eliminate the Illness
    and Injury Surveillance Program (IISP), the only active surveillance
    program across the Department of Energy (DOE) and National Nuclear
    Security Administration (NNSA) that allows for an immediate evaluation
    and monitoring of potential health effects of working at these nuclear
    sites. This program benefits active works--both Federal and contractor
    employees--who put their lives on the line on a daily basis working
    with nuclear material. The IISP currently monitors the health of
    approximately 79,000 current Federal and contract workers at 13 DOE/
    NNSA sites across the country, but this budget proposes to shift the
    funding for this important program to the National Institute for
    Occupational Safety and Health (NIOSH) for unrelated health studies,
    which would not actively monitor and survey workers.
        Can you please explain the reasoning behind your proposal to
    eliminate this program and shift work to NIOSH?
        Answer. The reference to the Department of Health and Human
    Services (HHS) in the Office of Health Safety and Security (HSS) fiscal
    year 2013 budget request is specifically associated with the public
    health studies activity. That funding supports the conduct of public
    health studies and other activities performed by HHS on behalf of DOE
    through NIOSH, the National Center for Environmental Health, and the
    Agency for Toxic Substances and Disease Registry to provide third-party
    objectivity regarding the effect of DOE operations on communities
    surrounding DOE sites. The public health studies activity is not
    associated with the epidemiological studies or IISP.
        DOE Office of Health Safety and Security (HSS) has re-examined
    every aspect of its budget to identify opportunities to reduce
    spending. Programs are assessed to determine:
      --overall value to the health, safety, and security posture of the
            Department;
      --if HSS is the proper organization for funding responsibility versus
            the DOE Program offices, other staff offices, the sites, or
            another department or agency; and
      --overall priority among activities for which HSS has funding
            responsibilities.
        Upon examination of the IISP, HSS determined that the program is:
      --redundant of other mandatory corporate injury and accident data
            collection systems, such as the Occurrence Reporting Program
            System (ORPS) and the Computerized Accident/Incident Reporting
            System (CAIRS);
      --better conducted and paid for by the site organization(s) since it
            is voluntary; and
      --of a lower priority than other programs for which HSS has sole or
            primary responsibility, such as nuclear safety and cyber
            security oversight.
                        bonneville power administration
        Question. Secretary Chu, as you know, 19 out of 21 bipartisan
    members from the Pacific Northwest recently sent you a letter
    describing our view that the Bonneville Power Administration (BPA)
    environmental redispatch policy issues should be resolved in the
    region, where we have a long tradition of working together to resolve
    difficult challenges. The Northwest delegation has a long history of
    working together across State and party lines to support the work our
    region does. Let me reiterate to you that I fully expect you to consult
    me should you or your staff consider any proposal that would increase
    Federal Energy Regulatory Commission (FERC) jurisdiction in the
    Northwest, impact Northwest ratepayers, or affect BPA's rates.
        As I told you, I am concerned about suggestions that FERC-mandated
    regulations are the best way to resolve this issue and other renewables
    integration issues. As you know, the Northwest suffered as a result of
    out-of-control energy markets during the West Coast energy crisis. And,
    our region has thrived without this additional layer of Federal
    regulation--for example, my understanding is that there is now more
    than 4,000 MW of wind connected to BPA's system.
        Do you support regional solutions to renewables integration issues?
        Answer. Yes, I have supported BPA's collaborative working
    relationships with its customers and stakeholders to seek regional and
    legally sustainable solutions to the environmental redispatch policy
    issues and other regional issues. My understanding is that BPA also is
    working collaboratively with its customers and stakeholders to develop
    open access transmission tariff provisions that address renewables
    integration issues in a manner that recognizes the diversity of
    interests involved and seeks to develop a regionally acceptable balance
    of them.
        Let me assure you we are very supportive of maintaining the
    excellent and effective cooperation that Bonneville has developed with
    regional stakeholders, including the Northwest Congressional
    delegation. You and the rest of the Northwest delegation will continue
    to be consulted on these issues to ensure that the concerns of your
    constituents are understood and appreciated.
        Question. Some potential solutions are short-term and others long-
    term. Are you aware of all of the short-term solutions BPA has taken
    the initiative to implement to deal with these new operational
    challenges?
        Answer. Yes. My staff and I are familiar with many of BPA's
    activities, starting with reconvening the Wind Integration Forum
    Steering Committee to analyze solutions and their costs and benefits.
    My understanding is that BPA and regional stakeholders have developed a
    significant number of new operating tools and business practices over
    the past 24 months. These include:
      --regulation sharing;
      --intra-hour transmission scheduling;
      --a new electronic bulletin board for intra-hour transactions;
      --new scheduling protocols for wind generators;
      --improved wind forecasting;
      --flexible bilateral contracts; and
      --a new dynamic scheduling system.
        There have also been initiatives developed to explore ways to
    leverage diversity in variable energy resources between balancing
    authorities. These tools will be evaluated in various combinations as a
    further extension of the region's bilateral markets. The region has
    also looked at potentially reconditioning the Keys Pump Generating
    Plant.
        Question. What additional short-term actions have not been explored
    in your view?
        Answer. I have confidence that BPA and the many regional
    stakeholders involved have scoped all viable options and that all of
    the short-term actions have been or are currently being explored.
        Question. Do you agree that long-term solutions need to make sense
    operationally and economically?
        Answer. As with all significant infrastructure, longer-term
    solutions, such as new storage, additional transmission, and better
    utilization of the grid, can be expensive and could affect grid
    reliability and safety. Before deciding which long-term solutions are
    appropriate, I agree that BPA and the region must determine how they
    might affect current system operations, whether they are cost-effective
    and, if so, how to fairly allocate those costs consistent with law.
        Question. Mr. Secretary, I have seen statements from you and your
    senior staff that there is a general need for more transmission. This
    Committee supports our Nation's energy infrastructure and wants to
    assure it is clean, adequate, reliable, and safe. I am concerned,
    however, about views that transmission isn't being built in my part of
    the West.
        The Northwest has a long history of building transmission when it's
    necessary and economically sound to do so. I am aware of transmission
    projects that are being built or are in environmental review by various
    entities, including BPA. In fact, BPA recently completed the 75-mile
    McNary-John Day transmission project, and is looking at more
    transmission in the region based on need.
        If there was a market for more transmission, wouldn't those
    additional projects already be reflected in what currently is being
    studied?
        Answer. I have been very appreciative that utilities in the Pacific
    Northwest, including BPA, have been very active in planning, siting,
    financing, and constructing new transmission lines, and we are very
    pleased with BPA's completion of the McNary-John Day line under budget
    and ahead of schedule. I know that BPA also pioneered the Network Open
    Season model to determine the market demand and business case for
    transmission system expansion, and BPA is working with regional
    customers to continue to refine that model. I also want to challenge
    BPA and other utilities to maximize the capability of existing
    transmission infrastructure to gain efficiencies. We are committed to
    overcoming any significant barriers to construction and financing of
    additional transmission capacity in those cases where there is a
    legitimate business need for transmission.
        Question. The Northwest, including British Columbia, has a long
    history of mutual cooperation to operate one of the largest clean power
    systems in the United States. I'm hearing from my constituents that you
    may have a differing view.
        What specifically would make you conclude that there isn't
    operational cooperation?
        Answer. I understand that there is a long history of cooperation
    among utilities within the Pacific Northwest. At the same time, the
    generation landscape in the Northwest and the rest of the United States
    has evolved to the point where non-utility developers play a very
    significant role in the wholesale power market. I am interested in
    challenging all utility and non-utility participants within a regional
    grid to work together to maximize opportunities to gain efficiencies
    and otherwise promote the public interest.
        I believe there is significant operational cooperation between the
    utilities, wind developers and advocates, policy makers, and regulators
    in the Pacific Northwest, but there is always room for improvement. The
    Nation can look to the Pacific Northwest as a model for such
    cooperation and improvement. We want to promote parties' interests in
    pursuing even greater cooperation to enhance their own systems as well
    as building on the legacy of operational coordination that has been
    going on for decades.
        If there are efficiencies to be captured from operational
    improvements in the West, what specifically do you believe they are,
    and who do you see as the financial beneficiaries of any savings?
        Answer. Efficiencies may be achieved by a more reliable and cost-
    effective system with lower costs of managing system variability with
    more efficient use of available assets. However, issues and
    efficiencies will vary by region and should be worked out by an
    inclusive regional committee. I believe the efficiencies will bring
    broad benefits, but decisions must be informed by rigorous cost-benefit
    analyses involving all relevant stakeholders in the region.
                         fuel cell and hydrogen program
        Question. Secretary Chu, this committee expressed its support last
    year for ``stable and consistent funding, now and in the future,'' for
    fuel cell and hydrogen energy technologies.
        Why was the budget for these programs cut by more than 40 percent
    overall? Why was the budget for these programs in Energy Efficiency and
    Renewable Energy (EERE) cut by 20 percent while EERE overall was
    increased by more than 25 percent?
        Answer. The budget request for hydrogen and fuel cells has been
    reduced as part of rebalancing the Department's portfolio of advanced
    technologies. However, hydrogen and fuel cells remain an integral part
    of that portfolio. The budget request for fiscal year 2013 allows the
    Department to focus on hydrogen and fuel cell activities that will
    yield technology advancements in key areas--including ongoing
    reductions in the cost and improvement in the durability of fuel cells,
    reductions in the cost of renewably produced hydrogen, and improvements
    in systems for storing hydrogen. Within EERE, funding has been reduced
    for aspects of the program with less impact on research and development
    (R&D) progress, such as technology validation, codes and standards, and
    market transformation. Rebalancing the portfolio will allow the
    Department to focus on nearer-term transportation technologies while
    maintaining a robust longer-term effort in hydrogen and fuel cells to
    address fuel cell vehicles in the 2015 timeframe and beyond.
        Question. The Obama administration has championed regulations to
    reduce pollution from power plants and from idling trucks. The Solid
    State Energy Conversion Alliance (SECA), the solid oxide fuel cell
    (SOFC) program in the Office of Fossil Energy, is developing and
    commercializing technology to address these issues that will result in
    highly efficient power from gasified coal and natural gas, and
    eliminate idling emissions with auxiliary power units
        Why did the budget request propose elimination of SECA, which meets
    this important goal?
        Answer. The Clean Coal Research Program has prioritized development
    of near-term carbon capture utilization and storage (CCUS)
    technologies, to be available for demonstration in the 2015 timeframe.
    As a result, fiscal year 2013 funding for longer-term fuel cell
    technologies has not been requested. Some SECA Core Technology R&D will
    continue in 2013 using prior year funding. Industry team work on fuel
    cell stack technology to enable low cost, 50 percent-plus efficiency,
    99 percent carbon capture power generation systems will also continue--
    at reduced scale. Work will focus on improving fuel cell stack
    reliability and endurance and on preparing for the manufacturing of a
    250 kilowatt (kW) SOFC system module. Demonstration and testing of this
    system module, which represents a building block of future multi-
    megawatt coal-based power plants, will be delayed from 2013 to 2015.
    Development and demonstration of commercial-scale fuel cell systems, as
    a CCUS transformational technology, can still remain on schedule for
    2020, dependent upon future program funding.
        As you may be aware, South Korea has made SOFCs a major part of
    their clean-energy plan. Additionally, the United States recently
    negotiated a free-trade agreement with South Korea.
        Question. As I am sure you are aware, South Korea has made SOFCs a
    major part of their clean-energy plan. We just completed a free-trade
    agreement with South Korea last year.
        Are you concerned that eliminating support for this technology will
    drive the industry overseas?
        Answer. Although support for SOFC technology has been deferred to
    allow funding for higher priority CCUS technologies, both Core
    Technology and Industry Programs will continue to be supported in
    fiscal year 2013 using prior year funding. Industry teams have
    communicated their commitment and domestic investment in R&D to make
    progress towards improving fuel cell stack reliability and endurance.
             office of electricity delivery and energy reliability
        Question. Mr. Secretary, you have called attention to the Nation's
    chronic underinvestment in R&D supporting the modernization of the
    electric power grid. I am referring specifically to grid-scale energy
    storage technologies and other control technologies that will enable
    the integration of larger shares of renewable energy, give operators
    better tools to manage the grid in real time, and make it more reliable
    and efficient.
        Moreover, DOE's Quadrennial Technology Review (QTR) emphasized grid
    modernization and related R&D as critical to many of the strategic
    areas highlighted in the Review. So, I am concerned and puzzled by the
    substantial cuts to the Office of Electricity Delivery and Energy
    Reliability's (OE) R&D budgets in your budget request. For example, the
    Smart Grid R&D budget request for fiscal year 2013 is 40 percent lower
    than the fiscal year 2012 budget, and the request for energy storage
    R&D is 24 percent lower than last year.
        It appears that some $20 million is carved out from existing OE R&D
    programs for an Electricity Systems Innovation Hub. I strongly support
    the inclusion of the Innovation Hub, but I am not comfortable with the
    proposal to fund it by reducing other OE R&D programs that are
    strategically critical to achieving many of our national energy policy
    goals, that have been--by the Department's own acknowledgement--
    historically underfunded, and that are already being reduced in the
    fiscal year 2013 budget request.
        Could you explain your strategy for the Office of Energy Delivery,
    as it is reflected in the budget request?
        Answer. The fiscal year 2013 budget request of $143 million for the
    OE supports the President's commitment to an ``all-of-the-above''
    energy strategy that includes critical investments in innovative
    technologies, tools and techniques that will enhance the capabilities
    of a modern power grid. As such, strategic decisions were made to
    prioritize activities providing a balanced portfolio of projects and
    activities that increase electricity reliability and security
    nationwide by taking a systems-level approach to grid modernization,
    developing the computational capabilities to improve system planning
    and operations, and emphasizing cybersecurity. Fiscal year 2013 also
    reflects our ongoing efforts to continue to leverage funding throughout
    the Department, with other Federal agencies and the industry to
    maximize cost effectiveness.
        Question. How is this request consistent with DOE's emphasis in the
    QTR and elsewhere, in which grid modernization has been identified as a
    key priority for DOE and the Nation?
        Answer. The fiscal year 2013 request factors in grid-related R&D
    investments across the Department such as storage, power electronics,
    and control architectures that are being explored within Advanced
    Research Projects Agency-Energy (ARPA-E) programs. Strategic priorities
    and tradeoffs were made to maximize resources and results while at the
    same time minimizing programmatic impacts. Investing in the Electricity
    Systems Hub will allow us to focus on the seam between transmission and
    distribution--a pinch point of grid modernization where power flows,
    information flows, policies, and markets intersect--to tackle the
    critical issues and barriers associated with integrating, coordinating,
    and facilitating the numerous changes that are happening system-wide.
    The Hub activities will accelerate adoption of new technologies within
    a policy and regulatory framework that allows efficient utilization of
    assets and capital investment, including minimizing consumer costs for
    grid modernization.
        Question. What steps will the Department take to ensure that any
    Electricity Systems Hub funding does not come at the expense of key
    ongoing OE R&D priorities, including energy storage, advanced modeling,
    and smart grid analytics?
        Answer. The Grid Tech Team, with DOE-wide representation, has been
    established through the Office of the Undersecretary of Energy to focus
    on improving communication and coordination across the Department on
    grid-related R&D. This diverse group is tasked with developing an
    internal strategy and identifying priorities for grid R&D. The
    Electricity Systems Hub is one of many topics that are under the
    purview of this group and efforts will be made to balance strategic
    priorities and limited resources. The Electricity Systems Hub will
    serve as a platform that can support ongoing OE R&D priorities,
    including energy storage, advanced modeling, smart grid analytics,
    cybersecurity, as well as the ARPA-E investments in power electronics
    and control architectures.
        Question. Mr. Secretary, I am likewise concerned that DOE is
    proposing to fund multiple Electricity Systems Innovation Hub with a
    $20 million budget, while each of DOE's previous innovation hubs has
    been funded at $20-$24 million each. In the Pacific Northwest, we are
    keenly aware that ``one-size-fits-all'' solutions to electric grid
    issues don't work--there are simply too many key differences between
    regional systems.
        But at the same time, the Northwest and its institutions have a
    history of pioneering technologies and grid management paradigms (such
    as Phasor Measurement Unit deployment and some of the earliest real-
    world experiments in demand response) that have been subsequently and
    successfully exported to regions across the country and other nations
    across the globe. Moreover, the stated purpose of the hub concept is to
    accelerate innovations that can deliver national outcomes, such as
    enhanced energy security, and to enable new markets and technologies
    that will bolster U.S. leadership in global energy markets.
        Please describe the steps the Department will take to ensure that
    the effectiveness of any Electricity Systems Innovation Hub(s) will not
    be diluted by the proposed budget number, coupled with the concept of
    multiple hubs. If the Congress chooses to fund the hub(s) as proposed,
    will the Department seriously consider limiting the number of hubs to a
    manageable, non-dilutive number?
        Answer. Ideally, the Electricity Systems Hub will be comprised of
    two to three regional hubs that will communicate, coordinate, and
    collaborate on a regular basis. Linking activities and comparing
    results from the different regional hubs will help identify solutions
    that can be applied across the Nation while simultaneously addressing
    unique regional challenges. The decision to pursue one, two, or three
    regional hubs will ultimately depend on the cost-share generated to
    leverage the Federal investment and the quality of the applicants.
        Question. Likewise, will DOE consider a mechanism that allows for
    linkages or participation in multiple hubs, in order to maximize
    learning, innovations, and commensurate benefits for consumers?
        Answer. Regional hubs are expected to routinely communicate,
    coordinate, and collaborate in order to identify innovative solutions
    that are broadly applicable. The Electricity Systems Hub will produce
    valuable information that will be disseminated to various stakeholders
    to ensure shared learning.
        Question. DOE's proposed 3-to-1 industry-to-Government cost share
    for the Electricity Systems Innovation Hub sets a potentially high
    hurdle and, by some accounts, will be prohibitive to the assembly of
    successful public-private partnerships given the patchwork of
    regulatory requirements under which electric infrastructure owner/
    operators including utilities currently operate. Please explain the
    Department's rationale in requiring such a high private sector cost
    share: can the Department cite successful precedents?
        Answer. DOE recognizes that a 3-to-1 cost share is an ambitious
    target, but the ratio has been proposed to ensure stakeholder
    commitment to the regional hubs. Teams are expected to apply with
    representation from industry, academia, national labs, utilities,
    States, and other relevant stakeholders. DOE believes there will be
    sufficient interest in the Electricity Systems Hub to generate
    significant cost-share which includes direct funds and contributions
    in-kind. However, we understand your concern about this significant a
    cost-share requirement, and DOE will evaluate this factor as it
    develops the solicitation.
                              water power program
        Question. Secretary Chu, as you well know, my State of Washington
    relies on hydropower for the majority of its electricity supply. Hydro
    is the main reason the Northwest as a whole has a lower air emissions
    profile and enjoys some of the lowest electricity rates. Northwest
    projects are at the forefront of innovation, employing new
    technologies, operating regimes, and environmental enhancements--some
    of which resulted from the DOE waterpower program.
        You have indicated your support for the potential of hydropower as
    an ``incredible opportunity'' that our ``lowest cost, clean energy
    option,'' and the thousands of jobs it can create across our country.
        The Water Power Program also supports R&D on emerging technologies
    in the marine and hydrokinetics arena. Washington State has tremendous
    potential for this technology, and if we can get this off the ground,
    this work could provide the basis for a base load source of clean
    energy--a consistently stated priority of yours and the President.
        But despite these factors, your budget yet again proposes to cut
    the program--this year by 66 percent from fiscal year 2012 levels.
        Why isn't the Water Power Program more of a priority for the
    Department?
        Answer. A robust $59 million budget in fiscal year 2012, a nearly
    70 percent increase over fiscal year 2011, has allowed the Department
    to continue and complete a number of important water power technology
    R&D projects. The $20 million requested in fiscal year 2013 would allow
    the Department's Water Power Program to complete the majority of its
    ongoing research efforts to advance water power technologies and
    accelerate their market adoption. This funding level would allow DOE to
    support a number of water power technologies for both conventional
    hydropower and the emerging marine and hydrokinetic (MHK) energy
    technologies. For hydropower specifically, DOE selected 16 new
    innovative hydropower technology development projects for funding in
    fiscal year 2011, and that work will continue into fiscal year 2012 and
    fiscal year 2013. Additionally, DOE expects to continue its efforts to
    analytically quantify the benefits that conventional and pumped-storage
    hydropower provide to the electric grid, which can also support the
    integration of variable renewable resources like wind and solar. For
    MHK technologies, fiscal year 2013 activities will focus on developing
    and demonstrating a suite of technologies that harness the energy from
    wave, tidal, and current resources. Specifically, MHK research is
    expected to focus on development and maintenance of advanced open water
    test infrastructure for MHK devices (including at the Northwest
    National Marine Renewable Energy Center) and research into the costs
    and performance of innovative, early-stage MHK systems and components.
    Finally, the Department anticipates completing resource assessments in
    fiscal year 2012 and fiscal year 2013 to accurately characterize all
    opportunities for water power development. DOE intends to use data from
    ongoing techno-economic MHK assessments to establish baseline levelized
    energy costs for these new devices, which DOE will use along with
    resource assessments to evaluate the opportunities for further
    innovative water power R&D. The identification of potential future
    water power research needs for beyond fiscal year 2013 will consider
    available opportunities and the progress of ongoing research efforts.
        Question. You recently characterized the Department's intention to
    continue to support the development of hydrokinetic renewable energy as
    distinct from run-of-river hydropower and new hydro at existing dams,
    which you described as ``very mature technologies.''
        However, there are no currently active solicitations under the
    Department's Water Power Program, for hydrokinetic or any other
    technologies.
        Can you clarify when the Department intends to issue new funding
    opportunities for hydrokinetic technologies, and what aspects of
    hydrokinetic development will be supported by these solicitations?
        Answer. DOE is pursuing an aggressive research, development, and
    demonstration effort to determine the technical and economic viability
    of a wide range of MHK technologies. We seek to advance the technology
    readiness of MHK systems through cost-shared industry research and
    demonstration projects. DOE is currently supporting more than two dozen
    such projects and has recently notified two applicants whom had been
    selected as alternates for previous funding opportunities that they
    will now receive funding. The Department is currently evaluating
    options for future funding opportunities for MHK technologies and will
    notify interested parties via a Notice of Intent or Funding Opportunity
    Announcement when more information becomes available.
        The Department also intends to complete a comprehensive techno-
    economic assessment in 2013 that will assess the viability of MHK
    systems and identify strategic opportunities to develop and deploy
    these systems in the near term. DOE is also addressing environmental
    and permitting issues in order to proactively address environmental
    performance issues and lower these costs to developers. Finally, the
    Department has also established three National Marine Renewable Energy
    Centers that are centers of excellence for ocean energy, and these
    Centers will cost-effectively support industry demonstration and
    performance monitoring (technical and environmental) efforts. In fiscal
    year 2012, we are investing heavily in testing infrastructure for these
    Centers as directed by the Congress, and the Northwest National Marine
    Renewable Energy Center recently began its first rounds of in-water
    testing.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu
                          strategic petroleum reserve
        Question. Mr. Secretary, I see that in your budget you propose
    using the $2.4 billion remaining in budget authority related to the
    2011 Strategic Petroleum Reserve (SPR) selldown to purchase 27 million
    barrels of oil to replenish the reserve. I am very interested in the
    management of the SPR, not only because of its great importance to
    national security, but also because it is located on the gulf coast and
    largely stocked with oil produced on the gulf coast. I will point out
    that this purchase of 27 million barrels--which will not even refill
    the reserve--is coming at a time when oil prices are relatively high.
    Given that I opposed the initial sale of oil from the SPR, I am
    concerned about your plans to both manage and refill it, particularly
    in light of continued threats of unrest in the Middle East.
        Will this remaining balance of $2.5 billion be adequate to
    replenish the emergency supplies of oil we so quickly sold off last
    summer, given that $2.4 billion will purchase roughly 24 million
    barrels of oil, which is short of the 27 million you intend to buy and
    the 31 which were actually sold out of the SPR?
        Answer. The SPR will develop an oil acquisition plan to repurchase,
    over a 5-year period beginning in 2013, 27 million barrels of the 31
    million barrels sold using funds available in the SPR Petroleum
    Account, which will provide the Nation with sufficient import
    protection.
        Question. With the threat of further unrest in the Middle East,
    will the Department of Energy be recommending a further selldown of the
    SPR, and if so will it propose a timely replenishment of the stocks
    sold off?
        Answer. The United States and the International Energy Agency are
    monitoring the global markets and are in daily communication on supply
    and distribution issues. The SPR has not been directed to sell
    additional stocks and we cannot speculate about the replenishment of
    supplies.
        Question. Mr. Secretary, I also see that funding for both Research
    and Development activities--activities like developing both new reactor
    technologies and ways to extend the life of our existing fleet--are
    being cut by 35.9 percent. With this funding being used to develop the
    next generation of reactor technologies, including Small Modular
    Reactors and the Next Generation Nuclear Plant (NGNP), and extend the
    life of existing reactors, I am concerned about the effect this cut
    will have on nuclear technology into the future.
        Where does this reduction in funding leave our efforts to develop
    new reactor technologies?
        Answer. The Advanced Reactor Concepts research and development
    program remains an important program for the Department. Reflecting
    difficult resource allocation choices, R&D activities associated with
    lead/lead-bismuth and fluoride high temperature reactors will be
    significantly reduced. The energy conversion R&D, which includes
    supercritical CO2 turbomachinery and related heat
    exchangers, will be consolidated under the Small Modular Reactor
    Advanced Concepts R&D Program in fiscal year 2013. Impacts to sodium-
    cooled fast reactor R&D will be minimized as much as possible given
    this concept's potential role in addressing fuel cycle issues, and in
    order to sustain collaborations conducted under international programs
    such as the Generation IV International Forum and various bilateral
    international agreements. Fuel development efforts that support sodium-
    cooled fast reactor technology also continue under the Fuel Cycle R&D
    budget. The funding request for the Next Generation Nuclear Plant
    Demonstration Project is sufficient to fund the research activities in
    fuels and graphites, including essential irradiation and post-
    irradiation examination.
        Question. What effect will this have on our existing reactor fleet,
    given that these funds are also used to extend the life and improve the
    performance of existing reactors?
        Answer. The Light Water Reactor Sustainability (LWRS) program is
    extremely valuable for addressing both the safety and economic issues
    that could affect how long our existing fleet of nuclear power plants
    operates. Under an austere budget, we made some very difficult
    prioritization decisions. To reduce costs, we are maximizing
    opportunities for cost-share with industry by working very closely with
    the Electric Power Research Institute (EPRI). DOE believes the budget
    request maintains the necessary research on the most critical issues to
    support the continued operation of our existing nuclear fleet.
                                     ______

               Questions Submitted by Senator Frank R. Lautenberg
        Question. The fiscal year 2013 budget dramatically cuts funding for
    the Princeton Plasma Physics Laboratory (PPPL) and general fusion
    research. In response to these cuts, DOE's Fusion Energy Sciences
    Advisory Committee (FESAC) sent a statement to the Office of Science
    stating that ``real damage'' would be done to U.S. fusion research. In
    addition, the committee said the proposed funding levels would not
    support a viable fusion research program and that U.S. scientific
    leadership would be jeopardized.
        How do you respond to the concerns of the scientists on the FESAC?
        Answer. The fiscal year 2013 budget proposal was developed with a
    long-term vision for the U.S. fusion energy sciences program. When
    viewed within the context of competing national priorities for energy
    research, the fiscal year 2013 budget addresses the highest priorities
    in the realm of fusion energy research.
        With the fiscal year 2013 budget request, the U.S. continues to
    have a strong investment in fusion research. The United States is a
    partner in the International Thermonuclear Experimental Reactor (ITER)
    Project, which is designed to be the first magnetic fusion facility to
    achieve self-sustaining (``burning'') plasmas and, thereby, open a new
    era in fusion energy science. The proposed budget will sustain a viable
    U.S. program that will continue to make significant contributions to
    resolving vital issues in fusion research and, thereby, contribute to
    building the scientific foundation needed to develop a future fusion
    energy source.
        The fiscal year 2013 budget positions the fusion program to
    maximize the scientific return on our investment in ITER; address gaps
    in materials science, required for harnessing fusion energy; continue
    to steward the broader plasma sciences, taking advantage of cross-
    agency synergies and provide opportunities for U.S. scientists to
    conduct research on a $1 billion-class of new international
    superconducting facilities. Although the proposed budget will present
    challenges, it will allow the U.S. to continue to have a dynamic
    domestic fusion program.
        Question. DOE administers the Weatherization Assistance Program
    (WAP), which creates jobs and helps reduce energy costs for low-income
    families. Due to reductions for the program in fiscal year 2012
    appropriations, you chose to allocate funds for project year (PY) 2012
    based on remaining funding from the American Recovery and Reinvestment
    Act (ARRA). Unfortunately, since the Christie Administration was slow
    to spend the ARRA funding, New Jersey received zero funding under the
    WAP for project year 2012. Last month, I sent you a letter asking you
    to reconsider DOE's decision to eliminate weatherization assistance
    funding for New Jersey for project year 2012.
        Have you decided whether to adjust the funding formula for project
    year 2012 to ensure that New Jersey and other States will receive at
    least some weatherization funding this year?
        Answer. The 2012 Consolidated Appropriations Act provided $65
    million to WAP for allocation of formula grants to grantees for the
    2012 fiscal year--a funding level that is less than one-third of the
    amount provided in the 2011 Appropriations for the WAP. The Congress
    also provided the Secretary of Energy with the authority and a strong
    recommendation in House Report language to use an alternate methodology
    other than the formula established in regulation to distribute the
    available funding--taking into consideration unspent ARRA balances and
    other resources available to grantees in 2012 from the U.S. DOE.
        The Secretary exercised this authority and allocated program year
    2012 funds to ensure two major outcomes:
      --grantees that spent their ARRA funds on time have adequate DOE
            funds to maintain their operations at post Recovery Act levels;
            and
      --all grantees have adequate funds to operate throughout program year
            2012, given the fund balances that are already allocated but
            remain unspent.
    The allocations were based on the following criteria:
      --Use of an appropriation amount of $210 million as the base ``PY12
            Target Allocation'' for establishing funding for each grantee.
            This is the amount that would have been awarded to grantees
            through the funding formula as established in the regulations
            based on a $210 million Appropriation by Congress in 2010.
      --Whether a significant portion of the ``PY12 Target Allocation'' was
            available in ARRA balances for at least one-half of the program
            year 2012. Program year 2012 ``Target Allocations'' were
            adjusted downward for grantees with significant ARRA balances.
        The DOE contacted the New Jersey Department of Community Affairs
    explaining the alternate formula and DOE's determination to allocate
    zero funds to the State of New Jersey, which has a total of $26.2
    million in unspent WAP funds as of August 2012.
                                     ______

                   Questions Submitted by Senator Jon Tester
                              fuel cells follow up
        Question. You stated that you have met with members of the fuel
    cell and hydrogen energy industry ``several times'' to discuss the
    industry and if you are taking adequate measures to keep it from moving
    overseas.
        Please provide the dates of the occasions that you have met
    personally with members of the fuel cell and hydrogen energy industry
    to discuss these issue, and a list of attendees at those meetings.
        Answer. The Secretary met with members of the fuel cell and
    hydrogen energy industry on the following occasions:
        September 29, 2009: Tour and meetings at Rolls-Royce Fuel Cell
    Systems in North Canton, Ohio;
        March 3, 2010: Meetings at United Technologies Research Center
    included meetings on Fuel Cells;
        April 13, 2010: Met with Jadoo Power, as part of a constituent
    event with Rep. Doris Matsui;
        August 22, 2011: Met with the South Carolina Hydrogen and Fuel Cell
    Alliance;
        January 9, 2012: Meetings on Fuel Cell Technology with
    manufacturers at the Detroit Auto Show;
        March 5, 2012: Visited the Fuel Cell Research Lab at Indiana
    University-Purdue University, Indianapolis; and
        May 10, 2012: Meetings and panel discussion with the Hydrogen and
    Fuel Cell Technical Advisory Committee.
        Question. In your answer to my question regarding our commitment to
    this technology compared to that of Japan, Germany, and South Korea,
    you spoke only about stationary fuel cells.
        What are you doing to support the introduction of fuel cell
    electric vehicles and hydrogen infrastructure, does industry believe it
    is sufficient, and if not, are you prepared to cede this industry to
    overseas competitors?
        Answer. The Department includes hydrogen and fuel cells as an
    integral part of its advanced transportation technologies portfolio,
    maintaining the necessary pace of advancement in anticipation of fuel
    cell electric vehicle (FCEV) commercialization in the 2015 timeframe
    and beyond. To support the introduction of FCEVs and hydrogen
    infrastructure, the Department is focusing on critical research and
    development (R&D) to address the key barriers of hydrogen production
    and delivery, as well as key analyses to determine technology gaps and
    focus areas. For example, the Department actively monitors the efforts
    and plans of Japan, Germany, and South Korea along with other
    countries, through the International Partnership on Hydrogen and Fuel
    Cells in the Economy, which is comprised of 17 nations and the European
    Union, as they relate to deployment of FCEVs and hydrogen
    infrastructure. Domestically, the Department coordinates closely with
    similar FCEV and hydrogen infrastructure planning efforts and State
    initiatives including in Hawaii, California, and New York. The
    Department also provides critical analysis of issues related to FCEV
    deployment and hydrogen infrastructure and continues to support data
    collection from FCEVs and key refueling infrastructure technologies
    ($2.4 million for five projects announced on July 18, 2012). In
    addition, the Department plans to continue analyses and workshops to
    leverage synergies with natural gas infrastructure.
                              hydraulic fracturing
        Question. Mr. Secretary, both your Advisory Board Shale Gas
    Production Subcommittee and the National Petroleum Council have
    released reports about Hydraulic Fracturing and domestic production of
    oil and gas. These reports provides suggested steps Government,
    industry, and researchers need to take to assure that we have a
    balanced regulatory regime to protect development and citizens. If
    there isn't public trust that this technology can be used safely, that
    will inhibit future development. I believe the industry is starting to
    recognize it.
        With this new input on from these independent panels, what is your
    agency doing to implement the recommendations?
        Answer. The Department of Energy (DOE) is working with the
    Environmental Protection Agency (EPA) and United States Geological
    Survey (USGS) to identify research priorities and collaborate on
    research associated with development of our Nation's abundant
    unconventional natural gas and oil resources. Each agency has a
    different combination of experiences, research strengths, personnel,
    resources and mission mandates, leading to complementary research core
    competencies. The three agencies fiscal year 2013 budget request to
    support this work is $45 million, with DOE requesting $12 million. In
    addition, the Appalachian Shale Recommended Practices Group (ASRPG), a
    consortium of 11 of the Appalachian Basin's largest natural gas and oil
    producers, have announced the creation of the Recommended Standards and
    Practices for Exploration and Production of Natural Gas and Oil from
    Appalachian Shale. The ASRPG Recommended Standards and Practices are
    consistent with the key recommendations of both the U.S. Secretary of
    Energy Advisory Board's (SEAB) final report issued in November 2011,
    and the National Petroleum Council's (NPC) Prudent Development report
    issued in September 2011.
        Question. What do you still need to do?
        Answer. The administration created a new Interagency Working Group
    to Support Safe and Responsible Development of Unconventional Domestic
    Natural Gas Resources. This new partnership will help coordinate
    current and future research and scientific studies, better positioning
    the Obama administration to ensure that continued expansion of natural
    gas and oil production happens safely and responsibly as part of an
    all-of-the-above approach to American energy.
        Question. Do you believe that States and companies are taking the
    proper steps to fulfill these recommendations as well?
        Answer. I do believe States and companies are addressing
    environmentally prudent methods for shale gas development. Fundamental
    to ensuring public safety and community health is the commitment to
    excellent environmental performance and continuous improvement that
    must be maintained by industry and Government. Shale gas development is
    subject to multiple Federal and State regulations. The States
    understand the local geology and hydrology. They are regulating
    hydraulic fracturing effectively and continue to get better by working
    with public and private agencies. State oil and gas commissions and
    many operators are collaborating on the development of a public Web
    site to report chemicals used in their hydraulic fracturing process
    based on the Interstate Oil and Gas Compact Commission and Ground Water
    Protection Council chemical disclosure submission. The industry is
    educating operators on industry best practices. It supports the
    disclosure program created by the Ground Water Protection Council for
    listing chemicals in fracturing fluids on the Web site registry called
    FracFocus, which already includes data for 16,000 wells from more than
    200 companies. Five States have adopted FracFocus in their rules. Also,
    the State Review of Oil and Natural Gas Environmental Regulations
    (STRONGER) is a nonprofit, multistakeholder organization whose purpose
    is to assist States in documenting the environmental regulations
    associated with the exploration, development, and production of crude
    oil and natural gas. Since its initiation, the state review process has
    completed the reviews of 21 State programs responsible for the
    regulation of more than 90 percent of the domestic onshore production
    of oil and natural gas. In addition, the industry is establishing
    regionally focused councils of excellence in effective environmental,
    health, and safety practices.
        Question. Much of these reports, in particular the DOE Advisory
    board's two 90-day reports focus on fracking being used for shale gas.
        Do you believe the same suggestions apply to fracking for oil, like
    in the Bakken?
        Answer. Safety and environmental sustainability underpin our
    Nation's energy security concerning both oil and natural gas. Some of
    the results from ongoing research by the DOE, EPA, and USGS may have
    application to the use of hydraulic fracturing of both oil and gas
    shale formations.
        Question. Your budget includes only a small increase of $2 million
    for the natural gas technology R&D program.
        Do you think your budget request is sufficient to address the
    recommendations of the previously mentioned committees and continue the
    needed research to better understand fracking?
        Answer. DOE's fiscal year 2013 Natural Gas budget request for shale
    gas will focus on the research recommendations received from the
    Subcommittee of the Secretary of Energy Advisory Board, including the
    study of methane migration, chemical interactions between fracturing
    fluids and different shale rocks, induced seismicity triggered by
    hydraulic fracturing and injection well disposal, development of green
    fracturing techniques, and improved casing and cementing integrity.
      office of inspector general report on the department of energy lab
                               contracting costs
        Question. Mr. Secretary, the Office of Inspector General (OIG)
    cited in their Special Report of Management challenges at the
    Department of Energy that a $1 billion is spent annually to employ
    4,000 staff to protect sensitive sites and labs around the country.
    These protective services are provided by 25 different contracts that
    Government Accountability Office (GAO) labeled (in a separate process),
    ``. . . not uniformly managed, organized, staffed, trained, or
    compensated.'' Not only do questions like these raise concerns about
    the security of these sites they also raise questions about the use of
    Federal funds.
        OIG suggested three options to help reduce costs: A master
    contract, consolidating by region and/or federalizing the protective
    force.
        Understanding that not all these options are acceptable to DOE,
    what actions are you taking to implement the recommendations of the OIG
    report and reduce the contracting costs?
        Answer. As the OIG report contends, there are nearly 4,000
    protective force staff involved in providing security for DOE physical,
    nuclear, and information security assets throughout the complex.
    Approximately one-half of those work under the purview of the National
    Nuclear Security Administration (NNSA). DOE/NNSA has taken the lead in
    implementation of graded protection and risk-informed decisions that
    will yield significant efficiencies in the use of Federal funds that
    are necessary for ensuring the maintenance and security of our
    indispensable national nuclear security deterrent. Similarly, DOE's
    Office of Science (SC) has developed a Baseline Level of Protection,
    based on national standards and rigorous peer reviews, which provides a
    common starting point for SC in ensuring adequate physical controls,
    development of the site-specific security posture of each of the SC
    laboratories, and streamlined budget formulation and execution
    processes that minimize the burden on the sites while providing
    sufficient information to advocate for security program resources and
    maintain the flexibility to allocate resources.
        DOE/NNSA agrees with IG-858 and previous GAO reports with respect
    to the lack of uniformity and consistency regarding the contracting of
    protective force services at DOE/NNSA sites. The Office of Defense
    Nuclear Security (DNS) recently completed a detailed analysis of the
    various contracting models currently in place throughout the nuclear
    security enterprise and confirmed that, while the type of contract has
    no bearing on the effectiveness of security, separate prime contracts;
    i.e., those that are procured separately from the management and
    operating contractor, are generally more cost-effective for procuring
    contractor protective force services.
        Informed by that analysis, NNSA initiated the procurement of a
    consolidated protective force contract for security services at the
    Pantex Plant and Y-12 National Security Complex in November 2011. This
    procurement is running largely in parallel with the consolidated
    management and operating contract procurement at the same sites, and is
    expected to yield proportionally similar cost savings and efficiencies.
    With respect to the overall protective force contracting approach, DNS
    is working with the NNSA Office of Acquisition and Project Management
    to implement a more consistent contracting approach for future
    protective force contracts throughout the nuclear security enterprise.
    The pros and cons associated with regional contracts or the creation of
    a ``master'' contract for all sites remain under consideration.
    Important factors that must be weighed include the distinction between
    nuclear and non-nuclear sites, and the need to balance consolidation
    and cost-efficiency efforts with aggressive Departmental small business
    goals.
        There remains no evidence of cost-benefit or performance-related
    enhancements associated with federalizing fixed site protective forces.
    Rather than suggesting a fresh look at the situation as suggested by
    the OIG report, the current budget environment affirms the Departmental
    decision to minimize long-term governmental obligations by maintaining
    the current fixed site contractor guard force arrangement. The
    ``potential benefits'' of federalization cited by the OIG report are
    being successfully addressed under current contracting models through
    the implementation of Enterprise-wide Mission Essential Task List
    (EMETL)-based training, standardized uniforms and equipment procurement
    initiatives, and renegotiation of collective bargaining agreements that
    are coming due in 2012. Through the ``Implementation Plan for the 29
    Recommendations of the Protective Force Career Options Study Group''
    dated January 2011, DOE/NNSA has taken decisive action toward achieving
    its goals of fulfilling the needs of the Government in terms of
    effectively and efficiently contracting for protective force services
    at its fixed nuclear security sites, while simultaneously addressing
    the critically important needs of the contractor employees who perform
    these essential tasks.
        IG-858 recommended the engagement of external public sector
    security experts to review the issue of protective force configuration
    with a view toward reigning in the Department's cost structure. DOE and
    NNSA have been actively engaged in a nuclear security collaboration
    effort to ``harmonize'' the manner in which nuclear security operations
    are implemented throughout the Government. Although the Department of
    Defense and DOE/NNSA have significantly different challenges in terms
    of their respective physical security work forces, the similarity of
    tasks has helped to inform the manner in which NNSA approaches its
    tactical, budgetary and contractual approaches toward accomplishing the
    nuclear security mission. As existing contracts come up for renewal,
    DOE and NNSA are invoking more consistent and cost-efficient
    strategies. In addition to the ongoing Pantex/Y-12 procurement, work
    has begun to initiate a review of the acquisition strategy for
    protective force services at the Sandia National Laboratories, Lawrence
    Livermore National Laboratory and Los Alamos National Laboratory. SC
    has also conducted a separate independent benchmarking study comparing
    SC laboratory security to security at research institutions operated by
    other Federal agencies and the private sector. The result of these
    efforts was the SC Baseline Level of Protection, a streamlined budget
    formulation and execution process, and program management approach to
    implement technologies where possible and reduce recurring contractor
    costs.
                            geothermal energy budget
        Question. Secretary Chu, I firmly believe geothermal power has the
    potential to be a significant part of our base load energy portfolio in
    the future. Senator Murkowski and I have a bill which would greatly
    expand our understanding of geothermal potential, expand use of
    enhanced geothermal systems and allow to co-leasing of geothermal and
    oil wells, helping to secure our energy future.
        Massachusetts Institute of Technology (MIT) estimates, ``. . . that
    with a reasonable investment in R&D Enhanced Geothermal Systems could
    provide 100 GW of cost-competitive generating capacity in the next 50
    years.'' That is why I am excited to see a 72-percent increase in
    Geothermal funding in the department's requested budget and an expanded
    area of study.
        Could you talk in detail about the new focus and long-term plan for
    the geothermal office?
        Answer. In 2011, the Program convened a Blue Ribbon Panel comprised
    of renowned geothermal experts from industry, academia, and the
    national laboratories. The panel recommended that the Program continue
    to invest in the promising potential of Enhanced Geothermal Systems
    (EGS) but to also fund critical research needed to increase exploration
    success for hydrothermal resources.
        Consistent with these recommendations, the Program's technology
    portfolio focuses on two closely-related areas, which balance a near-
    and long-term investment strategy: hydrothermal and EGS. Innovative
    exploration technologies and tools support risk reduction for both
    near-term hydrothermal systems and long-term EGS. Additional ongoing
    investments in economic and systems analysis will help identify ways to
    reduce nontechnical costs associated with these efforts.
        The Program budget request for fiscal year 2013 reflects confidence
    that EGS can be a viable and significant-scale baseload energy
    resource: in fiscal year 2012, the first of several EGS demonstration
    projects funded by DOE has clearly shown the potential to produce 5 MW
    from an engineered reservoir in a deep, impermeable, and unproductive
    rock body, with far greater additional potential at this site. This
    partially achieves a critical program goal 8 years ahead of the
    original forecast. Therefore, the program will pursue the development
    of innovative technology solutions through closely managed strategic
    R&D, industry-run EGS demonstration projects, and a Government-led EGS
    test site(s) focused on EGS optimization and validation.
    Simultaneously, the program will advance technologies needed to
    reliably identify new hydrothermal resources, thus developing a lower
    and more predictable risk profile for the industry to accelerate
    deployment in the near and long term. Concurrently, the program has
    initiated a first-ever project to build broad-scale geothermal resource
    maps that can be used by industry to lower the risk of finding new
    prospects.
        At the same time, the Program maintains a complementary effort on
    low-temperature and co-produced geothermal resources, and will commence
    a field project in fiscal year 2013 to actively collect operating data
    from a new coproduction site to better frame this broad area of
    potential.
        Question. Could you also discuss your plans for increasing
    investment in this technology?
        Answer. To bring more clean energy online in the near-term, the
    detection and imaging of subsurface geothermal reservoirs needs to be
    reliable and cost-effective. Upfront risks related to unsuccessful
    exploration activities are also a major barrier to increased
    development of geothermal resources in the United States. Accordingly,
    a major objective of the Program is to increase the probability of
    success of finding geothermal resources, and to lower the attendant
    cost. Lowered risks and costs and greater certainty of outcomes has a
    profound impact on the sector's ability to secure attractive financing
    and backing for renewable energy projects.
        Some of the most promising technologies include innovative
    geophysical and geochemical exploration technologies, which will allow
    the prediction or location of hidden hydrothermal resources. These
    technologies will allow more reliable and predictable subsurface
    temperature, physical rock properties, and permeability.
        The program is particularly interested in faster and less costly
    drilling technologies (spallation or laser drilling), zonal isolation
    or diverter technology development, and monitoring tools. These and
    other technologies are currently funded through our EGS program. The
    ability to develop sizeable and scalable fracture networks through
    which fluid can circulate and pick up heat is integral to EGS reservoir
    sustainability.
        Another example of promising work that has the potential to benefit
    a variety of other sectors is geothermal mineral extraction technology.
    Strategic minerals, such as lithium used in advanced car batteries, are
    often dissolved in the geothermal fluids that are pumped to the surface
    to produce power. This technology extracts lithium from the geothermal
    brine, combined with electricity generation, before the brine is re-
    injected into the subsurface.
        In addition, the Program is pursuing development of a Government-
    led EGS test site (Site) focused on EGS optimization and validation.
    The goals of the Site include testing new technologies, and
    demonstrating the ability to drill and complete the first-ever
    horizontal well in a geothermal reservoir. The Site is a critical step
    towards creating a commercial pathway to EGS, as it will promote
    transformative and high-risk science and engineering that the private
    sector is not financially or operationally equipped to undertake. This
    investment is in fact similar in scope and potential impact to the
    ground-breaking DOE investments in shale gas from 1978 through 1991,
    which led to the shale gas revolution.
                                  hydro budget
        Question. Mr. Secretary, in March of 2010, you signed a memorandum
    of understanding (MOU) with the Army Corps and the Department of
    Interior to identify existing Federal dams with the potential to
    sustainably install or retrofit them with hydropower. In evaluating 530
    sites in this process, 191 sites were identified as having some
    hydropower potential and 70 have economic potential for retrofitting or
    installing to create 225 MW of power.
        This MOU also agreed to continue research in traditional hydro to
    create more fish-friendly and efficient turbines to update our
    infrastructure (since many of these improvements only take a few years
    to pay themselves back).
        Yet this year's budget cuts the Water power budget by two-thirds,
    shifting almost entirely towards marine and hydrokinetic power.
        My question is does this budget request support your commitments
    made in the 2010 MOU for developing advanced hydropower technologies?
        Answer. A robust $59 million budget in fiscal year 2012, a nearly
    70-percent increase over fiscal year 2011, has allowed the Department
    to continue and complete a number of important water power technology
    research and development projects, including a nationwide assessment of
    energy opportunities at nonpowered dams across the United States. The
    $20 million requested in fiscal year 2013 will allow the Department's
    Water Power Program to continue and complete a number of its ongoing
    projects to advance water power technologies and accelerate their
    market adoption, including several efforts that have been coordinated
    and conducted jointly with the Bureau of Reclamation and the Army Corps
    of Engineers. These efforts include demonstrations of new, innovative
    hydropower technologies including the Alden Fish-Friendly Turbine as
    well as low-head small hydropower technologies at Bureau of Reclamation
    facilities, the Water Use Optimization Toolset and various water
    quality modeling efforts to aid in the prediction and improvement of
    water quality at Federal hydropower facilities, and new and refined
    assessments of opportunities to develop new hydropower facilities.
    Based upon the results and evaluation of ongoing efforts, especially
    the identification of new hydropower development opportunities and the
    potential for hydropower and pumped storage technologies to help
    integrate other sources of renewable energy into the electric grid, the
    Department will determine the needs and opportunities for future water
    power research beyond fiscal year 2013.
                             geothermal heat pumps
        Question. Mr. Secretary, it's my understanding that buildings
    dominate our Nation's energy use, consuming more than one-half of our
    electricity and natural gas. Buildings also account for more than 40
    percent of carbon emissions in the United States. With that being the
    case, I think the Department of Energy ought to be doing more to focus
    on the steps we can take to reduce the energy we use to heat and cool
    our buildings and homes, including promoting proven technology like
    geothermal heat pumps.
        What steps does the Department plan on taking to address the market
    barriers that prevent commercial building managers and homeowners from
    investing in energy efficient technologies like geothermal heat pumps
    (GHP)?
        Answer. Key barriers to market penetration of energy-efficient
    technologies like GHPs include high first costs, limited design and
    installation infrastructure, and lack of awareness among consumers,
    policymakers, and regulators about technology benefits. The Department
    is supporting initiatives that seek to overcome these barriers through
    technology development and demonstration, education and training, and
    policy analysis. Through the Recovery Act, the Department is currently
    funding 26 GHP demonstration and analysis projects and 30 Energy
    Efficiency and Conservation Block Grant projects that involve GHPs.
    These projects, as well as input from industry experts and
    stakeholders, will inform future efforts, which will be described in a
    report to the Congress that is in the final stages of preparation. The
    report describes the Department's GHP research, development, and
    demonstration activities and plans, as well as plans to promote the use
    of GHP technologies; analyze policies that affect consumers and
    manufacturers of GHPs; and collect, analyze, and disseminate publicly
    available data and information about these products.
                                distributed wind
        Question. Secretary Chu, while we're all aware of the myriad
    benefits of large, industrial-scale wind projects in the United States,
    there is great potential for smaller-scale ``distributed wind''
    projects as well. In Montana, we have second best wind potential in the
    U.S. In fact, smaller wind turbines or projects can often result in
    outsized benefits to rural communities, farmers, ranchers, and other
    citizens. And buy-in for smaller wind translates into social acceptance
    of larger-scale projects.
        It can also help to reinvigorate our Nation's manufacturing base
    given that 95 percent of the small wind systems installed in the U.S.
    in 2009 was manufactured domestically and much of that manufacturing
    activity occurred in economically challenged rural areas.
        In fiscal year 2010, the DOE spent approximately $80 million on
    research, development, and demonstration (RD&D) for wind energy, but
    only about 2 percent of that total, about $1.6 million was for small-
    and medium-sized wind. By contrast, your agency spent roughly $250
    million on solar RD&D in that same time period.
        Given the significant contributions that distributed wind can make
    to our rural economy and our clean-energy future; do you think that the
    Department ought to place more emphasis on this important renewable
    energy technology?
        Answer. While the Department has recently increased its emphasis on
    less mature wind technologies such as those used in offshore
    applications, it should be noted that wind technology innovations and
    improvements supported by the DOE Wind Program are likely to benefit a
    variety of sizes and applications across the wind industry, and small-
    and medium-sized wind remain priorities for the Program. The Department
    plans to continue ongoing efforts to support small- and medium-sized
    wind, and has also identified several market barrier removal,
    deployment, and technology optimization activities as areas for
    investment to accelerate the deployment of wind technologies used in
    distributed applications and to increase the speed of technology
    transfer from low-wind speed utility-scale technology to distributed
    systems.
        The recent growth and maturation of the U.S. small wind industry
    has seen a large number of new products enter the market without a
    framework for verifying manufacturer claims about turbine performance,
    reliability, noise, and safety. Product certification is essential for
    providing consumers, utilities, policy makers, and lenders with
    transparent, third-party-verified small wind turbine performance,
    durability and safety information, and DOE views certification as a way
    to provide manufacturers with the parameters for communicating
    transparent and credible information to stakeholders. To address these
    concerns, DOE supported the development of a technical standard that
    can now be used voluntarily to test small wind systems to performance
    and safety criteria. DOE has also supported the establishment of four
    small wind turbine regional test centers and the Small Wind
    Certification Council, which provides accredited third-party
    verification of test results in accordance with internationally adopted
    technical standards for testing. DOE plans to continue to support
    activities related to achieving its small wind technology goal, which
    is to increase the number of small wind turbine models certified to
    performance and safety standards from a 2010 baseline of 0 to 40 by
    2020. The fiscal year 2012 milestone of five models certified has been
    achieved, and State renewable energy programs are establishing lists of
    qualified small wind turbines for incentive programs based on the
    process for certification developed with support from DOE.
        The Department is also currently supporting research, analysis, and
    modeling to establish near-term cost of energy targets for midsize
    turbine technology and utility scale technology used in distributed
    applications, with the goal of being competitive with national average
    retail electricity rates. Work activities related to achieving this
    goal include economic analysis, next generation midsize turbine R&D,
    standards development, and technology transfer support. Future
    activities in support of this goal might include research to reduce the
    balance of station costs, studies of distribution grid integration, and
    the development and verification of site assessment tools.
        Question. Will you agree to take a close look at DOE's wind power
    program very soon and assess steps to increase focus and support for
    distributed wind power?
        Answer. The DOE Wind Program has identified several market barrier
    removal, deployment, and technology optimization activities (outlined
    below) as areas for investment to accelerate the deployment of wind
    technologies used in distributed applications and to increase the speed
    of technology transfer from low wind speed utility-scale technology to
    distributed systems.
          Resource Characterization.--Research and develop predictive
            modeling/site assessment and resource characterization tools to
            reduce project performance uncertainty. Reducing uncertainty
            will improve access to lenders and help mitigate system
            underperformance. Distributed wind resource characterization
            work might include developing and verifying site analysis
            tools, developing best practices for cost-effective distributed
            wind resource characterization, and developing predictive
            economic modeling tools based on these site analyses and
            resource characterization tools using certified turbine models.
          Grid Integration.--Research and assess distributed wind
            penetration on distribution grids. Increasing interconnection
            access to distribution grids operated by publicly owned
            utilities will increase installed capacity of distributed wind.
            Distribution grid integration work might include updating the
            distributed generation toolbox, reporting on how wind
            installations impact regional distribution grids, assessing the
            potential to penetrate distribution grids with distributed wind
            and other variable generation, and quantifying available
            capacity on the distribution grid.
          Market Acceleration and Deployment.--Provide tools and unbiased
            information on distributed wind energy impacts, benefits, and
            project development processes to help stakeholders (homeowners,
            communities, utilities, and local/State governments) decide if
            wind energy is right for them, and to reduce upfront time and
            costs for those pursuing projects. Information provided would
            vary regionally based on that region's needs and might include:
          --model zoning ordinances or permitting requirements;
          --guidelines for navigating the permitting process;
          --lists of certified turbines and installers;
          --policy comparisons tools;
          --reports on turbine noise, wildlife, or grid impacts;
          --interconnection guidelines and tools;
          --site analysis and resource characterization tools;
          --turbine siting guidelines;
          --case studies; and
          --predictive economic modeling tools for project assessment.
          Technology Performance Optimization.--R&D to improve small and
            midsize turbine performance, reliability, safety while reducing
            capital costs is critical for market growth. Small wind
            technology R&D activities might include a competitiveness
            improvement project with funding awarded for certification
            testing, noise-mitigating technology, component improvement and
            sub-system optimization, system performance optimization, and
            innovative manufacturing. Midsize wind technology R&D
            activities might include developing standards, establishing a
            certification framework, developing and testing prototypes, and
            testing for certification.
        Question. Often times DOE is focused on large deployments or
    breakthroughs of significant scale, and less on deployment of small
    scale or distributed technologies.
        What are you doing to continue to focus on distributed energy and
    expanding deployment at the small scale?
        Answer. While the Department has recently increased its emphasis on
    less mature wind technologies such as those used in offshore
    applications, it should be noted that wind technology innovations and
    improvements supported by the DOE Wind Program are likely to benefit a
    variety of sizes and applications across the wind industry, and
    distributed energy remains a priority for the Department.
        The recent growth and maturation of the U.S. small wind industry
    has seen a large number of new products enter the market without a
    framework for verifying manufacturer claims about turbine performance,
    reliability, noise, and safety. Product certification is essential for
    providing consumers, utilities, policy makers, and lenders with
    transparent, third-party-verified small wind turbine performance,
    durability and safety information, and DOE views certification as a way
    to provide manufacturers with the parameters for communicating
    transparent and credible information to stakeholders. To address these
    concerns, DOE supported the development of a technical standard that
    can now be used voluntarily to test small wind systems to performance
    and safety criteria. DOE has also supported the establishment of four
    small wind turbine regional test centers and the Small Wind
    Certification Council, which provides accredited third-party
    verification of test results in accordance with internationally adopted
    technical standards for testing. DOE plans to continue to support
    activities related to achieving its small wind technology goal, which
    is to increase the number of small wind turbine models certified to
    performance and safety standards from a 2010 baseline of 0 to 40 by
    2020. The fiscal year 2012 milestone of five models certified has been
    achieved, and State renewable energy programs are establishing lists of
    qualified small wind turbines for incentive programs based on the
    process for certification developed with support from DOE.
        The Department is also currently supporting research, analysis, and
    modeling to establish near-term cost of energy targets for midsize
    turbine technology and utility scale technology used in distributed
    applications, with the goal of being competitive with national average
    retail electricity rates. Work activities related to achieving this
    goal include economic analysis, next generation midsize turbine R&D,
    standards development, and technology transfer support. Future
    activities in support of this goal might include research to reduce the
    balance of station costs, studies of distribution grid integration, and
    the development and verification of site assessment tools.
        Question. Are you willing to commit to working with your sister
    agencies to identify opportunities to expand opportunities for
    distributed technologies?
        Answer. The U.S. Department of Energy would be willing to work with
    other interested agencies to identify opportunities for distributed
    technologies, including Federal and State agencies.
                        coordination with other agencies
        Question. While DOE is certainly the premier Federal agency for
    energy research, development, demonstration, and deployment, many other
    agencies--the Department of Agriculture, the Department of Defense, the
    Environmental Protection Agency, and the Department of Interior--also
    have authority and resources to support energy development and
    deployment. Along those lines you've teamed up with the Department of
    Agriculture to work on the development of biofuels and you have an MOU
    with interior on retrofitting existing hydro assets. That's a good
    first step.
        How are you coordinating with these agencies to expand information
    about your solicitations, projects, and commercialization
    opportunities, especially in rural America where they develop and
    harness this energy?
        Answer. We have a number of formal and informal avenues for
    coordination with other Government agencies. For example, the Advanced
    Research Project Agency--Energy has partnered with the Department of
    Defense to develop innovative technologies for energy storage that can
    be used on ships as well as at naval installations. In addition, the
    Department, through the Office of Energy Efficiency and Renewable
    Energy, has been a co-lead with the Department of Agriculture on the
    inter-agency biofuels group that sets priorities for and oversees
    Federal investments biofuels development. There are many of examples of
    such collaboration. In both of these cases, we are working hand-in-hand
    on solicitations and commercialization opportunities, casting as broad
    a net as possible to harness the best ideas in science and technology.
    As we do so, companies, universities, and research institutions in
    rural America, who are often closest to these challenges, will be
    critical participants and we are actively working to include them in
    our efforts.
        Question. How are you working to assure that rural businesses and
    researchers are participating and winning solicitations from DOE?
        Answer. As you know, the Department of Energy, like other agencies,
    does significant work in rural America by virtue of the locations of
    its key facilities like National Renewable Energy Laboratory in
    Colorado and the Idaho National Laboratory in Idaho. Our laboratories
    become geographic centers for engineering, scientific, and economic
    activity as a matter of our ongoing operations. In addition, we reach
    out to local small businesses, community colleges, and other entities
    to help develop technical expertise and human capital to support not
    only the labs themselves, but also the new industries that the labs
    create.
       pump storage hydro and power marketing administration coordination
        Question. The Power Marketing Administrations and Tennessee Valley
    Authority (TVA) are all somewhat different animals, due to their
    enabling legislation. But, presumably, they and their Senate confirmed
    board members are all working together with you and the administration
    to further the goals of the President--energy efficiency, renewable and
    clean energy, a more reliable and smarter grid and so on.
        How does all that work, because it's not obvious from out here that
    it's all hanging together with any specific goals in mind?
        Answer. The Power Marketing Administrations (PMAs) are separate and
    distinct wholesale electric utilities within the Department of Energy.
    Each PMA is headed by an administrator who is a career employee of the
    Senior Executive Service. The administrator positions are not Senate
    confirmed. The PMAs do not have boards of directors. Each of the PMAs
    has its own organic statutes governing its Federal power marketing
    mission in the regions that it serves. While the missions of the PMAs
    are similar, their statutory responsibilities vary. For example, while
    BPA has a statutory responsibility to promote energy efficiency in the
    Pacific Northwest, the other PMAs do not have a similar statutory
    responsibility. While the PMAs are operating utilities, they do
    coordinate with the Department of Energy and other administration
    officials on Federal energy policy as is appropriate and consistent
    with their governing Federal statutes.
        The Tennessee Valley Authority, a corporation owned by the U.S.
    Government, provides electricity for 9 million people in parts of seven
    southeastern States at prices below the national average. TVA, which
    receives no taxpayer money and makes no profits, also provides flood
    control, navigation, and land management for the Tennessee River system
    and assists utilities and State and local governments with economic
    development.
        TVA's Board of Directors are appointed by the President and are
    Senate confirmed. The Board guides TVA in achieving the objectives and
    missions established by the TVA Act for the benefit of the people of
    the Valley.
        As provided by the TVA Act and the TVA Bylaws, the principal
    responsibilities of the Board are to establish the broad strategies,
    goals, and objectives, long-range plans and policies of TVA and to
    ensure that those are achieved by the TVA staff led by the Chief
    Executive Officer. Each Director takes an oath to faithfully and
    impartially perform the duties of office. Directors serve part-time.
        The PMAs coordinate with TVA from time to time as they do with
    other electric utilities on energy policy and electric energy
    regulatory matters. The Bonneville Power Administration (BPA) and TVA
    also coordinate from time to time on Federal budget related matters and
    other Federal administrative issues related to self-financed entities.
        Like other electric utilities, the PMAs strive continuously to
    operate reliable power and transmission systems. The PMAs routinely
    maintain their systems and invest in capital upgrades to maintain high
    reliability and efficiency. Their customer utilities understand the
    value of highly reliable power system and pay the costs of those
    investments either through rates or direct customer investments. These
    investments also are at no cost to taxpayers. My understanding of TVA
    is that their operations and maintenance approach is similar.
        Question. Specifically you released a proposal last year to promote
    development of Pump Storage Hydro, while at the same time one of the
    PMAs was turning away companies interested in working with the Agency
    to develop permitted projects in their service territory. This project
    is located in a county with higher than the State average of
    unemployment and a construction project of this size would bring
    significant benefit to the BPA system and to the community.
        Again just 2 weeks ago when you testified in front of the Senate
    Energy and Natural Resources Committee you are pushing BPA to do more
    pump storage hydro.
        Does this mean you'll reconsider the permitted project awaiting
    investment which was push aside last year by BPA in Montana?
        Answer. BPA's primary statutory mission is to market and transmit
    electric power to serve the load requirements of its preference
    customers. BPA also is an open access transmission provider. BPA's only
    authority to acquire the output of generating resources is for those
    customers' load service needs. To my knowledge, the only pumped storage
    project BPA has investigated to date is a rehab of the existing John
    Keys III Pumping Project. BPA has not received any formal request to
    partner with any private developer of pumped storage projects, and
    consequently, has not turned down a pumped storage project development.
                           renewable energy standard
        Question. Secretary Chu, there are a lot of proposals out there to
    increase the market share of Renewable Energy Standard (RES). For
    example, I carried and passed Montana's Renewable Portfolio Standard
    (RPS) while in the State Senate. That effort brought more than $1
    billion of investment to Montana to develop renewable energy. There are
    economic, social, and environmental benefits to this kind of
    investment, but RPS or RES isn't the only option.
        Other members are promoting a Clean Energy Standard which requires
    that 80 percent of domestic energy come from clean sources by 2035.
    Still experts extol the benefits that tax credits and loan guarantee
    programs to expanding development. A recent Congressional Budget Office
    (CBO) report stated that imposing a carbon tax would be the strongest
    market signal.
        With all these proposals on the table, what do you believe is the
    best option to help strengthen the deployment of Renewable Energy?
        Answer. Many of the policy mechanisms mentioned represent viable
    approaches to strengthen the deployment of renewable energy and have
    been tested in various situations in the United States and around the
    world. With the support of current State and Federal policies (such as
    Montana's renewable portfolio standard), the President's goal of
    doubling renewable electricity generation was met in January of this
    year.\1\ In addition, the President has proposed a Clean Energy
    Standard to meet the goal of doubling the share of clean electricity
    including renewables by 2035.
    ---------------------------------------------------------------------------
        \1\ Goal is relative to end of 2008. 143,425 GWh in the 12-month
    period ending in January 2012 compared to 71,067 for the 12-month
    period ending in December 2008. Data from Energy Information
    Administration (EIA) annual energy review early release: http://
    www.eia.gov/electricity/data/eia860/index.html.
    ---------------------------------------------------------------------------
        One important factor in selecting policy mechanisms to advance the
    deployment of renewable energy is to provide long-term market
    certainty. Providing market certainty will also allow a strong and
    viable renewable energy industry to grow in the United States, with the
    potential to export into the growing global renewable energy market.
        In keeping with the President's ``all of the above'' energy
    strategy, a portfolio of policies may be an effective approach to
    strengthen the deployment of renewable energy.
                                     ______

                Questions Submitted by Senator Richard J. Durbin
                        fermilab and high energy physics
        Question. Prior to the shutdown of the historic Tevatron facility
    last year, scientists at Fermi National Laboratory may have detected
    the Higgs Boson particle, a long-sought-after particle that is critical
    to explaining the fundamentals of our universe. The lab is now focused
    on probing new scientific frontiers with the Long Baseline Neutrino
    Experiment (LBNE).
        Despite this landmark discovery and other promising results,
    funding for Fermilab was cut $30 million (an 8-percent cut). This cut
    would result in 140 lay-offs. This is in addition to the 90 layoffs
    that occurred this year due to previous budget cuts. These decisions
    only further encourage our best scientists and research facilities to
    leave the United States for European facilities, crippling our future
    in particle physics.
        Given this, what is the Department of Energy (DOE) prepared to do
    to ensure a robust future for U.S. leadership in high-energy physics
    and discovery science research?
        Answer. The Office of High Energy Physics (HEP) believes the P5
    framework of three frontiers of particle physics represents a
    compelling vision for U.S. particle physics. The U.S. will participate
    in the Large Hadron Collider (LHC) program at CERN for the Energy
    Frontier. HEP will support research on dark energy and dark matter on
    the cosmic frontier and HEP plans to center a world-class Intensity
    Frontier program at Fermilab. The Intensity Frontier program will
    utilize the Fermilab accelerator complex to produce neutrino, muon, and
    kaon beams for studies of neutrino oscillations, Charge Parity (CP)
    violation, and provide rare decays that test fundamental symmetries of
    nature. This program can start with the current complex at Fermi, but
    the complex would need to be upgraded in the future.
        LBNE has been part of the roadmap for the particle physics field
    for the last 4 years.
        Question. After extensive review, the National Academies of Science
    and National Research Council urged the U.S. to have a domestic
    underground research facility. What is the Administration's plan for
    the Long Baseline Neutrino Experiment?
        Answer. LBNE has been a key part of the HEP strategy since the 2008
    High Energy Physics Advisory Panel report, ``US Particle Physics:
    Scientific Opportunities A Strategic Plan for the Next Ten Years.''
    Since 2010, when the National Science Board withdrew National Science
    Foundation (NSF) support for Deep Underground Science and Engineering
    Laboratory (DUSEL), HEP has been seeking a cost-effective solution to
    pursuing the physics discoveries that could be produced by the LBNE.
    The most recent conceptual design presented to the Office of Science in
    January was deemed to take too long to build and had unsupportable peak
    costs. The Office of Science has charged Fermilab to develop phased
    alternatives to deliver science sooner with lower-peak costs.
    Fermilab's response will be submitted to the Office of Science by July
    1, 2012.
                           argonne and supercomputing
        Question. High-performance computing is a key capability of
    America's national laboratories. The Leadership Computing Facility at
    Argonne National Laboratory houses one of the world's fastest
    supercomputers and provides world-class computational capabilities.
    This enables breakthrough scientific research in fuel efficiencies,
    aerodynamics, drug discovery, nuclear energy, and climate change.
        Funding for the Leadership Computing Facilities, like the one at
    Argonne, are critical for continuing our path towards exascale
    computers, which would be 1,000 times more powerful than today's best
    computers. In the past 2 years we have seen significant investments by
    China, Japan, and the European Union in their computing capabilities.
        Can you describe how the DOE will invest to regain and maintain
    U.S. leadership in supercomputing in the future?
        Answer. To address critical missions in Science, Energy and
    National Security, the Department of Energy (DOE) in its 2011 Strategic
    Plan has set a goal to maintain ``leadership in computational sciences
    and high-performance computing.'' The targeted outcome is to continue
    to develop and deploy high-performance computing hardware and software
    systems through exascale platforms. To accomplish this ambitious goal,
    DOE will draw upon proven successful programmatic and technical
    strategies that have established the Department as the premier leader
    in innovative high-performance computing systems over the past half-
    century. These strategies consist of three thrusts:
      --research, development, and engineering (RD&E) to ensure timely
            availability of hardware, software, and mathematical
            technologies including improved cybersecurity;
      --more reliable science and engineering simulations that will ensure
            U.S. economic competitive leadership; and
      --acquisition, deployment, and operation of the most capable
            computing systems on a predictable cadence and budget.
        Some of the exascale relevant research was anticipated by DOE and
    has been underway for a few years. These investments include core
    computer research efforts, uncertainty quantification research and the
    start of three co-design centers to ensure scientific computing
    challenges are informing architecture designs while critical DOE
    applications also stay informed with regard to hardware developments.
    These long lead-time efforts have hinted at some options and tradeoffs,
    but much work remains to be done. Advanced Scientific Computing
    Research (ASCR) supports several significant steps toward exascale in
    fiscal year 2012, including the start of investments in critical
    technologies and the installation of our first hybrid computing system
    at the Oak Ridge Leadership Computing Facility and the Blue Gene Q at
    Argonne National Laboratory. These computers will be critical for our
    researchers working on exascale technologies. In fiscal year 2013, we
    will complete upgrades to both of the Leadership Computing Facilities
    to take each facility to at least 10 petaflops. Both machines will
    provide new capabilities to the research community, including industry,
    to deliver new science and engineering insights. Upgrading the
    Leadership Computing Facilities will enable DOE to continue to lead in
    a number of areas of science and engineering, including materials,
    chemistry, earth science, nuclear physics, and engineering.
                                 futuregen 2.0
        Question. With coal providing 50 percent of U.S. electricity
    generation and close to 80 percent of the electricity in China, it
    seems to me that we can't fight climate change without cutting
    greenhouse gas emissions from coal.
        As you are aware, DOE selected Morgan County, Illinois, to site the
    FutureGen 2.0 project. The project's goal is to develop a near-zero
    emission coal-fired power plant--reducing greenhouse gas emissions and
    generating tremendous economic opportunity at the same time.
        How is FutureGen 2.0 progressing and how does it fit into the
    larger strategy of the DOE's Office of Fossil Energy?
        Answer. The FutureGen 2.0 project consists of two cooperative
    agreements:
      --repowering an existing electric generating unit in Meredosia,
            Illinois, owned by Ameren Energy Resources (Ameren) with a
            purpose-built oxy-combustion and carbon capture technologies;
            and
      --constructing a pipeline and injection system that would sequester
            the carbon dioxide captured from the unit in a deep geologic
            formation beneath Morgan County, Illinois.
        The second project is managed by the FutureGen Alliance (Alliance);
    the first project is currently managed by Ameren, but it has decided
    not to pursue its project beyond Phase 1 (preliminary design).
        Phase 1 of both cooperative agreements is almost complete. The
    analyses undertaken during this phase resulted in an increased estimate
    of total program cost from $1.3 to $1.65 billion. This increase is
    attributable to identification of an additional $365 million in costs
    for Ameren's project scope. DOE understands that Ameren's decision not
    to proceed beyond Phase 1 was based in part on these cost increases.
        The Alliance informed DOE that it intends to ask the Department to
    transfer the Ameren cooperative agreement to the Alliance and to
    authorize the Alliance to take both cooperative agreements into Phase
    2. DOE's decision on these requests depends on the Alliance's ability
    to demonstrate that it has the technical, managerial, financial, and
    other capabilities needed to pursue all requirements of both
    cooperative agreements. The Alliance's demonstration will be contained
    in ``decision point applications'' that it intends to submit to DOE in
    June 2012.
        FutureGen 2.0 is an important part of the Office of Fossil Energy's
    research and development program aimed at enabling more efficient
    capture processes and ultimately bringing down the cost of carbon
    capture, utilization, and storage (CCUS). The cost of CCUS and coal-
    fired electricity is ultimately a function of significant market
    factors, well outside the control of the Department. However, the
    Department does conduct research and development on advanced clean coal
    technologies that will bring costs down over time. As part of this
    effort, the Department conducts large scale research and demonstration
    projects, such as the FutureGen project, that allow first-of-a-kind
    clean coal technologies to be utilized on a commercial scale. These
    activities have been shown to reduce costs over the long run, and allow
    for more efficient, cleaner, and more affordable technologies to be
    used in the marketplace.
                                     ______

                 Questions Submitted by Senator Lamar Alexander
                                 hub questions
        Question. The President's budget request includes $19.4 million for
    a new Electricity Systems Hub and there are plans for 3 additional Hubs
    to begin in future years. Based on budget constraints, do you still
    believe it makes sense to grow the hubs to a total of 9 over the next
    couple of years?
        Answer. The current Hubs have helped demonstrate the value of
    integrating the work of multiple researchers across various disciplines
    in tackling significant grand challenge problems. The Hub approach
    ensures that research efforts are coordinated at the most direct
    possible level, by ensuring that the relevant researchers are directly
    collaborating on a single, coherent team.
        Question. Do you believe the hub concept has been successful?
        Answer. The three existing Hubs have made robust progress in
    creating a critical mass of multidisciplinary research in their
    respective areas, enabling new approaches to challenging, high-priority
    technical barriers. In accordance with language in House Report 112-331
    to H.R. 2055 (the Consolidated Appropriations Act of 2012), the
    Department of Energy (DOE) will soon be providing a report to the
    Congress detailing milestones and performance goals for the Hubs.
        Question. Where will the funds come from assuming a flat-lined
    budget?
        Answer. The Department's mission of addressing America's energy
    challenges through transformative science and technology solutions
    requires careful analysis and deliberation to develop a balanced
    portfolio of basic science and research, development, demonstration,
    and deployment. To ensure the right funding profile, DOE uses strategic
    analysis to identify and prioritize the most appropriate portfolio, as
    identified in the fiscal year 2013 budget request.
        Question. Do you have plans for additional Hubs beyond the 9 that
    have been proposed?
        Answer. In general, the Hub model is appropriate for addressing
    focus areas where:
      --the problem represents a significant grand challenge, where major
            advances would be likely to have a material impact on energy
            production or consumption and on reducing greenhouse gases; and
      --a coordinated, large-scale, multidisciplinary, systems-level
            approach is needed to accelerate the pace of innovation.
    To determine which problems meet both these criteria and would thus be
    appropriate for the focus of a Hub, DOE draws on extensive technical
    and strategic discussions with industry, academia, other Federal
    agencies, and the technical expertise within the National Laboratories.
        Question. How did you (DOE) decide the Electricity Grid hub was the
    most important hub to start next year, rather than solar, carbon
    sequestration, or extreme materials?
        Answer. The Congress provided funding for a Critical Materials Hub
    in fiscal year 2012, and a funding opportunity announcement was
    released in May 2012. The goal of the Critical Materials Hub will be to
    reduce U.S. dependence on critical materials and ensure that the
    deployment of domestic energy technologies is not hindered by future
    materials supply shortages.
        Solar and carbon capture use and storage (CCS) continue to be high
    priorities at DOE, as indicated by the Sunshot Initiative and the
    continued commitment to the deployment of 5-10 large scale CCS
    demonstration projects by 2016.
                            nuclear waste questions
        Question. Can you describe what the Department is doing to address
    the waste problem, and how it complements the Blue Ribbon Commission's
    recommendations?
        Answer. If we are going to ensure that the United States remains at
    the forefront of nuclear safety and security, nonproliferation, and
    nuclear energy technology, we must develop an effective strategy and
    workable plan for the safe and secure management and disposal of used
    nuclear fuel and nuclear waste. That is why I asked General Brent
    Scowcroft and Representative Lee Hamilton to draw on their decades of
    public service and expertise to lead the distinguished Blue Ribbon
    Commission (Commission) to conduct a comprehensive review of policies
    for managing the back end of the nuclear fuel cycle.
        The Commission's recommendations outline a sensible and practical
    approach to solving the challenges associated with the management and
    disposition of commercial and defense nuclear materials. The consensus
    report they produced is a critical step toward finding a sustainable
    approach to disposing used nuclear fuel and nuclear waste. The
    Commission made it clear that, in its judgment, any workable and
    lasting solution for the final disposition of used fuel and defense
    high-level nuclear materials must secure and sustain the consent of the
    communities, States, and/or tribal nation governing officials and the
    public they represent.
        Following the completion of the Commission's report, I asked the
    Assistant Secretary of Nuclear Energy to lead a departmental review of
    its recommendations and develop a strategy that builds on the
    Commission's excellent work. Those efforts are well underway. A
    strategy and action plan that accounts for the Commission's
    recommendations will be conveyed to the Congress by the end of July of
    this year.
        Finally, the President's fiscal year 2013 budget calls for a $60
    million program to support used nuclear fuel disposition. This program
    will build on the fiscal year 2012 $60 million efforts and both are in
    alignment with the near-term activities recommended by the Commission
    during the interim period leading to a renewed national policy and
    strategy.
        Question. Are all of these activities consistent with your
    authority in the Nuclear Waste Policy Act?
        Answer. Yes, these activities being conducted and proposed for
    nuclear fuel disposition in fiscal year 2012 and 2013 are consistent
    with my authority under the Nuclear Waste Policy Act.
              nuclear energy and small modular reactors questions
        Question. Is $65 million of small modular reactors (SMR) licensing
    support enough to continue on the 5-year schedule with two reactors, or
    will the schedule slip or are you now only allowing for one reactor
    design?
        Answer. Yes, the Department believes that $65 million is an
    adequate budget for fiscal year 2013, and does not expect the schedule
    to slip for two reactor projects based on this amount. Because the
    program was not authorized to start until the end of calendar year
    2011, and is currently executing a complex and lengthy financial
    assistance process, the Office of Nuclear Energy (NE) anticipates
    having to carry over most of the fiscal year 2012 funding into fiscal
    year 2013. At that point, approximately $130 million will be available
    to invest in SMR certification and licensing efforts through fiscal
    year 2013. NE believes that this budget can sustain the program through
    fiscal year 2013, but we will need to increase the budget requests in
    the outyears in order to meet the program goals of accelerating the
    completion of the certification and licensing for the awarded projects.
    If additional funding were to be provided in the fiscal year 2013
    budget, there may be opportunities to accelerate the SMR licensing
    schedules.
        Question. Why isn't SMR licensing support just another subsidy, and
    how you plan to leverage the financial resources from private
    industries?
        Answer. The partnerships with industry will be executed as
    financial assistance cooperative agreements that will require our
    selected awardees to contribute 50 percent of the costs involved in the
    design, engineering, and licensing efforts conducted under the project
    scope. The Government contribution is expected to help our industry
    partners accelerate their timelines toward licensing and deployment of
    these SMR reactors. This cost-shared funding arrangement ensures that
    industry is fully sharing the investment risk, and the Department will
    track the projects closely to ensure that our partners are executing
    the work scope and meeting the milestones outlined in the cooperative
    agreements. If the Department finds evidence that the partners are not
    meeting their project commitments, DOE has the option to discontinue
    funding under the agreement.
        Question. Do you believe the United States will benefit from this
    SMR partnership not only domestically but also internationally?
        Answer. Yes, DOE believes that the development of a domestic SMR
    industry can create an economic ripple-effect as SMR units are
    certified and licensed for deployment. Large-scale, fleet level
    deployment of SMRs can act as an engine for domestic economic growth.
    The development of SMRs may be critical as replacements for dozens of
    old coal plants that are expected to be decommissioned within the
    decade. The manufacturing, on-site fabrication, and operation of these
    SMRs can create thousands of mid- to long-term, high-paying jobs. All
    of the domestic SMR designs can be manufactured using existing U.S.
    infrastructure and capability, something that cannot be said of the
    large light water reactor (LWR) designs. The U.S. currently does not
    have the ability to fabricate the large reactor pressure vessel and
    some steam generator forgings. Growth of a domestic SMR technology and
    manufacturing capability may also create an opportunity to increase
    U.S. presence in the nuclear technology export market as U.S.-designed
    and built SMRs are sold overseas.
        Question. Can you discuss what impact of the 50-percent cut to the
    advanced reactor concepts program would be, and how that could impact
    us in the international arena?
        Answer. The Advanced Reactor Concepts R&D program remains an
    important program for the Department. Impacts to sodium-cooled fast
    reactor research and development will be minimized as much as possible
    given this concept's potential role in addressing fuel cycle issues,
    and in order to sustain collaborations conducted under international
    programs such as the Generation IV International Forum and various
    bilateral international agreements. Fuel development efforts that
    support sodium-cooled fast reactor technology also continue under the
    Fuel Cycle R&D budget. We consider it a priority to maintain these
    advanced reactor research international relationships so that we can
    leverage our efforts by sharing the research of our international
    partners. Reflecting difficult resource allocation choices, R&D
    activities associated with lead/lead-bismuth and fluoride high
    temperature reactors will be significantly reduced. The energy
    conversion R&D, which includes supercritical CO2
    turbomachinery and related heat exchangers, will be consolidated under
    the Small Modular Reactor Advanced Concepts R&D Program in fiscal year
    2013.
                          office of science questions
        Question. Why should we continue to fund International
    Thermonuclear Experimental Reactor (ITER) if we can't afford it?
        Answer. We entered the ITER project to take the next step toward
    development of a practical and virtually inexhaustible energy source.
    We understood that no one nation had the financial, technical, and
    scientific resources to build this project on its own. The only
    practical solution was to negotiate and implement an international
    cooperative approach for fusion, which is the ITER Project. The
    conditions that convinced us to join ITER are still valid today.
        The United States has worked with the other country members and
    with the ITER Organization to maintain schedule and cost of the ITER
    Project. DOE has faced and overcome some challenges with ITER, and we
    are confident that the project has the management team in place to
    carry us efficiently through construction. The key to keeping ITER
    affordable is proper management that helps us achieve cost control and
    keep to the schedule. DOE will continue to maintain a close watch on
    the project, both at the ITER Organization and domestically, to ensure
    that we get the maximum value for the taxpayer's money, while working
    to achieve our goal of practical fusion energy.
        Question. In a time of limited resources and the knowledge that our
    budgets won't realistically grow much over the next few years, why are
    you proposing such a big new project in Facility for Rare Isotope Beams
    (FRIB) for something that is such a low priority?
        Answer. FRIB was identified as the highest priority for new
    construction in the 2007 Nuclear Science Advisory Committee Long Range
    Plan and is also one of two targeted outcomes in the DOE 2011 Strategic
    Plan. The DOE strategic outcome is to ``Complete construction of
    nuclear physics facilities by the end of the decade at Jefferson
    Laboratory and Michigan State University to test quantum
    chromodynamics, the theory of nuclear forces, and produce exotic nuclei
    of relevance in astrophysical processes.''
        A total of $51 million has been appropriated for the design and
    construction of FRIB from fiscal years 2009 through fiscal year 2012.
    FRIB will provide an important new capability for nuclear physics
    research in the United States. FRIB will provide intense beams of rare
    isotopes, i.e., short-lived nuclei not normally found on Earth. This
    will enable scientists to make discoveries about the properties of
    these rare isotopes in order to better understand the physics of
    nuclei, nuclear astrophysics, fundamental interactions, and
    applications for the United States. FRIB will increase the number of
    isotopes with known properties from about 2,000 observed over the last
    century to about 5,000 and will provide world-leading research
    capabilities. The fields of nuclear structure and astrophysics will be
    studied at FRIB to provide the link between our understanding of the
    fundamental constituents of nature and the understanding of the matter
    of which we, the Earth, and stars are made. FRIB is essential for
    maintaining a U.S. core competency in nuclear structure and
    astrophysics, which is at the heart of the national nuclear physics
    program. Expertise in these areas is also central to applied fields
    such as energy, security, and medicine.
                   streamlining and reducing costs questions
        Question. Is there a better way to centralize the way the
    individual labs buy goods and services that would better leverage DOE's
    buying power?
        Answer. The Office of Management and Budget (OMB) by memorandum
    dated May 20, 2005, mandated the use of strategic sourcing on a Federal
    Governmentwide basis. This directive required all Federal Government
    agencies to implement the concepts of strategic sourcing; ``a
    collaborative and structured process of critically analyzing an
    organization's spending and using this information to make business
    decisions about acquiring commodities and services more effectively and
    efficiently, to the maximum extent practicable.''
        In 1997, prior to issuance of the aforementioned OMB guidance, DOE
    recognized a majority of its procurement dollars flowed through its
    laboratory contracts and subsequently through subcontracts. To better
    leverage DOE's buying power, the Department established the Integrated
    Contractor Purchasing Team (ICPT), comprised of DOE management and
    operating contractors collaborating to produce acquisition ordering
    instruments for common products and services used across DOE. This
    complex-wide, contractor-led strategic sourcing program has achieved
    tens of millions of dollars in savings over the years. DOE has
    continued to emphasize use of the established ICPT commodity
    agreements, which contain pre-established favorable pricing, and are
    available for all DOE sites to purchase commercially available
    supplies. The National Nuclear Security Administration (NNSA) also
    determined it needed an enterprise-wide organization to address the
    needs of its unique supply chain. Consequently, in 2006 it established
    a contractor-led, strategic sourcing organization called the Supply
    Chain Management Center (SCMC). The SCMC's mission is to implement the
    NNSA strategic sourcing strategy of operating as an integrated nuclear
    complex. The SCMC has improved efficiencies and economies across the
    complex and is saving considerable amounts of money through the use of
    commercial best practices, shared software solutions, and leveraging
    NNSA's purchasing power.
        In 2010, Deputy Secretary Poneman issued a memorandum to all Heads
    of Departmental Elements, directing them to adopt a corporate approach
    to purchasing that necessitates close collaboration between the DOE
    programs and the contractor community. It noted the successful
    implementation of NNSA's Supply Chain Management strategies and
    discussed the potential benefits of expanding the initiative across the
    Department. Coordinating commodity management across the complex would
    help to achieve better pricing from suppliers, ensuring uniform prices
    for comparable goods and services, and streamlining and reducing the
    total cost of acquisition. The structured process of analyzing spending
    patterns across the entire department and utilizing this information to
    acquire commodities and services more efficiently could ultimately
    result in even greater cost savings.
        In 2012, the Office of Environmental Management (EM) determined it
    would be advantageous to utilize the SCMC to integrate its supply chain
    to achieve similar results. Although early in the implementation
    process, success is already being realized at EM sites. EM also avoided
    duplication of costs by utilizing the existing SCMC capabilities and
    infrastructure rather than developing and deploying a separate
    comparable program.
        Question. You have had success using the Supply Chain Management
    Center for NNSA, why can't this model be applied to all the national
    labs?
        Answer. Office of Management and Budget (OMB) memorandum dated July
    29, 2009, mandated that Federal agencies improve Government acquisition
    by developing more strategic acquisition approaches to leverage buying
    power and achieve best value for the taxpayer. Specifically, it
    directed agencies to; ``increase their participation in government-wide
    strategic acquisition initiatives, including strategic sourcing
    initiatives that reduce costs for all agencies by leveraging the
    Government's buying power and, where appropriate, expand their use of
    enterprise-wide strategic acquisition initiatives that offer
    significant savings opportunities from both business process
    improvements and access to lower product and service costs.''
        DOE might improve upon its success by applying the SCMC model to
    the remaining national labs, but it is not known to what extent it is
    feasible to do so. As discussed in the response to question 28-2, EM
    has determined it would be advantageous to utilize the SCMC to
    integrate its supply chain in an attempt to achieve similar results.
    Although early in the implementation process, success is already being
    realized at EM sites. The Office of Science (SC) has made a
    determination that its labs already have a sufficient Strategic
    Sourcing Program in place and it would not be cost effective to
    implement the SCMC model at its sites. In a study completed by the
    Office of Science, it determined that; ``given the evolved state of
    supply chain activities at many SC labs, combined with available
    commercial resources, a parallel structure tuned to the differing SC
    mission is a better alternative than wholesale participation in SCMC.''
    The report concludes that through the strategic efforts of its labs,
    ``SC successfully generates equal or better savings on commodities, as
    compared to the SCMC eStore.'' It also concludes that the ``SC labs
    obtain competitive and negotiated cost savings on par with the results
    of the SCMC eSourcing tools,'' although they concede ``they may benefit
    from selected use of a reverse auction tool.'' Essentially, SC has
    determined that by utilizing the existing Integrated Contractor
    Purchasing Team (ICPT) commodity agreements and the labs' own internal
    site specific sourcing capabilities, it is as effective as the SCMC at
    leveraging the SC buying power and ultimately generating sufficient
    cost savings.
        Coordinating commodity management across the complex would help to
    achieve better pricing from suppliers, ensuring uniform prices for
    comparable goods and services, and streamlining and reducing the total
    cost of acquisition. The current process includes cross-representation
    between the ICPT and the SCMC to ensure an enterprise look at spend
    data. The structured process of analyzing spending patterns across the
    entire department and utilizing this information to acquire commodities
    and services more efficiently could ultimately result in even greater
    cost savings.
                                     ______

                   Question Submitted by Senator Thad Cochran
        Question. The Department is targeting a significant amount for
    investment into high-risk, high-reward renewable energy alternatives,
    perhaps at the expense of research at the national labs and in
    partnership with institutions of higher education. In the biofuels
    arena, many of these technologies require significant developments and
    investment in feedstock supply infrastructure. Mississippi, for
    example, has a surplus of southern yellow pine that remains readily
    available and proven commercial viability.
        Might it be more prudent to invest in alternatives that have the
    necessary components for economic viability in the near-term while
    using the research sector and National Lab system to further refine and
    advance technologies until they are much closer to commercialization?
        Answer. The Department of Energy invests in research, development,
    and deployment across a wide variety of technologies at many stages of
    development. The Office of Science is the lead Federal entity
    supporting fundamental scientific research for energy and the Nation's
    largest supporter of basic research in the physical sciences. Advanced
    Research Projects Agency-Energy (ARPA-E) focuses exclusively on high-
    risk, high-payoff concepts, filling a former gap in the Department's
    portfolio. For applied energy technologies, the Office of Fossil
    Energy, Office of Nuclear Energy, Office of Energy Efficiency and
    Renewable Energy, and the Office of Electricity Delivery and Energy
    Reliability carry out targeted, use-inspired research and development,
    as well as a variety of deployment projects for energy sources that
    have strong potential for economic viability in the near-term. In each
    case, the blend of activities is selected through careful program
    management and regularly re-evaluated for effectiveness. These programs
    also work with a variety of university, National Lab, and private
    company partners based on the maturity and characteristics of the
    technology or system.
        Biomass resources are available in every county in the United
    States, making them one of the most universal opportunities. However,
    as with the yellow pine in Mississippi, many specific geographic and
    technical issues need to be explored for different location. The Office
    of Biomass Program works on feedstock logistics issues in partnership
    with local universities and companies. Some example projects are
    described in this fact sheet: http://www1.eere.energy.gov/biomass/pdfs/
    feedstocks_four_pager.pdf.
                                     ______

                  Question Submitted by Senator Susan Collins
        Question. Secretary Chu, my support for New Strategic Arms
    Reduction Treaty (New START) was influenced in part by the
    administration's commitment to modernize the U.S. nuclear weapons
    complex. During Senate consideration of the treaty in November 2010,
    the President announced his commitment to increase funding for nuclear
    modernization activities by $4.1 billion during the next 5 years.
        However, the budget request for fiscal year 2013 for Weapons
    Activities is $372 million less than was projected in the President's
    Section 1251 Plan as delivered in November 2010. If we fund Nuclear
    Weapons Activities at the amounts proposed in the President's budget
    request for the next 5 years, the total investment to the nuclear
    complex will be $4.3 billion less than the President committed to
    Senators during the debate on New START. This is where we were before
    New START.
        As you can imagine, this change of course in the investment in the
    safety, security, and reliability of our nuclear stockpile raises
    doubts and concerns about the administration's commitments.
        Secretary Chu, how would you respond to the concern many of us have
    on this issue?
        Answer. The administration, including the Department of Energy
    (DOE)/National Nuclear Security Administration (NNSA) leadership,
    remains committed to programs and capabilities outlined in the 1251
    report and fiscal year 2012 Stockpile Stewardship and Management Plan.
        If approved by the Congress, the President's budget for fiscal year
    2013 will be the third consecutive increase in Weapons Activities,
    resulting in an 18.6 percent increase for Weapons Activities since the
    fiscal year 2010 budget. While this is less than projected in last
    year's budget submission and the 1251 report, the request reflects a
    new fiscal climate in Washington, embraced by both the Congress and the
    administration.
        Last year, the Congress passed the Budget Control Act (BCA), which
    limits discretionary spending for the next decade, and caps national
    security spending in fiscal year 2012 and 2013. In fiscal year 2012,
    the Congress also reduced NNSA's request for Weapons Activities by $416
    million below the President's request, or 5.4 percent.
        NNSA must adjust to this new reality. But the agency and the
    administration remain committed to necessary investments in nuclear
    capabilities and the nuclear complex.
                                     ______

                 Questions Submitted by Senator Lisa Murkowski
        Question. As you are aware, the authorization in Public Law 106-392
    to use power revenues to fund the Upper Colorado Recovery
    Implementation Plan expired at the end of fiscal year 2011. Currently,
    the Congress is working on legislation to address the reauthorization
    of this Program. However, the administration's fiscal year 2013 budget
    addresses this funding, saying ``In the absence of legislation to
    extend this specific authority, Reclamation may rely on existing
    authority to continue the use of Center for Revolutionary Solar
    Photoconversion (CRSP) hydropower revenues or use appropriated funds to
    ensure full base funding.''
        Is it the intent of the administration to continue to use power
    revenues without an authorization?
        Answer. This question should be redirected to the Department of the
    Interior for a response. The referenced administration language comes
    from the U.S. Bureau of Reclamation's fiscal year 2013 budget
    submission and they would be the most appropriate agency to address
    questions related to that request.
        Question. If so, please describe what ``existing authority'' is
    being referred to in your budget request.
        Answer. This question should be redirected to the Department of the
    Interior for a response. The referenced administration language comes
    from the U.S. Bureau of Reclamation's fiscal year 2013 budget
    submission and they would be the most appropriate agency to address
    questions related to that request.

                              SUBCOMMITTEE RECESS

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

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

                           WEDNESDAY, MARCH 21, 2012

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:32 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Dianne Feinstein (chairman)
    presiding.
        Present: Senators Feinstein and Alexander.

                              DEPARTMENT OF ENERGY

                    National Nuclear Security Administration

    STATEMENT OF THOMAS P. D'AGOSTINO, ADMINISTRATOR

                 OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

        Senator Feinstein. Good afternoon, ladies and gentlemen,
    and welcome to the Energy and Water Subcommittee's hearing on
    the National Nuclear Security Administration's (NNSA) fiscal
    year 2013 budget request.
        NNSA has requested $11.536 billion for fiscal year 2013.
    Now, that's an increase of $536 million, or 5 percent from
    fiscal year 2012 levels.
        If the budget request were enacted, NNSA would see an
    increase of $1.7 billion, or 17 percent in just 3 years. This
    increase is particularly noteworthy because the rest of the
    Department of Energy (DOE) would be down $1.5 billion, or 9
    percent, compared to fiscal year 2010, and NNSA is making up a
    larger share of total spending. It's 42 percent of total
    spending for this portfolio in 2013 compared to 36 percent in
    fiscal year 2010.
        Regarding nuclear weapons activities, I believe the fiscal
    year 2013 budget request provides more than sufficient funding
    to modernize the nuclear weapons stockpile. Some of my Senate
    and House colleagues have raised concerns that the budget
    request falls short and more funding is needed. I do not agree.
        However, I would like to highlight management issues that
    raise serious concerns about NNSA's ability to contain costs
    and effectively spend taxpayer dollars at the request level,
    let alone at higher levels.
        First, NNSA's projects are over-budget. The most recent
    examples of significant cost increases and schedule slips
    include the cost of a new uranium facility at Y-12 in
    Tennessee, known as the Uranium Processing Facility (UPF). This
    has grown from $600 million to $6 billion. It is 10 times more
    expensive than originally projected.
        The B61 life extension program is expected to be $1 billion
    to $2 billion more than originally projected, and 2 years
    behind schedule.
        The cost of a new plutonium facility at Los Alamos, which
    has now been delayed, grew from $660 million to $5 billion, six
    times more expensive than originally projected, and is facing a
    7-year delay.
        Finally, the cost of a new facility to downblend pit
    plutonium into commercial nuclear fuel at Savannah River in
    South Carolina grew from $1.4 billion to $5 billion, four times
    more expensive than originally projected, and 14 years behind
    schedule. And the list goes on.
        It is clear, to me at least, that NNSA does not have good
    cost-estimating practices, making it impossible to determine
    the actual cost of a project, and whether the benefit outweighs
    the costs. The solution for these cost increases cannot be
    solely providing more and more funding.
        Second, when NNSA completes a project, it reduces the scope
    of its work and delivers less than promised. For example, NNSA
    claimed when it completed life-extension activities for the
    W87, and a major component of the B61 bomb, on time and on
    budget, but only because it refurbished hundreds of weapons
    less than originally planned.
        Even more worrying is that as costs go up, NNSA is reducing
    the capabilities of new facilities, and not properly
    communicating the changes to the Congress.
        A Government Accountability Office (GAO) report that will
    be issued on Monday, which I requested, found that the cost of
    building a new plutonium facility as Los Alamos would cost six
    times more than projected. However, NNSA would have eliminated
    certain critical capabilities that were part of the original
    project scope to avoid even more cost increases.
        For example, the facility would not have been able to
    accommodate other plutonium-related missions for homeland
    security and nuclear nonproliferation. The result may have been
    requests for even more funding at a later date to build more
    facilities, to house capabilities that should have been
    included in the plutonium facility.
        Third, NNSA has failed to assess alternatives before
    embarking on multi-billion dollar projects. I know this is
    harsh, but if you can prove what's being said is not correct, I
    would like to hear it.
        NNSA has just terminated or delayed two major construction
    projects after spending $1.5 billion only to conclude that it
    could use existing facilities to meet mission requirements.
    Those funds could have been better spent on other nuclear
    weapons and nonproliferation activities, and it raises
    questions about the return on the taxpayers' investment.
        At a time of fiscal constraint, NNSA must be more cost-
    conscious and do a better job developing realistic and credible
    cost estimates for major projects, or else cost overruns and
    schedule delays will undermine the nuclear modernization agenda
    and nonproliferation goals.
        While the nuclear weapons program receives a significant
    budget increase, I am concerned about potential funding
    shortfalls for nonproliferation activities, which address the
    highest risk to the United States, nuclear terrorism.
        Just yesterday, NNSA announced that it removed all weapons
    useable nuclear material from Mexico, the seventh country in
    only 3 years to achieve that milestone. This is an example of
    why we need to maintain momentum in removing dangerous
    materials.
        I'm concerned about unanticipated delays in implementing
    nonproliferation activities that detect nuclear smuggling and
    secure vulnerable nuclear materials. Efforts to install
    detection equipment at strategic international borders and
    shipping ports to prevent nuclear and radiological smuggling
    have had their budgets cut by $171 million. The plan up to a
    few months ago was to accelerate efforts to deploy detection
    equipment at 650 sites in 30 countries and 100 international
    seaports by the end of 2018. NNSA has now decided to take a
    strategic pause and delay activities to deploy this equipment.
    NNSA must explain this change of implementation, especially
    when nuclear trafficking remains a serious concern.
        According to the International Atomic Energy Agency, there
    were 147 incidents of nuclear smuggling in 2011. Four incidents
    involved significant quantities of highly enriched uranium, one
    of the main ingredients for a nuclear weapon. One of these
    incidents was related to an attempted sale of this material.
        I'm equally concerned about delays in converting or
    shutting down reactors around the world that use highly
    enriched uranium. Up to a few months ago, the original plan was
    to accelerate these conversions and shut down or convert 200
    research reactors by 2022. The goal has now been delayed by 3
    years to 2025.
        This delay is troubling because these research reactors are
    not well protected. The only way to reduce the risk of nuclear
    threat at these facilities to zero is to make sure there is no
    usable weapons material left there to steal. This requires
    shutting down or converting these reactors as quickly as
    possible so that we can remove the material permanently.
        Finally, I am worried that delays in implementing these
    nonproliferation programs will lead to further delays as
    budgets are more restrained. While modernizing the nuclear
    weapons stockpile is important, it cannot come at the expense
    of nonproliferation activities.
        Joining us today to explore these important national
    security issues is Tom D'Agostino, the administrator of the
    NNSA. Before calling on Mr. D'Agostino, I would like to
    recognize my wonderful friend and colleague with whom, over
    many years, it's been such a great pleasure to work, Senator
    Alexander, for any remarks he would care to make.

                      STATEMENT OF SENATOR LAMAR ALEXANDER

        Senator Alexander. Thank you, Madam Chairman, Mr.
    D'Agostino. I want to thank the Chairman. It's a joy to work
    with her. We actually work on getting results, and we work
    together, and we explore our differences of opinion. I have a
    good friend who said we had a good 35-year partnership, and he
    said it was due to the fact that we had many differences of
    opinion, but never a disagreement. So that's not a bad way to
    work.
        I want to pick up on what Senator Feinstein said about cost
    overruns in big projects. And, Mr. Administrator, you and I
    have talked about this before. When you've been a Governor or
    maybe even a mayor, you have stories. And one of mine is that
    when I was running for Governor, we were about to have a
    World's Fair in Knoxville, and the Chamber of Commerce
    president was deeply concerned that the interstate road
    construction wouldn't get done in time for the World's Fair,
    and he wanted it to be my priority, if I were elected. I said,
    ``Well, how would you do it if you were me?'' And he said,
    ``Well, I would find the very best person you could to put in
    charge of it, I would agree upon a plan, and then I'd meet with
    him once a month, and I'd ask him whether it was on time and on
    budget.''
        So after I was elected, I went back to the Chamber of
    Commerce head, and I invited him, and he agreed to be the head
    of the highway department. And he developed a plan, and we met
    once a month, and it got done.
        And that sounds awfully simple, but it's the kind of
    accountability that, Mr. Administrator, you're accustomed to as
    a Navy man. I mean that's why our nuclear submarines have
    really never had a death in terms of the operation of the
    reactors there since the 1950s. And I'm sure it's because
    Admiral Rickover said the captain, the commander, has the full
    responsibility for this. And everybody knows that their career
    in the Navy depends upon the safe operation of the reactor and
    the proper operation of the reactor.
        So Senator Feinstein went through several of these huge
    projects that we have, and no one doubts the complexity and
    difficulty of them, and they're very expensive, but she's
    right. I mean, we think about the uranium project at Y-12 in
    Oak Ridge, it seemed like every time I asked about it, it went
    up another $500 million in cost, literally.
        And so, Madam Chairman, I'm thinking just for myself, and
    maybe this is something that you and I would want to do
    together, or maybe not, but the UPF under the Administration's
    proposals has now been moved front and center. And there's a
    proposal to make phase one of it, which will probably cost in
    the neighborhood of $5 billion, the front-and-center project.
    And it's supposed to be done by 2019, and we're supposed to
    know by the end of the year. I think 90 percent of the design
    should be done by then, and at that point, we should be able to
    fix a cost.
        And it would seem to me that maybe one way to deal with
    this is, by the end of the year, fix the cost, if we agree with
    the phase one proposal, and if it's properly funded, and agree
    with the administrator on a timeline and a cost, and then I,
    for one, would like to meet with him, maybe once a quarter, for
    about an hour just for the purpose of asking the question,
    ``Are you on time, and are you under-budget?''
        Senator Feinstein. That's a good idea.
        Senator Alexander. And just do that all the way through.
    And maybe that would be true with some of the other big
    projects, and see by focusing attention on them, we can help do
    that, because a United States Senator cannot, and I don't think
    should, try to manage anything of that complexity. But our
    responsibility in oversight is to try to protect the taxpayer
    dollars, and we have so many urgent needs within just this
    budget that if we can save money, we've got a place to put it
    or to reduce the debt, which we have in our country today.
        For example, I'm concerned, the Senator mentioned the
    funding for nuclear modernization. It is true; we're $363
    million above last year, a lot of money, based upon the
    President's recommendation. But we're $372 million below where
    we, just a couple of years ago, said we should be and where the
    Department of Defense (DOD) says we should be.
        So I want to explore that in my question time as well. I'll
    wait for my question time to go into these issues. But my major
    concerns are, number one, these big projects and making sure
    that we have an agreed-upon cost, and agreed-upon timeline, and
    an accountability for whose job it is to see to it that it's
    done.
        I want to know, if we're not going to go forward with the
    facility in New Mexico right now, who's going to do the work
    that needs to be done on plutonium, and how much is it going to
    cost?
        I want to make sure that on the uranium facility at Oak
    Ridge, that as you go through a competition for management--and
    that's your prerogative to do that; it's a part of keeping
    everybody honest and making the taxpayer secure--but I want to
    make sure that all of the effort that surrounds a competition
    of such a major effort does not interfere with whatever we
    agree upon should be the timeline and the cost of what may be
    a--I don't want to say a number, because I hope it's lower than
    this--a $5 billion or so phase one of the UPF.
        So those are important issues. I thank you for your
    service. And I look forward to your testimony and to have a
    chance to follow up with questions.
        Senator Feinstein. Thank you very much, Senator Alexander.
        Mr. D'Agostino, you're on.

                   SUMMARY STATEMENT OF THOMAS P. D'AGOSTINO

        Mr. D'Agostino. Chairman Feinstein and Ranking Member
    Alexander, good afternoon and thank you for having me here
    today to discuss the President's fiscal year 2013 budget
    request. Your ongoing support for the men and women of the NNSA
    and the work they do, and your bipartisan leadership on some of
    the most challenging national security issues of our time, has
    kept American people safe, helped protect our allies, and
    enhanced global security.
        Last month, President Obama released his budget for fiscal
    year 2013. Due in part to constraints established by the Budget
    Control Act, this is a time of fiscal austerity. We recognize
    that. I want to assure you that the NNSA is being thoughtful,
    pragmatic, and efficient on how we achieve the President's
    nuclear security objectives and shape the future of nuclear
    security.
        We have continuously improved the way we operate, and we
    are committed to doing our part in this constrained budget
    environment.
        In April 2009 in Prague the President shared his vision and
    the united approach for our shared nuclear security goals. The
    request for NNSA is $11.5 billion, which is an increase of $536
    million over the fiscal year 2012 appropriation.
        This request reaffirms our commitment to building a 21st
    century nuclear security enterprise through innovative
    approaches to some of our greatest security challenges with key
    investments in our infrastructure.
        We're continuing our critical work to maintain the
    stockpile and ensuring that as long as nuclear weapons exist,
    they remain safe, secure, and effective. And this budget
    request provides $7.58 billion for our weapons activities
    account to implement the President's strategy in coordination
    with our partners at the DOD.
        The President continues to support our life extension
    programs, including funding for the B61 activities. He also
    requested increased funding for out stockpile systems for the
    W78 and 88 life-extension study, which I discussed with you
    last year.
        Our request for investment in science, technology, and
    engineering that supports NNSA's mission will ensure that the
    national security laboratories continue to lead the world in
    advanced scientific capabilities. For over a decade, we've been
    building the tools and capabilities we need to take care of the
    stockpile. And in fact, not just take care of the stockpile,
    but support the whole range of nuclear security work.
        We're now entering into a time when NNSA will fully utilize
    the analytical tools and capabilities towards the mission of
    maintaining a safe, secure, and effective stockpile, and
    perform the necessary life-extension work. These capabilities
    provide a critical base for our nuclear nonproliferation and
    counterterrorism work, allowing us to apply our investments to
    the full scope of our mission.
        The President's budget also reflects his commitment to
    completing key dismantlements with $51.3 million requested in
    2013 to continue to reduce the number of legacy of nuclear
    weapons retired from stockpile.
        We've previously committed to completing the dismantlement
    of all warheads retired as of fiscal year 2009 by completing
    this work by fiscal year 2022.
        Last year, NNSA completed the dismantlement of the last B53
    nuclear bomb, one of the largest ever built, ahead of schedule
    and under budget. We also eliminated the last components of the
    W70 warhead, which was originally in the U.S. Army arsenal.
        To support our stockpile and provide us with world-class
    capabilities, we need to modernize our cold war-era facilities
    and maintain the Nation's expertise in uranium processing and
    plutonium research.
        This budget includes $2.24 billion to maintain our
    infrastructure and execute our construction projects.
        As you know, our deterrent is only one part of the NNSA's
    mission. 2013 will see us continue to advance the President's
    4-year goal to secure the most vulnerable nuclear material
    around the world. And the budget request provides $2.46 billion
    we need to continue critical nuclear nonproliferation efforts.
        Our continued focus on innovative and ambitious
    nonproliferation and nuclear security is vital. The threat is
    not gone, and the consequences of nuclear terrorism and state
    proliferation would be devastating.
        Detonation of a nuclear device anywhere in the world would
    lead to overwhelming economic, political, and psychological
    consequences. We must remain committed to reducing the risk of
    terrorism and state-sponsored or state-based proliferation.
        Anne Harrington and I will be leaving for Seoul, South
    Korea, very soon, where the President and more than 50 world
    leaders will renew their commitment to nuclear security at the
    2012 Nuclear Security Summit.
        We know there's no silver-bullet solution, which is why
    we'll continue to implement a multilayered strategy to
    strengthen the security of nuclear material around the world by
    removing or eliminating it where we can; consolidating and
    securing the material, if elimination is not an option;
    reducing the civilian uses of highly enriched uranium,
    particularly for research in medical isotope production where
    low-enriched uranium options exist or can be developed; and
    maintaining our commitment to detecting and deterring nuclear
    smuggling.
        NNSA has also helped American sailors reach destinations
    across the globe safely and reliably for decades through our
    Naval Reactors program. The $1.1 billion in the 2013 request
    will support the effort to complete the Ohio-class replacement
    submarine, and to modernize key elements of our infrastructure.
        Support for the President's request is key in our ability
    to support the nuclear Navy. This budget request also gives us
    the resources we need to maintain our one-of-a-kind emergency
    response capabilities, which allow us to respond to a nuclear
    or radiological event anywhere in the world and anticipate the
    future of nuclear counterterrorism and counterproliferation.
        I told you a lot about our plans and budgets, and I'd like
    you to know that we are committed to being responsible stewards
    of our taxpayer dollars. We've taken steps to ensure that we're
    building a capabilities-based infrastructure. We view this
    constrained budget environment as an additional incentive to
    ask ourselves how can we rethink the way we're operating, how
    can we further innovate and improve our business processes?
        We're adjusting our plutonium strategy by deferring the
    construction of the chemistry and metallurgy research
    replacement facility, the nuclear portion, and focusing instead
    on how we can meet our plutonium needs on an interim basis by
    using the capabilities and expertise found at existing
    facilities.
        Deferring this project will have an estimated cost
    avoidance of approximately $1.8 billion over the next 5 years,
    which will help offset the costs of other priorities, such as
    weapon life-extension programs and the nuclear security work
    that we have to do around the world.
        We're not resting on old ideas to solve tomorrow's
    problems. We're shaping the future in a fiscally responsible
    way. Budget uncertainty adds costs and complexity on how we
    achieve our goals. You've been very supportive of our efforts
    in the past, and I ask again for your help in providing the
    stability we need to do our jobs effectively and efficiently.
        I'm proud of the work that we do everywhere, that the men
    and women of the NNSA have done around the world. And we're
    defining ourselves, and we're continuing to push ourselves into
    an integrated and interdependent enterprise, one that's not
    based on geography, but one that's based on capabilities that
    need to be maintained.
        We're implementing new business processes by looking at
    International Standards Organization (ISO) 9001 standards, and
    looking to the future via a detailed workforce analysis to make
    sure we have the right people we need in the right jobs,
    particularly in the project management area, which is so
    important.
        And finally, we've created an acquisition and project
    management organization to help institutionalize our commitment
    to improving the way we do business, to integrate project
    management and the acquisition experts, because those two
    fields overlap with each other and have a long--and will be a
    great determiner on how successful we are in pulling our
    projects together.

                               PREPARED STATEMENT

        Finally, in my role as Under Secretary of Energy for
    Nuclear Security, I've made better coordination of the
    Department's environmental management programs in the NNSA and
    the Office of Legacy Management as one of my priorities.
        We have great opportunities in this area. And I look
    forward to any question in this particular area.
        Thank you again for having me today, and I'm happy to
    answer any questions that you may have.
        [The statement follows:]
                   Prepared Statement of Thomas P. D'Agostino
                                  introduction
        Chairman Feinstein, Ranking Member Alexander, and members of the
    subcommittee: good afternoon and thank you for having me here to
    discuss the President's fiscal year 2013 budget request. Your ongoing
    support for the men and women of National Nuclear Security
    Administration (NNSA) and the work they do, and your bipartisan
    leadership on some of the most challenging national security issues of
    our time, has helped keep the American people safe, helped protect our
    allies, and enhanced global security.
        Earlier this month, President Obama released his budget for fiscal
    year 2013. As you know, due in part to the constraints established by
    the Budget Control Act, this is a time of fiscal austerity. I want to
    assure you that NNSA is being thoughtful, pragmatic, and efficient in
    how we achieve the President's nuclear security objectives and shape
    the future of nuclear security. We have continuously improved the way
    we operate, and we are committed to doing our part in this constrained
    budget environment.
      achieving the president's nuclear security objectives, shaping the
                                     future
        In April 2009 in Prague, President Obama shared his vision for a
    world without nuclear weapons, free from the threat of nuclear
    terrorism, and united in our approach toward shared nuclear security
    goals. The President's fiscal year 2013 request for NNSA is $11.5
    billion, an increase of $536 million, or 4.9 percent, more than the
    fiscal year 2012 appropriation. The request reaffirms the national
    commitment to his vision, applying world-class science that addresses
    our Nation's greatest nuclear security challenges and building NNSA's
    21st century nuclear security enterprise through key investments in our
    people and infrastructure, including the revitalization of our existing
    facilities.
        We are doing this in a number of key ways. We are continuing our
    critical work to maintain the Nation's nuclear stockpile, and ensuring
    that, as long as nuclear weapons exist, the stockpile is safe, secure,
    and effective. The fiscal year 2013 budget provides $7.58 billion for
    our weapons activities account, an increase of 5 percent more than
    fiscal year 2012, to implement the President's strategy in coordination
    with our partners at the Department of Defense (DOD).
        The President continues to support our life extension programs
    (LEPs) including funding for B61-12 activities in response to the
    Nuclear Weapons Council's (NWC) anticipated approval and entry into
    Phase 6.3 Development Engineering. He has also requested increased
    funding for our stockpile systems to support the W78 and W88 life-
    extension study, which I discussed with you last year.
        The President's budget also reflects his commitment to completing
    key dismantlements, with $51.3 million requested in fiscal year 2013 to
    continue reducing the number of legacy nuclear weapons retired from the
    stockpile. NNSA has previously committed to completing the
    dismantlement of all warheads retired as of fiscal year 2009 by fiscal
    year 2022, and we continue to be on a path to do that. In fact, in
    fiscal year 2011, NNSA completed the dismantlement of the last B53
    nuclear bomb, one of the largest ever built, ahead of schedule and
    under budget. We also eliminated the last components of the W70 warhead
    which was originally in the U.S. Army's arsenal.
        Our request for investments in the science, technology, and
    engineering that support NNSA's missions will ensure that our national
    security laboratories continue to lead the world in advanced scientific
    capabilities:
      --$150.6 million is requested for our engineering campaign, which
            reflects the need for validation-related testing and surety
            options required for current and future refurbishments;
      --$350.1 million is requested for our science campaign, expanding and
            refining our experiments and capabilities, which coupled to
            simulation, improves our confidence in and broadens the
            national security application of our predictive capabilities;
            and
      --$460 million is requested for our inertial confinement fusion and
            high-yield campaign, to operate NNSA's suite of world-leading
            high-energy density facilities--National Ignition Facility
            (NIF), Omega, and Z--to support stockpile stewardship in a safe
            and secure manner.
        The Advanced Simulation and Computing (ASC) Campaign's request of
    $600 million is required for the continued improvement of full-system
    calculations and metric suites that are essential to annual assessments
    and also to future stockpile changes. Our capabilities directly impact
    our stockpile by generating incredibly sophisticated models against
    which we can validate our nuclear weapons codes. Not only has
    supercomputing helped us solve some existing questions such as energy
    balance, it also allows us to plan for issues that impact the future
    health of our deterrent--aging, component lifetimes, and new models for
    abnormal and hostile environment certification. Supercomputing is
    critical for life extension programs and stockpile modernization--the
    implementation of various concepts such as reuse and enhanced
    multipoint safety are only possible with the power of ASC platforms.
        For more than a decade, NNSA has been building the science,
    technology, and engineering tools and capabilities needed to take care
    of the stockpile. We are now entering a time when we will fully utilize
    these analytical tools and capabilities towards the mission of
    maintaining a safe, secure, and effective stockpile and performing the
    necessary life-extension work. These capabilities also provide the
    critical base for nonproliferation and counterterrorism work, allowing
    us to apply our investments to the full scope of our mission.
        To support our stockpile and to continue producing the world-class
    capabilities we need to modernize our cold war-era facilities and
    maintain the Nation's expertise in uranium processing and plutonium
    research. This budget includes $2.24 billion to maintain our
    infrastructure and execute our construction projects.
        The President also requests support for infrastructure improvements
    necessary to maintain the stockpile well into the future. Major efforts
    include extending the life of enduring facilities needed for directed
    stockpile work (DSW) and science, technology, and engineering (ST&E)
    program requirements, construction of the Uranium Processing Facility
    at Y-12, and construction of the transuranic (TRU) Waste Facility at
    Los Alamos National Laboratory. Funding will also provide for the start
    of construction of the Electrical Infrastructure Upgrades project at
    Lawrence Livermore and Los Alamos National Laboratories, and continued
    construction activities for various projects at Los Alamos and Sandia
    National Laboratories, the Y-12 National Security Complex, and Pantex.
    The budget request also includes the resources we need to ensure a
    comprehensive physical and cyber security posture that provides strong
    security to support NNSA missions--protecting our nuclear materials,
    facilities, and information.
        However, our nuclear deterrent is only one part of NNSA's mission.
    Our nonproliferation programs perform an equally critical function. One
    of our most important missions has been to support the administration's
    commitment to secure the most vulnerable nuclear material across the
    globe in 4 years. Our accomplishments in securing plutonium and highly
    enriched uranium around the world have made it significantly more
    difficult to acquire and traffic the materials required to make an
    improvised nuclear device, and I am proud to say that we are on track
    to meet our goals to remove or dispose of 4,353 kilograms of highly
    enriched uranium and plutonium in foreign countries and equip
    approximately 229 buildings containing weapons-usable material with
    state-of-the-art security upgrades.
        The Defense Nuclear Nonproliferation budget request provides the
    $2.46 billion to continue these and other critical nonproliferation and
    nuclear security efforts. Our continued focus on innovative and
    ambitious nonproliferation and nuclear security efforts is vital. The
    threat is not gone, and the consequences of nuclear terrorism and state
    proliferation would be devastating. Detonation of a nuclear device
    anywhere in the world would lead to significant loss of life and
    overwhelming economic, political, and psychological consequences. We
    must remain committed to reducing the risk of nuclear terrorism and
    state-based proliferation.
        But there is no silver bullet solution, which is why we will
    continue to implement a multilayered strategy to strengthen the
    security of nuclear material around the world by removing or
    eliminating it when we can; consolidating and securing it if
    elimination is not an option; reducing the civilian use of highly
    enriched uranium particularly for research and medical isotope
    productions where low-enriched uranium options exist of can be
    developed; and maintaining our commitment to detecting and deterring
    nuclear smuggling. Many of you are familiar with the significant
    contributions NNSA's Second Line of Defense program has made to the
    worldwide effort to combat nuclear trafficking. In light of the
    constrained budget environment that we find ourselves in, NNSA has
    initiated a strategic review of the program to evaluate what
    combinations of capabilities and programs make the most effective
    contribution to national security.
        We will continue to research and develop tools and technologies to
    detect the proliferation of nuclear materials as well as nuclear
    detonations. We will provide technical support and leadership to our
    interagency colleagues during the negotiation and implementation of
    arms control treaties, as we did with New Strategic Arms Reduction
    Treaty (New START). We will expand on our ongoing efforts to strengthen
    the capabilities of our foreign partners to implement international
    nonproliferation and nuclear security norms, and support the critically
    important work of the International Atomic Energy Agency. We will
    continue to play a supporting role in the negotiation of Peaceful
    Nuclear Cooperation Agreements (123 Agreements), which are so crucial
    for achieving our nuclear nonproliferation and trade objectives.
        The President's fiscal year 2013 budget request also keeps focus on
    our commitment to eliminate U.S. excess weapons materials and supports
    the Mixed Oxide (MOX) Fuel Fabrication Facility and Waste
    Solidification Building at the Savannah River Site in South Carolina.
    The $569.5 million committed to the MOX and related
    activities this year will lead to the permanent elimination of enough
    plutonium for at least 8,500 nuclear weapons, which will be matched by
    similar commitments by the Russian Federation. We have eliminated the
    line item for a Pit Disassembly and Conversion Facility for the
    MOX program, opting instead for a preferred alternative
    approach to producing feedstock that is much less costly by utilizing
    existing facilities at the Savannah River Site and Los Alamos National
    Laboratory.
        In addition, the fiscal year 2013 budget request gives us the
    resources we need to maintain our one-of-a-kind emergency response
    capabilities, which allow us to respond to a nuclear or radiological
    incidents anywhere in the world. In fiscal year 2011, we were able to
    assist the United States military, military families, and the Japanese
    people by deploying our unique emergency response assets in the
    aftermath of devastating tsunami that affected the Fukushima Daiichi
    Nuclear Power Plant.
        In response to the President's concern regarding the threat of
    nuclear terrorism, which is also a key goal within the 2010 Nuclear
    Posture Review, we have established a new organization that is now the
    focal point for all counterterrorism and counter proliferation
    activities within NNSA. This organization, the Office of
    Counterterrorism and Counterproliferation, not only provides unique
    technical contributions based on NNSA's core nuclear science and
    technology expertise, but also is designed to coordinate all nuclear
    counterterrorism, counterproliferation, and postdetonation nuclear
    forensics related efforts without drastic restructuring.
        In addition, NNSA's Naval Reactors program directly supports all
    aspects of the U.S. Navy's nuclear fleet, which encompasses the Navy's
    submarines and aircraft carriers, more than 40 percent of the U.S.
    Navy's major combatants. Currently, the nuclear fleet is composed of 54
    attack submarines, 14 ballistic missile submarines, 4 guided missile
    submarines, and 11 aircraft carriers. More than 8,300 nuclear-trained
    Navy personnel safely operate the propulsion plants on these ships all
    over the world, and their consistent forward presence protects our
    national interests. Our $1.1 billion fiscal year 2013 request will
    support the refueling overhaul for the S8G land-based prototype
    reactor, the design of the Ohio replacement reactor plant, and
    recapitalization of our naval spent nuclear fuel infrastructure.
        Each of the projects is critical to fulfillment of the Navy's
    longer term needs. The S8G land-based prototype refueling overhaul
    reactor plant has served naval reactors' needs for research,
    development, and training since 1978, and the reactor provides a cost-
    effective testing platform for new technologies and components before
    they are introduced. To continue vital research capabilities, as well
    as train sufficient operators to man the Fleet, the S8G land-based
    prototype refueling overhaul must begin in 2018. The Ohio replacement
    reactor plant design continues and the fiscal year 2013 requested
    amount supports continuing this work to meet the Navy's revised
    schedule and procurement of reactor plant components in 2019 (to
    support a 2021 lead-ship procurement). We need to recapitalize its
    naval spent fuel infrastructure in a cost-effective way that does not
    impede the refueling of active ships and their return to operations.
    The existing facility is more than 50 years old and was never designed
    for its current primary mission of packaging naval spent nuclear fuel
    for permanent dry storage.
        And finally, $411 million is requested for NNSA's Office of the
    Administrator account. This funds Federal personnel and provides for
    resources necessary to plan, manage, and oversee the operation of NNSA
    missions which strengthen U.S. security.
                                 doing our part
        We are committed to being responsible stewards of taxpayer dollars.
    We have taken steps to ensure that we are building a capabilities-based
    enterprise focused on needs and solutions. We view this constrained
    budget environment as an additional incentive to ask ourselves how we
    can re-think the way we are operating, how we can innovate, and how we
    can get better.
        For example, in close consultation with our national laboratories
    and national security sites, we are adjusting our plutonium strategy by
    deferring for at least 5 years construction of the Chemistry and
    Metallurgy Research Replacement Nuclear Facility (CMRR-NF) project at
    Los Alamos National Laboratory and focusing instead on how we can meet
    our plutonium needs on an interim basis by using the capabilities and
    expertise found at existing facilities. Utilizing existing facilities
    will allow us to meet anticipated near-term requirements for plutonium
    operations while focusing on other key modernization projects.
    Deferring CMRR-NF will have an estimated cost avoidance from 2013 to
    2017 that totals approximately $1.8 billion, which will help offset the
    costs of other priorities such as Weapons Lifetime Extension programs
    and other infrastructure needs.
        We have also updated our strategy to stop the spread of dangerous
    nuclear material as we meet the President's 4-year lockdown goal. We
    have developed an innovative approach to scientist engagement tailored
    for an age when knowledge spreads effortlessly through Google,
    Facebook, and Twitter.
        We are not resting on old ideas to solve tomorrow's problems--we're
    shaping the future of nuclear security, and we're doing it in a
    fiscally responsible way. However, I want to stress that as we make
    adjustments and look toward the future, our plans are based on the
    fiscal year 2013 budget request, which give us the resources we need to
    carry out our mission. Budget uncertainty adds cost and complexity to
    how we achieve our goals. You have been supportive of our efforts in
    the past, I ask again for your help in providing the stability we need
    to do our jobs efficiently and effectively.
                             continuously improving
        I would like to acknowledge that I have come before you in the past
    and talked at length about how NNSA has been working to change the way
    we do business. I am proud of the work the men and women of our NNSA
    have done to come together and operate as one. We are defining
    ourselves as a fully integrated enterprise that operates efficiently,
    is organized to succeed, that performs our work seamlessly, and speaks
    with one voice.
        We are improving everywhere, from our governance model to our
    network infrastructure, from our contracting processes to leadership
    and development programs. We are improving business processes by
    implementing the ISO 9001 standard, looking toward the future through a
    workforce analysis, and improving efficiency through consolidated
    contracts.
        We are continuously improving so we are able to do the work the
    American people need us to do, in a time when everyone is looking to do
    more with less. We are positioning ourselves for the next decade by
    making big decisions focused on the future.
        For example, after more than 2 years of analysis and outside
    reviews, we released a request for proposal (RFP) for the combined
    management of the Y-12 National Security Complex and Pantex Plant, with
    an option for phase-in of Tritium Operations performed at the Savannah
    River Site. Combining contracts and site offices will allow us to
    improve performance, reduce the cost of work, and operate as an
    integrated enterprise. We also decided to compete the contract for
    management and operation of Sandia National Laboratories, a move
    designed to find meaningful improvement in performance and reduce cost
    for taxpayers.
        We have taken other significant steps to continue improving, from
    top-to-bottom. We created an Acquisition and Project Management
    organization to help institutionalize our commitment to improving the
    way we do business. This move will improve the quality of our work
    while keeping our projects on time and on budget.
        We awarded a Blanket Purchasing Agreement (BPA) for Enterprise
    Construction Management Services. The BPA will standardize our approach
    to project management across the enterprise and provide subject-matter
    experts to provide independent analysis and advice related to the
    design and construction of facilities.
        And, importantly, we have institutionalized a culture of safety.
    Through a unique series of Biennial Reviews, including reviews at
    headquarters, we have improved nuclear safety across our Nuclear
    Security Enterprise. We have provided objective, value-added
    information to managers that ensure our nuclear safety oversight is
    consistent and effective. Since the reviews began in 2005, we have seen
    continuous improvement at every site.
        We are also improving the way we work with our partners across the
    Department of Energy (DOE). In my role as Under Secretary of Energy for
    Nuclear Security, I have made better coordination with DOE's Office of
    Environmental Management and Office of Legacy Management key
    priorities.
        For example, by partnering with the Office of Environmental
    Management, we have been able to share investments in our current
    infrastructure at the Savannah River Site. Using H-Canyon to eliminate
    surplus weapons-grade plutonium is a cost-effective approach for
    producing plutonium oxide for the MOX Facility that utilizes
    current resources and capabilities, and saves jobs. We are also taking
    care to make good use of past investments. For example, 40 grams of
    curium worth $8.8 million that was no longer needed for stockpile
    stewardship was transferred from the Los Alamos National Laboratory to
    the Idaho and Oak Ridge National Laboratories for use in energy R&D and
    for production of new isotopes.
        We are also working with the Office of Legacy Management to
    benchmark long-term surveillance and maintenance costs. Large closed
    sites with on-going groundwater issues, such as Fernald, Rocky Flats,
    Weldon Spring, Tuba City, and Mound, may have postclosure requirements
    similar to some of the Savannah River facilities, so we are learning
    from each other by comparing scope and cost to refine our estimates.
                                   conclusion
        Our mission is vital, and your past support has been key in helping
    us accomplish it. The fiscal year 2013 budget reflects our commitment
    to keeping the American people safe while continuously improving and
    doing our part in a time of fiscal austerity. We are looking toward the
    future and building an organization that is aligned to succeed. I look
    forward to working with each of you to help us do that. Thank you.
      national nuclear security administration--appropriation and program
    summary tables--outyear appropriation summary tables--fiscal year 2013
                                 budget tables

                                        NATIONAL NUCLEAR SECURITY ADMINISTRATION--OVERVIEW--APPROPRIATION SUMMARY \1, 2\
                                                                    [In thousands of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Fiscal year  Fiscal year  Fiscal year  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                       2011         2012         2013         2014         2015         2016         2017
                                                                     current      enacted      request      request      request      request      request
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Office of the Administrator:
        Program direction........................................      398,993      410,000      411,279      418,742      426,599      434,848      444,276
        Rescission of prior year balances........................       -5,700  ...........  ...........  ...........  ...........  ...........  ...........
                                                                  ------------------------------------------------------------------------------------------
          Total, Office of the Administrator.....................      393,293      410,000      411,279      418,742      426,599      434,848      444,276
                                                                  ==========================================================================================
    Weapons Activities Appropriation:
        Defense Programs:
            Directed stockpile work..............................    1,905,078    1,873,694    2,088,274  ...........  ...........  ...........  ...........
            Science campaign.....................................      366,167      332,958      350,104  ...........  ...........  ...........  ...........
            Engineering campaign.................................      142,010      142,636      150,571  ...........  ...........  ...........  ...........
            Inertial confinement fusion ignition and high-yield        478,105      474,812      460,000  ...........  ...........  ...........  ...........
             campaign............................................
            Advanced simulation and computing campaign...........      613,620      618,076      600,000  ...........  ...........  ...........  ...........
            Readiness campaign...................................       91,695      128,406      130,095  ...........  ...........  ...........  ...........
            Readiness in technical base and facilities...........    1,842,519    2,004,785    2,239,828  ...........  ...........  ...........  ...........
            Secure transportation asset..........................      251,806      242,802      219,361  ...........  ...........  ...........  ...........
                                                                  ------------------------------------------------------------------------------------------
              Total, Defense Programs............................    5,691,000    5,818,169    6,238,233  ...........  ...........  ...........  ...........
                                                                  ==========================================================================================
        Nuclear counterterrorism incident response...............      232,503      220,969      247,552  ...........  ...........  ...........  ...........
        Facilities and infrastructure recapitalization program...       93,574       96,120  ...........  ...........  ...........  ...........  ...........
        Site stewardship.........................................      104,727       78,581       90,001  ...........  ...........  ...........  ...........
    Safeguards and security:
        Defense nuclear security.................................      717,722      695,679  ...........  ...........  ...........  ...........  ...........
        Cyber security...........................................      124,231      126,370  ...........  ...........  ...........  ...........  ...........
                                                                  ------------------------------------------------------------------------------------------
          Subtotal, Safeguards and security......................      841,953      822,049  ...........  ...........  ...........  ...........  ...........
                                                                  ==========================================================================================
        Defense nuclear security.................................  ...........  ...........      643,285  ...........  ...........  ...........  ...........
        National Nuclear Security Administration Chief             ...........  ...........      155,022  ...........  ...........  ...........  ...........
         Information Officer activities..........................
        Science, technology, and engineering capability..........       19,794  ...........  ...........  ...........  ...........  ...........  ...........
        National security applications...........................  ...........       10,000       18,248  ...........  ...........  ...........  ...........
        Legacy contractor pensions...............................  ...........      168,232      185,000  ...........  ...........  ...........  ...........
        Use of prior year balances...............................      -67,776  ...........  ...........  ...........  ...........  ...........  ...........
        Rescission of prior year balances........................      -50,000  ...........  ...........  ...........  ...........  ...........  ...........
                                                                  ------------------------------------------------------------------------------------------
          Total, weapons activities..............................    6,865,775    7,214,120    7,577,341    7,613,033    7,755,866    7,905,841    8,077,242
                                                                  ==========================================================================================
    Defense nuclear nonproliferation:
        Nonproliferation and verification research and                 355,407      354,150      548,186      412,622      420,344      428,417      437,719
         development.............................................
        Nonproliferation and international security..............      147,494      153,594      150,119      156,363      167,070      173,718      177,490
        International nuclear materials protection and                 578,633      569,927      311,000      282,628      288,026      293,870      300,171
         cooperation.............................................
        Fissile materials disposition............................      802,198      685,386      921,305      950,000      960,000      975,000      996,170
        Global threat reduction initiative.......................      444,689      498,000      466,021      485,775      494,866      504,371      515,322
        Legacy contractor pensions...............................  ...........       55,823       62,000       63,138       64,320       65,555       66,978
        Use of prior year balances...............................       -2,050  ...........  ...........  ...........  ...........  ...........  ...........
        Rescission of prior year balances........................      -45,000      -21,000  ...........  ...........  ...........  ...........  ...........
                                                                  ------------------------------------------------------------------------------------------
          Total, Defense nuclear nonproliferation................    2,281,371    2,295,880    2,458,631    2,350,526    2,394,626    2,440,931    2,493,850
                                                                  ==========================================================================================
    Naval reactors:
        Naval reactors...........................................      986,526    1,080,000    1,088,635    1,108,391    1,129,186    1,151,021    1,175,975
        Rescission of prior year balances........................       -1,000  ...........  ...........  ...........  ...........  ...........  ...........
                                                                  ------------------------------------------------------------------------------------------
          Total, Naval reactors..................................      985,526    1,080,000    1,088,635    1,108,391    1,129,186    1,151,021    1,175,975
                                                                  ------------------------------------------------------------------------------------------
          Total, National Nuclear Security Administration........   10,525,965   11,000,000   11,535,886   11,490,692   11,706,277   11,932,641   12,191,343
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ The annual totals include an allocation to NNSA from DOD. The amounts included are $677,076 in fiscal year 2014; $712,344 in fiscal year 2015;
      $766,924 in fiscal year 2016; and $781,204 in fiscal year 2017.
    \2\ Fiscal year 2012 enacted reflects a rescission of $27,300 associated with savings from the contractor pay freeze. Of the $27,300, $19,877 was
      rescinded from weapons activities and $7,423 was rescinded from Defense Nuclear Nonproliferation.

                   NATIONAL NUCLEAR SECURITY ADMINISTRATION FUTURE-YEARS NUCLEAR SECURITY PROGRAM \1\
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                     Fiscal year  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                         2013         2014         2015         2016         2017
                                                       request      request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    National Nuclear Security Administration:
        Office of the Administrator................      411,279      418,742      426,599      434,848      444,276
        Weapons activities.........................    7,577,341    7,613,033    7,755,866    7,905,841    8,077,242
        Defense nuclear nonproliferation...........    2,458,631    2,350,526    2,394,626    2,440,931    2,493,850
        Naval reactors.............................    1,088,635    1,108,391    1,129,186    1,151,021    1,175,975
                                                    ----------------------------------------------------------------
          Total, National Nuclear Security            11,535,886   11,490,692   11,706,277   11,932,641   12,191,343
           Administration..........................
    ----------------------------------------------------------------------------------------------------------------
    \1\ The annual totals include an allocation to NNSA from DOD. The amounts included are $677,076 in fiscal year
      2014; $712,344 in fiscal year 2015; $766,924 in fiscal year 2016; and $781,204 in fiscal year 2017.

     OFFICE OF THE ADMINISTRATOR--OVERVIEW--APPROPRIATION SUMMARY BY PROGRAM
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Office of the Administrator:
      National Nuclear Security
       Administration program
       direction:
        Salaries and benefits........      282,967      301,995      304,474
        Travel.......................       16,536       15,500       15,500
        Support services.............       22,445       20,500       20,500
        Other related expenses.......       77,045       72,005       70,805
                                      --------------------------------------
          Subtotal, Office of the          398,993      410,000      411,279
           Administrator.............
                                      ======================================
    Rescission of prior year balances       -5,700  ...........  ...........
                                      --------------------------------------
          Total, Office of the             393,293      410,000      411,279
           Administrator.............
    ------------------------------------------------------------------------

                                        OUTYEAR APPROPRIATION SUMMARY BY PROGRAM
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    Office of the Administrator:
      National Nuclear Security Administration program
       direction:
        Salaries and benefits...................................      311,937      319,794      328,043      337,471
        Travel..................................................       15,500       15,500       15,500       15,500
        Support services........................................       20,500       20,500       20,500       20,500
        Other related expenses..................................       70,805       70,805       70,805       70,805
                                                                 ---------------------------------------------------
          Total, Office of the Administrator....................      418,742      426,599      434,848      444,276
    ----------------------------------------------------------------------------------------------------------------

         WEAPONS ACTIVITIES--OVERVIEW--APPROPRIATION SUMMARY BY PROGRAM
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Weapons activities:
        Directed stockpile work......    1,905,078    1,873,694    2,088,274
        Science campaign.............      366,167      332,958      350,104
        Engineering campaign.........      142,010      142,636      150,571
        Inertial confinement fusion        478,105      474,812      460,000
         ignition and high-yield
         campaign....................
        Advanced simulation and            613,620      618,076      600,000
         computing campaign..........
        Readiness campaign...........       91,695      128,406      130,095
        Readiness in technical base      1,842,519    2,004,785    2,239,828
         and facilities..............
        Secure transportation asset..      251,806      242,802      219,361
        Nuclear counterterrorism           232,503      220,969      247,552
         incident response...........
        Facilities and infrastructure       93,574       96,120  ...........
         recapitalization program....
        Site stewardship.............      104,727       78,581       90,001
        Defense nuclear security.....      717,722      695,679      643,285
        Cyber security...............      124,231      126,370  ...........
        National Nuclear Security      ...........  ...........      155,022
         Administration Chief
         Information Officer
         activities..................
        Science, technology, and            19,794  ...........  ...........
         engineering capability......
        National security              ...........       10,000       18,248
         applications................
        Legacy contractor pensions...  ...........      168,232      185,000
                                      --------------------------------------
          Subtotal, Weapons              6,983,551    7,214,120    7,577,341
           activities................
                                      ======================================
        Use of prior year balances...      -67,776  ...........  ...........
        Rescission of prior year           -50,000  ...........  ...........
         balances....................
                                      --------------------------------------
          Total, Weapons activities..    6,865,775    7,214,120    7,577,341
    ------------------------------------------------------------------------

    Outyear Appropriation Summary by Program
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

       DIRECTED STOCKPILE WORK--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Directed stockpile work:
        Life-extension programs......      248,357      479,098      543,931
        Stockpile systems............      651,333      486,123      590,409
        Weapons dismantlement and           57,968       56,591       51,265
         disposition.................
        Stockpile services...........      947,420      851,882      902,669
                                      --------------------------------------
          Total, Directed stockpile      1,905,078    1,873,694    2,088,274
           work......................
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

          SCIENCE CAMPAIGN--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
          Total, Science campaign....      366,167      332,958      350,104
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

        ENGINEERING CAMPAIGN--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
          Total, Engineering campaign      142,010      142,636      150,571
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

      INERTIAL CONFINEMENT FUSION IGNITION AND HIGH-YIELD CAMPAIGN--FUNDING
                       PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
          Total, Inertial confinement      478,105      474,812      460,000
           fusion and high-yield
           campaign..................
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

         ADVANCED SIMULATION AND COMPUTING CAMPAIGN--FUNDING PROFILE BY
                             SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
          Total, Advanced simulation       613,620      618,076      600,000
           and computing campaign....
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

         READINESS CAMPAIGN--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
          Total, Readiness campaign..       91,695      128,406      130,095
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

         READINESS IN TECHNICAL BASE AND FACILITIES--FUNDING PROFILE BY
                             SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Readiness in technical base and
     facilities:
        Operations of facilities.....    1,255,307    1,281,847    1,419,403
        Program readiness............       69,736       73,962  ...........
        Material recycle and recovery       77,493       77,780  ...........
        Containers...................       27,820       28,892  ...........
        Storage......................       23,945       31,196  ...........
        Nuclear operations capability  ...........  ...........      203,346
         support.....................
        Science, technology, and       ...........  ...........      166,945
         engineering support.........
                                      --------------------------------------
          Subtotal, Operations and       1,454,301    1,493,677    1,789,694
           maintenance...............
                                      ======================================
    Construction.....................      388,218      511,108      450,134
                                      --------------------------------------
          Total, Readiness in            1,842,519    2,004,785    2,239,828
           technical base and
           facilities................
    ------------------------------------------------------------------------

    Outyear Funding Schedule by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

     SECURE TRANSPORTATION ASSET--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Secure Transportation Asset
     [STA]:
        Operations and equipment.....      156,877      144,800      114,965
        Program direction............       94,929       98,002      104,396
                                      --------------------------------------
          Total, Secure                    251,806      242,802      219,361
           Transportation Asset......
    ------------------------------------------------------------------------

     SECURE TRANSPORTATION ASSET--OPERATIONS AND EQUIPMENT--FUNDING PROFILE
                           BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Operations and equipment:
        Mission capacity.............       83,718       84,376       56,458
        Security safety capability...       34,670       19,986       22,457
        Infrastructure and C5 systems       28,867       29,449       24,199
        Program management...........        9,622       10,989       11,851
                                      --------------------------------------
          Total, Operations and            156,877      144,800      114,965
           equipment.................
    ------------------------------------------------------------------------

       SECURE TRANSPORTATION ASSET--PROGRAM DIRECTION--FUNDING PROFILE BY
                             SUBPROGRAM AND ACTIVITY
                             [Dollars in thousands]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Program Direction:
        Salaries and benefits........      $79,644      $82,613      $84,878
        Travel.......................       $8,334       $7,758       $7,216
        Other Related expenses.......       $6,951       $7,631      $12,302
                                      --------------------------------------
          Total, Program direction...      $94,929      $98,002     $104,396
                                      --------------------------------------
          Total, Full-time                     637          622          639
           equivalents...............
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

         NUCLEAR COUNTERTERRORISM INCIDENT RESPONSE--FUNDING PROFILE BY
                             SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Nuclear counterterrorism incident
     response (Homeland Security):
     \1\
        Emergency response (Homeland       135,429      136,185      150,043
         Security) \1\...............
        National technical nuclear          11,446       11,589       11,694
         forensics (Homeland
         Security) \1\...............
        Emergency management                 7,494        7,153        6,629
         (Homeland Security) \1\.....
        Operations support (Homeland         8,488        8,691        8,799
         Security) \1\...............
        International emergency              6,986        7,129        7,139
         management and cooperation..
        Nuclear counterterrorism            62,660       50,222       63,248
         (Homeland Security) \1\.....
                                      --------------------------------------
          Total, Nuclear                   232,503      220,969      247,552
           counterterrorism incident
           response..................
    ------------------------------------------------------------------------
    \1\ Office of Management and Budget (OMB) Homeland Security designation.

    Outyear Target Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

     FACILITIES AND INFRASTRUCTURE RECAPITALIZATION PROGRAM--FUNDING PROFILE
                           BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Facilities and infrastructure
     recapitalization program:
      Operations and maintenance
       [O&M]:
        Recapitalization.............       77,160       81,720  ...........
        Infrastructure planning......        6,494        9,400  ...........
        Facility disposition.........        9,920        5,000  ...........
                                      --------------------------------------
          Total, Operations and             93,574       96,120  ...........
           maintenance--facilities
           and infrastructure
           recapitalization program..
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

          SITE STEWARDSHIP--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Site Stewardship:
      Operations and maintenance:
        Environmental projects and          41,970       45,191       46,978
         operations..................
        Energy modernization and             6,618  ...........       10,262
         investment program..........
        Nuclear materials integration       41,169       33,390       18,963
        Corporate project management.  ...........  ...........       13,798
                                      --------------------------------------
          Total, Operations and             89,757       78,581       90,001
           maintenance...............
                                      ======================================
        Construction.................       14,970  ...........  ...........
                                      --------------------------------------
          Total, Site stewardship....      104,727       78,581       90,001
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

      DEFENSE NUCLEAR SECURITY--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Defense nuclear security:
      Operations and maintenance
       (Homeland Security):
        Protective forces............      414,166      418,758      341,676
        Physical security systems....       73,794       82,783       98,267
        Information security.........       25,943       30,117       34,237
        Personnel security...........       30,913       37,285       37,781
        Materials control and               35,602       34,592       34,484
         accountability..............
        Program management...........       78,183       75,595       96,840
        Technology deployment,               7,225        4,797  ...........
         physical security...........
                                      --------------------------------------
          Total, Operations and            665,826      683,927      643,285
           maintenance (Homeland
           Security).................
                                      ======================================
      Construction (Homeland                51,896       11,752  ...........
       Security).....................
                                      --------------------------------------
          Total, Defense nuclear           717,722      695,679      643,285
           security..................
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

           CYBER SECURITY--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Cyber security (Homeland
     Security):
        Infrastructure program.......       97,735      107,374  ...........
        Enterprise secure computing..       21,500       14,000  ...........
        Technology application               4,996        4,996  ...........
         development.................
                                      --------------------------------------
          Total, Cyber security......      124,231      126,370  ...........
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

       NATIONAL NUCLEAR SECURITY ADMINISTRATION CHIEF INFORMATION OFFICER
             ACTIVITIES--FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    National Nuclear Security
     Administration Chief Information
     Officer activities:
      Cyber security (Homeland
       Security):
        Infrastructure program.......  ...........  ...........      111,022
        Technology application         ...........  ...........  ...........
         development \1\.............
      Enterprise secure computing      ...........  ...........       14,000
       (Homeland Security)...........
      Federal unclassified             ...........  ...........       30,000
       information technology........
                                      --------------------------------------
          Total, National Nuclear      ...........  ...........      155,022
           Security Administration
           Chief Information Officer
           activities................
    ------------------------------------------------------------------------
    \1\ In fiscal year 2011 and fiscal year 2012 Technology Application
      Development is reflected in the Cyber Security program. In fiscal year
      2013 funds supporting Technology Application Development were
      realigned to infrastructure for higher priority requirements.
      Technology Application initiatives are to be supported in the
      outyears.

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

        NATIONAL SECURITY APPLICATIONS--FUNDING PROFILE BY SUBPROGRAM AND
                                    ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
          Total, National security     ...........       10,000       18,248
           applications..............
                                      ======================================
          Total, Science, Technology,       19,794  ...........  ...........
           and Engineering Capability
    ------------------------------------------------------------------------

    Outyear Funding Profile by Subprogram and Activity
        The outyear numbers for weapons activities do not reflect
    programmatic requirements. Rather, they are an extrapolation of the
    fiscal year 2013 request based on rates of inflation in the Budget
    Control Act of 2011. The administration will develop outyear funding
    levels based on actual programmatic requirements at a later date.

      DEFENSE NUCLEAR NONPROLIFERATION--OVERVIEW--APPROPRIATION SUMMARY BY
                                     PROGRAM
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current    enacted \1\    request
    ------------------------------------------------------------------------
    Defense nuclear nonproliferation:
        Nonproliferation and               355,407      354,150      548,186
         verification research and
         development.................
        Small Business Innovation          [5,579]      [6,245]     [11,727]
         Research/Small Business
         Technology Transfer [Non-
         Add]........................
        Nonproliferation and               147,494      153,594      150,119
         international security......
        International nuclear              578,633      569,927      311,000
         materials protection and
         cooperation \2\.............
        Fissile materials disposition      802,198      685,386      921,305
        Global threat reduction            444,689      498,000      466,021
         initiative \2\..............
        Legacy contractor pensions...  ...........       55,823       62,000
                                      --------------------------------------
          Subtotal, Defense nuclear      2,328,421    2,316,880    2,458,631
           nonproliferation..........
                                      ======================================
        Use of prior year balances...       -2,050  ...........  ...........
        Rescission of prior year           -45,000      -21,000  ...........
         balances....................
                                      --------------------------------------
          Total, Defense nuclear         2,281,371    2,295,880    2,458,631
           nonproliferation..........
    ------------------------------------------------------------------------
    \1\ Fiscal year 2012 enacted reflects rescission of $7.4 million
      associated with savings from the contractor pay freeze.
    \2\ Fiscal year 2011 total includes international contributions for
      INMP&C of $300,000 from South Korea; $117,000 from the United Kingdom
      of Great Britain; $512,076 from Norway; $540,602 from New Zealand; and
      $5,169,026 from Canada. International contributions for GTRI include
      $8,207,791 from Canada, and $499,970 from the Netherlands.

                                        OUTYEAR APPROPRIATION SUMMARY BY PROGRAM
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    Defense nuclear nonproliferation:
        Nonproliferation and verification research and                412,622      420,344      428,417      437,719
         development............................................
        Nonproliferation and international security.............      156,363      167,070      173,718      177,490
        International nuclear materials protection and                282,628      288,026      293,870      300,171
         cooperation \1\........................................
    Fissile materials disposition...............................      950,000      960,000      975,000      996,170
    Global threat reduction initiative \1\......................      485,775      494,866      504,371      515,322
    Legacy contractor pensions..................................       63,138       64,320       65,555       66,978
                                                                 ---------------------------------------------------
          Total, Defense nuclear nonproliferation...............    2,350,526    2,394,626    2,440,931    2,493,850
    ----------------------------------------------------------------------------------------------------------------

       NONPROLIFERATION AND VERIFICATION RESEARCH AND DEVELOPMENT--FUNDING
                       PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Nonproliferation and verification
     research and development:
        Proliferation detection [PD].      229,427      222,150      240,536
        Homeland security-related         [50,000]     [50,000]     [50,000]
         proliferation detection [Non-
         Add]........................
        Nuclear detonation detection       125,980      132,000      157,650
         [NDD].......................
        Domestic uranium enrichment    ...........  ...........      150,000
         research, development, and
         demonstration...............
        Small Business Innovation      ...........      [6,245]     [11,727]
         Research/Small Business
         Technology Transfer \1\ [Non-
         Add]........................
                                      --------------------------------------
          Total, Nonproliferation and      355,407      354,150      548,186
           verification research and
           development...............
    ------------------------------------------------------------------------
    \1\ Fiscal year 2011 current appropriation reflects the $5,579,000
      transferred out of the DNN appropriation for SBIR/STTR.

                                   OUTYEAR FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    Nonproliferation and verification research and development:
        Proliferation detection [PD]............................      248,312      252,955      257,790      263,369
        Homeland security-related proliferation detection [Non-      [50,000]     [50,000]     [50,000]     [50,000]
         Add]...................................................
        Nuclear detonation detection [NDD]......................      164,310      167,389      170,627      174,350
        Domestic uranium enrichment RD&D........................  ...........  ...........  ...........  ...........
        SBIR/STTR [Non-Add].....................................      [8,446]      [8,941]      [9,598]     [10,461]
                                                                 ---------------------------------------------------
          Total, Nonproliferation and verification R&D..........      412,622      420,344      428,417      437,719
    ----------------------------------------------------------------------------------------------------------------

         NONPROLIFERATION AND INTERNATIONAL SECURITY--FUNDING PROFILE BY
                           SUBPROGRAM AND ACTIVITY \1\
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Nonproliferation and
     international security:
        Dismantlement and                   49,207  ...........  ...........
         transparency................
        Global security engagement          47,289  ...........  ...........
         and cooperation.............
        International regimes and           39,824  ...........  ...........
         agreements..................
        Treaties and agreements......       11,174  ...........  ...........
        Nuclear safeguards and         ...........       54,897       54,723
         security....................
        Nuclear controls.............  ...........       47,444       45,420
        Nuclear verification.........  ...........       39,969       40,566
        Nonproliferation policy......  ...........       11,284        9,410
                                      --------------------------------------
          Total, Nonproliferation and      147,494      153,594      150,119
           international security....
    ------------------------------------------------------------------------
    \1\ The Nonproliferation and International Security Program implemented
      a budget structure change starting in fiscal year 2012. The structure
      change created a more efficient and clearer program organization with
      activities aligned along functional lines that reflect U.S.
      nonproliferation priorities and initiatives. The new structure depicts
      more clearly the alignment of people, technology, and resources to
      meet and implement nuclear nonproliferation objectives.

                                   OUTYEAR FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    Nonproliferation and international security:
        Dismantlement and transparency..........................  ...........  ...........  ...........  ...........
        Global security engagement and cooperation..............  ...........  ...........  ...........  ...........
        International regimes and agreements....................  ...........  ...........  ...........  ...........
        Treaties and agreements.................................  ...........  ...........  ...........  ...........
        Nuclear safeguards and security.........................       56,999       60,902       63,326       64,701
        Nuclear controls........................................       47,309       50,549       52,560       53,701
        Nuclear verification....................................       42,253       45,147       46,943       47,962
        Nonproliferation policy.................................        9,802       10,472       10,889       11,126
                                                                 ---------------------------------------------------
          Total, Nonproliferation and international security....      156,363      167,070      173,718      177,490
    ----------------------------------------------------------------------------------------------------------------

       INTERNATIONAL NUCLEAR MATERIALS PROTECTION AND COOPERATION--FUNDING
                       PROFILE BY SUBPROGRAM AND ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    International nuclear materials
     protection and cooperation:
        Navy complex.................       34,332       33,664       39,860
        Strategic rocket forces/12th        51,359       59,105        8,300
         main directorate............
        Weapons material protection         93,318       80,735       46,975
         \1\.........................
        Civilian nuclear sites.......       53,027       59,117       60,092
        Material consolidation and          13,867       14,306       17,000
         conversion..................
        National infrastructure and         60,928       60,928       46,199
         sustainability program \2\..
        Second line of defense.......      265,163      262,072       92,574
        International contributions          6,639  ...........  ...........
         \3\.........................
                                      --------------------------------------
          Total, International             578,633      569,927      311,000
           nuclear materials
           protection and cooperation
    ------------------------------------------------------------------------
    \1\ Weapons Material Protection was formerly known as Rosatom Weapons
      Complex.
    \2\ National Infrastructure and Sustainability was formerly known as
      National Programs and Sustainability.
    \3\ Fiscal year 2011 total includes international contributions of
      $300,000 from South Korea, $117,000 from the United Kingdom of Great
      Britain, $512,076 from Norway, $540,602 from New Zealand, and
      $5,169,026 from Canada.

                                   OUTYEAR FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    International nuclear materials protection and cooperation:
        Navy complex............................................       39,742       39,767       39,843       39,823
        Strategic rocket forces/12th main directorate...........       14,300       14,300       14,300       14,300
        Weapons material protection \1\.........................       54,857       54,882       54,958       54,938
        Civilian nuclear sites..................................       59,972       59,997       60,074       60,053
        Material consolidation and conversion...................       20,000       20,000       20,000       20,000
        National infrastructure and sustainability program \2\..       46,081       46,106       46,182       46,162
        Second line of defense..................................       47,676       52,974       58,513       64,895
                                                                 ---------------------------------------------------
          Total, International nuclear materials protection and       282,628      288,026      293,870      300,171
           cooperation..........................................
    ----------------------------------------------------------------------------------------------------------------
    \1\ Weapons Material Protection was formerly known as Rosatom Weapons Complex.
    \2\ National Infrastructure and Sustainability was formerly known as National Programs and Sustainability.

        FISSILE MATERIALS DISPOSITION--FUNDING PROFILE BY SUBPROGRAM AND
                                    ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Fissile Materials Disposition:
        U.S. surplus fissile
         materials disposition:
            Operations and
             maintenance [O&M]:
                U.S. plutonium             200,400      205,632      498,979
                 disposition.........
                U.S. uranium                25,985       26,000       29,736
                 disposition.........
                                      --------------------------------------
          Subtotal, Operations and         226,385      231,632      528,715
           maintenance...............

                Construction.........      575,788      452,754      388,802
                                      --------------------------------------
          Total, U.S. surplus fissile      802,173      684,386      917,517
           materials disposition.....
                                      ======================================
        Russian surplus fissile                 25        1,000        3,788
         materials disposition:
         Russian materials
         disposition.................
                                      --------------------------------------
          Total, Fissile materials         802,198      685,386      921,305
           disposition...............
    ------------------------------------------------------------------------

                                   OUTYEAR FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    Fissile materials disposition:
        U.S. surplus fissile materials disposition:
            Operations and maintenance [O&M]:
                U.S. plutonium disposition......................      793,506      908,906      930,967      957,881
                U.S. uranium disposition........................       30,058       33,546       33,453       30,514
                                                                 ---------------------------------------------------
                  Subtotal, Operations and maintenance..........      823,564      942,452      964,420      988,395

                Construction....................................      118,661        9,773        2,805  ...........
                                                                 ---------------------------------------------------
                  Total, U.S. surplus fissile materials               942,225      952,225      967,225      988,395
                   disposition..................................
                                                                 ===================================================
        Russian surplus fissile materials disposition: Russian          7,775        7,775        7,775        7,775
         materials disposition..................................
                                                                 ---------------------------------------------------
          Total, Fissile materials disposition..................      950,000      960,000      975,000      996,170
    ----------------------------------------------------------------------------------------------------------------

      GLOBAL THREAT REDUCTION INITIATIVE--FUNDING PROFILE BY SUBPROGRAM AND
                                    ACTIVITY
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current      enacted      request
    ------------------------------------------------------------------------
    Global threat reduction
     initiative:
      Highly enriched uranium [HEU]        100,968      148,269      161,000
       reactor conversion............
      Nuclear and radiological
       material removal:
        Russian-origin nuclear             159,031      147,000      102,000
         material removal............
        U.S.-origin nuclear material         4,420        9,000        5,000
         removal.....................
        Gap nuclear material removal.        9,289       45,731       61,000
        Emerging threats nuclear             8,768        5,000        5,000
         material removal............
        International radiological          20,660       20,000        8,000
         material removal............
        Domestic radiological               19,128       20,000       19,000
         material removal (Homeland
         Security) \1\...............
                                      --------------------------------------
          Subtotal, Nuclear and            221,296      246,731      200,000
           radiological material
           removal...................
                                      ======================================
      Nuclear and radiological
       material protection:
        BN-350 nuclear material              1,840        2,000  ...........
         protection..................
        International material              46,573       50,000       50,000
         protection..................
        Domestic material protection        65,304       51,000       55,021
         (Homeland Security) \1\.....
                                      --------------------------------------
          Subtotal, Nuclear and            113,717      103,000      105,021
           radiological material
           protection................
                                      ======================================
        International contributions          8,708  ...........  ...........
         \2\.........................
                                      --------------------------------------
          Total, Global threat             444,689      498,000      466,021
           reduction initiative......
    ------------------------------------------------------------------------
    \1\ Office of Management and Budget (OMB) Homeland Security designation.
    \2\ International contributions for GTRI include $8,207,791 from Canada,
      and $499,970 from the Netherlands.

                                   OUTYEAR FUNDING PROFILE BY SUBPROGRAM AND ACTIVITY
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                  Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2014         2015         2016         2017
                                                                    request      request      request      request
    ----------------------------------------------------------------------------------------------------------------
    Global threat reduction initiative:
      Highly enriched uranium [HEU] reactor conversion..........      177,000      183,000      185,000      195,000
      Nuclear and radiological material removal:
        Russian-origin nuclear material removal.................      100,000      100,000      100,000       95,000
        U.S.-origin nuclear material removal....................        5,000        5,000        6,000        8,000
        Gap nuclear material removal............................       45,000       30,000       20,000       15,000
        Emerging threats nuclear material removal...............        5,000        5,000        5,000        5,000
        International radiological material removal.............       20,000       20,000       20,000       20,000
        Domestic radiological material removal (Homeland               20,000       20,000       20,000       20,000
         Security) \1\..........................................
                                                                 ---------------------------------------------------
          Subtotal, Nuclear and radiological material removal...      195,000      180,000      171,000      163,000
                                                                 ===================================================
      Nuclear and radiological material protection:
        BN-350 nuclear material protection......................  ...........  ...........  ...........  ...........
        International material protection.......................       52,000       60,000       68,000       73,000
        Domestic material protection (Homeland Security) \1\....       61,775       71,866       80,371       84,322
                                                                 ---------------------------------------------------
          Subtotal, Nuclear and radiological material protec-         113,775      131,866      148,371      157,322
           tion.................................................
                                                                 ===================================================
          Total, Global threat reduction initiative.............      485,775      494,866      504,371      515,322
    ----------------------------------------------------------------------------------------------------------------

           NAVAL REACTORS--OVERVIEW--APPROPRIATION SUMMARY BY PROGRAM
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                                       Fiscal year  Fiscal year  Fiscal year
                                           2011         2012         2013
                                         current    enacted \1\  request \2\
    ------------------------------------------------------------------------
    Naval reactors:
        Naval reactors operations and      914,071  ...........  ...........
         maintenance [O&M]...........
        Naval reactors operations and  ...........      358,300      366,961
         infrastructure..............
        Naval reactors development...  ...........      421,000      418,072
        S8G protype refueling........  ...........       99,500      121,100
        Ohio replacement reactor       ...........      121,300       89,700
         systems development.........
                                      --------------------------------------
          Total, Naval reactors            914,071    1,000,100      995,833
           operations and maintenance
                                      ======================================
        Program direction............       39,920       40,000       43,212
        Construction.................       32,535       39,900       49,590
                                      --------------------------------------
          Subtotal, Naval reactors...      986,526    1,080,000    1,088,635
                                      ======================================
        Rescission of prior year            -1,000  ...........  ...........
         balances....................
                                      --------------------------------------
          Total, Naval reactors......      985,526    1,080,000    1,088,635
    ------------------------------------------------------------------------
    \1\ The Conference Report of H.R. 2055 Military Construction and
      Veterans Affairs, and Related Agencies Appropriations Act, 2012
      establishing new funding controls for Naval Reactors: Naval Reactors
      Operations and Infrastructure, Naval Reactors Development, S8G
      Prototype Refueling, and Ohio Replacement Reactor Systems Development.
    \2\ Fiscal year 2013, fiscal year 2014, and fiscal year 2015 include an
      allocation to Naval Reactors from the Department of Defense's (DOD)
      Research, Development, Testing, and Evaluation (RDT&E) account
      entitled ``NNSA PROGRAM SUPPORT''. The amounts included for naval
      reactors from this DOD account are fiscal year 2013 $5.8 million;
      fiscal year 2014, $2 million; and fiscal year 2015, $0.9 million.

                                        OUTYEAR APPROPRIATION SUMMARY BY PROGRAM
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                              Fiscal year     Fiscal year   Fiscal year  Fiscal year
                                                                 2014            2015           2016         2017
                                                            projection \1\  projection \1\   projection   projection
    ----------------------------------------------------------------------------------------------------------------
    Naval reactors:
        Naval reactors operations and infrastructure......        384,365         377,814       383,719      396,283
        Naval reactors development........................        434,306         426,245       432,449      446,609
        S8G prototype refueling \2\.......................        123,327         125,522       127,760      130,054
        Ohio replacement reactor systems development \2\..         91,350          92,975        94,634       96,333
        Program direction.................................         49,670          52,400        54,159       56,096
        Construction......................................         25,373          54,230        58,300       50,600
                                                           ---------------------------------------------------------
          Total, Naval reactors...........................      1,108,391       1,129,186     1,151,021    1,175,975
    ----------------------------------------------------------------------------------------------------------------
    \1\ Fiscal year 2013, fiscal year 2014, and fiscal year 2015 include an allocation to Naval Reactors from the
      Department of Defense's (DOD) Research, Development, Testing, and Evaluation (RDT&E) account entitled ``NNSA
      PROGRAM SUPPORT''. The amounts included for naval reactors from this DOD account are fiscal year 2013 $5.8
      million; fiscal year 2014, $2 million; and fiscal year 2015, $0.9 million.
    \2\ Due to the Budget Control Act of 2011 the outyear funding for S8G Prototype Refueling and Ohio Replacement
      Reactor Systems Development is under review and will be updated at a later date.

        Senator Feinstein. Thank you very much, Mr. D'Agostino.
        Senator, if it's agreeable with you, I'd like to proceed in
    5-minute increments, and we'll just go back and forth. I have a
    large number of questions.
        Senator Alexander. You can just go through for a while if
    you want to, if you don't want me to interrupt that. That's
    fine with me. I'll listen.
        Senator Feinstein. Well, let's see. I want you to have
    plenty of opportunities.

                           NATIONAL IGNITION FACILITY

        On March 19, a letter was sent to Member Frelinghuysen and
    Member Visclosky signed by a substantial number of House
    Members on the National Ignition Facility (NIF). There have
    been claims made that the NIF is short $140 million, and
    proposed budget cuts, which I understand are $20 million, will
    result in the shutdown of the facility, and the layoff of 400
    scientists and technicians.
        Are these claims true?
        Mr. D'Agostino. Madam Chairman, the NIF, the Lawrence
    Livermore National Laboratory's (LLNL) budget, the overall
    laboratory budget, did go down. The budget did not go down by
    $140 million. The decrease at LLNL is on the order of $81
    million.
        The majority of that decrease is due to the completion of a
    procurement of a computer called the Sequoia computer, it's a
    supercomputer, as well as some reductions in our security
    budget, because we are in the process of reaching our
    commitment that we made a number of years ago to reduce the
    quantities of category one and two security for plutonium in
    the Livermore Valley. We're 96 percent of the way on that, and
    that's why we have a little bit of a decrease in security.
        The reductions in the specific line, the budget line for
    the NIF, or Inertial Confinement Fusion Program, is about $20
    million. The challenges, what we're working through right now
    with the laboratory, is factoring in how the laboratory and the
    DOE can blend what's known as an overhead rate. And this is a
    problem that we've known for 2 years, and we're working
    together to make sure that the overhead rates, the rates that
    the laboratory charges its internal programs, is even and
    consistent and meets accounting standards. And there's some
    challenges that we're working on with the laboratory to do
    that.
        So I don't believe that we are talking--I'm committed that
    the NIF project is very important. It's important to stockpile
    stewardship. We are not reducing the budget by $140 million in
    the NIF project, and we are committed to working with the
    laboratory to ensure that we can get through this adjustment of
    their overhead rate in a way that allows the project to move
    forward to address its mission.
        Senator Feinstein. Okay, let's go into that for a minute. A
    decrease of $81 million because of the completion of the
    Sequoia program and a reduction in security. The fusion
    element, which I want to ask some questions about, you said is
    $20 million. Is that a $20 million cut?
        Mr. D'Agostino. Yes, it's a $20 million reduction in the
    NIF line. The project is essentially complete. The construction
    project is complete. And an element of the construction project
    is installing what's known as cryogenic and diagnostic tools to
    keep the target itself cold, the cryogenic piece, and to be
    able to have the tools to measure the output, the experiments.
        This is the whole reason for NIF, of course, is to get this
    very important data. And so you need to have the diagnostics
    there.
        The reduction is due to the fact that the procurement of
    those tools is done, and they're installed, and now we're just
    into the operation of that. And this is documented in the NIF
    plan itself.
        So that $20 million is not because we wanted to just take
    money out of the laboratory, because we're trying to balance
    the budget. It's because that work, that specific work, is done
    on the project.
        Senator Feinstein. Okay. Now, NIF is supposed to achieve
    ignition by September. My question is, will it? There are some
    that believe it will not.
        Mr. D'Agostino. Achieving ignition is going to be very
    challenging. I'll be very upfront with this. Ignition is very
    important to stockpile stewardship, but achieving ignition by
    the end of this year will be very challenging. We've learned a
    lot, particularly in the last year, on how good our codes are,
    our simulation codes, in actually predicting the experimental
    data.
        And we've realized, and this is actually a very good news
    in a way, that there are some gaps. And so we're going to focus
    our effort to try to understand why did our codes predict one
    thing and the experiments gave us some different data. It's
    very important that we solve that particular piece of the
    problem.
        We will be doing credible shots on the NIF, credible
    meaning--our codes predicted that we should achieve ignition.
    Whether we do or not will have to stand the test of time. We'll
    know soon enough whether we can do it or not.
        Senator Feinstein. And if you can't achieve ignition, that
    becomes a very big deal in terms of testing of weapons.
        Mr. D'Agostino. Should I comment on that?
        Senator Feinstein. That's a question. Yes.
        Mr. D'Agostino. Okay. Achieving ignition is absolutely very
    important for stockpile stewardship. It's a critical element
    for us to be able to have confidence in our codes, in our
    validation codes, and it's important for us to be able to get
    that kind of experimental data in the very high temperature and
    pressure areas that only ignition can give us.
        Does it mean that we fail in being able to take care of our
    stockpile the day after, the week after, the year after we fail
    to achieve ignition? Absolutely not.
        Senator Feinstein. Well, how much longer can the stockpile
    be considered safe without ignition?
        Mr. D'Agostino. I would put it in terms of many years. I
    would like to provide you a detailed answer for the record, if
    I could.
        Senator Feinstein. If you would, and we will follow up.
        Mr. D'Agostino. Thank you.
        Senator Feinstein. Is it possible that NIF will not achieve
    ignition?
        Mr. D'Agostino. It's always----
        Senator Feinstein. Is it only a question of time? Because
    you're just now pushing the September date until the end of the
    year.
        Mr. D'Agostino. Right.
        Senator Feinstein. So here we go.
        Mr. D'Agostino. Well, you know, I would say achieving
    ignition is a very important factor for it. It's always
    possible that we can achieve it, I think. But the key is, for
    us, is to make every concerted effort to reach ignition by
    making sure we have the right power and energy level on the
    target inside the hohlraum in order to squeeze that particular
    target, and getting the diagnostic tools, these measuring
    devices, so that when we actually do it, we actually know we
    actually did it. It wouldn't be right for us to try to do this
    too early and then not be able to actually measure the fact
    that we achieved it.
        Senator Feinstein. Well, if the original estimate was
    September, and it's now March, that's a substantial period of
    time. But what I hear you saying is, and correct me if I'm
    wrong, please, that the likelihood of so doing is remote, even
    by the end of the year.
        Mr. D'Agostino. I would not call it remote.
        Senator Feinstein. Then what is it, on a scale of 1 to 10?
        Mr. D'Agostino. You know, it's hard for me to put a
    specific number to it. I would say there is a likelihood that
    we will achieve ignition. I would say it's very difficult for
    us to predict. There are new phenomenon in squeezing the
    capsule itself that we hadn't predicted would come out of the
    experiments that we've already done.
        And so we're approaching this in a stepwise fashion,
    because we don't want to rush all the way to full speed ahead
    without approaching it in a stepwise fashion.
        So my sense is that we have a likelihood of achieving
    ignition, I would respectfully ask that I not put a number on
    it, because, actually, I don't want to pretend I know the
    actual number, is what I'm saying. We have the report--I'm
    sorry?
        Senator Feinstein. In the Senate, there was a considerable
    debate about whether to go ahead with this facility or not.
    Senator Domenici was really not a big fan of this facility.
    Everything we heard was, you know, this thing would achieve
    ignition and they would go on and do all this stuff, and fusion
    was a possibility.
        Now, all that appears to have been changed. So what I'm
    saying is, the climate for funding, for finishing this
    facility, and this facility is major. I mean, it is a very
    impressive facility, just in terms of hardware alone.
        I would just hate to see all the money put in not able to
    achieve the goal. What you have said today doesn't give me a
    lot of belief that it's just a question of time. What you've
    said is some new problem has arisen, and you need a solution to
    it.
        Mr. D'Agostino. I want to be clear that I am not saying
    that it's remote. I'm saying that there is a likelihood that we
    will achieve ignition this year. That is the goal that we have
    set out of the laboratory to do. We have pressed very hard.
        Senator Feinstein. You are saying there is a likelihood we
    will achieve ignition by the end of the year?
        Mr. D'Agostino. Yes. Yes, absolutely. And I want to be
    clear on that.
        I also want to let you know, Madam Chairman, that we have
    submitted recently--Dr. Cook had sent a report to the Congress,
    a quarterly report, documenting the technical challenges, the
    successes, and the technical challenges.
        A success, for example, a very significant milestone that
    LLNL achieved, is reaching the 1.8 megajoule target, which is
    all 196 beams, 1.8 megajoules into the very tiny target
    chamber.
        And that's a very significant milestone, just the timing of
    196 beams to arrive at the precise moment in time, and the
    pulses needed to squeeze that. The laboratory has made
    progress.
        We've also done hundreds of experiments and shots on the
    facility itself, getting a tremendous amount of data that has
    already--the Nation is already taking advantage of it. Some of
    this data, because of the radiation that comes out of it, lets
    us test electronics, if you will, that the DOD needs to make
    sure can survive in different types of radiation environments.
        So we are getting a significant amount of work out of the
    NIF as it exists today.
        This ignition goal of this year, which I said we have a
    likelihood of achieving, will be, frankly, something that
    mankind has never done before. Man has never been able to
    harness and achieve this capability in a controlled laboratory
    fashion.
        So there are some things that are hard to projectize in a
    way of just saying that it's a matter of money and time. This
    is a hard one to projectize, because it's never been done
    before.
        Senator Feinstein. Okay. Well, the letter that the House
    Members have written to the chairman and ranking member of the
    Appropriations subcommittee essentially says the reduction will
    result in the termination of approximately 100 highly trained
    staff, and will jeopardize LLNL's ability to support the
    stewardship of the Nation's nuclear weapons.
        Can you comment on how many layoffs are necessitated by
    these cuts?
        Mr. D'Agostino. I think, if done correctly, there will not
    be any layoffs as a result of a fairly small change in the NIF
    budget, and a fairly small change in the laboratory's overall
    budget. It's a matter of management and getting the right type
    of blend of the overhead rate that was charged to the project.
        If I may, I could add a little bit to that, depending on
    how much time you'd like on this.
        Senator Feinstein. Please, why don't you? This is a big
    issue and obviously is going to be in the House, too.
        Mr. D'Agostino. Certainly.
        When the NIF project was in its construction phase, the
    United States Government committed a significant amount of
    money, as you've indicated, every year to the laboratory to
    construct and build and assemble this NIF.
        In order to do that, we, United States Government, decided
    that the laboratory would be allowed to charge a lower overhead
    rate to the project, because, in essence, why would they charge
    the normal overhead rate, because this is a one-time
    construction project, and when construction is done, it goes
    back down to normal.
        This change is called a self-constructed asset pool. It's a
    set-aside on overhead, and it's a significantly reduced
    overheard because we in the United States Government want the
    dollars to flow into the construction project, not into the
    overhead of the laboratory.
        Once the project was completed, and it was completed a few
    years ago, and the national ignition campaign is completed,
    which will be done in September this year, we had an
    understanding a few years back that we would work together to
    have a lower--to get the laboratory off of this special
    overhead rate.
        And this is the area, this is where you hear this number
    $140 million, it comes through. This is the area where we are
    going to work together with the laboratory to change their
    overhead rates across the laboratory, allow the movement of
    people into the NIF project appropriately, because the reality
    is the bottom line is the laboratory's overall budget is not
    going down all that much.
        And so the logic of saying we have to layoff these very
    important scientists--Parney Albright, who is the laboratory
    director, and I and Don Cook, we don't want that, and so we're
    working together. In fact, we had a very long conference call,
    video conference call, last week Thursday on this, to address
    this very specific issue, because we recognize it was getting a
    lot of attention. And we can come back to that, Madam Chairman.
        Senator Feinstein. Thank you very much. I've taken a lot of
    time on this.
        Senator, why don't you go ahead?
        Senator Alexander. Okay. It's very interesting.

                           OAK RIDGE URANIUM PROJECT

        I'd like to talk about the two big projects, the uranium
    project at Oak Ridge and the New Mexico project on plutonium.
    And I'll start off with the uranium project at Oak Ridge.
        As I understand the Administration's proposal, you plan now
    to accelerate construction somewhat, and to do a phase one by
    the year 2019. Is that right? Or roughly?
        Mr. D'Agostino. That's right. That's the proposal. Dr. Cook
    has asked for a 30-day study, which will be completed at the
    end of this month, in another week or so. And the leading
    approach on delivering on this project is the phased approach
    you just described.
        Senator Alexander. When will we know what our cost
    objective is for phase one?
        Mr. D'Agostino. Our plan right now is to complete critical
    decision--I shouldn't use this terminology, I apologize. Our
    plan is, after we reach 90 percent design, which is going to be
    about this fall timeframe, because there's still a fair amount
    of work to reach that objective, then the department will
    undergo a very detailed review, it takes about 4 months or so,
    of the proposal put forward by our contractor down in Tennessee
    on this.
        Then this will be independent reviews by outside experts to
    make sure that, because as you said earlier, Sir, once we make
    a commitment on how much something is going to cost, we want to
    make sure we can honor that commitment and honor that
    commitment for this 8-year period.
        So my expectation is, by the end of this year, or early
    into next year, Sir.
        Senator Alexander. You have a number now, if I'm correct,
    of about $6.5 billion for the entire project before you lop off
    phase one. Is that about right?
        Mr. D'Agostino. The cost range right now is--that's the
    upper end of the Government's cost range. At this stage in the
    game, because we don't have the design completed, we talk about
    ranges, a low-end and a high-end of the range. And that $6.5
    billion is there.
        Senator Alexander. So you might have design 90 percent
    complete by the fall, then it will take you another 3 or 4
    months to satisfy yourself that you got the right figure. And I
    assume the right schedule for project completion; is that
    right?
        Mr. D'Agostino. That's absolutely right. The cost, the
    schedule, and the scope. What we're actually going to
    accomplish will be a key part of that as well.
        Senator Alexander. So that might be early next year that
    you could say to Senator Feinstein and me and what the schedule
    is and what the cost objective is?
        Mr. D'Agostino. Yes, but we would be happy to update you in
    the interim before then to give you an idea of how things look
    as we approach that time. Of course, with the President's
    official budget submittal in January of next year, my
    expectation is to make sure that that's formally documented in
    that particular timeframe.
        Senator Alexander. Well, that means you'll have to know in
    October and November.
        Mr. D'Agostino. Well, ideally, we'll have a pretty good
    sense in October and November, because we will have----
        Senator Alexander. So you'll be able to tell us about the
    same time you tell the Office of Management and Budget, which
    will probably be October, November, what you think it's going
    to be. And then you're going to confirm it within the next 2,
    3, or 4 months.
        Mr. D'Agostino. Yes, Sir. We want to do a validation
    process. It's not simply a matter of just taking what we get
    and just throwing it in there. We want to get external experts.
        And this is a key point that that was discussed earlier on
    project management, of establishing a very solid baseline of
    project management principles, which one of them is the 90
    percent design that we've talked about; having the right people
    in the job to get the job done.
        You brought this point up and, in fact, John Eschenberg in
    the audience here, who's a certified project manager at the
    highest levels, he's got a great reputation, he does fantastic
    work. We have him assigned particularly this project, establish
    the baseline, get it independently checked. And that's what we
    want. We want the independent validation.
        And then once we do that, kind of line up the funding, the
    project scope itself, and the right people, and then hold them
    accountable. And that'll be the key piece at the very end of
    this.
        Senator Alexander. Well, there's a competition going on for
    management of the Y12 project. And it's possible, it seems to
    me, that that competition could divert energy that ought to be
    directed toward keeping the project under cost and on budget.
    What's your plan to make sure that doesn't happen?
        Mr. D'Agostino. The plan to make sure that doesn't happen
    is the way we've structured the competition, by asking the
    people that propose, that would like to ultimately run our
    facility, two proposals, one is in which where we can sever out
    or cut out the UPF project from the project, if we needed to.
    So this will give the Government a number of options on how we
    can move forward.
        We also have a wonderful team that is there; Babcock &
    Wilcox and Bechtel that are working together. They both
    committed that this is--from their standpoint, their commitment
    is to make sure that taxpayers get the best value and that they
    have committed, no matter how the competition goes, to make
    sure that there if there is a transition, that the transition
    happens appropriately.
        Senator Alexander. The contractor was arguing that the
    longer we delayed UPF, the more money we wasted because of the
    inefficiency of the cost of security and operations. And anyone
    who visits there, as I have, could easily believe that. The
    numbers that I used to hear when we were talking about the
    whole project I believe were in the neighborhood of a couple of
    $100 million a year in extra costs to taxpayers for every year
    we delayed it.
        Now, if we're going to speed it up, we should be saving
    money, shouldn't we? If we get it done a year earlier,
    shouldn't we be saving as much as if we delayed it a year
    later?
        Mr. D'Agostino. We should expect to save money on two
    fronts. One is the fact that it's one less year of operating
    kind of in this less efficient way. And two is projects
    typically become more efficient if you compress the amount of
    time to actually do the project.
        In addition, the phasing that you had talked about earlier,
    Senator Alexander, will address a portion--it's not the
    complete collapse of the security footprint, because we are
    phasing it, because we want the most important part of the
    project, the 9212 capabilities piece, done early instead of--
    we're going to move that up a few years, like 2\1/2\-years,
    3\1/2\-years timeframe.
        So we will save from an operational efficiency standpoint.
    We'll save some money from the security standpoint. We hope to
    do that in the near future by driving this H road right down
    the site and splitting it into two pieces.
        And we should be able to save some resources, particularly
    once the facility gets operational. Those savings typically,
    though, particularly on the latter, the security savings and
    the operational savings, won't happen until that phase is
    completed.
        Senator Alexander. Well, my last question on the UPF, and
    then in my next opportunity I want to talk about the plutonium
    facility and how you're going to deal with that.
        And this is the Chairman's prerogative to how she would
    like to do this, but I'd like to ask your advice about the
    example I used of when I was trying to get that highway built
    on time.
        You've got a number of people who are accountable to you,
    but it seems to me that, using good Navy procedure, that there
    ought to be a single person accountable to Senator Feinstein
    and to me for an on-time, on-budget project and that ought to
    be you.
        And that would mean, it seems to me, that it would be wise
    for us to have some session with you in 2 or 3 months just on
    this one project. And we may want to do it on others but just
    on this one. And say, find out how you're doing in preparing
    for it. And then about the time of the budget, it sounds like
    October or something, we need another one.
        And then once you come to us, and it sounds like it'll
    finally be at the end of the year, early next year, and say,
    ``Okay, this is an X-cost project. This is our plan between now
    and 2019'', or whatever the number is, that we ought to meet on
    a regular, systematic basis, not to waste time, not too much,
    maybe a quarter, every quarter is enough, but for the sole
    purpose of a report about whether you're on time and whether
    you're on budget.
        And I don't think it's up to us then to get inside and
    figure out why you are and why you aren't. I mean, we could do
    that if we want, but we're not the managers of the project; in
    effect, you are.
        And that would be the discipline that I would think would
    be most likely for us to do our jobs in making sure we're
    saving taxpayers' money.
        What's your thought and your recommendation about how that
    process could be most useful?
        Mr. D'Agostino. I like that idea. I like the idea that you
    as ranking and Madam Chairman are interested in wanting to
    deliver this project. It helps me actually do that as well,
    knowing that it's time on your calendars.
        And I'm happy to do that. I would look forward to doing it.
        I think once we get this baseline, particularly, we should
    establish the kind of information that is important for both of
    you to hear and see and gain confidence in. And in fact, I
    would also even suggest at some point, time permitting, that at
    the right moment, we schedule a short visit down to the site
    itself. I think it would be very illuminating. And I don't
    think it has to happen every year, but I think maybe when we
    establish that point in the sand where we say, ``Okay, this is
    it,'' both your presence there would reinforce to our team, our
    colleagues, that this is serious business, that the Government
    is making a commitment, that we need a commitment, not just a
    contractual commitment, but a commitment to get this job done.
        Senator Alexander. Thanks, Madam Chairman.
        It is serious business. I mean, we're talking about
    billions of dollars here, and we just don't have billions of
    dollars. We've got a debt that has to be reduced, and we've got
    other urgent needs just within our own budget.
        Senator Feinstein. Right. Thank you very much. It's a good
    idea, Senator. And I'd be very pleased to participate.

                           NATIONAL LABORATORY COSTS

        Let me ask you, as long as we're on the subject of lab
    costs, it's my understanding that indirect costs at the
    national labs average 45 percent. I assume that this is
    overhead and administration.
        This seems to me to be inordinately high. Why would an
    average of indirect costs be 45 percent?
        Mr. D'Agostino. There are a couple of reasons. One is, the
    cost accounting standards, each laboratory approaches cost
    accounting, we ask them to manage and operate, so we will not
    dictate on the Federal side that you have to, you know, do
    things everywhere across the laboratories in the exact same
    way.
        However, each laboratory will then decide how it wants to
    attribute its costs for just the basic operation of the
    facility, whether it's turning on the lights, keeping the
    buildings painted, putting a roof on the facility, taking care
    of the grounds, the chief financial officer organization, the
    human capital office organization, these are high costs. We
    think they're very too high.
        And one way we are approaching to address this particular
    problem, because we realize it's a real problem, because
    ultimately the taxpayers are paying this particular cost, is
    we're looking at consolidation of contracts to see if like-
    minded what we would call business functions, like human
    capital, procurement, general counsel, and the like, can be
    done in a more efficient way.
        And by integrating contracts and by asking our contractors
    to buy their equipment from a central procurement source, we
    can save money.
        Senator Feinstein. Well, I've asked GAO to take a look at
    this.
        Mr. D'Agostino. Okay.
        Senator Feinstein. So I'd like to ask that you work closely
    with them and that we get figures that the Senator and I can
    share and see what is really at the heart of this, because it's
    an inordinately high figure.

                            PLUTONIUM PIT PRODUCTION

        Let's talk a little bit about pit production. In 2007, the
    JASONs found that the plutonium in pits can last up to 100
    years without affecting nuclear weapons' performance. Recent
    assessments, I'm led to believe, may indicate that pit
    lifetimes may even approached 200 years.
        Has NNSA conducted pit-aging studies in the last 5 years?
        Mr. D'Agostino. Madam Chairman, we're continuing----
        Senator Feinstein. Yes or no?
        Mr. D'Agostino. Yes.
        Senator Feinstein. Okay.
        Mr. D'Agostino. And I'm not familiar with the 200-year
    estimate that you've provided. But the original 100 years
    calculation that we did, and that JASON did validate it, as you
    suggest.
        Senator Feinstein. Could we please see the results of your
    pit-aging studies?
        Mr. D'Agostino. Yes, Ma'am.
        Senator Feinstein. In the last 5 years?
        Mr. D'Agostino. Yes. It's continuous. Yes, of course.
        Senator Feinstein. Okay. I'd like to see it.
        NNSA says that the current capacity of 10 to 20 pits per
    year is not enough. However, is there an identifiable need in
    the next 10 years to manufacture new pits? Given shrinking
    stockpiles, do we really need the capacity to produce 50 to 80
    new pits per year?
        Mr. D'Agostino. We believe our current capacity, which is
    roughly at about the 10 to 20 pit per year capacity, is enough
    to take care of the stockpile needs over the next decade. We'll
    work closely with the Defense Department.
        Senator Feinstein. Good. Okay, that's good to hear.
        Mr. D'Agostino. There will always be a question--the term
    you used, the 50 to 80 pits per year term, is an element of
    what we call a responsive infrastructure, which once there is
    confidence that we have a nuclear security infrastructure in
    place that can take care of the Nation's need, the number of
    reserve warheads that we would need to maintain could actually
    go down even further.
        Senator Feinstein. Okay, but for my purposes, what you're
    telling us is that for the next 20 years, the 10 to 20 percent
    figure is enough, 10 to 20 pits is enough.
        Mr. D'Agostino. No, Ma'am. I would say in the next 10
    years, we're confident that we take care of the--is enough, and
    that, in all likelihood, that can be stretched to 15 years,
    because we have a pretty good sense of the kind of work that we
    need to do.
        Senator Feinstein. Okay. That's what I want to know. We'll
    write it down and hold you to it.
        Mr. D'Agostino. Right. What I'd like to just add, if I
    could, because, unfortunately, some of these, you'd like to
    make these black and white. Some of them aren't so black and
    white.
        We're in the process of conducting a study called the W78
    and W88 life-extension study, you recall. And an element of
    that study will be to examine what is needed from a plutonium
    need for the country. That study is not done, so I don't want
    to make a presumption or force our laboratories into saying you
    can only come up with solutions that do the following.
        The laboratories need to be free to examine all options
    then bring options before the Government to decide which is the
    right approach. So we'll have an opportunity on this.
        Senator Feinstein. Okay, good.

                            LIFE EXTENSION PROGRAMS

        The W76 makes up the largest share of our nuclear deterrent
    on the survivable leg of the triad--nuclear submarines. Yet,
    the fiscal year 2013 budget request cuts the W76 life extension
    program by $81 million, and it delays completion by 3 years. My
    understanding is that this funding was shifted to support the
    B61 life extension program. Why did you make that decision?
        Mr. D'Agostino. We recognize that it's important to take
    care of the W76 and the B61. Particularly, the B61 is entering
    into a phase of work where the workload will increase if we are
    going to meet our milestone data 2019.
        When we looked at the impacts of the fiscal year 2012
    appropriation and the Budget Control Act from last summer, we
    recognize that we need to balance across all our programs.
        Senator Feinstein. But what effect will this have on the
    W76 in the Navy?
        Mr. D'Agostino. Well, the Navy's warhead, we're going to do
    the production requirements to meet the Navy's operational
    needs, which will take care of the Navy's needs by, I believe,
    it's the 2018 timeframe.
        And what we will have done is then shifted so that the
    warheads that need to be on the submarines for sure are going
    to be taken care of. We're going to meet the production
    requirements with that.
        Senator Feinstein. So the Navy's needs are met.
        Mr. D'Agostino. The Navy's operational needs are met, but
    we need to also finish the refurbishment on the systems that
    are not actually going to be deployed out on--and we're going
    to do that. That's going to take a few more years.
        But the key is to make sure the Navy's operational needs
    are met.
        Senator Feinstein. And the Navy is accepting of this
    transfer?
        Mr. D'Agostino. The Nuclear Weapons Council, which has
    elements of the Defense Department, the senior officials from
    the Defense Department who are responsible for this area, have
    agreed that this is an approach. I will add that that doesn't
    mean that everybody in the Navy thinks this is the right thing
    to do.
        But the reality is when we've examined all of the options,
    when we took a look at our desire to make sure that the Navy's
    operational needs are met, that the proposal that we put
    forward is one that makes sense.
        I will also add, though, that we're working very closely
    with the Defense Department this summer because--in fact, not
    right now, but we're working right now through the summer to
    make sure that we fully understand and agree on the fiscal year
    2014 to fiscal year 2022 timeframe, make sure that that plan is
    all laid out.
        Senator Feinstein. And this will not increase the cost of
    the W76?
        Mr. D'Agostino. Well, there will be, most likely probably a
    slight cost increase, because we've had to stretch the
    production out over a few more years, because we're completing
    the warheads a little bit later than we had wanted to. So we
    have to maintain a little bit of that infrastructure in place.
        But I don't think it's that significant. We can give you
    our best analysis on that, probably in a question for the
    record, to give you a sense of that.
        Senator Feinstein. Yes, would you please do that?
        Mr. D'Agostino. Yes, Ma'am.

               LOS ALAMOS NATIONAL LABORATORY PLUTONIUM FACILITY

        Senator Feinstein. I want to speak about the termination or
    delay of two projects after spending a $1.5 billion on them.
    And you can, of course, guess what they are. One is Savannah
    River, and the other is the new plutonium facility at Los
    Alamos that's now been delayed by at least 5 years.
        Why did you delay the construction? These are multi-billion
    dollar facilities. So you spend money and then stop. I don't
    understand it.
        Mr. D'Agostino. Well, there's a couple of things. We
    learned a lot in the last year, and some things have changed.
    And I'll describe the changes from last year to this year that
    led us to conclude, led me to conclude, because it's my
    decision in submitting this to the Secretary and ultimately
    then to the White House.
        The things that changed, and I apologize in advance for
    maybe getting down the level of detail. We built part of the
    Chemistry and Metallurgy Research Replacement Facility already.
    It's called the radiation building. It's the radiological
    building that is done. It's built, and it's in place.
        Senator Feinstein. Are you talking about Savannah River?
        Mr. D'Agostino. Oh, no, I'll just start off with the--I can
    start with Savannah River.
        Senator Feinstein. Well, whichever.
        Mr. D'Agostino. We're starting off with the Los Alamos, New
    Mexico, plutonium facility.
        Senator Feinstein. Okay.
        Mr. D'Agostino. That particular facility, the radiation
    building, which already exists, which you appropriated
    resources for and we built, was originally only going to handle
    extremely small quantities of plutonium. And it will still
    handle small quantities of plutonium.
        But the analysis that was done, the safety analysis that
    was done for that particular facility was done at a time--did
    not use what we would call modern, up-to-date internationally
    accepted dose conversion factors.
        Now, this term dose conversion factor, this is somewhat of
    a technical term, but translated it means how would you convert
    material in the building to an actual dose that a human being
    might receive if they were exposed to this material.
        In modern dose conversion factors, in the past year, we've
    shifted our approach to doing the safety analysis to use the
    most up-to-date, modern, internationally accepted dose
    conversation factors. That one simple change alone allowed us
    to shift the amount of plutonium we can have in this radiation
    building, which already exists, from small gram quantities,
    like 4 to 6 grams, up to higher gram quantities, like 34 to 39
    grams of plutonium.
        It doesn't sound like a lot of plutonium, and it's not a
    lot of plutonium. But that one change alone will allow us to do
    the analysis in the radiation building that we didn't think we
    could do there.
        And in essence, it's a very significant increase in the
    amount of work we can do in this radiation building. That takes
    a tremendous amount of pressure off the desire to have the
    nuclear facility built and up and operating quickly, which was
    a big item.
        The second change from last----
        Senator Feinstein. I'm not understanding.
        Mr. D'Agostino. Okay.
        Senator Feinstein. So you're saying that based on this new
    acceptable dose conversion factor----
        Mr. D'Agostino. Right.
        Senator Feinstein [continuing]. That you can now process
    more plutonium. Therefore, the new facility is not necessary.
    Is that what you're saying?
        Mr. D'Agostino. The new facility, the need for the new
    facility to take care of those items by the year--early 2020s,
    the pressure is off to get that done. We can actually use the
    facility that we have built already.
        Before this, we didn't have this modern dose conversion
    factor piece in there. At some point in the future, and this is
    why we've deferred it; we haven't canceled Chemistry and
    Metallurgy Research (CMR). The Nation will need a facility that
    can consolidate all of these functions.
        Senator Feinstein. Okay. We've got $1.5 billion worth of
    facilities here, right? These two facilities? Over the last 10
    years, $800 million has been spent on design of the new
    facility.
        My understanding is that now you find you don't need it,
    and that the other facility is going to be used. Is that right?
        Mr. D'Agostino. We are going to use--we believe we can
    delay, defer the decision on building the actual facility,
    because we have flexibility as a result of this analysis, as
    you've correctly described.
        Senator Feinstein. Okay. And you're $800 million into it.
        Mr. D'Agostino. We are----
        Senator Feinstein. Over 10 years, over the past 10 years.
        Mr. D'Agostino. Over the past 10-year period, we spent a
    significant amount of money in doing the analysis, because we
    didn't have the modern dose conversion factors.
        In fact, we had earlier on, 10 years ago, the production
    rates were higher, because the size of the stockpile was
    different and was more. There was a time many years ago that
    there was a discussion of a thing called the modern pit
    facility, which was going to make plutonium pits. That is off
    the table.
        And in fact, because of----
        Senator Feinstein. Yes, the plutonium pits----
        Mr. D'Agostino. Because we've been illuminated by longer
    pit aging, because we've now been illuminated by the fact that
    we have a very significant and different financial environment,
    because we know that we have a lot of material out of the
    plutonium vault in the existing plutonium facility that the
    laboratory has cleaned up, the pressure to start today on two
    large, very expensive facilities, that pressure has been
    reduced.
        And so we've decided to focus our attention on the most
    critical, that thing that limits us most operationally, which
    is the uranium capability.
        That's on the Savannah River side. I think your second part
    of your question dealt with--asked the question on the Savannah
    River side.
        Also, from the standpoint, we benefited in some respects,
    and the Secretary made a decision last year to integrate--not
    integrate but to have both the environmental management
    organization and the NNSA report to one position, this Under
    Secretary for Nuclear Security.
        Working with the Environmental Management (EM)
    organization, the NNSA looked at fully utilizing the H Canyon
    facility in order to provide some plutonium feedstock, as well
    as fully utilizing the Los Alamos facility for the feedstock
    itself.
        This is probably the other $700 million that you described
    on the Pit Disassembly and Conversion Facility (PDCF).
        Senator Feinstein. $700 million over 13 years.
        Mr. D'Agostino. Right. So what we wanted to do is take
    advantage of the fact that we've gotten--the NNSA received 4
    metric tons of material of feed from the EM organization. We're
    going to use the H Canyon to make a certain amount of material.
    And we're going to take advantage of the Los Alamos capability.
        That takes the pressure off having this large PDCF. They
    don't make sense----
        Senator Feinstein. I just want you to understand that if
    it's been $700 million over 13 years to design a facility that
    you terminate, and then $800 million over 10 years. That's $1.5
    billion essentially wasted.
        I mean, that's the way I see it.
        Mr. D'Agostino. Yes, Ma'am. I make the decisions----
        Senator Feinstein. Based on what you----
        Mr. D'Agostino [continuing]. Based on what I know.

                      UNITED STATES ENRICHMENT CORPORATION

        Senator Feinstein. I understand that. We haven't even
    gotten to USEC yet. You want to do that on top of this?
        Let's do USEC for a minute.
        Given the uncertainty about the future of operations, my
    understanding is that there's a one-time cost of $150 million
    in fiscal year 2013, and that is it. Is that correct?
        Mr. D'Agostino. Yes, Ma'am. I've talked to Secretary Chu
    about this, most recently even yesterday. We have a request for
    the transfer authority in fiscal year 2012 coupled with the
    fiscal year 2013 request that is in the nonproliferation budget
    for $150 million to do the demonstration project.
        Senator Feinstein. Have things improved?
        Mr. D'Agostino. With the ability----
        Senator Feinstein. Has management improved?
        Mr. D'Agostino. The management, in this environment, we
    would only agree to move forward in this area is if a
    consortium of companies came together with USEC in order to----
        Senator Feinstein. We're aware of that, because we had a
    big discussion, and I know the Senator is well aware, and I am,
    too.
        But the question is, has it made a difference?
        Mr. D'Agostino. Well, because we don't have the consortium
    in place, and we haven't started the----
        Senator Feinstein. It isn't in place?
        Mr. D'Agostino. Well, not to my knowledge. Until we have
    the----
        Senator Feinstein. Can you refresh my memory? Because we
    went over this----
        Senator Alexander. Well, it seems to me, Madam Chairman,
    isn't the idea that the research and development (R&D) project
    is ready to be demonstrated for 2 years. And we're going to run
    it for 2 years and see if it can operate at a level of
    efficiency the DOE regards as adequate, both in terms of its
    successes in operation and its ability to acquire materials?
        Senator Feinstein. We're funding it for 1 year.
        Senator Alexander. The transfer authority did 1 year and
    then we fund it for another. And that's the two $150 million
    that we were all caught up in with the late requests that we
    got last year.
        But somebody has got to be in charge of the facility today.
        Mr. D'Agostino. Well, absolutely. USEC is in charge of the
    facility today.
        Senator Alexander. And who's going to be in charge of the
    2-year test? Is that what's not put together yet?
        Mr. D'Agostino. Well, we have to, with great respect, we're
    waiting for the transfer authority. I mean, obviously, this is
    complicated. The Congress and the Administration have to do
    this together.
        Senator Alexander. Yes.
        Mr. D'Agostino. We don't have the transfer authority in
    place unless something happened recently that I'm not aware of.
    And so, therefore, moving forward on the exact mechanism is
    going to take a little bit of time.
        Senator Alexander. So you're saying first we have to
    provide the money and then you have to put together the team to
    figure out whether the project works?
        Mr. D'Agostino. Well, there are things happening in
    parallel. We won't do this first and then second and then
    third, because we don't have the time for that kind of an
    approach.
        Senator Feinstein. We didn't fund it with all those
    discussions?
        Senator Alexander. No, we didn't. And they're asking----
        Senator Feinstein. We made an offer to the House. The House
    turned it down.
        Mr. D'Agostino. That's correct.
        Senator Feinstein. So we didn't fund it.
        Senator Alexander. Right.
        Mr. D'Agostino. Right.
        Senator Alexander. They've asked for transfer authority to
    go with some other money to take care of what would have been
    year 1, and they put in the 2013 budget another $150 million
    for year 2.
        And at the end of that, we're supposed to know if it works
    or it doesn't. And if it does, then it's up to the Department
    to recommend where we go from there.
        Mr. D'Agostino. That's right. But I would also propose for
    something like this, we would want, not just at the end but
    throughout the process, we, you know, on a periodic basis,
    frankly, whether it's quarterly or maybe even more frequently
    than that, we communicate officially back to the committee in
    this particular area, once we get started.
        The planning work has started.
        Senator Feinstein. Well, have you stockpiled low-enriched
    uranium for tritium?
        Mr. D'Agostino. We are set. We have commitments for a
    number of years into the future, 5 years into the future. We're
    fine for tritium production for the next 5 years in the future.
        We can do obligation exchanges to take care--what's known
    as flag swapping, taking material and making sure that it's
    domestically produced material that we can use it for national
    security purposes, that will take care for about another 5 more
    years.
        But it's not just the tritium production piece that's
    important, an element of this. But from a tritium production
    standpoint over the next number of--a decade or so, as I've
    described, there are ways through this, but----
        Senator Feinstein. Without USEC, is that what you're
    saying?
        Mr. D'Agostino. I don't want to call it a particular
    company. I'm talking without an indigenous U.S. capability,
    which of course USEC right now is the only indigenous U.S.
    capability. It doesn't mean another company can't step in to do
    this.
        Senator Feinstein. So what is your prognosis? As you know,
    this keeps going back and forth and back and forth. Candidly, I
    don't know whether this facility can produce or not. And yet,
    you've requested $150 million.
        Mr. D'Agostino. I mean, the American Centrifuge Plant (ACP)
    project is one that the Department and the USEC organization
    have been working on. There's been some successes, and some
    areas where improvements are needed.
        The key is, the concern that we have, of course, is making
    sure, since it is the only technology----
        Senator Feinstein. What are the successes?
        Mr. D'Agostino. What are the successes?
        Senator Feinstein. Yes.
        Mr. D'Agostino. I would say the success is the fact that
    we've operated and trained a number of centrifuges for periods
    of time. I don't have the exact lengths of time off the top of
    my head, but we can get that for you, for periods of time and
    successfully spun the centrifuges. And there have been some
    very significant challenges.
        Senator Feinstein. Well, the Iranians are doing that, too.

                               NUCLEAR SMUGGLING

        I mean, in any event, let me go to an easier topic, nuclear
    smuggling.
        NNSA plans to cut $171 million from efforts to install
    detection equipment at strategic international borders and
    shipping ports.
        What's the reason for the cut and the reason for the
    ``strategic pause''?
        Mr. D'Agostino. Well, there's multiple reasons, one of
    which I mentioned of having to do with challenges. When we look
    at the overall scope of work that has to happen in the
    nonproliferation arena, the most important part of the
    nonproliferation scope, the absolutely most important part, is
    securing the material at its location or removing the material
    from its location.
        And, of course, we just can't do this ourselves. We have to
    get agreement by our partner countries in order to make this
    particular thing happen. And so the emphasis is placed on the
    Global Threat Reduction Initiative program, because we're
    absolutely deeply committed to achieving the President's charge
    to us.
        With your support, we've been very successful to finish the
    first slice of dealing with the most vulnerable material.
        The second line of defense program helps significantly in
    the transfer, illicit transferring of material around the
    world. And we've done a significant amount, and we will have,
    with this budget, more than 500 sites around the world complete
    a significant amount of this work.
        The pause allows us to, in essence, evaluate whether or not
    just combinations of capabilities and programs from across the
    agency can be done in a different way.
        We've been doing second line of defense in this manner now
    for, I would say, close to a decade in this approach. And it's
    normal when you're doing something in a consistent way for a
    long period of time and had successes in installation, and,
    frankly, we had some successes in finding material to evaluate.
    Do we keep doing things the same way out well out into the
    future or not?
        We're going to focus on increasing our mobile detection
    efforts, because we recognize that when we established fixed-
    site radiation detectors, the obvious question is, is, well,
    you've just told the smugglers that this is a place where
    you've got radiation detectors, they're just not going to go
    there. They're going to go somewhere else or they're going to
    go around.
        So an element of the pause is to put in place mobile
    detection capability to ensure that the whole border areas are
    covered.
        And so it's a confluence of budget and the like----
        Senator Feinstein. You talked about buildings. You had a
    goal of securing 8,500 buildings by 2025, and that slipped by
    10 years to 2035. Is that for the same reason or that you just
    can't do it?
        Mr. D'Agostino. Well, it's somewhat of the same reason, but
    it's also the fact that to make sure that the resource, the
    limited resources, we have are applied on the highest risk
    activities, which is not just securing some of the building.
        The numbers you mentioned, Ma'am, are dealing with
    radiological materials in many cases, which are different than
    nuclear materials. The nuclear material is fissionable
    materials that can turn into a mushroom cloud. The radiological
    materials are hazardous, but in a radiological dirty device. So
    they can cause some contamination spread, which would be
    expensive to clean up, but it's different than the mushroom
    cloud problem.
        So given a limited, finite set of dollars, the
    preponderance of our resources should be focused on dealing
    with the improvised nuclear device or nuclear materials, not
    just radiological materials.
        Senator Feinstein. Well, Mr. D'Agostino, you certainly have
    a difficult portfolio.
        Mr. D'Agostino. Yes, Ma'am, I'd agree.
        Senator Feinstein. I don't know why any nation would want
    to go nuclear.
        Senator.
        Senator Alexander. Yes, Ma'am. I've got three questions, if
    I may.

                         NUCLEAR WEAPONS MODERNIZATION

        One is the United States DOD and the President have said in
    their so-called 1251 figure that we need $372 billion more for
    nuclear weapons modernization than your budget recommends, even
    though your budget recommends $363 billion more than we spent
    in the current year--than we're spending in the current year.
        What can you say to the DOD and to the group of defense
    experts who said we need $372 billion more? Were they wrong?
    Have they changed their mind? Or do you have some other way to
    meet what they say is important for the Nation's defense?
        And I'm assuming most of the questions about it would come
    from your decision to delay the additional facilities for
    plutonium in New Mexico, because that's where about $300 of the
    $373 billion comes from. In other words, how are you going to
    do the work in plutonium that they say needs to be done to
    adequately secure the Nation's defense?
        Mr. D'Agostino. Okay, if I could start off with saying the
    DOD and the Nuclear Weapons Council support the President's
    budget, support this program.
        All of our organizations are larger organizations, so there
    may be folks that aren't happy with the fact that we have
    stepped off of----
        Senator Alexander. So they've adjusted their view, they
    have amended the 1251 number, those people you just mentioned?
    The DOD, the----
        Mr. D'Agostino. I don't know about the whole Department. I
    know about the Under Secretaries and the four-star officers on
    the Nuclear Weapons Council. Those are----
        Senator Alexander. Well, who provided us with the 1251
    number? That was part of a review?
        Mr. D'Agostino. That was both the DOE and the DOD that
    provided that.
        Senator Alexander. Now have the Departments amended that
    number?
        Mr. D'Agostino. We will be. And this is the study we're
    doing with the DOD to make sure that our out-year budgets, the
    fiscal year 2014 through 2022, 2023 budgets, because we do owe
    the Congress a plan.
        Senator Alexander. So the answer is yes, you're going to
    amend the 1251 budget, 1251 number. Then how are you going to
    do what needs to be done with plutonium with at the lower
    estimate level and with the deferral of the facility?
        Mr. D'Agostino. Sure. One element of how we're going to do
    this is by doing more work inside the radiological building
    that's already built.
        Senator Alexander. Which you described.
        Mr. D'Agostino. Which I described earlier. And that is an
    element of the resources that Madam Chairman was asking
    earlier, you know, was this a waste.
        Senator Alexander. So you do more work in an existing
    building. Are you going to produce, are you going to refurbish
    fewer pits or manufacture fewer pits?
        Mr. D'Agostino. We're going to take care and we're going to
    do the surveillance as we always do on the plutonium pits that
    we have. We have a PF facility called PF4 that exists, and
    we're going to take advantage of that.
        That was always the case. What we've done in the last year,
    the piece I hadn't described adequately, was--the big thing
    that changed in the last year as well, aside from this decision
    to be able to do more work in the existing radiologic facility,
    is we've reduced the amount of material that Los Alamos was
    keeping in its plutonium vault.
        In essence, the laboratory did a fantastic job in cleaning
    out, if you will--I use that term ``cleaning out''; it's not a
    technical term--but making sure that they only have material in
    the vault that they need in order to do their job. And the
    material that they don't need is appropriately dispositioned,
    whether it goes to the Waste Isolation Pilot Plant (WIPP)
    facility also in New Mexico or is put in a different area that
    the vault space is--the pressure on having a large vault, which
    CMR was going to give us, the nuclear facility was going to
    give us, the pressure on having a large vault right away has
    been taken--the notch has been taken down.
        But because we can use the device assembly facility for
    staging in Nevada, and because we plan on using the Superblock
    Facility at Lawrence Livermore for very small amounts of
    experimental work in the Superblock facility.
        So it's what I described earlier, which is this idea of
    operating in an integrated and interdependent----
        Senator Alexander. Well, just to boil it down, are you
    going to be processing fewer pits than you otherwise would
    have, otherwise were planning?
        Mr. D'Agostino. No, we will process the same amount of
    pits, which processing means doing surveillance on them, taking
    them apart, looking at them, making sure that they're okay.
        Senator Alexander. What about manufacturing?
        Mr. D'Agostino. Manufacturing pits, we have the capability
    to manufacture about 10 pits per year now. With a few small
    upgrades, we can move that number up to 20 pits per year.
        I believe that depending on the outcome of the W78 study,
    and if we maintain kind of this 10- to 20-pit per year capacity
    and working with the Defense Department on the overall size of
    the stockpile that that will take care of the need, the
    operational need to stockpile.
        Senator Alexander. So manufacturing 10 or 20 and then
    otherwise processing an additional number of pits.
        Mr. D'Agostino. Processing for surveillance, to do the
    surveillance work.

                      UNITED STATES ENRICHMENT CORPORATION

        Senator Alexander. Right. Let me shift quickly to my other
    two.
        Just to summarize the chairman's questions about USEC, I
    mean, basically, this centrifuge project is completed to the
    point where we need to know whether it works or not. Isn't that
    the argument?
        And the request is for a $150 million in the current year
    and next year to do an R&D deployment and assess whether it's
    ready to go. Isn't that basically right?
        Mr. D'Agostino. It's basically right, but it includes the,
    essentially, I'll call it the purchase--this R&D program to buy
    and train a set, a small production grouping of these
    centrifuges, and make sure that they work together.
        Senator Alexander. Yes, enough of them to make a judgment
    about whether it's been successful or not, this project.
        Mr. D'Agostino. And then to ensure that the taxpayer is
    protected in this area, that that intellectual property comes
    back to the department because----
        Senator Alexander. Yes, we understand that.
        But the point is to find out, at the end of 2 years, you
    should be able to say, unfortunately, this project on which we
    have spent billions of dollars doesn't work well enough to go
    forward with it, or, fortunately, it does and this is what we
    propose to do with it at this point.
        Is that----
        Mr. D'Agostino. Right.
        Senator Alexander. Is that basically right?
        Mr. D'Agostino. That's about right, Sir.
        Senator Alexander. And then, now, if I've got this right,
    you don't have the budget for cleanup, environmental cleanup,
    but you've got the management responsibility. Is that right?
        Mr. D'Agostino. Well, the Environmental Management
    organization works for me. I'm keeping the Environmental
    Management and the NNSA budgets separate. There's two separate
    accounts, because it's very important--we have a significant
    amount of environmental management work.
        So, yes, the Environmental Management budget is part of my
    portfolio.

                              RADIOLOGICAL CLEANUP

        Senator Alexander. It comes to you.
        Well, that's very important and another part, Madam
    Chairman, of making good use of the taxpayer dollars. Shrewd
    decisions and careful priorities in cleanup could make a huge
    difference not just in the safety of Americans, but in how
    wisely we spend the money, for example, in the case of the Y-12
    facility.
        I know that you're making some decisions to get certain
    buildings out of the security compound to reduce security costs
    and to permit us to clean them up more rapidly. You're
    finishing up, I know at least in the Oakridge area, a huge
    amount of radiological cleanup. And we've talked about the
    importance of beginning to move ahead with a plan to deal with
    the mercury problem in the Oakridge area, which is a very large
    problem.
        So I would like to receive assurances from you that you
    will continue to focus on finishing the radiological cleanup
    and be flexible in terms of spending the dollars to move as
    rapidly ahead so we can, A, develop a plan, and, B, get started
    on the long-term mercury cleanup.
        Mr. D'Agostino. Senator, I'd be glad to do that. The U-233
    project I think is the radiological project that you talked
    about.
        Senator Alexander. Yes.
        Mr. D'Agostino. And that's a real demonstration of how two
    organizations can and, frankly, should work together. It was as
    the result of pushing--or Bill Brinkman and I--Bill Brinkman
    runs the Office of Science--and I have the other piece of
    working together and saying we have to finish this job.
    Fortunately, I have a colleague like Bill in this area, and we
    were able to do it with his help.
        Senator Alexander. Madam Chairman, I have no other
    questions.

                           AMERICAN CENTRIFUGE PLANT

        Senator Feinstein. Okay. I'm afraid I do.
        Let's go back to last June at USEC. What blew up?
        Mr. D'Agostino. Last June at USEC. I don't know, Madam
    Chairman. I will have to check. I wasn't given responsibility
    at that particular point.
        Senator Feinstein. Well, didn't the centrifuges blow up?
        Mr. D'Agostino. I don't know if I would use the term ``blow
    up''. We had, I think, as I understand it, there were some
    issues with the centrifuges spinning in a way that was not
    conducive to their operation at all.
        Senator Feinstein. Sorry.
        Welcome to the United States Government.
        Mr. D'Agostino. Senator, if when you have somebody that has
    my job called the Nuclear Security Administration, I don't
    usually use the words ``blow up'' too often. So I'm aware that
    sometimes I can be--that term could get--if I use the term
    ``blow up''----
        Senator Feinstein. Let me put it in another way.
        Mr. D'Agostino. Okay.
        Senator Feinstein. Were they all incapacitated?
        Mr. D'Agostino. Were they all incapacitated?
        Senator Feinstein. The centrifuges.
        Mr. D'Agostino. We'll have to take that for the record. I
    don't know.
        Senator Feinstein. Because it seems to me, before we fund
    something, we ought to know where things are.
        Mr. D'Agostino. Absolutely. I'd glad to come up, once I get
    the data, with my colleagues from the nuclear energy
    organization to explain where things are with the ACP,
    absolutely.
        Senator Feinstein. Okay. I would appreciate that very much,
    because, you know, we went through this. All the vibrations
    that I get from the commentary is we're right where we were.
    And yet, has the plant been operating?
        Mr. D'Agostino. Well, the plant has--I mean, pieces of the
    plant had been operating. I couldn't tell you which pieces are.
    USEC continues to do work on the ACP project to tackle the
    problem.
        Senator Feinstein. Well, I'd like to know what's working
    and what isn't working.
        Mr. D'Agostino. Sure. Absolutely.
        Senator Feinstein. Before we fund it. I'm really serious.
        Mr. D'Agostino. Absolutely. I think that's a fair question.
        Senator Alexander. Madam Chairman, if I could add, I mean,
    isn't the question, is the project ready to receive funding for
    a 2-year demonstration about whether it works or not. I mean,
    isn't that what we're talking about? That was the whole project
    purpose of the 2-year project, was to see whether all this
    research and effort over the last several years----
        Senator Feinstein. Candidly, I thought it began. Now what
    I'm finding out is that it may not have. I don't know whether
    the plant went totally down, whether the centrifuges went
    totally down last June, but there certainly was a big
    interruption.
        I mean, if it can't operate, why fund it? If it doesn't
    operate well, why fund it when, as I understand it, there are
    other methods of handling the problem?
        Senator Alexander. Well, it could be, Madam Chairman,
    that--I mean, that's certainly a logical--we got a late request
    for 2 years of $150 million that surprised us, correct?
        Senator Feinstein. Correct.
        Senator Alexander. And we weren't--it came late in the
    process, and we tried to help but could not. Because we
    couldn't fund it, I suppose that produced--you couldn't move
    ahead, would be my guess. And I guess the question I'd like to
    know the answer to, too, is if are you ready for us to fund it?
    And if so, can you show us why?
        Mr. D'Agostino. And the answer would be, we believe that
    moving forward that we will be ready to show you why we can
    move forward with this deactivation and decommissioning (D&D)
    project. I don't have the data here to tell you exactly how
    many centrifuges are spinning, do we have all of the problems
    solved.
        But the key for us is, USEC has been working on this
    project for a number of years, as we've discussed, that it is
    the best technology available, we believe the best approach to
    move forward on maintaining an indigenous U.S. capability.
    That's absolutely critical for not just the tritium reason,
    recognizing that's not a problem that we have to make tritium,
    make low-enriched uranium for tritium today. But it takes time
    in order to take us from a D&D project, a 2-year effort, to
    ultimately turning into a capability that the Nation can rely
    upon to take care of its needs out into the future.
        And that's why we believe it's important to move forward
    with this D&D project, but if at some point in working with the
    Congress, it isn't something that the Congress is willing to
    do, we will have to explore other paths and take back the
    technology and use a different approach.
        Senator Feinstein. How many people are working there now
    and how is it funded?
        Mr. D'Agostino. I'll have to take that one for the record.
    I don't know the number of people that are working there now
    and the details of funding.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Feinstein. All right. At this point, this is a
    serious concern. We had to grapple with it, and we tried to
    solve what was an immediate problem. We made the offer to the
    House; nothing happened.
        I don't know how they're functioning. I don't know how
    they're paying for functioning. I don't know whether they are
    functioning and producing.
        Mr. D'Agostino. As I understand it----
        Senator Feinstein. I don't know how many people they
    employ. I heard it was a couple of thousand people. So it's
    kind of like a shadow, and I think we need to flesh it out.
        Mr. D'Agostino. Okay.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                Questions Submitted by Chairman Dianne Feinstein
                           national ignition facility
        Question. Mr. D'Agostino, the National Ignition Facility (NIF) is
    supposed to achieve ignition in September 2012. Some experts believe
    that NIF will not achieve ignition by September.
        What are the prospects for ignition at NIF?
        Answer. The timeframe for achieving ignition is impossible to
    predict with our current scientific understanding. Demonstrating fusion
    ignition has always been recognized to be a grand scientific challenge.
    The National Ignition Campaign (NIC), a multilaboratory, multiyear
    effort devoted to this pursuit, although producing many significant
    advances, has yet to accomplish three key milestones on the pathway to
    ignition. The milestone to create significant self-heating (``lighting
    the match'') and the ignition milestone itself were recently delayed by
    3 months each, and the milestone to exceed 5 million joules of fusion
    yield has been dropped from the campaign. The campaign is scheduled to
    end at the close of fiscal year 2012. It is imperative that the
    Stockpile Stewardship Program understands the physics underlying
    National Nuclear Security Administration's (NNSA) inability to achieve
    indirect-drive ignition thus far, and in doing so, assess the important
    fundamental issues relevant to ignition. Through the current campaign,
    the NIC team has gained insights into the challenges of developing the
    scientific, technological, and engineering basis for indirect-drive
    ignition and has regularly communicated the technical progress to the
    broader scientific communities through a number of reviews and refereed
    papers. An in-depth scientific understanding of the ignition target
    performance and its deviations from computer model predictions is
    critically important and will inform our subsequent decisions relative
    to the stockpile and further ignition attempts. Gaining that
    understanding while continuing to conduct important stockpile
    stewardship experiments that do not rely on an igniting capsule will be
    the priority for the next few years.
        Question. Has NNSA developed a plan B to maximize the use of this
    $3.5 billion facility?
        Answer. The experimental and simulation work required to resolve
    the issues remaining after fiscal year 2012 will be based on
    information derived from an evaluation of experimental results from the
    NIC. A process is well underway to stand up a Federal advisory
    committee to provide independent advice to NNSA regarding Stockpile
    Stewardship including the future conduct of the Inertial Confinement
    Fusion (ICF) program and ignition activities. Once established, NNSA
    will charge the Federal advisory committee or a subcommittee thereof
    with evaluating the progress on the NIF and providing advice on the
    evaluation, selection, and pursuit of alternative approaches to
    ignition. In the intervening time, the NNSA is continuing with plans to
    conduct the next NIC review in May using a combination of Federal staff
    members and outside scientists who served on the panel under former
    Under Secretary Koonin. Lawrence Livermore National Laboratory (LLNL)
    has also planned and invited national and international participants
    for a workshop on ignition science in May to be co-chaired by Dr.
    William Goldstein and Dr. Robert Rosner. NNSA will observe and will use
    the output of this workshop as one input for the report to the Congress
    due in November 2012 on impediments to ignition and the path forward.
    NNSA is soliciting ideas for alternative approaches to ignition, and
    for one of these, polar direct drive, has Q2 and Q4 fiscal year 2012
    milestones to develop a proposed scientific plan.
        Question. How much longer can NIF support stockpile stewardship
    work without ignition?
        Answer. NNSA has invested in a balanced stewardship program that
    includes:
      --underground nuclear test re-analysis;
      --Advanced Simulation and Computing (ASC); and
      --hydrodynamic, nuclear, and non-ignition high-energy-density physics
            experimental capabilities that when combined provide necessary
            tools to assess and certify the stockpile in the near term.
        In the longer term, it is imperative that the Stockpile Stewardship
    Program understands the physics underlying the challenges encountered
    during the campaign to achieve indirect-drive ignition, and in doing
    so, assesses the fundamental issues relevant to ignition and whether
    they might impact our understanding of simulating high energy density
    plasmas. Ignition provides a critical capability needed to explore
    physical regimes of matter previously only achievable in a nuclear
    weapon. This capability will inform decisions that will be required for
    the future stockpile in the latter half of this decade. Achieving
    ignition on NIF would potentially open a larger range of design choices
    for increased safety and security, but more constrained design options
    do not negate stewardship. Emphasizing this point, in its April 2010
    report to the Subcommittee on Energy and Water Development, Committee
    on Appropriations, U.S. Senate entitled ``Nuclear Weapons--Actions
    Needed to Address Scientific and Technical Challenges and Management
    Weaknesses at the National Ignition Facility,'' the GAO concluded
    ``failure to achieve ignition in fiscal year 2012 would not immediately
    impact NNSA's Stockpile Stewardship Program, but further delays could
    limit NNSA's options for maintaining the stockpile''.
        Question. Is it possible that NIF will never achieve ignition?
        Answer. The timeframe for achieving ignition is impossible to
    predict with our current scientific understanding, and therefore, yes
    it is possible that in its current design, ignition may never be
    achieved. ICF Program participants, who have the principal purpose of
    providing experimental capabilities to validate NNSA's nuclear weapons
    codes in unprecedented regimes, are engaged in reconciling NIC
    experimental data with predictions; they also have begun planning for
    alternate approaches to ignition and preparing for enhanced utilization
    of ICF facilities for a wide array of SSP-relevant experimental
    activities. The Office of Defense Science through its Science Campaigns
    is developing programmatic plans for fiscal year 2013 and beyond under
    both ignition and non-ignition scenarios. Ignition, or understanding
    the obstacles to it, will remain a significant goal for NNSA. It
    supports multiple aims within the Predictive Capability Framework of
    the Stockpile Stewardship and Management Plan.
                             construction projects
        Question. Mr. D'Agostino, NNSA has just terminated or delayed 2
    major construction projects--a plutonium facility at Los Alamos and a
    pit disassembly and conversion facility at Savannah River--after
    spending $1.5 billion only to conclude that it could use existing
    facilities to meet mission requirements. (NA-20 needs to provide PDCF
    info).
        If these existing facilities were available, why did NNSA pursue
    the construction of these multibillion dollar facilities?
        Answer. The use of existing facilities to meet mission requirements
    is a choice precipitated by the realities of the current fiscal
    environment. NNSA is fully committed to being responsible stewards of
    taxpayer dollars and doing our part in a time of fiscal austerity.
        The decisions related to the deferral of the Chemistry and
    Metallurgy Research Replacement Nuclear Facility (CMRR-NF) are designed
    to ensure that NNSA is building a capabilities-based enterprise focused
    on needs and solutions while achieving President Obama's nuclear
    security objectives with the funding that is available. The decision to
    defer the construction of the CMRR-NF for at least 5 years was not an
    easy one, but it was assessed that, given budget constraints, other
    programs were a higher priority. Moreover, every effort has been made
    to mitigate the risks inherent in this decision, to include the use of
    existing infrastructure to provide for some of the capabilities
    originally planned for the CMRR-NF. Deferring a major construction
    project and opting to use current infrastructure carries an inherent
    programmatic risk that NNSA accepts in a time of constrained budgets.
    Use of existing infrastructure to provide analytical chemistry,
    materials characterization, and storage capabilities is not a final,
    nor preferred, solution but requires additional efforts to optimize
    equipment sets in both the newly constructed Radiological Laboratory/
    Utility/Office Building (RLUOB) and Plutonium Facility-4 (PF-4). While
    NNSA accepts the programmatic risk associated with deferral of the
    CMRR-NF, it will continue to mitigate the current operational risks
    associated with the Chemistry and Metallurgy Research facility by
    continuing orderly phase out of program activities targeted for
    completion in 2019.
        Question. What is the return on the taxpayer investment after
    spending $1.5 billion on these projects?
        Answer. Through fiscal year 2011 the CMRR project received
    approximately $640 million and in fiscal year 2012 another $200 million
    with the stipulation that no construction for the NF begin in fiscal
    year 2012. Of the funds appropriated through fiscal year 2012,
    approximately $363 million provided for the first two phases of the
    CMRR project, the construction of the Radiological Laboratory/Utility/
    Office Building and RLUOB Equipment Installation (REI). Through March
    2012 approximately $362 million was spent on design of the third phase
    of the CMRR project, the CMRR-NF. A portion of the remaining fiscal
    year 2012 project funds provides for the close out of CMRR-NF design
    activities. Responsible close out of CMRR-NF design activities in
    fiscal year 2012 provides:
      --Enhanced insight into the seismology at Los Alamos and its impacts
            to design of nuclear facilities.
      --A design product that incorporates lessons learned during CMRR-NF
            design and the design, construction, and equipment installation
            of the RLUOB.
      --Analysis of the programmatic and support equipment needed for
            enduring capabilities in analytical chemistry and materials
            characterization.
      --Improved understanding of the safety equipment requirements of a
            Hazard Category 2 Nuclear Facility for any future Hazard
            Category 2 facilities.
        Question. What has NNSA done to avoid these issues in the future?
        Answer. NNSA plans and programs for new construction projects
    through its Planning, Programming, Budgeting and Execution (PPBE)
    activities, and relies on program-specific prioritization efforts like
    the Construction Working Group in Defense Programs. Large scale, unique
    nuclear projects like the plutonium facility at Los Alamos and the pit
    disassembly and conversion facility at Savannah River have inherent
    risks to scope, schedule, and cost. In the future, NNSA will continue
    to sharpen its risk analysis in order to inform sound resource
    decisions that support national program priorities. While NNSA works
    with the Congress, the Department of Defense, the Office of Management
    and Budget, and other stakeholders to align priorities with anticipated
    out-year funding profiles, unforeseen events may require NNSA to make
    difficult budget decisions.
        Question. Domestic uranium enrichment technology is needed to
    produce tritium for nuclear weapons.
        Given the uncertainty about the future of operations of domestic
    facilities and technologies, has NNSA stockpiled low-enriched uranium
    for tritium production?
        Answer. The Tennessee Valley Authority (TVA) has the United States
    Enrichment Corporation (USEC) under contract to provide unobligated
    low-enriched uranium (LEU) to support tritium production through fiscal
    year 2015. TVA has confidence that these requirements can be met from
    USEC inventories, if the Paducah enrichment capability goes away. NNSA
    has identified approximately 140 metric tons uranium (MTU) of
    unobligated LEU that can be used for obligation exchanges to support
    tritium production through fiscal year 2020. This unobligated LEU is
    maintained by the MOX program as backup to provide potential
    MOX customers with assurance of delivery. In addition, DOE
    has approximately 5,000 MTU of unobligated uranium hexafluoride feed
    material (normal uranium) which could be enriched to LEU. The initial
    investment for such an approach would include enrichment costs of
    approximately $45 million per reload for each TVA 18-month fuel cycle,
    plus the costs of carrying that fuel in inventory until it is needed
    beginning in fiscal year 2021. NNSA has no other stockpiles of
    unobligated LEU that could support tritium production.
        Question. Does NNSA have a contingency plan for tritium production
    if Paducah is shut down and the new gas centrifuge technology is not
    viable?
        Answer. Plans for providing unobligated LEU for tritium production
    between now and fiscal year 2020 are described in the response to the
    previous question. Beyond fiscal year 2020, there are a number of
    options under evaluation. However, the contingency plan is to down
    blend highly enriched uranium (HEU) from future weapons dismantlements.
    High assay HEU is also needed to meet naval reactor program
    requirements and is essentially irreplaceable until a domestic HEU
    capability is built. There may also be intermediate assay HEU that
    could be accelerated for dismantlement to meet the fuel requirement for
    producing tritium in the timeline necessary.
        Question. Have you determined whether there are cheaper
    alternatives to the American Centrifuge Project for low enriched
    uranium supplies?
        Answer. Other than down blending HEU or stockpiling LEU from a
    special enrichment campaign at Paducah, we know of no alternative to
    ACP for providing unobligated enrichment services in the future, absent
    a new United States Government enrichment facility.
                                     ______

                  Questions Submitted by Senator Patty Murray
                 major shift in second line of defense program
        Question. I understand the NNSA is undertaking a strategic review
    of the program. Which agencies are participating in the review? What is
    the schedule for the review?
        Answer. The Second Line of Defense (SLD) program is in the process
    of a strategic review. The program has held multiple meetings with
    important stakeholders and partners with which it collaborates on a
    regular basis. SLD coordinates its prioritization and deployment
    activities through the State Department and its Embassies; carries out
    multiple joint initiatives involving partner countries, including
    regional exercises with Department of Defense (DOD) and Department of
    Homeland Security (DHS); and is responsible for a large component of
    the foreign transit and foreign departure element of the Interagency
    Global Nuclear Detection Architecture. SLD also participates in the
    National Security Council (NSC)-led and Department of State (DOS)
    coordinated effort to establish Counter Nuclear Counter-Smuggling
    Teams. SLD similarly collaborates with international partners such as
    the European Commission's Joint Research Centre (JRC) and the
    International Atomic Energy Agency (IAEA) on related efforts, and is
    taking into account their capabilities as part of its review of how to
    most effectively deploy SLD programs, including mobile detection, to
    meet the threat of nuclear trafficking.
        The schedule for the review is closely linked to the fiscal year
    2014 budget development cycle to provide an overall strategic plan for
    consideration in light of the current fiscal environment. Throughout
    this deliberative process, SLD is engaging interagency partners with
    which it has traditionally collaborated. This includes the Departments
    of Defense, State, and Homeland Security, as well as interagency
    coordinating groups such as the Interagency Working Group at the
    Department of State and the Counter Nuclear Smuggling Initiatives led
    by the National Security Council.
        Question. What concerns me is what happens in the meantime?
        Answer. It's not clear to me how you maintain existing
    capabilities, retain existing expert personnel, sustain currently
    deployed detection systems, and meet our international commitments to
    priority ``source'' nations by cutting funding for this program by 65
    percent while you undertake a strategic review.
        Question. What can you do with the $93 million you've requested for
    the SLD program? Are you going to deploy any new detection systems in
    priority ``source'' countries?
        Answer. In fiscal year 2013, the SLD program will focus on a
    strategic review intended to identify and prioritize those elements of
    SLD that should continue. While this strategic review is underway, SLD
    will focus on the highest priority deployments. This will still allow
    for a number of new starts at locations in the highest priority Core
    countries, including some fixed radiation portal monitor deployments,
    the next segment of the national communications system in Russia, and
    the provision of mobile detection equipment to countries such as
    Belarus, Czech Republic, Jordan, Moldova, Poland, Russia, and Ukraine.
    The remaining funding will be used to ensure adequate sustainability
    support is available to assist those partner countries in process of
    assuming the maintenance, training, and management responsibilities
    associated with the radiation detection systems.
        Question. How will you meet our existing international commitments
    to these and other nations?
        Answer. The SLD program will not be able to meet all prior
    commitments for new installations in fiscal year 2013 as a result of
    the reduced budget and the associated strategic pause. SLD is currently
    conducting outreach to international partner countries to inform them
    of the implications of the strategic pause. A major element of the
    outreach is to express SLD's continued support for the project and our
    commitment to sustainability activities. We are also actively
    encouraging partners whose SLD work scope in fiscal year 2013 is
    reduced or terminated to continue operating previously deployed
    systems. As the strategic review is refined, we will reach out to
    partner countries to inform them of the results of the review.
        Question. How will you be able to maintain the hundreds of millions
    of dollars in detection systems that have already been deployed around
    the world?
        Answer. SLD is committed to a robust sustainability program with
    partner countries and will strive to maintain that standard under the
    new funding profile. SLD has a multi-faceted 3-year support and long-
    term engagement strategy that we believe is a solid formula for
    building partner country capabilities to sustain SLD systems and for
    ensuring the long-term operation of such systems.
        SLD seeks to provide at least 3 years of maintenance and training
    support to each partner country following the acceptance of a new
    Megaport or Core site. We also seek continued technical engagement
    thereafter to ensure that the value of SLD's investment is properly
    sustained. SLD conducts quarterly assessments of local maintenance
    provider performance to ensure that local maintenance providers are
    properly maintaining SLD systems. In addition, SLD conducts quarterly
    assessments of the partner countries' capabilities to sustain the
    systems in the areas of operations and management, training, and
    maintenance. SLD will fund the highest-priority sustainability
    activities, and will continue to engage with partner countries and will
    identify opportunities for improvement through continued analysis of
    daily operational reports from deployed monitors, worldwide reporting
    to the SLD technical support Help Desk, and regular review of local
    maintenance provider reporting, refresher training, and assurance
    visits. This information, in combination with our consistent engagement
    with partner countries, will ensure the sustainability of installed SLD
    systems and will offer the opportunity to address any gaps. As a result
    of the prioritization of sustainability activities, other activities
    such as exercises, refresher training, and regulations development
    might not receive full funding.
        Question. And how do you intend to implement the recommendations
    coming from the strategic review?
        Answer. You've got capabilities and teams of experts at labs like
    Pacific Northwest National Laboratory and elsewhere who have been
    working hard to deploy and maintain systems to keep nuclear material
    from ever reaching our shores.
        Question. After reducing the budget by 65 percent, are you sure
    those people and those assets are still going to be available once your
    strategic review is complete?
        Answer. The current and future success of the SLD Program is
    largely dependent on the contributions of the technical experts at the
    National Laboratories, including those at the Pacific Northwest
    National Laboratory (PNNL). Accordingly, SLD intends to maintain a core
    capability of these technical experts. However, it is well understood
    that the reduction in funding and resulting reduction in workscope will
    necessitate a decrease in the present number of technical staff
    supporting this program effort. It is possible that this loss will
    impact the program's ability to resume a high level of workscope
    implementation immediately should the results of the review call for
    that. The strategic planning process and outyear budget development
    will take this into account. In the meantime, SLD is working with its
    national laboratory colleagues to retain key expertise throughout the
    strategic pause.
        environmental management--technology development and deployment
        Question. Under Secretary D'Agostino, as you may know, the Pacific
    Northwest National Laboratory has historically provided scientific and
    technical support to the Hanford Site in areas such as tank waste
    processing and soil and groundwater monitoring. Over the past few
    years, the funding for Technology Development and Demonstration and
    within each site that supports these tasks has been on a downward
    trend.
        If adequate funding is not provided to maintain the institutional
    scientific and technical knowledge, subsequent staff reductions will
    result in these capabilities being lost forever--even as we enter a
    period in which addressing technical challenges underlying cleanup is
    key to ensuring successful outcomes.
        What is the Department of Energy's (DOE) Environmental Management
    (EM) office doing to address this issue and to ensure that EM has the
    technical and scientific capabilities it will need to address cleanup
    challenges moving forward?
        Answer. In the 2012 budget, EM requested $32 million for the
    Technology Development and Deployment program. The Congress provided
    $10 million. The 2013 budget requests $20 million for the program. EM's
    focus is to maintain a strategic applied research and technology
    development program that supports the effective, efficient, safe, and
    compliant completion of cleanup at the DOE sites. To accomplish this,
    EM identifies its highest priority technical challenges involving,
    among other things, soil and groundwater remediation, tank waste
    processing, nuclear materials disposition, and facility deactivation
    and decommissioning. Then the EM program interacts with the national
    laboratories and various universities to address those challenges. We
    look forward to working with the laboratories to address EM's technical
    challenges.
          national nuclear security administration workforce planning
        Question. Have you done a comprehensive assessment of the
    appropriate staffing levels and skills needed to oversee the nuclear
    security enterprise?
        Answer. The National Nuclear Security Administration (NNSA) is
    currently conducting a Federal Workforce Analysis to enhance NNSA's
    human capital model by identifying future staffing levels and
    organizational core competencies, and implementing a competency model,
    and integrating legacy human capital information with project
    information. This will assist NNSA in organizing and staffing
    optimally, including the proper skill mix, to meet future mission
    requirements.
                                     ______

                 Questions Submitted by Senator Lamar Alexander
                                 pit production
        Question. The National Nuclear Security Administration (NNSA) has
    decided it will defer for at least 5 years construction of the
    Chemistry and Metallurgy Research Replacement Facility (CMRR).
        NNSA's Stockpile Stewardship and Management Plan issued in April
    2011 stated ``. . . the U.S. must maintain a basic set of production,
    scientific and engineering capabilities. This minimum capability-based
    physical infrastructure will have to be responsive to changing world
    demands and have the inherent capacity to produce up to 80 of the most
    work-intensive weapons per year while sustaining the remaining
    stockpile''.
        Has the requirement for a capacity of producing up to 80 pits per
    year changed?
        Answer. There were a number of factors the Department of Defense
    and NNSA considered that informed the decision to seek a pit production
    capability of up to 80 newly manufactured pits per year. First, at an
    unclassified level, the best estimate for minimum pit lifetimes in the
    U.S. stockpile is 85-100 years, and most pits are nearing half that
    age. There are many uncertainties with regard to the pit lifetime
    estimates and performance of aged pits (the details of which are
    classified) which all support the prudent maintenance of a capability
    to manufacture pits to ensure against technological surprise.
    Furthermore, adding modern safety and surety capabilities to the
    majority of the enduring stockpile will require capabilities to
    remanufacture and rework pits and pit components. These factors have
    not changed, and therefore, a pit production rate of up to 80 pits per
    year is currently assessed to be a prudent, long-term capability to
    achieve. However, NNSA is reviewing combinations of reuse of existing
    pits in addition to the remanufacture of existing pit designs to
    support planned life extension programs and determine the most
    efficient use of resources and production capabilities and capacities.
        Question. NNSA says it can develop the capability to produce 20-30
    pits per year without CMRR. How much will this cost over the next 5
    years? Please delineate which facilities will do the work in the
    absence of CMRR, and the associated costs.
        Answer. The CMRR project involved three phases:
      --the construction of the Radiological Laboratory/Utility/Office
            Building for small sample analytical chemistry,
      --the RLUOB Equipment Installation, and
      --the CMRR-NF for larger sample analytical chemistry, material
            characterization, and vault space.
        Construction of the radiological facility is complete and the
    nuclear facility construction is deferred. As a result, in the interim,
    options are being evaluated to increase the analytical chemistry work
    in the radiological facility; additional material characterization to
    include sample preparation in PF-4; performing some material
    characterization at Lawrence Livermore National Laboratory; and
    reducing the amount of unused material in the existing PF-4 vault.
    These actions are targeted at supporting a production rate of 30 pits
    per year. The feasibility of these actions are currently being
    evaluated, including cost estimates.
        Question. NNSA plans to reuse or refurbish existing plutonium pits,
    which would lessen the need for manufacturing. Are you confident this
    will be feasible?
        Answer. Plans to reuse or refurbish existing plutonium pits would
    reduce the short-term need for manufacturing, but do not address the
    long-term need. The best estimate for minimum pit lifetimes in the U.S.
    stockpile is 85-100 years, and most pits are nearing half that age.
    There are also many uncertainties with regard to the pit lifetime
    estimates and performance of aged pits (the details of which are
    classified) which all support the prudent maintenance of a capability
    to manufacture pits to ensure against technological surprise.
    Furthermore, adding modern safety and surety capabilities to the
    majority of the enduring stockpile will require capabilities to
    remanufacture and rework pits and pit components.
        NNSA has a strong record of reusing and refurbishing pits as part
    of major nuclear explosive package operations and life extension
    programs (LEP) over the last two decades. Examples include the W87
    Alteration (Alt) 342, the B61 Alt 357, and most recently the ongoing
    W76 LEP. In addition, the baseline for the B61 LEP, scheduled for a
    first production unit in fiscal year 2019, is relying on a pit reuse
    strategy. NNSA is also pursuing the ability to certify the use of
    insensitive high explosives with pits designed for conventional high
    explosives, which would increase the re-usable pit inventory. Science,
    Technology, and Engineering tools and capabilities investments are
    being made to enable this certification.
        Our interim capability of 20-30 pits per year will support our
    expectation during this interim time period to rely on reuse and
    refurbishment of existing pits. We are confident that this is feasible.
    Therefore, an expanded capability to produce 80 pits per year is
    associated with the remanufacture of existing stockpile designs or the
    replacement option, which produces new pits based on previously tested
    designs. With the CMRR deferment choice made following the adoption of
    the Budget Control Act of 2011, an inability to expand to 80 pits
    annually over the short term does represent an acceptable risk.
        Question. Which planned life extension programs are expected to
    require new pit production?
        Answer. NNSA has existing life extension programs for the W76 and
    the B61. The W76-1 and B61-12 do not require new pit production. The
    W78 and W88 are undergoing a conceptual study for life extension
    options. Options for both reuse of existing pits and remanufacture of
    existing pit designs are being evaluated. No decisions have been made.
                            life extension programs
        Question. The life extension program (LEP) for the W76 nuclear
    warhead is well underway. This summer, the B61 LEP is expected to begin
    and may delay completion of the W76 LEP.
        Please describe, in broad terms, the relative importance of the B61
    and W76 to our strategic deterrent.
        Answer. The B61 and W76 support separate but very important
    elements of the U.S. nuclear deterrent Triad. B61 bomb variants are
    actively deployed in the United States and abroad. The B61 strategic
    variants are an integral part of the air delivered deterrent supporting
    the bomber leg of the Triad. The non-strategic variants, along with the
    U.S. and North Atlantic Treaty Organization (NATO) dual capable
    aircraft, are the cornerstone of the U.S. commitment to extended
    deterrence. The W76 warheads are deployed on the submarine launched
    ballistic missiles as part of the sea-based strategic nuclear
    deterrent, which is the most survivable leg of the Triad. Additionally,
    with the reductions in warheads and launchers under the New Strategic
    Arms Reduction Treaty (New START), the W76 will comprise a majority of
    the Nation's nuclear strategic force. Both the B61 and W76 provide the
    U.S. with unique capabilities. The two LEPs will enable the U.S. to
    continue to rely on these capabilities. The NNSA is working closely
    with the Department of Defense to balance resources on both programs to
    ensure requirements are met.
        Question. Currently, what is the projected unit cost for a
    refurbished B61 and how does this compare to the unit cost of the W76?
        Answer. The B61 LEP is finalizing and validating costs as part of
    the Nuclear Weapons Council Phase 6.3 authorization. These costs are
    not available today but will be reported to the Congress in July 2012
    as part of the report on the Phase 6.2A design definition and cost
    study required by Public Law 112-74. Upon submittal of the report, a
    comparison to the W76 LEP unit cost can be provided.
        Question. What percentage of the B61 LEP costs will our NATO allies
    pay?
        Answer. All design, qualification, and production costs associated
    with the B61 LEP nuclear bomb components, with the exception of the
    USAF procured tail kit assembly, are funded by NNSA in accordance with
    Atomic Energy Act and applicable joint USAF and NNSA memorandum of
    agreements. The USAF and NATO allies are responsible for aircraft
    integration costs. Additional questions on NATO responsibilities
    associated with the U.S. extended deterrent should be referred to the
    Office of Secretary of Defense.
        Question. A stated goal for LEPs is to increase the safety,
    security, and use control (surety) of U.S. nuclear weapons. Please
    describe in broad terms the surety improvements in the W76 and B61
    LEPs.
        Answer. The W76 and B61 LEPs have and will, respectively,
    incorporate design features to increase the safety, security, and use
    control of the nuclear explosive package. A major goal for the W76 LEP
    was to improve the surety and safety of the Ultimate User Package
    delivered by NNSA to the Department of Defense. This goal was
    accomplished by incorporating a modern safety and surety architecture
    known as Enhanced Nuclear Detonation Safety (ENDS) into the W76 LEP
    hardware including new electrical stronglinks, thermal weaklinks and
    improved exclusion region barriers which greatly enhance safety in
    abnormal electrical and thermal environments. The existing B61 bomb
    variants already have some of the most advanced safety, security, and
    use control features in the stockpile including a modern ENDS and an
    insensitive high explosives design. However, these features are old and
    are reaching the end of their service life. The B61 life extension
    program will replace these capabilities and incorporate improvements
    including enhancements to the stronglinks and exclusion region barriers
    in the safety theme without significant impact to cost or schedule.
                         fissile materials disposition
        Question. The budget includes $569 million for continued
    construction and initial testing and evaluation of the Mixed Oxide Fuel
    (MOX) Fabrication Facility. NNSA estimates the
    MOX facility will cost nearly $500 million a year to
    operate, compared to earlier estimates of $185-356 million. Why is the
    estimated annual cost to operate so much higher than earlier estimates?
        Answer. As the project advances, we are now in a better position to
    identify and project which elements need to be reflected in a
    comprehensive estimate of operating costs for the MOX
    facility. Therefore, the current total life cycle costs include capital
    equipment procurements, a larger facility staff, and increased Nuclear
    Regulatory Commission costs, which were not included in any of the
    previous estimates. In addition, the previous total life cycle cost
    estimate did not include government furnished services such as
    electricity, waste disposal services, and SRS emergency services, which
    are now included in the estimate.
        Furthermore, the current estimate is expressed in 2011 dollars,
    while the previous estimate was expressed in 2005 dollars. These
    estimates will continue to be preliminary until the negotiations for
    the contract, option for operating the MOX facility, have
    been completed. In the meantime, we will continue to update and refine
    these estimates.
        Question. NNSA has cancelled plans for a new Pit Disassembly &
    Conversion Facility (PDCF) that would have produced the plutonium
    feedstock for the MOX facility, and will instead produce the
    feedstock from existing facilities. Are you confident you have the
    facilities you need to generate plutonium feedstock for MOX
    Fuel Fabrication Facility (MFFF) without the PDCF facility? Please
    explain which facilities will be used, the extent to which
    refurbishment will be required, and the costs.
        Answer. NNSA examined a number of alternatives for the pit
    disassembly and conversion capability. The examination considered
    resources across the Savannah River Site (SRS), including K-Reactor, H-
    Canyon, the MFFF, as well as possible additional work at the Los Alamos
    National Laboratory (LANL). In January 2012, the Department issued an
    Amended Notice of Intent that identified a preferred alternative, which
    will consider a combination of facilities at TA-55 at LANL, H-Canyon/HB
    Line, and MFFF at SRS.
        The Department is confident that the preferred alternative for the
    pit disassembly and conversion capability would meet the long term,
    steady-state plutonium disposition feedstock requirements by utilizing
    LANL to provide the majority of plutonium metal, H-Canyon to process
    certain categories of plutonium pits, and the MOX facility
    to convert the plutonium metal to oxide. A more detailed plan is being
    prepared by the Department, and will be made available to the committee
    upon completion.
        In addition, the Department has already identified nearly 10 MT of
    early feedstock for the MOX facility, including:
      --2 MT from ARIES at LANL;
      --3.7 MT to be processed at H-Canyon at SRS; and
      --4.1 MT of plutonium currently stored at SRS.
        Question. Concerns have been raised about whether you will have
    customers for the MOX fuel that will eventually be produced
    by the Mixed Oxide Fuel Fabrication Facility. How many firm
    MOX fuel customers have been identified? Is NNSA confident
    there will be sufficient customers for MOX fuel?
        Answer. The Tennessee Valley Authority (TVA) is currently exploring
    technical and regulatory requirements associated with irradiation of
    MOX fuel in five reactors, pursuant to an interagency
    agreement that was signed in 2010. The current schedule with TVA is to
    execute a fuel supply agreement for MOX fuel in early 2013,
    after NNSA completes a Supplemental Environmental Impact Statement, in
    which TVA is a cooperating agency.
        In addition, NNSA is consulting with various fuel vendors regarding
    the possibility of them marketing MOX fuel to their utility
    customers. NNSA also continues to develop strategies to attract other
    utility customers.
        Question. The contractor building the MOX facility has
    difficulty retaining nuclear workers. What measures, if any, has NNSA
    and its contractors put in place to retain the skilled workforce needed
    for constructing and operating the MOX fuel facility?
        Answer. The Department is working with MOX Services to
    mitigate high employee turnover and is currently developing a retention
    plan to ensure that its investment in the trained staff is fully
    capitalized. In addition to the retention plan, MOX Services
    provides employees with quality-of-life benefits, such as ensuring a
    safe workplace with 8.5 million work hours without a lost time
    accident, and career development incentives, such as an MBA program
    with on-site classes through the University of South Carolina.
                 major shift in second line of defense program
        Question. What does this ``strategic pause'' mean, how will NNSA
    assess the path forward for this program, what changes are being
    considered, and have the specific goals of the program changed?
        Answer. After an administration review of DNN priorities, funding
    was shifted in fiscal year 2013 to focus the Second Line of Defense
    (SLD) on a strategic review intended to identify and prioritize those
    elements of SLD that should continue. While this strategic review is
    underway, SLD will focus on the highest priority deployments. This will
    still allow for a number of new starts at locations in the highest
    priority Core countries, including some fixed radiation portal monitor
    deployments, the next segment of the national communications system in
    Russia, and the provision of mobile detection equipment to countries
    such as Belarus, Czech Republic, Jordan, Moldova, Poland, Russia, and
    Ukraine. In fiscal year 2013, the SLD Core Program plans to complete
    installation of radiation detection equipment at an additional 35 high-
    priority foreign sites. The program has no Megaports implementation
    work planned in fiscal year 2013.
        The strategic review of the program will achieve four primary
    objectives. First, the review is intended to assess the effectiveness
    of the program's deployments relative to their cost and other
    interdiction methods. Second, it is intended to produce program and
    country specific strategies that capitalize on SLD lessons learned and
    available detection technologies and applications. Third, the review
    will also update our performance metrics that are closely linked to
    performance data collected by maintenance providers, help desk
    requests, and other sources of information to continually improve our
    understanding of system performance. Finally, the review will also
    consider the impacts of a new Eurasian Customs Union, currently
    composed of Russia, Belarus, Kazakhstan, and soon Kyrgyzstan. The
    Customs Union resulted in a loss of customs presence on the affected
    borders, such as the border between Russia and Kazakhstan, which means
    there are reduced opportunities to scan people and cargo in those
    countries. This review is part of a broader assessment strategy.
                            nuclear export controls
        Question. U.S. suppliers of nuclear commodities and services have
    voiced frustration that the U.S. nuclear export control system imposes
    major competitive disadvantages on U.S. suppliers competing with State-
    owned international rivals. DOE 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. Delays in the licensing of exports can amount
    to a significant commercial disadvantage for suppliers that have slower
    regulators. NNSA often takes more than 1 year to process specific
    authorizations for commercial nuclear transfers under 10 CFR 810.
        How will NNSA improve the efficiency of the 10 CFR 810 process so
    that U.S. exporters are on a level playing field with their foreign
    competitors whose governments process similar export licenses in a few
    months, rather than more than a year?
        Answer. We know that we need to improve the efficiency of the 10
    CFR part 810 process and we are addressing this in a couple of key
    ways. First, we are in the process of updating the current 10 CFR 810
    regulations to address industry's concerns. Second, we intend to
    examine our internal review and approval process to ensure maximum
    efficiency. In carrying out the review process, we have to balance U.S.
    nonproliferation principles and obligations with commercial interests.
                            nuclear export controls
        Question. The National Nuclear Security Administration (NNSA) has
    recently proposed a significant revision to 10 CFR 810. Rather than
    ending restricted treatment of countries that have concluded a nuclear
    trade agreement with the United States, the proposed rule would double
    the number of countries requiring a specific authorization. Rather than
    focus the regulation on sensitive technologies, consistent with the
    Administration's Export Control Reform Initiative, the proposed rule
    would extend its reach to new technologies that pose little or no
    proliferation risk. The proposed changes would dramatically increase
    the number of Part 810 applications and the delays in processing them.
    However, the Administration's budget request shows no evidence that
    resources have been requested to process the significant number of new
    authorizations that will be required or to make the process of issuing
    authorizations more efficient.
        How will NNSA ensure that any changes to the 10 CFR 810 regulation
    do not result in additional delays that negatively impact U.S.
    industry?
        Answer. We have received helpful comments and suggestions from
    industry and other stakeholders on the revision of the 10 CFR 810
    regulation through the public comment period and Federal register
    process. We are aware of concerns articulated by some industry groups
    that the revised regulation would increase the number of countries for
    which U.S. nuclear industry would need specific authorization from the
    Secretary of Energy to engage. We are also aware of concerns
    articulated by these same groups that the proposed rule expands the
    scope of technologies that would require specific authorizations for
    non-sensitive technologies. We are reviewing all comments received, and
    we plan to re-release the revised regulation for public comment through
    the Federal register process. This will allow U.S. industry to voice
    any specific concerns it may have. In addition to updating the 810
    regulation, we are exploring ways to automate certain aspects of the
    process to allow applicants to more easily track the progress of their
    requests.
        Question. Has NNSA considered the additional resources required to
    administer the proposed 10 CFR 810 revision? If so, how long should a
    U.S. exporter expect to wait for a specific authorization under the
    proposed rule?
        Answer. As with all updates to regulations, there will be an
    adjustment period during which the Department will need to work more
    closely with U.S. industry to help clarify the implementation and
    application of the revised rule. Once we are through that period, we
    believe that the U.S. exports will see more efficient service from the
    Department. We do not at this time anticipate that additional staff
    will be needed to support the revised process.
                              administrative costs
        Question. NNSA's budget includes $411.3 million for its Federal
    workforce. In 2005, NNSA had 1,634 total Federal employees overseeing
    the NNSA. Today the number is 1,928--an increase of 15 percent.
        Last year, NNSA decided to consolidate the contracts at Y-12 and
    Pantex. What other efforts are you considering to consolidate
    operations and achieve administrative efficiencies?
        Answer. NNSA continues to evaluate options for increased
    efficiencies throughout the complex, both in its contracting strategies
    and oversight. NNSA has three management and operating (M&O) contracts
    expiring over the next 5 years, Sandia National Laboratories, the
    Kansas City Plant, and the Nevada National Security Site. As the
    expiration dates draw near, NNSA will evaluate whether there are
    opportunities for efficiencies within an existing site or through
    consolidation, and develop an acquisition strategy that is in the best
    interest of the government for each individual procurement.
    Additionally, NNSA is conducting two studies that evaluate staffing
    requirements throughout the Enterprise, the ``NNSA Baseline Staffing
    Requirements,'' which informs the NNSA's Federal Workforce Study to be
    completed by December 2012.
                               workforce planning
        Question. What have you done to review your administrative and
    overhead costs to ensure you are adequately overseeing work while not
    spending excessive amounts on unnecessary layers of administration?
        Answer. NNSA ensures the Office of the Administrator (OA) account
    provides the appropriate level of Federal personnel and resources
    necessary to plan, manage, and oversee the operation of NNSA by
    participating in the planning, programming, budgeting, and evaluation
    (PPBE) processes.
        During the planning, programming, and budgeting processes, the
    budget is formulated by working with the headquarters NNSA programs and
    field sites to develop a funding request that will accomplish the NNSA
    mission under fiscally constrained budgets. They are required to
    justify any requirement that is over the established baselines. In
    addition, over the past several years, our budget has reflected the
    efficiencies required in support of the President's Executive Order
    ``Promoting Efficient Spending''. This has forced us to reduce our
    travel and support service budgets by more than 25 percent and 20
    percent, respectively, from our fiscal year 2010 funding levels. Also,
    in the fiscal year 2013 President's request, we proposed the internal
    transfer of Federal Unclassified Information Technology from the Office
    of the Administrator to Weapons Activities, NNSA CIO Activities, to
    achieve efficiencies by consolidating all information management
    activities under one program.
        During the evaluation process, we ensure that the OA budget is
    executed effectively and efficiently. We have developed tracking
    systems, provide monthly execution reviews, review uncosted and
    unobligated balances on a quarterly basis, and in fiscal year 2012, did
    an extensive clean up of support service contracts and old uncosted
    balances.
        In addition, in keeping with OMB and DOE expectations that
    administrative costs be minimized, one of the NNSA performance measures
    is to maintain the Office of the Administrator Federal administrative
    costs as a percentage of total Weapons Activities and Defense Nuclear
    Nonproliferation program costs at less than 6 percent.

                              SUBCOMMITTEE RECESS

        Senator Feinstein. Okay. Well, thank you very much. I
    appreciate it.
        Mr. D'Agostino. Thank you.
        Senator Feinstein. The hearing is adjourned.
        [Whereupon, at 4:09 p.m., Wednesday, March 21, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

                           WEDNESDAY, MARCH 28, 2012

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:30 p.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Dianne Feinstein (chairman)
    presiding.
        Present: Senators Feinstein, Landrieu, Lautenberg, Harkin,
    Alexander, Collins, Murkowski, and Graham.

                          DEPARTMENT OF DEFENSE--CIVIL

                             DEPARTMENT OF THE ARMY

                           Corps of Engineers--Civil

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

                 OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

        Senator Feinstein. Good afternoon, ladies and gentlemen,
    and welcome to the Energy and Water Subcommittee's oversight
    hearing on the fiscal year 2013 budget request for the United
    States Army Corps of Engineers and the Bureau of Reclamation.
        Let me say from the outset, and I've never actually said
    this before in 20 years, I am a big fan of both of your
    agencies. The work that your agencies do touches nearly every
    person in the Nation. It's really where the pedal meets the
    metal. Forty-one States are served by 926 Corps harbors and
    25,000 miles of waterways.
        These harbors and waterways move more than 2.3 billion tons
    of cargo annually. Damages prevented by Corps flood control
    projects over the last decade exceed 25 billion annually.
    That's prevention. Every $1 invested in flood control since
    1928 has prevented more than $7 in damages when adjusted for
    inflation.
        I'd have to say that 7-to-1 is a good return on any
    investment. The Corps is the number one Federal provider of
    outdoor recreational opportunities, and the number one producer
    of hydroelectric power. And they're extensively involved in
    environmental and ecosystem restoration.
        The Bureau of Reclamation provides water and power to the
    17 Western States. They deliver water to 31 million people for
    municipal, rural, and industrial uses. Reclamation delivers
    water to 20 percent of the West's farmers, providing irrigation
    to 10 million acres of some of the most productive agricultural
    land in the world.
        Reclamation also addresses water resources and challenges
    posed by drought, climate change, depleted aquifers,
    environmental needs, energy demands, and population increases
    in the West.
        We depend on both of your agencies to build this water
    infrastructure as well as facilitating much needed
    environmental restoration. Not only does the work you perform
    provide jobs now, the infrastructure that's constructed,
    continues to benefit the economy for decades which in turn
    creates more jobs and boosts our standard of living.
        While we all realize that for the next decade, we're going
    to be operating under austere budget caps in the Budget Control
    Act, we should not underfund agencies that provide tangible
    benefits and create jobs. This is really where America lives,
    where America works, and where America either thrives or does
    not.
        The President's fiscal year 2013 budget for the Corps of
    Engineers is $4.7 billion, which is $271 million or 5.4 percent
    below the 2012 enacted amount. The Bureau of Reclamation's
    budget is proposed at $1.03 billion, which is $14 million or
    1.3 percent below the 2012 enacted amount.
        Candidly, I don't believe these budget requests provide the
    necessary resources to adequately fund ongoing work, and I've
    never said that before. For example, the Corps construction
    budget is proposed at $1.47 billion, which is $223 million or
    13.2 percent below the 2012 enacted amount.
        Dam safety and environmental restoration and compliance
    activities account for $850 million or 58 percent of the
    request. Inland and deep draft navigation accounts for $336
    million or 23 percent of the request, and only $226 million or
    15 percent is directly toward traditional flood control
    projects.
        Of the 95 construction projects proposed in the budget
    request, only 46 are displayed with benefit-to-cost ratios.
    That means that more than one-half of the projects proposed for
    funding utilize a much more intangible set of budget criteria.
    And I'm going to ask about that.
        A skeptic might even say that these budget decisions were
    arbitrary or politically based. However, my point is, that
    while I believe we can agree that nearly all of the items in
    the budget request have merit, one certainly has to question
    how the decisions were made for the many ongoing projects that
    were not included.
        Based on my review, I believe your budget request needs
    some adjusting. It appears to me that while your overall budget
    for fiscal year 2013 boosts funding for navigation, which is a
    good idea, the budget proposes less funding for flood control
    in 2013 than you proposed in 2012.
        I'm concerned about this decrease particularly in light of
    two record-setting floods in the Missouri and Mississippi
    Rivers in 2011. I very much hope that it's not the start of a
    trend.
        In the general investigation account, 80 studies are listed
    in the budget for a total of $52 million. However, five studies
    are adequately funded for about $24 million of that total,
    leaving the other 75 studies competing for the remaining $28
    million. This, candidly, doesn't seem balanced to me.
        I have other issues with the Corps budget that I'll ask
    about at the appropriate time. Now, turning quickly to the
    Bureau of Reclamation's budget.
        The scheduled completion of the Animas-La Plata Project and
    the Red Bluff fish screen and Pumping Plant Project this year
    seemed to have freed up some funding within your budget. As a
    result, your budget request seems to be more balanced than in
    prior years.
        Hopefully, the planned completion of the Mni Wiconi Rural
    Water Project in 2013 will have a similar impact on the 2014
    budget. So I'm pleased to see an increase in discretionary
    funding for the San Joaquin River Restoration in your budget
    for 2013.
        This discretionary funding along with the mandatory funding
    under the settlement agreement will assure that water impacts
    are reduced or avoided while maintaining the San Joaquin River
    ecosystem.
        Rural water projects are proposed at higher levels than in
    your budget request but are still not funded at the levels
    necessary, we think, to continue progress on these projects. So
    I look forward to exploring that with you as well.
        Senator Alexander, I'm very fortunate, if anybody in this
    room doesn't know it, I say it all the time, I'm really very
    fortunate to work with a great ranking member. He is sincere.
    He is straightforward. He is bright. He is everything. So I
    have really lucked out.
        So let me recognize our distinguished ranking member,
    Senator Alexander.

                      STATEMENT OF SENATOR LAMAR ALEXANDER

        Senator Alexander. Thank you, Madam Chairman. The feeling
    is absolutely mutual, and I'd like to write that down if I may.
    That's very kind of you to say that.
        Senator Feinstein. Okay.
        Senator Alexander. We do have a very good working
    relationship, and I thank the staff for their working together
    as well and the courtesy that the chairman shows us as we work
    on these issues.
        That was a very good statement of reaction, I think, to the
    proposals that we have. I'd like to make just two or three
    points, and then I'll look forward to your testimony.
        One, I want to congratulate the Corps of Engineers for the
    work you did during the floods and natural disasters of 2011.
    The only way to congratulate you is to compare what happened in
    2011 with what happened in the big flood in 1927, which we call
    the Great Flood.
        Books have been written about it. That year, I think 16
    million acres were inundated, 500 people died, 600,000
    displaced, 41,000 buildings destroyed, rail lines cut,
    communities wiped out. That was the story of 1927.
        But contrast that with 2011, after a lot of investment and
    work by the Corps of Engineers, no lives lost, 4 million people
    protected. It was all done so well that many people and the
    rest of the country didn't even know there was a big problem.
        The Corps estimates that our investments in the Mississippi
    River and Tributaries Project of about $14 billion over the
    last 80 years probably saved about $500 billion. Figures like
    that are always speculative, but the idea is probably right.
    That a small investment has had a big return.
        And the Congress provided $1.7 billion in disaster recovery
    funding last year to restore the damages from flooding to Corps
    facilities. One way to tell the level of interest in an
    agency's work is by the attendance of Senators at hearings
    involving them.
        And I can remember a hearing last year of the Environment
    and Public Works Committee at which I believe 17 Senators of
    both parties showed up to either talk about, criticize, praise,
    or have some opinion about the effect of the big floods in
    their States.
        Now, the second thing I'd like to talk about is the Harbor
    Maintenance Trust Fund and the Inland Waterways Trust Fund.
    I've now watched this for a few years. We have two trust funds
    and neither one of them works well.
        The first, the Harbor Maintenance Trust Fund, collects
    money successfully, but it turns out we can't use the money on
    things communities need to expand ports and double exports as
    the President has suggested.
        The second fund, the Inland Waterways Trust Fund, doesn't
    collect enough money. And so projects like the Chickamauga Lock
    and others are on indefinite hold, really, are not getting the
    attention they need.
        I would like to strongly suggest, and the chairman and I
    have been working on this with other members of the
    subcommittees, that we step back and take a look at these two
    trust funds, Harbor Maintenance, Inland Waterway, and think
    about our country and the competitive position that we want it
    to be in in the future, and think of what we need to do.
        Don't think about the money involved, or how to collect the
    money. Think first about, what do we need to do? What's our
    vision for the future? And then, see if we can match money and
    procedures to the vision we have.
        My experience is that most ideas in Washington, DC fail for
    lack of the idea. And I would strongly urge you to work with us
    over the next few months to see if we can take both these trust
    funds, and not just muddle along the way we had been muddling.
        But to say, okay, what do we need to do for, you know, the
    greatest country in the world, the one that produces 25 percent
    of all the wealth in the world, with the Panama Canal being
    deepened, our ports need to be deepened. We need locks and dams
    that are safe in the inland waterways.
        And I believe that if we have the right vision, we would be
    able to do something about that. I remember a few years ago, we
    had something called America Creating Opportunities to
    Meaningfully Promote Excellence in Technology, Education, and
    Science (America COMPETES) Act. We asked a distinguished group,
    the National Academies did, to tell us what would be the 10
    things the Congress could do to keep us competitive in the
    world marketplace.
        This distinguished group, headed by Norm Augustine, gave us
    20 things. We eventually got 35 Republican and Democratic co-
    sponsors. We passed that law. It's been funded. It's been
    reauthorized and it succeeded because we had an idea and we
    stopped muddling.
        Now, it didn't do everything. But we need to do the same
    kind of thing with our ports and our locks and our dams. So I
    ask you to work with us to do that.
        I'm particularly troubled about the $1 billion cost
    increase in Olmsted Locks and Dam. Makes me almost think I'm in
    the National Nuclear Security Administration (NNSA) hearing
    where things just keep going up and up and up and up and up
    with no rational reason for it.
        I mean, what is happening is that single project is soaking
    up all the money available for everything else in the country,
    and that's poor planning, and something's wrong when we have
    that kind of increase.
        I'm particularly sensitive to that because of the effect
    it's having on the Chickamauga Lock on the Tennessee River near
    Chattanooga. If that lock fails, it closes down one-third of
    the navigation on the Tennessee River. It would force chemical
    plants, Tennessee Valley Authority (TVA) reactors, Oak Ridge
    National Lab to put more freight and hazardous materials on our
    roads.
        It would put 150,000 heavy trucks in Interstate 75, and it
    would flood downtown Chattanooga. Now, we don't want any of
    that. And we also don't want the slowdown that we're seeing
    right now with the Chickamauga Lock.
        I know that there had been some work done with industry to
    try to come up with a way to put more money into the trust
    fund. But what I'm asking for is working with Industry and the
    subcommittee and with anybody who has any idea, let's have a
    vision for where we need to go with both the needs that are
    supposed to be addressed by these trust funds and come up with
    a mechanism that works.
        I certainly pledge my effort to do that and working with
    the chairman and Senator Collins and other members of the
    subcommittee, I would like to give that a try over the next few
    months.
        Thank you, Madam Chairman.
        Senator Feinstein. Thank you very much. Senator Collins, do
    you have a comment you would like to make at this time?

                       STATEMENT OF SENATOR SUSAN COLLINS

        Senator Collins. Thank you, Madam Chairman.
        First of all, let me just agree with the praise that the
    chairman and the ranking member heaped on one another. They do
    work extraordinarily well together and they're truly a model
    for how the Senate should work.
        I know that my west coast colleagues will address the
    Bureau of Reclamation's budget requests so my comments and
    questions today are going to focus on the Army Corps of
    Engineers.
        I just want to make two points. The first is that I'm very
    concerned about the discrepancy in the way the Army Corps
    regulates developments that affect wetlands versus how it is
    done in the State of Maine and other parts of the country.
        The second issue that I want to raise is my concern that we
    not forget as we look at the major navigational waters, the
    need for maintenance, dredging projects at smaller harbors and
    waterways, those are very important in a State like mine, for
    our fishermen, for example.
        And I know that last year, the Chair and the Ranking Member
    worked with us to include $30 million for operations and
    maintenance projects at small, remote, or subsistence
    navigation harbors and waterways. And I think that is extremely
    important as well.
        So, thank you for the opportunity to comment.
        Senator Feinstein. Thank you.
        From the Department of the Army, we will hear from Jo-Ellen
    Darcy, the Assistant Secretary of the Army for Civil Works, and
    Major General Bo Temple, Acting Chief of Engineers for the
    Corps.
        From the Department of the Interior, we will hear from Anne
    Castle, Assistant Secretary for Water and Science, and Mike
    Connor, Commissioner, Bureau of Reclamation.
        Secretary Darcy, we will begin with you.

                      SUMMARY STATEMENT OF JO-ELLEN DARCY

        Ms. Darcy. Thank you, Senator Feinstein, and distinguished
    members of the subcommittee, thank you for the opportunity to
    present the President's fiscal year 2013 budget for the Civil
    Works program of the Army Corps of Engineers.
        I am Jo-Ellen Darcy, the Assistant Secretary of the Army
    for Civil Work, and I'll now summarize my statement and ask
    that my complete statement be included in the record.
        The President's 2013 budget provides $4.7 billion for the
    Civil Works program. This is $100 million above the President's
    2012 budget request for Civil Works.
        The budget reflects the Administration's priorities through
    targeted investments in the Nation's water resources
    infrastructure, including dams and levees to address flood
    risks, and navigation projects in support of both domestic and
    global trade, especially at coastal ports that support the
    greatest national economic activity. The budget also includes
    restoration of major ecosystems affected by past water
    resources development in support of the Administration's
    initiatives such as America's Great Outdoors and the Clean
    Water Framework.
        The budget also supports programs that contribute to the
    protection of the Nation's waters and wetlands, the generation
    of low-cost, renewable hydropower, the restoration of certain
    sites contaminated as a result of the Nation's early atomic
    weapons development program, emergency preparedness and
    training to respond to natural disasters, and recreation,
    environmental stewardship and water supply storage at existing
    projects owned or operated by the Corps.
        The budget funds a number of activities to completion,
    including 5 flood risk management projects, 3 navigation
    projects, 1 hydropower mitigation project, and 18 studies.
        The Civil Works budget includes funding for three high-
    performing construction new starts, six study new starts, and a
    new activity in the Operation and Maintenance account to reduce
    the vulnerability of our Civil Works projects to extreme
    natural events.
        The budget includes funding to evaluate the potential for,
    and encourage the use of, nonstructural alternatives during
    postdisaster recovery decisionmaking while leveraging the
    expertise of intergovernmental teams known as Silver Jackets to
    support States and communities in the development and
    implementation of actions to reduce flood risks.
        The budget includes the highest amount ever budgeted for
    use of receipts from the Harbor Maintenance Trust Fund to
    maintain coastal channels and harbors. Inland waterway capital
    investments in the construction account are funded at the
    maximum amount that is affordable within the project trust fund
    revenues under existing law.
        Last September, President Obama transmitted to the Congress
    a proposal to modernize financing of capital investments on the
    inland waterways through establishing a new vessel user fee to
    supplement the existing fuel tax.
        The Administration will continue to work with the Congress
    and stakeholders to enact a mechanism to increase revenues to
    this trust fund. The 2013 budget provides $532 million for dam
    and levee safety activities including $491 million for dam
    safety activities in both the flood risk management and
    navigation programs.
        We have $41 million to continue the comprehensive levee
    safety initiative. The Army continues to work to modernize the
    Civil Works Planning program. Proposed changes are aimed at
    dramatically shortening the time and the costs of completion
    for pre-authorization studies while retaining the quality of
    the analyses.
        The budget again includes $3 million for the Veterans
    Curation Project which provides vocational rehabilitation and
    innovative training for wounded and disabled veterans while
    achieving historical preservation responsibilities for
    archeological collections administered by the Corps.
        This program will contribute to the goals of the
    President's recently announced Veterans Job Corps.

                               PREPARED STATEMENT

        In summary, the 2013 budget for the Army Civil Works
    program is a fiscally prudent, appropriate level of investment
    that will generate jobs, contribute to a stronger economy, and
    continue progress on important water resources investments that
    will yield long-term returns for the Nation and its citizens.
        I'd like to thank the members of the subcommittee and I
    look forward to working with you in support of this President's
    budget. Thank you.
        [The statement follows:]
                      Prepared Statement of Jo-Ellen Darcy
        Madam Chairman and distinguished members of the subcommittee, thank
    you for the opportunity to present the President's budget for the Civil
    Works program of the United States Army Corps of Engineers (COE) for
    fiscal year 2013.
                                    overview
        The fiscal year 2013 budget for the Civil Works program reflects
    the Administration's priorities through targeted investments in the
    Nation's water resources infrastructure, including dams and levees,
    navigation investments in support of both domestic and global trade,
    restoration of ecosystems affected by past water resources development,
    and support of administration initiatives such as America's Great
    Outdoors and the Clean Water Framework. These investments will generate
    American jobs, contribute to a stronger economy, improve reliability
    and efficiency of waterborne transportation, reduce flood risks to
    businesses and homes, and provide low-cost renewable hydropower. In
    addition, investment in the restoration of significant aquatic
    ecosystems and the remediation of sites associated with the Manhattan
    Project of the 1940s will not only provide important benefits but also
    support jobs.
        The primary objectives of the budget are as follows:
      --Focus funding on water resources investments that will yield high-
            economic and environmental returns or address a significant
            risk to public safety.
      --Support commercial navigation through maintenance and related
            activities at the most heavily used commercial harbors and
            waterways in the Nation.
      --Modernize financing of capital investments on inland waterways by
            establishing a new user fee.
      --Restore large ecosystems such as the California Bay-Delta,
            Chesapeake Bay, the Everglades, Great Lakes, and Gulf Coast.
      --Invest in improvements to the Corps regulatory program that will
            provide greater efficiency, providing benefits to businesses
            and more protection to regulated wetlands and small streams.
      --Provide significant funding for dam and levee safety, including
            interim risk reduction measures designed to immediately
            mitigate risk at the highest risk dams, and continue funding to
            advance the Corps' national levee safety initiative to help
            improve the safety of Federal levees and to provide available
            levee data on levee safety issues to non-Federal entities.
      --Support the modernization of Federal water resources infrastructure
            processes to address 21st century water resources needs through
            improvements to policies and procedures that govern Federal
            water resources development and strategies for both managing
            the Nation's aging infrastructure and restoring aquatic
            ecosystem functions affected by past investments.
      --Increase the organizational efficiency and improve the management,
            oversight, and performance of ongoing programs.
        The budget funds the planning, design, construction, operation and
    maintenance of projects, and focuses on the three main Civil Works
    mission areas:
      --commercial navigation;
      --flood and storm damage reduction; and
      --aquatic ecosystem restoration.
        The budget also supports programs that contribute to the protection
    of the Nation's waters and wetlands; the generation of low-cost
    renewable hydropower; the restoration of certain sites contaminated as
    a result of the Nation's early atomic weapons development program;
    emergency preparedness and training to respond to natural disasters;
    and recreation, environmental stewardship, and water supply storage at
    existing projects owned or operated by the Corps.
                  fiscal year 2013 discretionary funding level
        The budget for fiscal year 2013 for the Civil Works program
    provides a fiscally prudent, appropriate level of investment in the
    Nation's water resources infrastructure and in the restoration of its
    aquatic ecosystems.
        In keeping with President Obama's commitment to put the country on
    a sustainable fiscal path, while continuing to invest in those efforts
    that are a priority for the Nation, the budget includes $4.731 billion
    in discretionary appropriations for the Army Civil Works program. This
    represents a reduction of $271 million, or about 5 percent, from the
    fiscal year 2012 enacted level, but is a $100 million above the
    President's fiscal year 2012 budget. The fiscal year 2013 funding level
    reflects a considered, practical, effective, and sound use of the
    Nation's financial resources.
        Within the $4.731 billion recommended appropriations, $1.47 billion
    is for projects in the Construction account, and $2.398 billion is for
    activities funded in the Operation and Maintenance (O&M) account. The
    budget also includes:
      --$102 million for Investigations;
      --$234 million for Mississippi River and Tributaries;
      --$30 million for Flood Control and Coastal Emergencies;
      --$205 million for the Regulatory Program;
      --$104 million for the Formerly Utilized Sites Remedial Action
            Program;
      --$182 million for the Expenses account; and
      --$5 million for the Office of the Assistant Secretary of the Army
            for Civil Works.
        Attachment 1 shows this funding by account and program area.

                                            ATTACHMENT 1.--FISCAL YEAR 2013 BUDGET--BUSINESS LINE/ACCOUNT CROSS-WALK
                                                                    [In millions of dollars]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Funding Categories
                                        --------------------------------------------------------------------------------------------------------------------
                                                                                   MR&T
               Business Lines                                      ------------------------------------                                       OASA
                                            I        C       O&M                                TOTAL    FUSRAP    FCCE     REG       E       (CW)    TOTAL
                                                                       I        C       O&M      MRT
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Flood and Coastal Storm Damage            46      652      536       <1       83       89      172  .......  .......  .......  .......  .......    1,406
     Reduction.........................
        Coastal........................        5       17       11  .......  .......        4        4  .......  .......  .......  .......  .......       37
        Inland.........................       41      635      525  .......       83       85      168  .......  .......  .......  .......  .......    1,369
    Hydropower.........................  .......        2      178  .......  .......  .......  .......  .......  .......  .......  .......  .......      180
    Navigation.........................       25      352    1,326  .......       14       30       44  .......  .......  .......  .......  .......    1,747
        Coastal........................       17      151      797  .......  .......        2        2  .......  .......  .......  .......  .......      967
        Inland.........................        8      201      529  .......       14       28       42  .......  .......  .......  .......  .......      780
    Environment:
        Aquatic Ecosystem Restoration..       31      464       14       <1        2  .......        2  .......  .......  .......  .......  .......      512
        Stewardship....................  .......  .......       92  .......  .......        4        4  .......  .......  .......  .......  .......       96
        FUSRAP.........................  .......  .......  .......  .......  .......  .......  .......      104  .......  .......  .......  .......      104
    Regulatory.........................  .......  .......  .......  .......  .......  .......  .......  .......  .......      205  .......  .......      205
    Recreation.........................  .......  .......      241  .......  .......       11       11  .......  .......  .......  .......  .......      252
    Emergency Management (incl. NEPP)..  .......  .......        6  .......  .......  .......  .......  .......       30  .......  .......  .......       36
    Water Supply.......................  .......  .......        5  .......  .......  .......  .......  .......  .......  .......  .......  .......        6
    Expenses...........................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......      182  .......      182
    OASA(CW)...........................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......        5        5
                                        --------------------------------------------------------------------------------------------------------------------
          TOTAL........................      102    1,471    2,398        1       99      134      234      104       30      205      182        5    4,731
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    I=Investigations; C=Construction; O&M=Operation and Maintenance; MR&T=Flood Control, Mississippi River and Tributaries; FUSRAP Formerly Utilized Sites
      Remedial Action Program; FCCE=Flood Control and Coastal Emergencies; REG=Regulatory Program; NEPP=National Emergency Preparedness Program; E=Expenses;
      OASA(CW)=Office of the Assistant Secretary of the Army for Civil Works.

        The fiscal year 2013 budget continues the Army's commitment to a
    performance-based approach to budgeting to provide the best overall
    return from available funds from a national perspective in achieving
    economic, environmental, and public safety objectives. Competing
    investment opportunities for studies, design, construction, and
    operation and maintenance were evaluated using multiple metrics, and
    objective performance criteria guided the allocation of funds.
        The fiscal year 2013 budget supports investments in commercial
    navigation, flood risk management, aquatic ecosystem restoration, and
    other programs. The distribution of funding among these programs is
    similar to the distribution in the fiscal year 2012 budget, except for
    an 11-percent increase in investments in support of waterborne
    transportation. Of the total in the fiscal year 2013 budget, 30 percent
    is allocated to flood risk management activities; 37 percent is
    allocated to commercial navigation; and 33 percent to environmental,
    hydropower, and other activities. Five flood risk management projects,
    three navigation projects, one hydropower project, and 18 studies are
    funded to completion in this budget.
                      new investments in fiscal year 2013
        The Civil Works budget includes funding for three high-performing
    construction new starts and six new study starts, and a new activity to
    focus on reducing the vulnerability of Civil Works projects to extreme
    natural events.
        In the Construction account, parallel to the recommendation for
    fiscal year 2012, the budget includes $7.5 million for the Hamilton
    City project in California, which will provide environmental
    restoration and flood damage reduction benefits in the Bay-Delta area;
    $16.8 million for the Louisiana Coastal Area Ecosystem Restoration
    program, a nationally significant and urgent effort to both restore
    habitat and protect the important Louisiana gulf region from the
    destructive forces of storm driven waves and tides, which will
    complement the ongoing Federal effort under the Coastal Wetlands
    Planning, Protection, and Restoration Act, as amended; and $2 million
    for the Lower Colorado River Basin, Onion Creek, Texas, project, which
    will significantly reduce the risk of flood damages using nonstructural
    solutions.
        There are six new studies in the Investigations account, five of
    which were recommended in fiscal year 2012. These six studies are:
      --an important new reconnaissance study for fish passage at
            Englebright and Daguerre Point Dams on the Yuba River in
            California for $100,000;
      --environmental restoration and flood damage reduction at Cano Martin
            Pena in Puerto Rico for $100,000;
      --the Chesapeake Bay Comprehensive Plan for $250,000;
      --the Louisiana Coastal Area Comprehensive Plan for $100,000; and
      --the national Water Resources Priorities Study for $2 million.
        The fiscal year 2013 budget also includes $100,000 for a new study
    of the Houston Ship Channel, Texas.
        The Water Resources Priorities Study will establish a baseline
    assessment of the Nation's flood risks on both national and regional
    scales, improve existing programs, and reduce future costs by focusing
    on which ongoing and future investments will best reduce flood risks.
    The $8 million for new line-item called Reducing Civil Works
    Vulnerability in the O&M account will aid the Corps in creating a more
    robust Civil Works infrastructure.
        Within the Floodplain Management Services Program, $3 million is
    recommended to evaluate the potential for and encourage the use of
    nonstructural alternatives and actions during post-disaster recovery
    decisionmaking. With these funds, the Corps would leverage the
    expertise of intergovernmental teams known as Silver Jackets to provide
    selected technical services and support States and communities in the
    development and implementation of actions to reduce flood risks, with
    an emphasis on nonstructural alternatives.
                          infrastructure modernization
        The Administration is developing and considering proposals to serve
    as the foundation of a comprehensive water resources infrastructure
    modernization initiative, which will help the Federal Government
    support a 21st century water resources infrastructure. In considering
    and developing these new policies, procedures, and strategies, the
    Administration will continue to engage and collaborate with the
    Congress and the many stakeholders whose interests are tied to the
    Nation's water infrastructure, including State, local, and tribal
    governments.
                                   navigation
        The budget includes a high level of investment in support of
    domestic and global waterborne transportation, especially at coastal
    ports that support the greatest national economic activity. On the
    inland waterways, the budget focuses on maintaining reliable service at
    those waterways with a high level of commercial use, specifically, the
    Lower Mississippi River, Ohio River, Upper Mississippi River, Gulf
    Intracoastal Waterway, Illinois Waterway, Tennessee River, and the
    Black Warrior Tombigbee Waterway. Funding to operate and maintain the
    Mississippi River, Baton Rouge to the Gulf project is $82 million, a
    significant increase above the $68 million requested for fiscal year
    2012.
        The budget provides $68 million to continue deepening the New York
    and New Jersey Harbor project in order to complete construction by
    fiscal year 2014. The budget also includes $38 million to construct
    dredge material placement sites at several deep draft ports to provide
    additional capacity for the maintenance of these projects in the
    future. It provides $12 million to continue studies and designs at
    coastal ports, including several proposals to deepen existing channels
    to accommodate Post-Panamax commercial shipping.
        The budget also provides for use of $848 million from the Harbor
    Maintenance Trust Fund to maintain coastal channels and harbors. This
    is a 12-percent increase over the fiscal year 2012 budget and the
    highest amount ever proposed in a President's budget for use of
    receipts in the Harbor Maintenance Trust Fund.
        Inland waterway capital investments are funded at $201 million, of
    which $95 million will be derived from the Inland Waterways Trust Fund.
    This is the amount that is affordable within the projected level of
    revenue to this trust fund under existing law. In September 2011, as
    part of his Jobs bill proposal, President Obama transmitted to the
    Congress a proposal to modernize financing of capital investments on
    the Nation's inland waterways. The proposal includes increasing the
    revenue paid by commercial navigation users sufficiently to meet their
    share of the costs of capital development activities financed from the
    Inland Waterways Trust Fund. A new vessel user fee would supplement the
    existing fuel tax. The Administration will continue to work with the
    Congress and stakeholders to enact such a mechanism to increase revenue
    to this trust fund, in order to enable a significant increase in
    funding for high-performing inland waterway capital investments in the
    future.
                             flood risk management
        Through both structural and nonstructural measures, the flood risk
    management program serves as a vehicle to reduce the risk to human
    safety and property from riverine and coastal flooding. The fiscal year
    2013 budget provides $1.4 billion for the flood risk management
    program, including $492 million that is directed at dam and levee
    safety.
        This flood risk management program also includes $41 million to
    continue the comprehensive levee safety initiative to assess the
    conditions of Federal levees and help ensure that they are safe. These
    funds will also enable the Corps to better assess and communicate risk,
    for example, by providing information that will assist non-Federal
    entities in identifying safety issues with their levees. The Corps will
    be conducting levee inspections and levee risk screenings, adding to
    the data in the national levee inventory, and providing the available
    levee data to communities for their use in gaining accreditation under
    the Federal Emergency Management Agency's National Flood Insurance
    Program.
        In addition to this funding in the flood risk management program,
    the budget includes $40.2 million in the navigation program to address
    dam safety issues at two navigation dams (Locks and Dams 2,3,4,
    Monongahela River, Pennsylvania, and Lockport Lock and Dam, Illinois).
                         aquatic ecosystem restoration
        The fiscal year 2013 budget reflects a continuing effort by the
    Corps and other Federal agencies to collaborate developing a unified
    budget proposal, which reflects the Nation's priorities for restoring
    its most significant aquatic ecosystems. Attachment 2 provides a list
    of these ecosystems and the Corps funding amounts budgeted on this
    basis.

           ATTACHMENT 2.--FISCAL YEAR 2013 PRIORITY ECOSYSTEMS FUNDING
                            [In millions of dollars]
    ------------------------------------------------------------------------
     Ecosystem
    account \1\               Projects and studies                 Amount
    ------------------------------------------------------------------------
               Bay Delta:
              I    Yuba Fish Passage                                   .1
              I    CALFED Coordination                                 .1
                   San Pedro Watershed                                 .2
              I    Sac-San Joaquin Delta Island and Levee             1.02
                    Study
              I    Sac-San Joaquin Comp Study                          .3
              C    Hamilton City                                      7.5
              C    American River Common Features                     8
              C    Sac River Bank Protection                          3
              C    Success Dam Remediation [DSAP]                     3
            O&M    Additional studies and projects in                28.3
                    Navigation and Flood Risk Management
                    Programs
                                                             ---------------
                     Total, Bay Delta                                51.5
                                                             ===============
               Chesapeake Bay:
              I    Chesapeake Bay Comp (new recon)                     .3
              I    Lynnhaven                                           .3
              I    Upper Rappahannock                                  .05
              I    Anacostia--Montgomery                               .25
              I    Anacostia--Prince Georges                           .25
              C    Chesapeake Oysters                                 5
              C    Poplar Island                                     13.5
                                                             ---------------
                     Total, Chesapeake Bay                           19.6
                                                             ===============
               Everglades:
              C    Everglades                                       153.3
            O&M    Everglades                                         7.78
                                                             ---------------
                     Total, Everglades                              161.08
                                                             ===============
               Great Lakes:
              I    Interbasin Control Study [GLMRIS]                  3
              C    Chicago Sanitary and Ship Canal [CSSC]            24.5
            O&M    Dredging                                          75.09
                                                             ---------------
                     Total, Great Lakes                             102.59
                                                             ===============
               Gulf Coast:
              I    LCA--studies, PED                                  9.96
              C    LCA--Beneficial Use                                5
              C    LCA--Amite Diversion                               5.6
              C    LCA--Atchafalaya to N Terrebonne                   6.2
                                                             ---------------
                     Total, Gulf Coast                               26.26
    ------------------------------------------------------------------------
               \1\ Key: I=Investigation; C=Construction; O&M=Operation and
                 Maintenance.

        The budget for the Army Civil Works program provides $161 million
    to efficiently fund the ongoing South Florida Ecosystem Restoration
    Program, which includes the Everglades, consisting of $153 in the
    Construction account and $8 million in the O&M account. It also
    supports several major ecosystem-wide initiatives, by providing a total
    of $81 million in the aquatic ecosystem restoration program in support
    of the Federal efforts in the California Bay-Delta, Chesapeake Bay, the
    Great Lakes, and the gulf coast.
        The budget includes $98 million for the Columbia River Fish
    Mitigation program, an ongoing effort to reduce the adverse impacts of
    a series of Corps dams on migrating salmon. Funds will be used to
    construct juvenile fish bypass facilities, improve adult fish ladders
    and conduct other activities that support salmon habitat. The budget
    also provides $90 million for ongoing work under the Missouri River
    Fish and Wildlife Recovery program to construct shallow water habitat
    and undertake other activities to recover and protect federally listed
    species, such as the pallid sturgeon.
                             planning improvements
        The Army continues to work to modernize the Civil Works Planning
    program to better address the current and future water resources needs
    of the Nation. The Army has undertaken an aggressive review of all
    ongoing, protracted feasibility studies to assure that studies are
    scoped appropriately and to focus limited resources on studies with the
    highest probability of leading to high performing projects. Proposed
    changes are aimed at dramatically shortening the timeframe for
    completion of pre-authorization studies while retaining the quality of
    the analyses, reducing the cost of conducting planning studies, and
    increasing Corps corporate and individual accountability for decisions.
        The fiscal year 2013 budget includes $4 million for the national
    Planning Support Program. These funds will be used to improve training
    of Corps planning personnel, including through the Planning Associates
    Program; support development and implementation of revisions to the
    Water Resources Principles and Guidelines in accordance with
    requirements in the Water Resources Development Act of 2007 (sec. 2031,
    Public Law 110-114); and provide for more stable, capable national
    planning centers of expertise.
                               regulatory program
        The budget includes $205 million for the Regulatory Program, which
    is a $9 million increase above the fiscal year 2012 budget. This
    funding increase is one of the Army's priorities. It will support a
    transparent and timely permit review process, bringing greater program
    efficiency and customer service. It will enable the Corps to better
    protect high-value aquatic resources, enable more timely business
    planning decisions, and support sustainable economic development.
                           veterans curation project
        The fiscal year 2013 budget includes $3 million to continue the
    Veterans Curation Project, which provides vocational rehabilitation and
    innovative training for wounded and disabled veterans, while achieving
    historical preservation responsibilities for archaeological collections
    administered by the Corps. The project supports work by veterans at
    curation laboratories located in Augusta, Georgia; St. Louis, Missouri;
    and Washington, DC. This project will contribute to the goals of the
    President's recently announced Veterans Job Corps.
                     american recovery and reinvestment act
        The American Recovery And Reinvestment Act (ARRA) provided $4.6
    billion for the Civil Works program. That amount includes:
      --$2 billion for Construction;
      --$2.1 billion for O&M;
      --$375 million for Mississippi River and Tributaries;
      --$25 million for Investigations;
      --$25 million for the Regulatory Program; and
      --$100 million for the Formerly Used Sites Remedial Action Program.
        The Corps applied ARRA funds to more than 800 projects across the
    Nation.
        The Army is proud to report that 99.8 percent of the ARRA
    appropriations for Civil Works are obligated, and more than 87 percent
    of the funds have been outlayed to date. These investments helped
    create or maintain direct construction industry jobs, jobs in firms
    supplying or supporting construction work and the businesses that sell
    goods and services to these workers and their families.
                                   conclusion
        In summary, the President's fiscal year 2013 budget for the Army
    Civil Works program is a performance-based budget that supports
    continued progress on important water resources investments that will
    yield long-term returns for the Nation and its citizens.
        These investments will generate jobs, contribute to a stronger
    economy, support waterborne transportation, reduce flood risks to
    businesses and homes, provide low-cost renewable hydropower, restore
    important ecosystems, and deliver other benefits to the American
    people.
        Madam Chairman and members of the subcommittee, I look forward to
    working with this subcommittee in support of the President's budget.
    Thank you.

        Senator Feinstein. Thank you very much, Secretary Darcy.
    General Temple, would you like to make comments now? Please go
    ahead.
    STATEMENT OF MAJOR GENERAL MERDITH W.B. TEMPLE, ACTING
                COMMANDING GENERAL, CHIEF OF ENGINEERS
        General Temple. Madam Chairman and members of the
    subcommittee, I'm Major General Bo Temple, the Acting Commander
    of U.S. Army Corps of Engineers (USACE) and Acting Chief of
    Engineers, and I'm honored to be here with Ms. Darcy to testify
    regarding the President's fiscal year 2013 budget for the Civil
    Works program.
        The Corps is wrapping up an unprecedented period of
    construction and project execution. Over the past 5 years, we
    provided $12 billion in base realignment and closure (BRAC)-
    related construction, $7 billion of American Recovery and
    Reinvestment Act work in both our Military and Civil Works
    programs, and about $14 billion of gulf coast recovery work.
        In 2011, more than 2,000 Corps employees deployed in
    response to multiple disasters, including Midwest tornadoes and
    flooding in the Missouri, Mississippi, and Souris river basins
    and also throughout the Northeast due to Hurricane Irene and
    Tropical Storm Lee.
        Our systems performed as designed, saving lives and
    preventing billions in damages. However, as you are aware, many
    of our projects were damaged, and we are currently working to
    address those issues utilizing the $1.7 billion the Congress
    appropriated for this purpose.
        The fiscal year 2013 budget includes $4.7 billion to fund
    Civil Works activities within the Corps' three main water
    resources missions: Commercial navigation, flood and storm
    damage reduction, and aquatic ecosystem restoration.
        The budget includes $102 million for these and related
    activities in the Investigations account, and $1 million in the
    Mississippi River and Tributaries (MR&T) account.
        It funds 81 continuing studies and six new studies. It also
    includes more than $10 million for work on proposals to deepen
    seven U.S. ports.
        The budget includes $1.47 billion in the Construction
    account and $99 million in the MR&T account, funding 101
    construction projects including 57 flood and coastal storm
    damage reduction projects, 5 of which are budgeted for
    completion, 23 commercial navigation projects, 19 aquatic
    ecosystem restoration projects, and mitigation associated with
    2 hydropower projects.
        The Operation and Maintenance (O&M) program includes $2.53
    billion and an additional $134 million under the MR&T program
    with a focus on the maintenance of key commercial navigation,
    flood and storm damage reduction, hydropower and other
    facilities.
        The Corps will continue to implement actions to improve its
    planning program through planning modernization efforts
    focusing on how best to modernize the planning program to more
    effectively address water resources challenges.
        The Corps always strives to improve its efficiency and
    effectiveness. In fiscal year 2013, the Corps will further
    expand the implementation of modern asset management programs
    using a larger portion of its funds for the most important
    maintenance work while implementing an energy sustainability
    program that pursues major deficiencies in the acquisition and
    operations of our information technology assets as well as
    finalizing the organization of the Corps acquisition work
    force.
        The fiscal year 2013 budget provides $30 million for
    preparedness for floods, hurricanes, and other natural
    disasters including $3 million in support of the Corps
    participation in levee safety and other flood mitigation
    initiatives such as the Silver Jackets program to provide
    unified Federal assistance in implementing flood and coastal
    storm damage reduction solutions.
        Internationally, the Corps of Engineers continues to
    support the mission to help Iraq and Afghanistan build
    foundations for democracy, freedom, and prosperity. In Iraq and
    Afghanistan, we completed or closed out hundreds of projects in
    support of the host nations and coalition forces.
        This critical infrastructure and our capacity building
    efforts will play a key role in ensuring stability and security
    for those nations.

                               PREPARED STATEMENT

        The Corps remains committed to change that ensures an open,
    transparent and performance-based Civil Works program while
    remaining focused on consistently delivering innovative
    resilient risk-informed solutions to the Armed Forces and to
    the Nation.
        Thank you, Madam Chairman and members of the subcommittee.
    This concludes my statement, and I'm happy to take questions
    when we're ready.
        Senator Feinstein. Thank you very much, General Temple.
        [The statement follows:]
            Prepared Statement of Major General Merdith W.B. Temple
                                  introduction
        Madam Chairman and distinguished members of the subcommittee: I am
    honored to be testifying before your subcommittee today, along with the
    Assistant Secretary of the Army (Civil Works), the Honorable Jo-Ellen
    Darcy, on the President's fiscal year 2013 budget for the Civil Works
    Program of the United States Army Corps of Engineers (COE).
        The Corps is wrapping up an unprecedented period of construction
    and project execution. Over the past 5 years, we provided $12 billion
    in base realignment and closure (BRAC)-related construction; $7 billion
    of American Recovery and Reinvestment Act (ARRA) work in our Military
    and Civil Works programs combined; and about $14 billion of gulf coast
    recovery work.
        In 2011, the Corps responded to several devastating tornadoes and
    floods, as well as hurricanes and tropical storms, under the National
    Response Framework in support of Federal Emergency Management Agency
    (FEMA). Flooding was a significant problem as we experienced record
    high water levels for a much longer duration than is the norm
    throughout much of the country. Our flood risk reduction systems were
    operated at their maximum capacity, some for the first time.
        The great men and women of COE worked tirelessly, together with our
    State, local, and industry partners, to ensure that we could deliver on
    all of our commitments last year. It is through their efforts that we
    were successful and will continue to be able to carry out the projects
    and programs included in the fiscal year 2013 budget.
        My statement covers the following 11 topics:
      --Summary of fiscal year 2013 program budget;
      --Direct Program;
      --Investigations Program;
      --Construction Program;
      --Operation and Maintenance Program;
      --Reimbursable Program;
      --Planning Program Modernization;
      --Efficiency and Effectiveness of Corps Operations;
      --Value of the Civil Works Program to the Nation's Economy and
            Defense;
      --Research and Development; and
      --National Defense.
                   summary of fiscal year 2013 program budget
        The Corps is fully committed to its support of the Nation's
    priorities to reduce the deficit, contribute to the economy, and
    restore and protect the aquatic environment. The fiscal year 2013 Civil
    Works budget provides the Corps with the means to support these
    priorities. It is a performance-based budget, which reflects a focus on
    the projects and activities that provide the highest net economic and
    environmental returns on the Nation's investment or address significant
    risks to human safety, to include continuing a comprehensive levee
    safety initiative and supporting increased interagency and stakeholder
    collaboration. The Reimbursable Program funding is projected to provide
    an additional $1.6 billion.
                                 direct program
        The budget includes $4.7 billion for Civil Works activities, with
    priority on the highest performing activities within our three main
    water resources missions--commercial navigation, flood and storm damage
    reduction, and aquatic ecosystem restoration. The budget invests in
    more than 600 flood and storm damage reduction projects, 143 commercial
    coastal navigation projects, and 51 projects on the inland waterways.
    For example, it provides increased funding for high use, commercial,
    coastal channels, and harbors including support of efforts to
    accommodate Post-Panamax ships. In total, the budget supports ongoing
    construction of 98 projects and three new construction starts. The
    budget includes funds for 81 studies already underway and six new study
    starts. It will enable the Corps to process approximately 80,000 permit
    requests and to operate 75 hydropower plants with 350 generating units
    that produce approximately 24,000 megawatts annually. At its multi-
    purpose projects, the Corps also stores water to supply about 14
    percent of the Nation's municipal water needs. The budget will also
    sustain the Corps' preparedness to respond to natural disasters.
                             investigations program
        The budget for the Investigations program will enable the Corps to
    evaluate and design future projects that are most likely to be high-
    performing within the Corps three main water resources mission areas.
    The budget includes $102 million for these and related activities in
    the investigations account and $1 million in the Mississippi River and
    Tributaries account. It funds 81 continuing studies and six new
    studies:
      --Englebright and Daguerre Point Dams (Yuba River) Fish Passage,
            California;
      --Cano Martin Pena, Puerto Rico;
      --the Chesapeake Bay Comprehensive Plan;
      --the Louisiana Coastal Area Comprehensive Study; and
      --the Houston Ship Channel, Texas.
        Funding is also included for the Water Resources Priorities Study,
    a high-priority evaluation of the Nation's vulnerability to inland and
    coastal flooding, as well as the effectiveness, efficiency, and
    accountability of existing water resource programs and strategies.
    Investigations funding also includes $10.63 million for work on
    proposals to deepen seven U.S. ports:
      --Boston, Massachusetts;
      --Charleston, South Carolina;
      --Savannah, Georgia;
      --Wilmington, North Carolina;
      --Brazos Island, Brownsville Channel, Texas; and
      --Jacksonville, Florida, and Houston, Texas.
                              construction program
        The goal of the construction program is to deliver as high a value
    as possible to the Nation from the overall available funding through
    the construction of new water resources projects and the replacement,
    rehabilitation, and expansion of existing flood and storm damage
    reduction, aquatic ecosystem restoration, commercial navigation, and
    hydropower projects. The fiscal year 2013 budget includes $1.47 billion
    in the Construction account and $99 million in the Mississippi River
    and Tributaries account to further this objective. Consistent with this
    objective, the budget also gives priority to projects that address a
    significant risk to human safety.
        The budget funds 101 construction projects, including:
      --57 Flood and Coastal Storm Damage Reduction projects (five budgeted
            for completion);
      --23 Commercial Navigation projects (including 11 continuing
            mitigation items and 6 dredged material placement areas);
      --19 Aquatic Ecosystem Restoration Projects (including 4 projects to
            meet Biological Opinions); and
      --mitigation associated with two Hydropower projects.
        Three of these construction projects are new starts:
      --Hamilton City, California;
      --Louisiana Coastal Area Ecosystem Restoration, Louisiana; and
      --Lower Colorado River,Wharton-Onion Creek, Texas.
        This program also includes significant environmental mitigation
    work in the Columbia River Basin and the Missouri River Basin needed to
    support the continued operation of COE multipurpose projects, which
    improves habitat and migration pathways for endangered and threatened
    species.
        Performance measures, which the Corps uses to establish priorities
    among projects, include the benefit-to-cost ratios for projects with
    economic outputs and the most cost-effective restorations of
    significant aquatic ecosystems. The selection process also gives
    priority to dam safety assurance, seepage control, and static
    instability correction work and to activities that address a
    significant risk to human safety. These performance measures maximize
    the overall return to the Nation from the investment in the Civil Works
    construction program, by focusing on the projects that will provide the
    best net returns for each $1 invested.
                       operation and maintenance program
        The facilities owned and operated by, or on behalf of, COE care
    aging. As stewards of this infrastructure, we are working to ensure
    that its key features continue to provide an appropriate level of
    service to the American people, a growing challenge in some cases, as
    proper maintenance is becoming more expensive at many of our projects.
        The operation and maintenance (O&M) program for the fiscal year
    2013 budget includes $2.53 billion and an additional $134 million under
    the Mississippi River and Tributaries program with a focus on the
    maintenance of key commercial navigation, flood and storm damage
    reduction, hydropower, and other facilities. Specifically, the O&M
    program supports completed works owned or operated by the COE,
    including administrative buildings and laboratories. Work to be
    accomplished includes:
      --operation of the locks and dams of the inland waterways;
      --dredging of inland and coastal Federal commercial navigation
            channels;
      --operating multiple purpose dams and reservoirs for flood damage
            reduction, commercial navigation, aquatic ecosystem
            restoration, hydropower, and related purposes;
      --maintenance and repair of the facilities; monitoring of completed
            storm damage reduction projects along our coasts; and
      --general management of Corps facilities and the land associated with
            these purposes.
                              reimbursable program
        Through the Interagency and Intergovernmental Services Program we
    help non-Department of Defense (DOD) Federal agencies, State, local,
    and tribal governments, and other countries with timely, cost-effective
    implementation of their programs. Rather than develop their own
    internal workforces to oversee project design and construction, these
    agencies can turn to COE, which already has these capabilities. Such
    intergovernmental cooperation is effective for agencies and the
    taxpayer by using the skills and talents that we bring to our Civil
    Works and Military Programs missions. The work is principally technical
    oversight and management of engineering, environmental, and
    construction contracts performed by private sector firms, and is
    totally financed by the agencies we service.
        We only accept agency requests that we can execute without
    impacting our Civil Works or Military Programs missions that are
    consistent with our core technical expertise and that are in the
    National interest.
        Currently, we provide reimbursable support for about 70 other
    Federal agencies and several State and local governments. Total
    reimbursement for such work in fiscal year 2013 is projected to be $1.6
    billion, reflecting the completion of ongoing reimbursable work and an
    estimated amount for fiscal year 2013.
                         planning program modernization
        The Corps will continue to implement actions to improve the
    performance of its Civil Works Planning Program through a planning
    modernization effort. This effort focuses on how best to prepare,
    organize, manage, operate, and oversee the planning program to more
    effectively address 21st century water resources challenges. This means
    improved project delivery that yields smarter outcomes; improved
    technical capability of our planners; enhanced collaboration with
    Federal, tribal, State, local and nongovernment partners; evaluating
    and enhancing production capability and staffing at Corps Planning
    Centers of Expertise; and strengthening the objectivity and
    accountability of our planning efforts. Our improved planning
    performance will include:
      --updated planning guidance and policy;
      --streamlined, adaptable planning processes that improve our
            effectiveness, efficiency, transparency, and responsiveness;
            and
      --enhanced technical capabilities.
        In fiscal year 2011, the Corps launched a 2-year National Planning
    Pilot Program to test these concepts and to develop and refine
    processes for planning studies across all business lines. This approach
    will be both sustainable and replicable, which will inform future Civil
    Works guidance. Seven to nine pilot studies will be executed over the
    course of this National Planning Pilot Program.
                efficiency and effectiveness of corps operations
        The Corps always strives to continually improve its investigations,
    construction, and operations programs' efficiency and effectiveness. In
    2013, the Corps will further expand the implementation of a modern
    asset management program, using a larger portion of its funds for the
    most important maintenance work, while implementing an energy
    sustainability program that pursues major efficiencies in the
    acquisition and operations of its information technology assets, as
    well as finalizing the reorganization of the Corps' acquisition
    workforce.
      value of the civil works program to the nation's economy and defense
        COE personnel continue to respond whenever needed to assist during
    major floods and other natural disasters. The critical work that they
    perform reduces the risk of damage to people and communities. The
    budget provides $30 million for preparedness for floods, hurricanes,
    and other natural disasters, including funding in support of Corps
    participation of the levee safety and other flood mitigation
    initiatives, including the Silver Jackets program, with a goal of one
    in every State, and to provide unified Federal assistance in
    implementing flood and storm damage reduction solutions.
                            research and development
        Civil Works Program research and development provides the Nation
    with innovative engineering products, some of which can have
    applications in both civil and military infrastructure spheres. By
    creating products that improve the efficiency and competitiveness of
    the Nation's engineering and construction industry and by providing
    more cost-effective ways to operate and maintain infrastructure, Civil
    Works program research and development contributes to the national
    economy and our quality of life.
                                national defense
        Internationally, the U.S. Army Corps of Engineers continues to
    support the mission to help Iraq and Afghanistan build foundations for
    democracy, freedom, and prosperity.
        We are proud to serve this great Nation and our fellow citizens,
    and we are proud of the work the Corps does to support America's
    foreign policy, particularly with our ongoing missions in Afghanistan
    and Iraq. Men and women from across the Corps--all volunteers and many
    of whom have served on multiple deployments--continue to provide
    critical support to our military missions there and humanitarian
    support to the citizens of those nations. Currently, 885 Corps
    employees (both civilian and military) are deployed in Iraq and
    Afghanistan. Since these deployments began, the Corps has completed
    more than 9,000 civilian and military projects that were managed by the
    Corps in support of U.S. and Coalition efforts in those countries.
        In Iraq, we completed a more than $15 billion construction program
    and in Afghanistan we have constructed $5 billion worth of work through
    fiscal year 2011. By the end of 2014 we will complete another $10
    billion, for a total Afghanistan program of $15 billion. This critical
    infrastructure and our capacity building efforts will play a key role
    in ensuring stability and security for these nations.
                                   conclusion
        The fiscal year 2013 budget represents a continuing, fiscally
    prudent investment in the Nation's water resources infrastructure and
    in the restoration of its aquatic ecosystems. COE is committed to
    change that ensures an open, transparent, and performance-based Civil
    Works program, while remaining focused on consistently delivering
    innovative, resilient, risk-informed solutions to the Armed Forces and
    the Nation.
        Thank you, Madam Chairman and members of subcommittee. This
    concludes my statement.

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    STATEMENT OF HON. ANNE CASTLE, ASSISTANT SECRETARY FOR
                WATER AND SCIENCE
        Senator Feinstein. Secretary Castle, please.
        Ms. Castle. Thank you. Madam Chair, Ranking Member
    Alexander, and members of the subcommittee, I appreciate the
    opportunity to talk to you today about the water-related
    programs of the Department of the Interior and the 2013 budget.
        Commissioner Connor is going to address the specifics of
    the Bureau of Reclamation budget, and I'm going to talk about
    some of Interior's overall programs to address water challenges
    in the West and contribute to the development of renewable
    energy that are contained in the budget.
        It's well known that we're facing unprecedented pressure on
    our water supplies. And that's all across the country, but it's
    particularly in the Western United States. We've got population
    growth, aging infrastructure, and increased demand for water to
    support domestic energy development.
        We have increased recognition of environmental needs. We
    have changing climate. And all of those are challenging already
    scarce water supplies. This Administration puts a very high
    priority on addressing these water challenges.
        Interior's WaterSMART Program (Sustain and Manage America's
    Resources for Tomorrow) Program is designed to do that. It's
    designed to help secure and stretch our water supplies and to
    provide tools to water managers that allow them to work toward
    sustainability.
        Reclamation proposes to fund the WaterSMART Program at $54
    million. The WaterSMART Program includes our WaterSMART grants
    that are funded at $21.5 million, the Basin Studies program
    funded at $6 million, and the Title XVI Recycling and Reuse
    projects that are funded at a little more than $20 million.
        The U.S. Geological Survey (USGS) also has $21 million in
    the 2013 budget requested for WaterSMART programs and that's
    primarily for the water availability and use assessment. These
    WaterSMART programs have a very real and a very positive
    impact.
        We have set the goal of enabling the saving of 730,000
    acre-feet over the 4 years from 2010 to 2013. That's as much
    water as the San Diego County Water Authority uses to serve all
    of its customers for 1 year.
        We're on track to meet that goal. With our programs in 2010
    and 2011, we've enabled the savings of almost 488,000 acre-
    feet, and that number is right around the annual use for the
    seven largest cities in the State of Colorado. So we're talking
    about real water savings.
        Another very important focus of the Department of the
    Interior is our New Energy Frontier initiative that's intended
    to foster the development of clean and renewable energy to
    create jobs and to achieve greater energy independence.
        And one of the components of the all-of-the-above energy
    strategy is hydropower. Hydropower is clean, it's efficient,
    it's flexible, and it's a renewable energy resource.
        Reclamation's hydroelectric power plants produce an average
    of 40 million megawatt hours of electricity every year. That's
    enough to meet the needs of more than 3.5 million households.
        Last year, Reclamation released an assessment of the
    hydroelectric potential on its existing dams and reservoirs,
    and that report highlighted 225 megawatts of hydro-potential
    with favorable cost-benefit ratios.
        In the next couple of weeks, we're going to release Phase 2
    of that assessment that looks at the hydropower potential on
    Reclamation's canals and conduits. And we're anticipating that
    we'll see another 100 megawatts of potential on those
    structures.
        These facilities with potential are being made available
    for private development. The Reclamation budget allocates $2
    million to increase clean renewable energy generation by
    integrating renewable technologies into Reclamation projects
    and continuing the effort to optimize our own hydropower
    projects so that we can produce more energy using the same
    amount of water.

                               PREPARED STATEMENT

        Madam Chair, we really appreciate the support that this
    subcommittee has shown for Reclamation's mission, projects, and
    those tangible benefits that you mentioned in your opening
    statement. And we appreciate the support for the mission of the
    Department.
        I look forward to answering your questions.
        [The statement follows:]
                       Prepared Statement of Anne Castle
        Madame Chair, Mr. Alexander, and members of this subcommittee, I am
    pleased to appear before you today to discuss the President's fiscal
    year 2013 budget for the Department of the Interior. I would also like
    to thank the members of this subcommittee for your efforts to enact a
    2012 appropriation, and for your ongoing support for our initiatives.
        The fiscal year 2013 budget builds on that strong foundation with
    $11.5 billion budgeted for the Department of the Interior. The budget
    demonstrates that we can responsibly cut the deficit, while investing
    to win the future and sustain the national recovery. Our budget
    promotes the actions and programs as the President details in his
    ``Blueprint for an America Built to Last''; the budget supports
    responsible domestic energy development and advances an America's Great
    Outdoors strategy. The budget continues to advance efforts that you
    have facilitated in renewable energy and sustainable water
    conservation, cooperative landscape conservation, youth in the
    outdoors, and reforms in our conventional energy programs.
        I will discuss the President's fiscal year 2013 budget for the
    Bureau of Reclamation and the Office of the Central Utah Project
    Completion Act (CUPCA), including our proposal to reconsolidate the
    CUPCA Office into Reclamation, and the water-related programs of the
    United States Geological Survey (USGS). I thank the subcommittee for
    your continued support of these programs.
                                  introduction
        Interior's mission--to protect America's natural resources and
    cultural heritage and honor the Nation's trust responsibilities to
    American Indians and Alaska Natives--is profound. Interior's people and
    programs impact all Americans.
        The Department of the Interior is the steward of 20 percent of the
    Nation's lands including national parks, national wildlife refuges, and
    the public lands. Interior manages public lands and the Outer
    Continental Shelf, providing access for renewable and conventional
    energy development and overseeing the protection and restoration of
    surface-mined lands. Through the Bureau of Reclamation, Interior is the
    largest supplier and manager of water in the 17 Western States and
    provides hydropower resources used to power much of the country. The
    Department supports cutting edge research in the earth sciences--
    geology, hydrology, and biology--to inform resource management
    decisions within Interior and improve scientific understanding
    worldwide. The Department also helps fulfill the Nation's unique trust
    responsibilities to American Indians and Alaska Natives and provides
    financial and technical assistance for the insular areas.
        The Department of the Interior makes significant contributions to
    the Nation's economy. We estimate that it supports more than 2 million
    jobs and approximately $363 billion in economic activity each year.
    Visits to our national parks, cultural and historic sites, refuges,
    monuments and other public lands contribute more than $47 billion in
    economic activity from recreation and tourism. The American outdoor
    industry estimates 1 in 20 U.S. jobs is in the recreation economy.
    Conventional and renewable energy produced on Interior lands and waters
    results in about $230 billion in economic benefits each year, and the
    water managed by Interior is a major contributing factor to more than
    $40.2 billion in agriculture.
                              2011 accomplishments
        Three years ago, Secretary Salazar set Interior on a course to
    create a comprehensive strategy to advance a new energy frontier,
    tackle the impacts of a changing landscape, improve the sustainable use
    of water, engage youth in the outdoors, and improve the safety of
    Indian communities. These priority goals integrate the strengths of the
    Department's diverse bureaus and offices to address key challenges of
    importance to the American public. Interior has been making progress in
    these areas, including:
      --In 2011, the Department of the Interior generated a total of $13.2
            billion in receipts benefitting the U.S. Treasury--from a
            combination of royalties, rents and bonuses from mineral,
            timber, and other natural resource development. Of the total
            receipts generated by Interior in 2011, $11.3 billion was
            collected from energy production on public lands, tribal lands,
            and Federal offshore areas--a $2 billion increase over the
            previous year--with receipts disbursed among Federal, State,
            and tribal governments.
      --Since March 2009, 29 onshore projects that increased approved
            capacity for production and transmission of power have been
            approved, including the first-ever utility scale solar project,
            five wind projects, and eight geothermal projects. The Cape
            Wind Energy Project, approved for construction and operation,
            is the first-ever offshore commercial wind operation.
      --We continue to make youth a priority, and increased the number of
            youth employed in conservation activities through Interior or
            its partners by 31 percent more than the 2009 levels. We
            launched the YouthGO.gov portal in January 2011, a tool of the
            Departments of the Interior and Agriculture to provide
            information on education programs, outdoor activities, and job
            opportunities.
      --Water Sustain and Manage America's Resources for Tomorrow
            (WaterSMART), established in 2010, has assisted communities in
            improving conservation, increasing water availability,
            restoring watersheds, resolving longstanding water conflicts,
            addressing the challenges of climate change, and implementing
            water rights settlements. The WaterSMART grant program has
            provided more than $85 million in funding to non-Federal
            partners, including tribes, water districts, and universities.
            In 2011, we provided $33 million in funding for 82 WaterSMART
            grant projects.
      --The year 2011 was the second year of a 2-year pilot at four
            reservations to conduct expanded community policing, equip and
            train the law enforcement cadre, partner with the communities
            to organize youth groups and after school programs, and closely
            monitor results. The results exceeded expectations with a 35
            percent overall decrease in violent crime in the four
            communities. Information about the four reservations is being
            analyzed, and the program will be expanded in 2013 to an
            additional two communities.
      --In December 2011, the President hosted the third White House Tribal
            Nations Conference bringing together tribal leaders from across
            the United States; we are improving the Nation-to-Nation
            relationship with 565 tribes.
      --The Department advanced key priorities and strategic goals that
            will improve the conservation and management of natural and
            cultural resources into the future.
      --Interior and its Federal, State, and tribal partners have created a
            national network of 22 Landscape Conservation Cooperatives
            (LCCs) and eight Climate Science Centers (CSCs) in order to
            address an increasing variety of conservation challenges.
      --In the spirit of America's Great Outdoors, we welcomed new national
            wildlife refuges in Kansas, the Dakotas, Pennsylvania, and
            Florida at the headwaters to the Everglades. These refuges mark
            a new era of conservation for the Department, one that is
            community-driven, science-based, and takes into account entire
            ecosystems and working landscapes.
      --The Department worked with others to implement short-term measures
            and develop a long-term action plan to help address water
            supply and environmental challenges in the California Bay-Delta
            area, invested more than $600 million in major water projects
            over the past 3 years, and moved forward on longstanding water
            availability issues in the Colorado River Basin.
                             fiscal responsibility
        Interior's fiscal year 2013 budget must be viewed in the context of
    the difficult fiscal times facing the Nation. This budget is
    responsible and austere. Interior's $11.5 billion budget funds
    important investments by eliminating and reducing lower priority
    programs, deferring project start-ups, reducing duplication,
    streamlining operations, and capturing savings. It maintains funding
    levels for core functions that are vital to uphold stewardship
    responsibilities and sustain key initiatives. The fiscal year 2013
    budget includes $10.5 billion for programs funded by the Interior,
    Environment, and Related Agencies appropriation. The fiscal year 2013
    budget for Reclamation, including the CUPCA, is $1 billion in current
    appropriations, $42.4 million below the 2012 enacted level.
        Interior's fiscal year 2013 budget reflects many difficult budget
    choices, cutting worthy programs and advancing efforts to shrink
    Federal spending. Staffing reductions are anticipated in some program
    areas, which will be achieved through attrition, and buy-outs in order
    to minimize the need to conduct reductions in force to the greatest
    extent possible. These reductions are a necessary component of
    maintaining overall fiscal restraint while allowing us to invest
    additional resources in core agency priorities.
                          growing the economy outdoors
        The President's ``Blueprint'' recognizes the economic potential of
    renewable energy development. The economic benefits could be
    particularly significant in America's remote and rural places near
    public lands. The Department's 2010 estimates identified nearly $5.5
    billion in economic impacts associated with renewable energy
    activities, a growing economic sector that supports high-paying jobs.
        Interior is at the forefront of the Administration's comprehensive
    effort to spur job creation by making the United States the world's top
    travel and tourism destination. In a recent statement, President Obama
    cited Department of Commerce figures showing that in 2010,
    international travel resulted in $134 billion in U.S. exports.
        The President has asked Secretary Salazar to co-chair an
    interagency task force with Commerce Secretary Bryson to develop a
    National Travel and Tourism Strategy to expand job creation by
    promoting domestic and international travel opportunities throughout
    the United States. A particular focus of the Task Force will be on
    strategies for increasing tourism and recreation jobs by promoting
    visits to the Nation's national treasures.
        According to a departmental study, in 2010, 437 million visits were
    made by American and international travelers to these lands,
    contributing $47.9 billion in economic activity and 388,000 jobs. Eco-
    tourism and outdoor recreation also have an impact on rural economies,
    particularly in Arizona, California, Colorado, Florida, Nevada, North
    Carolina, Oregon, Utah, and Wyoming.
                            america's great outdoors
        The Administration continues to listen to the American public as
    they ask for protection and restoration of our outdoors and to expand
    opportunities for recreation through partnerships with States and
    others and the promotion of America's parks, refuges, and public lands.
    An important element in this effort is the restoration of our rivers to
    both protect the environmental benefits and to secure future water
    supplies. By encouraging innovative partnerships in communities across
    the Nation, the Administration is expanding access to rivers and
    trails, creating wildlife corridors, and promoting conservation while
    working to protect historic uses of the land including ranching,
    farming, and forestry. As part of America's Great Outdoors, Interior is
    supporting 101 signature projects in all States across the country to
    make parks accessible for children, create great urban parks and
    community green spaces, restore rivers, and create recreational
    blueways to power economic revitalization. Projects were selected in
    concert with governors, tribal leaders, private landowners, and other
    stakeholders and were evaluated based on the level of local support,
    the ability of States and communities to leverage resources, and the
    potential to conserve important lands and promote recreation.
        The 2013 America's Great Outdoors initiative focuses on investments
    that will lead to healthy lands, waters, and resources while
    stimulating the economy--goals that are complementary. Through
    strategic partnerships, Interior will support and protect historic uses
    of lands, restore lands and resources, protect and interpret historic
    and cultural resources, and expand outdoor recreation opportunities.
    All of these activities have significant economic benefits in rural and
    urban communities.
        Interior's fiscal year 2013 budget continues to better equip land
    and resource managers with the tools they need to effectively conserve
    resources in a rapidly changing environment. Significant changes in
    water availability, longer and more intense fire seasons, invasive
    species, and disease outbreaks are creating challenges for resource
    managers and impacting the sustainability of resources on public lands.
    These changes result in bark beetle infestations, deteriorated range
    conditions, and water shortages that negatively impact grazing,
    forestry, farming, as well as the status of wildlife and the condition
    of their habitats. Many of these problems are caused by or exacerbated
    by climate change.
        The Department's budget includes $6 million for Reclamation's Basin
    Studies program, which funds Reclamation's partnerships with State and
    local entities to initiate comprehensive water supply and demand
    studies in the West.
        Reclamation continues to participate in and support to the Desert
    and Southern Rockies Landscape Conservation Cooperatives. These LCCs
    are partnerships between Interior and other Federal agencies, States,
    tribes, nongovernmental organizations, and other stakeholders, to bring
    together science and sustainable resource conservation activities to
    develop science-based solutions to on-the-ground challenges from a
    changing environment within an ecological region or ``landscape.'' The
    LCCs leverage the resources and expertise of the partners and work
    across jurisdictional barriers to focus on natural resource issues
    specific to a particular ecosystem or landscape.
                             investing in our youth
        Furthering the youth and conservation goals of the America's Great
    Outdoors initiative, the fiscal year 2013 budget proposes to continue
    engaging youth by employing and educating young people from all
    backgrounds.
        Interior is uniquely qualified to engage and educate young people
    in the outdoors and has programs that establish connections for youth
    ages 18 to 25 with natural and cultural resource conservation. These
    programs help address unemployment in young adults and address health
    issues by encouraging exercise and outdoor activities. For example,
    Interior is taking part in the First Lady's Let's Move initiative to
    combat the problem of childhood obesity. Interior has longstanding
    partnerships with organizations such as the 4-H, the Boy Scouts, the
    Girl Scouts, the Youth Conservation Corps, and the Student Conservation
    Association. These programs leverage Federal investments to put young
    people to work, build a conservation ethic, and educate the next
    generation of land and water stewards.
                                water challenges
        Interior is working to address the 21st century pressures on the
    Nation's water supplies. Population growth, aging water infrastructure,
    changing climate, rising energy demands, impaired water quality, and
    environmental needs are among the challenges to already scarce
    supplies. Water shortage and water use conflicts have become more
    commonplace in many areas of the United States, even in normal water
    years. As competition for water resources grows, the need for
    information and tools to aid water resource managers also grows.
    Traditional water management approaches no longer meet today's needs.
        In 2010, the Secretary issued a Secretarial Order establishing the
    WaterSMART program which embodies a new water sustainability strategy.
    WaterSMART coordinates Interior's water sustainability efforts, creates
    a clearinghouse for water conservation best practices and implements a
    Department-wide water footprint reduction program to reduce consumption
    of potable water by 26 percent by 2020.
        Reclamation proposes to fund the rebased WaterSMART at $53.9
    million, $6.8 million above 2012 enacted levels. The three ongoing
    WaterSMART programs include:
      --the WaterSMART Grant program funded at $21.5 million;
      --Basin Studies funded at $6 million; and
      --the title XVI Water Reclamation and Reuse program funded at $20.3
            million.
        The rebasing adds the existing Water Conservation Field Services
    program, funded at $5.9 million, and participation by Reclamation in
    the Cooperative Watershed Management program, funded at $250,000.
    WaterSMART is a joint effort with the USGS. The USGS fiscal year 2013
    budget includes $21 million, an increase of $13 million more than the
    2012 enacted level, for the USGS WaterSMART Availability and Use
    Assessment program.
        In November 2011, the Department adopted the WaterSMART Strategic
    Implementation Plan, which discusses the coordination of activities
    across bureaus, and the contributions they will make in providing
    Federal leadership toward a sustainable water resources future. In
    December 2011, we released a report on a pilot project within the
    Colorado River Basin. This report represents a snapshot of Interior's
    WaterSMART activities within the Basin and demonstrates the diversity
    and significance of several ongoing Federal, State, tribal, local, and
    nongovernmental cooperative efforts that are underway. It also
    demonstrates the effectiveness of the WaterSMART program, and the
    importance of these coordinated efforts to the sustainability of
    resources in the Colorado River Basin.
        Other significant programs and highlights specific to Reclamation
    include:
      --We are in dialogue with Mexico on the management of the Colorado
            River. We have ongoing efforts to improve our management of
            resources on the Colorado River, from renewable hydropower
            development near the headwaters to a pilot program of
            desalination near the Mexican border. We are completing
            environmental compliance on a new protocol for high-flow
            releases from Glen Canyon Dam to improve and protect downstream
            resources. We have begun the process for updating the long-term
            plan of operations for Glen Canyon Dam to incorporate the
            scientific advancements that have occurred since the last plan
            was finalized, more than 15 years ago.
      --We are actively pursuing workable solutions to regional issues such
            as in the California Bay-Delta. The Bay-Delta is a source of
            drinking water for 25 million Californians and sustains about
            $400 billion in annual economic activity, including a $28
            billion agricultural industry and up until recently supported a
            thriving commercial and recreational fishing industry. Our
            efforts in the Bay-Delta are focused on co-leading an inter-
            agency effort with the Council on Environmental Quality (CEQ)
            to implement the December 2009 Interim Federal Action Plan for
            the California Bay-Delta. In coordination with five other
            Federal agencies, we are leveraging our activities to work in
            concert with the State and local authorities to encourage the
            smarter supply and use of water, ensure healthy ecosystems and
            water quality, help deliver drought relief services, and ensure
            integrated flood risk management. Over the past 3 years, we
            have invested more than $600 million in water projects in
            California. This funding supports the co-equal goals of
            providing a more reliable water supply for California and
            protecting, restoring, and enhancing the Bay-Delta ecosystem.
            We have also, in close coordination with NOAA and the State of
            California, worked on the California Bay-Delta Conservation
            Plan, a long-term plan aimed at restoring both reliable water
            supplies and a healthy Bay-Delta ecosystem.
        On February 22, 2012, we announced the initial Water Supply
    Allocation for Central Valley Project (CVP) water users. Even though
    2011 was a wet water year that allowed reservoirs to fill and provided
    abundant flows in the Sacramento and San Joaquin river systems, the
    exceedingly dry conditions earlier this winter pose risks to threatened
    and endangered fish species, as well as to the water supplies of the
    CVP. Interior, Reclamation, State and local agencies, and other
    interested parties are working together to identify and secure
    additional water supplies and create opportunities that will aid water
    management in California. We will continue to work with our Federal,
    State, and local partners to improve water supply reliability while
    addressing significant ecological issues. Reclamation is continuing to
    update the forecast to provide the most current information to its
    stakeholders.
                           innovation through science
        Sustainable stewardship of natural resources requires strong
    investments in research and development (R&D) in the natural sciences.
    Research and development funding is increased by $64 million in the
    Department's fiscal year 2013 budget, with R&D funding increases among
    all of the Interior bureaus, and particularly USGS with a $51 million
    increase to fund R&D priorities in disaster response, hydraulic
    fracturing, coastal and ocean stewardship, and ecosystem restoration.
    The fiscal year 2013 budget includes R&D funding of $10.1 million for
    Reclamation to address climate change adaptation, control invasive
    quagga mussels, improve desalination technologies, and promote
    renewable energy development.
                              new energy frontier
        The fiscal year 2013 budget continues Interior's New Energy
    Frontier initiative to create jobs and achieve greater energy
    independence. The Administration's blueprint for energy security
    focuses on safely and responsibly developing our domestic energy
    resources, including both conventional and renewable resources. The
    Department plays an important role by providing opportunities for safe
    and responsible development on public lands and on the U.S. Outer
    Continental Shelf.
                                   hydropower
        Hydropower is a very clean and efficient way to produce energy and
    is a renewable resource. Each kilowatt-hour of hydroelectricity is
    produced at an efficiency of more than twice that of any other energy
    source. Further, hydropower is very flexible and reliable when compared
    to other forms of generation. Reclamation has nearly 500 dams and
    10,000 miles of canals and owns 58 hydropower plants, 53 of which are
    operated and maintained by Reclamation. On an annual basis, these
    plants produce an average of 40 million megawatt (MW) hours of
    electricity, enough to meet the entire electricity needs of more than
    3.5 million households on average.
        Reclamation and Federal Energy Regulatory Commission (FERC) are
    parties to a Memorandum of Understanding (MOU), signed in 1992, that
    addresses the establishment of processes for early resolution of issues
    related to the timely development of non-Federal hydroelectric power at
    Bureau of Reclamation facilities. Reclamation and FERC recently met to
    discuss how to improve the timeliness of the processes developed in
    that MOU and resolution of authority issues.
        The Department signed a MOU with the Department of Energy and COE
    on March 24, 2010 to increase communication between Federal agencies
    and strengthen the long-term relationship among them to prioritize the
    generation and development of sustainable hydropower. This
    Administration is committed to increasing the generation of
    environmentally sustainable, affordable hydropower for our national
    electricity supplies in as efficient a manner as possible. Activities
    under this MOU have been ongoing, and have resulted in accomplishments
    such as assessments of potential hydropower resources on Federal and
    non-Federal lands, a collaborative basin-scale pilot project in Oregon,
    and grant opportunities for R&D of new technologies. An example of its
    on-going efforts to maximize potential generation at existing Federal
    facilities, Reclamation has assessed the potential for developing
    hydropower at existing Reclamation facilities and by utilizing low-head
    hydroelectric generating capacity on Reclamation-owned canals and
    conduits. A report on this assessment will be released within the next
    few weeks.
        The budget allocates $2 million to increase clean renewable energy
    generation by exploring how renewable technologies including solar,
    small hydropower, and hydrokinetics can be integrated into Reclamation
    projects; by continuing the effort to optimize Reclamation hydropower
    projects to produce more energy with the same amount of water; by
    investigating hydro pump-storage projects that can help integrate large
    amounts of variable renewable resources such as wind and solar into the
    electric grid; and by working with tribes to assist them in developing
    renewable energy sources.
                       indian land and water settlements
        Interior's fiscal year 2013 budget includes $82.8 million in the
    Bureau of Reclamation and Bureau of Indian Affairs (BIA) to implement
    land and water settlements.
        The Department has a unique responsibility to American Indians and
    Alaska Natives, which is upheld by Interior's support for a robust
    Government-to-government relationship as demonstrated by a new
    comprehensive and transparent consultation policy that ensures there is
    a strong, meaningful role for tribal governments.
        In 2011, Interior started planning to implement the landmark $3.4
    billion settlement of the Cobell v. Salazar lawsuit, and appointed a
    Secretarial Commission on Trust Administration and Reform to oversee
    implementation of the Settlement agreement. The Commission is
    undertaking a forward-looking, comprehensive evaluation of Interior's
    management of nearly $4 billion in American Indian trust funds--with
    the goal of making trust administration more transparent, responsive,
    customer focused, and accountable.
        The Claims Resolution Act of 2010 settled the Cobell lawsuit and
    four settlements that will provide permanent water supplies and
    economic security for the Taos Pueblo of New Mexico and Pueblos of New
    Mexico named in the Aamodt case, the Crow Tribe of Montana, and the
    White Mountain Apache Tribe of Arizona. The agreements will enable
    construction and improvement of reservation water systems, irrigation
    projects, a regional multipueblo water system, and codify water-sharing
    arrangements between Indian and neighboring communities. The primary
    responsibility for constructing water systems associated with the
    settlements was given to Reclamation; and BIA is responsible for the
    majority of the trust funds.
        Reclamation is budgeting $21.5 million in 2013 for the continued
    implementation of these four settlements and $25 million for the
    Navajo-Gallup Water Supply project. Reclamation is proposing the
    establishment of an Indian Water Rights Settlements account to assure
    continuity in the construction of the authorized projects and to
    highlight and enhance transparency.
                              central utah project
        CUPCA, titles II-VI of Public Law 102-575, provides for completion
    of the Central Utah Project (CUP) by the Central Utah Water Conservancy
    District (District). The Act also authorizes funding for fish,
    wildlife, and recreation mitigation and conservation; establishes an
    account in the Treasury for deposit of these funds and other
    contributions; establishes the Utah Reclamation Mitigation and
    Conservation Commission to coordinate mitigation and conservation
    activities; and provides for the Ute Indian Rights Settlement.
        The fiscal year 2013 budget proposes to reconsolidate the CUPCA
    Office and program into the Bureau of Reclamation. This consolidation
    is part of broader administration efforts to implement good Government
    solutions to consolidate and streamline activities. The CUP is the only
    water project within the Department of the Interior not managed by
    Reclamation. The proposed merger would correct that anomaly, ensuring
    that these projects receive equal and consistent consideration and
    treatment. Concerns about Reclamation's previous management and
    operation of the CUP have been addressed within Reclamation and
    corrected. The fiscal year 2013 CUPCA budget is $21 million, a decrease
    of $7.7 million from the 2012 enacted level. Of this amount, $1.2
    million will be transferred to the Utah Reclamation Mitigation and
    Conservation Account for use by the Utah Reclamation Mitigation and
    Conservation Commission (Mitigation Commission). We propose to maintain
    both the Central Utah Project Completion and the Utah Reclamation
    Mitigation and Conservation Accounts for CUPCA appropriations after the
    proposed consolidation of the CUPCA Office into Reclamation in order to
    enhance transparency.
        The fiscal year 2013 budget includes $17.3 million for use by the
    District to continue construction of the Utah Lake System facilities
    and to implement approved water conservation and water management
    improvement projects. The Act requires a local cost share of 35 percent
    for projects implemented by the District which increases the
    effectiveness of the program. The budget for the District includes $7.3
    million to fund the designs, specifications, land acquisition, and
    construction of the Utah Lake System, a decrease of $6.7 million from
    the 2012 enacted level. The budget also includes water conservation
    measures at $10 million for construction of the Provo River Canal
    Enclosure Project, which when completed will provide 8,000 acre-feet of
    conserved water for endangered fish and convey 30,000 acre-feet of CUP
    water.
        The fiscal year 2013 budget includes $1.2 million for the
    Mitigation Commission to implement the fish, wildlife, and recreation
    mitigation and conservation projects authorized in title III ($1
    million) and to complete mitigation measures committed to in pre-1992
    Bureau of Reclamation planning documents ($200,000), all of which are
    necessary to allow CUP operations.
        Finally, the budget includes $1.2 million for the Program Office
    for endangered species recovery and operation and maintenance costs
    associated with instream flows and fish hatchery facilities and $1.3
    million for program administration.
                                   conclusion
        Thank you for the opportunity to testify on behalf of the
    President's fiscal year 2013 budget for the Department of the Interior
    and the Bureau of Reclamation. I want to reiterate my appreciation for
    the longstanding support of this subcommittee. This budget has fiscal
    discipline and restraint, but it also includes forward-looking
    investments. We have a tremendous opportunity to improve the future for
    all generations with wise investments in healthy lands, clean waters,
    and expanded energy options.
        I look forward to working with you to implement this budget. This
    concludes my testimony. I am happy to answer any questions that you may
    have.

        Senator Feinstein. Thank you, Madam Secretary.
        Commissioner Connor.
    STATEMENT OF MICHAEL L. CONNOR, COMMISSIONER
        Mr. Connor. Yes. Thank you, Madam Chair, Ranking Member
    Alexander, and members of the subcommittee, for the opportunity
    to discuss Reclamation's fiscal year 2013 budget request.
        The overall request for Reclamation is $1 billion. I have
    submitted detailed written testimony for the record. The budget
    reflects a comprehensive set of actions and initiatives that
    support Reclamation's mission as well as hundreds of thousands
    of jobs in the Western United States.
        Reclamation is employing an all-of-the-above strategy in
    the area of water resources. Certainty and sustainability are
    primary goals with respect to the use of water resources and
    require Reclamation to take action on many fronts and our
    budget proposal was developed with that in mind.
        To help meet the water and energy needs of the 21st
    century, we must continue to maintain and improve existing
    infrastructure, develop new infrastructure, conserve and make
    more efficient use of limited water resources, protect the
    environment, better understand and plan for future challenges,
    and help clarify the relative rights to use water.
        I'll briefly summarize areas of particular interest in our
    budget. Infrastructure. Overall, the budget supports the need
    to maintain our infrastructure in safe operating condition.
    Approximately 52 percent of the water and related resources
    account is dedicated to operation, maintenance, and replacement
    (OM&R) activity with 48 percent allocated to resource
    management and development.
        OM&R include the Dam Safety program, Site Security program,
    and Replacements, Additions, and Extraordinary Maintenance
    (RAX).
        A second priority area is WaterSMART. Secretary Castle
    summarized our WaterSMART initiative. I'll simply reiterate
    that WaterSMART is yielding significant results West-wide and
    demand greatly exceeds available resources at this point in
    time.
        Ecosystem Restoration is a third-priority area. In order to
    meet Reclamation's mission goals of producing power and
    delivering water in a sustainable manner, we simply must
    continue to focus on the protection and restoration of the
    aquatic and riparian environments affected by our projects.
        Specifically, the 2013 request provides substantial funding
    for a number of restoration programs in California including
    the Central Valley Project (CVP) Improvement Act, San Joaquin
    River Restoration, Trinity River Restoration, and Bay-Delta
    initiatives.
        And our ESA Recovery and Compliance Programs have received
    specific authorization from Congress and also enjoy broad
    support from diverse interests.
        Fourth, Cooperative Landscape Conservation is a
    Departmental initiative in which Reclamation is actively
    engaged. We are developing and implementing approaches to
    understand and effectively adapt to the array of challenges
    facing Western water management. Reclamation's Basin Studies
    and Science and Technology programs are key efforts in this
    area.
        Fifth, to support the Department's New Energy Frontier
    Initiative, the 2013 budget allocates funding to specifically
    support Reclamation-wide Renewable Energy Initiatives and to
    collaborate with other entities on renewable energy
    integration.
        Once again, Secretary Castle discussed our efforts in this
    area and their yielding of significant results and all are part
    of the President's all-of-the-above strategy for meeting the
    country's energy needs.
        Sixth, and finally, Reclamation has a longstanding
    commitment to the Secretary's goal of strengthening tribal
    nations. The 2013 budget supports this goal through a number of
    activities including fisheries restoration, rural water
    projects, and the implementation of the new Water Right
    Settlements.
        Reclamation has a large role in implementing settlements
    and our goals are simple: help tribes realize settlement
    benefits as quickly as possible; two, ensure certainty in the
    use of water for tribes and their non-Indian neighbors; and
    three, promote economic prosperity in Indian country in both
    the short term and the long term.

                               PREPARED STATEMENT

        Madame Chair, as Secretary Castle mentioned, we greatly
    appreciate your support for our programs and efforts at the
    Bureau of Reclamation, and I'm happy to answer questions at the
    appropriate time.
        [The statement follows:]
                    Prepared Statement of Michael L. Connor
                                  introduction
        Thank you Madame Chair, Mr. Alexander, and members of this
    subcommittee, for the opportunity to discuss with you the President's
    fiscal year 2013 budget for the Bureau of Reclamation.
        I appreciate the time and consideration this subcommittee gives to
    reviewing and understanding Reclamation's budget and its support for
    the program. Reclamation works hard to prioritize and define our
    program in a manner that serves the best interest of the public.
        Our fiscal year 2013 budget continues support for activities that,
    both now and in the future, will deliver water and generate power,
    consistent with applicable State and Federal law, in an environmentally
    responsible and cost-effective manner. Overall, our goal is to promote
    certainty, sustainability, and resiliency for those who use and rely on
    water resources in the West. Success in this approach will help ensure
    that Reclamation is doing its part to support the basic needs of
    communities, as well as provide for economic growth in the
    agricultural, industrial, energy, and recreational sectors of the
    economy. In keeping with the President's pledge to reduce spending and
    focus on deficit reduction, this budget reflects reductions and savings
    where possible. The fiscal year 2013 budget allows Reclamation to
    fulfill its core mission, but cost savings have been implemented where
    possible.
        The budget also supports the Administration's and Department of the
    Interior's (Department) priorities to tackle America's water
    challenges; promote America's Great Outdoors and Cooperative Landscape
    Conservation; and support and strengthen tribal nations. The Department
    will continue the Water Sustain and Manage America's Resources for
    Tomorrow (WaterSMART) program (with participation from both Reclamation
    and the United States Geological Survey) and Reclamation's budget
    reflects that priority.
        Reclamation's fiscal year 2013 budget is $1 billion, $42.4 million
    below the fiscal year 2012 enacted level. Reclamation's budget request
    is partially offset by discretionary receipts in the Central Valley
    Project Restoration Fund, estimated to be $39.6 million. The request
    for permanent appropriations in 2013 totals $174.1 million. The budget
    proposes the establishment of a new Indian Water Rights Settlement
    account and a discretionary appropriation for the San Joaquin River
    Restoration Fund.
        As the largest supplier and manager of water in the 17 Western
    States and the Nation's second largest producer of hydroelectric power,
    Reclamation's projects and programs are critical to driving and
    maintaining economic growth in the Western States. Reclamation manages
    water for agricultural, municipal and industrial use, and provides
    flood control and recreation for millions of people. According to a
    June 2011 economic report prepared by the Department, Reclamation
    activities, including recreation, have an economic contribution of $55
    billion, and support nearly 416,000 jobs. Reclamation's 58
    hydroelectric power plants generate more than 40 million megawatt hours
    of electricity to meet the annual needs of more than 3.5 million
    households and generates nearly $940 million in revenues for the
    Federal Government. It would take more than 23.5 million barrels of
    crude oil or about 6.8 million tons of coal to produce an equal amount
    of energy with fossil fuel. As a result, Reclamation facilities
    eliminate the production of more than 27 million tons of carbon dioxide
    that would have been produced by fossil fuel power plants.
        The fiscal year 2013 budget allocates funds to projects and
    programs based on objective, performance-based criteria to most
    effectively implement Reclamation's programs and its management
    responsibilities for its water and power infrastructure in the West.
                          water and related resources
        The fiscal year 2013 budget for Water and Related Resources,
    Reclamation's principal operating account, is $818.6 million, a
    decrease of $76.4 million from the fiscal year 2012 enacted level. This
    decrease is due, in part, to a shift of $46.5 million for the proposed
    establishment of the Indian Water Rights Settlement account, and $12
    million for a discretionary appropriation for the San Joaquin River
    Restoration Fund.
        The fiscal year 2013 budget includes a total of $395.6 million at
    the project/program level for water, energy, land, and fish and
    wildlife resource management and development activities. Funding in
    these activities provides for planning, construction, water
    sustainability activities, management of Reclamation lands including
    recreation areas, and actions to address the impacts of Reclamation
    projects on fish and wildlife.
        The budget also provides a total of $423.1 million at the project/
    program level for the operation, maintenance, and rehabilitation
    associated with Reclamation's water and power facilities. Reclamation
    emphasizes safe, efficient, economic, and reliable operation of
    facilities, ensuring systems and safety measures are in place to
    protect the facilities and the public. Providing adequate funding for
    these activities continues to be one of Reclamation's highest
    priorities.
        highlights of the fiscal year 2013 budget for water and related
                                   resources
        I would like to share with the subcommittee several highlights of
    the Reclamation budget including an update on the WaterSMART program,
    and the Department's priority goal target to enable capability to
    increase available water supply in the Western United States by 730,000
    acre-feet by the end of 2013 based on cumulative savings since 2009.
        WaterSMART Program.--The fiscal year 2013 budget continues to focus
    resources on expanding and stretching limited water supplies in the
    West to reduce conflict, facilitate solutions to complex water issues,
    and meet the growing needs of expanding municipalities, domestic energy
    development, the environment, and agriculture.
        Reclamation proposes to fund WaterSMART at $53.9 million, $6.8
    million above the fiscal year 2012 enacted level. There are five
    ongoing WaterSMART programs:
      --the WaterSMART Grant program, funded at $21.5 million;
      --Basin Studies, funded at $6 million;
      --the title XVI Water Reclamation and Reuse program, funded at $20.3
            million;
      --Water Conservation Field Services program, funded at $5.9 million;
            and
      --the Cooperative Watershed Management program, funded at $250,000.
        Reclamation has budgeted $6.5 million to actively engage in
    developing and implementing approaches to understand, and effectively
    adapt to landscape-level conservation challenges, including the impacts
    of climate change on western water management. The Basin Studies
    program is part of an integrated strategy to respond to changing
    impacts on the resources managed by Interior, and is a key component of
    the WaterSMART initiative. In 2013, the Basin Studies program will
    continue West-wide risk assessments, coordinated through the
    Department's Landscape Conservation Cooperatives (LCCs) and focus on
    the threats to water supplies from changing weather patterns.
    Reclamation will continue to participate in and lead the Desert and
    Southern Rockies LCCs. Included within Reclamation's Science and
    Technology program is water resources research targeting improved
    capability for managing water resources under multiple drivers,
    including a changing climate. This research agenda will be collaborated
    and leveraged with capabilities of the Interior Climate Science
    Centers.
        Supporting Renewable Energy Initiatives.--To support the
    Administration's New Energy Frontier initiative, and the Renewable
    Energy priority goal, the 2013 Reclamation budget allocates $2 million
    to provide support for the renewable energy initiative and to
    collaborate with other agencies and entities on renewable energy
    integration. The funds will be used to explore how other renewable
    energy technologies can be integrated into Reclamation projects.
    Reclamation will continue the effort to facilitate the development of
    sustainable hydropower; optimize Reclamation hydropower projects to
    produce more energy with the same amount of water; explore hydro pump-
    storage projects that can help integrate large amounts of variable
    renewable resources such as wind and solar into the electric grid; and
    work with tribes to assist them in developing renewable energy sources.
    These important projects can help produce cleaner, renewable energy.
        Supporting Tribal Nations.--Reclamation has a longstanding
    commitment to realizing the Secretary's goal to strengthen tribal
    nations. The fiscal year 2013 budget continues to support that goal
    through a number of activities and projects ranging from ecosystem
    restoration to rural water infrastructure and the implementation of
    water rights settlement. The budget includes $6.4 million for the
    Native American Affairs Program to continue support of Reclamation
    activities with Indian tribes. These activities include providing
    technical support for Indian water rights settlements and assisting
    tribal governments to develop, manage, and protect their water and
    related resources. Also, the office provides policy guidance for
    Reclamation's work with tribes throughout the organization in such
    areas as the Indian trust responsibility, Government-to-government
    consultations, and Indian self-governance and self-determination.
        Rural Water Projects.--The Congress has specifically authorized
    Reclamation to undertake the design and construction of seven projects
    intended to deliver potable water supplies to specific rural
    communities in the West. Reclamation has been working diligently to
    advance the completion of all of its authorized rural water projects
    consistent with current fiscal and resource constraints with the goal
    of delivering potable water to tribal and non-tribal residents within
    the rural water project areas. In support of rural communities, the
    fiscal year 2013 budget includes a funding increase to advance the
    construction of rural water projects.
        Reclamation has proposed $69.6 million in funding for Reclamation's
    seven on-going authorized rural water projects. This funding reflects
    the high priority that the Department and Reclamation place on
    improving the circumstances of rural economies and those living in
    rural economies. Tribal and non-tribal people will greatly benefit by
    this demonstrated commitment to rural water construction.
        Specifically, the budget includes $18 million for operation and
    maintenance of tribal features for two projects--the Mni Wiconi Project
    and the Garrison Diversion Unit of the Pick-Sloan Missouri Basin
    Program--and $51.6 million in construction funding combined for the
    seven projects:
      --Garrison Diversion Unit, (North Dakota);
      --Mni Wiconi Rural Water System, (South Dakota);
      --Jicarilla Apache Reservation Rural Water System, (New Mexico);
      --Lewis and Clark Rural Water System, (South Dakota, Iowa,
            Minnesota);
      --Fort Peck Reservation/Dry Prairie Rural Water System, (Montana);
      --Rocky Boys/North Central Montana Rural Water System, (Montana); and
      --Eastern New Mexico Water Supply Project, (New Mexico).
        The fiscal year 2013 budget includes sufficient funding to complete
    construction of the Mni Wiconi Project.
        Aging Infrastructure.--In recognition of the growing need to
    address aging infrastructure associated with Reclamation projects, the
    2013 Reclamation budget includes $7.3 million for a Reclamationwide
    Aging Infrastructure program that will make use of recently enacted
    authorities such as the aging infrastructure program enacted in Public
    Law 111-11. This funding will address the infrastructure needs of
    Reclamation projects, which is essential for maintaining system
    reliability and safety and to support sustainable water management by
    promoting established asset management practices. This budget will
    provide additional funding for an increased number of extraordinary
    maintenance and rehabilitation activities which will enhance the
    ability of Reclamation and its operating entities to preserve the
    structural safety of project facilities, while continuing delivery of
    project benefits.
        Dam Safety Program.--A total of $87.5 million is budgeted for
    Reclamation's Safety of Dams program. This includes $67 million
    directed to specific dam safety modifications; of which $15 million is
    for work at Folsom Dam. Funding also includes $19.4 million for safety
    evaluations of existing dams and $1.1 million to oversee the Interior
    Department's Safety of Dams program.
        Site Security.--A total of $26.9 million is budgeted for Site
    Security to ensure the safety and security of the public, Reclamation's
    employees, and key facilities. This funding includes $5.9 million for
    physical security upgrades at high-risk critical assets and $21 million
    to continue all aspects of bureau-wide security efforts.
        This includes law enforcement, risk and threat analysis, personnel
    security, information security, risk assessments and security-related
    studies, and guards and patrols.
        Ecosystem Restoration.--In order to meet Reclamation's mission
    goals of generating power and managing water in a sustainable manner
    for the 21st century, one focus of its programs must be the protection
    and restoration of the aquatic and riparian environments affected by
    its operations. Ecosystem restoration involves a large number of
    activities, including Reclamation's Endangered Species Act recovery
    programs, which directly address the environmental aspects of the
    Reclamation mission. These programs also implement important river
    restoration efforts that support the America's Great Outdoors
    initiative.
        The fiscal year 2013 budget provides $128 million to operate,
    manage, and improve the Central Valley Project. This amount includes
    $16.1 million for the Trinity River Restoration program, and $2.9
    million for the Red Bluff fish passage to complete postconstruction
    activities of the new pumping plant and fish screen, which will be
    operational in the spring of 2012, as well as continued biological and
    research and monitoring activities.
        The budget provides $27.2 million for Lower Colorado River
    Operations to both fulfill the role of the Secretary as water master
    for the Lower Colorado River and continue the multispecies conservation
    program, which is $17.8 million of that total, and provides long-term
    Endangered Species Act compliance for the river operations.
        The budget includes $18.9 million for Endangered Species Act
    Recovery Implementation programs, which includes $8 million in the
    Great Plains Region to implement the Platte River Endangered Species
    Recovery Implementation program. This funding will facilitate the
    implementation of measures to help recover four endangered or
    threatened species, thereby enabling existing water projects in the
    Platte River Basin to continue operations, as well as allowing new
    water projects to be developed in compliance with the Endangered
    Species Act. This program also includes $8.4 million for the Upper
    Colorado and San Juan River Endangered Fish Recovery programs. This
    funding will continue construction of a system that automates canal
    operations to conserve water by matching river diversions with actual
    consumptive use demands and redirecting the conserved water to improve
    in-stream flows. The budget also provides $18 million for Columbia/
    Snake River Salmon Recovery. This funding will be used for the
    implementation of required Biological Opinion actions including
    extensive hydro actions, plus tributary habitat and hatchery
    initiatives as off-sets for the impacts of Federal Columbia River Power
    System operations.
        The fiscal year 2013 budget includes $7.1 million for Reclamation
    to move forward with actions that address water supply enhancement and
    restoration of natural resources that support the Klamath Basin
    Restoration Agreement and are authorized under existing law. The
    Klamath Basin Restoration Agreement includes restoration and related
    activities to reduce conflicts over water between the Upper and Lower
    Klamath Basins.
        The results of the Klamath Dam Removal and Sedimentation Studies
    conducted over the past several years will be used in discussions over
    whether or not removing PacifiCorp's four dams on the Lower Klamath
    River is in the public interest and advances restoration of the Klamath
    River fisheries. No funds are budgeted in 2013 for this effort.
        The fiscal year 2013 budget includes $22.5 million for the Middle
    Rio Grande project. Within this amount $8.4 million supports the
    acquisition of supplemental non-Federal water for Endangered Species
    Act efforts and low flow conveyance channel pumping into the Rio Grande
    during the irrigation season. Further, funding will be used for
    recurring river maintenance necessary to ensure uninterrupted,
    efficient water delivery to Elephant Butte Reservoir, reduced risk of
    flooding, as well as water delivery obligations to Mexico.
        The Yakima River Basin Water Enhancement project budget is $9.5
    million, which will continue funding grants to implement conservation
    measures that stretch water supplies and improve fishery conditions.
                      central utah project completion act
        The fiscal year 2013 budget proposes to consolidate the Central
    Utah Project Completion Act (CUPCA) program with the Bureau of
    Reclamation, while maintaining a separate appropriations account for
    CUPCA. This consolidation is part of broader administration efforts to
    implement good Government solutions to consolidate and streamline
    activities when possible. The proposed merger would ensure that all
    major Federal water projects within Interior are managed by
    Reclamation, ensuring that these projects receive equal consideration
    and treatment. The fiscal year 2013 CUPCA budget is $21 million, a
    decrease of $7.7 million from the fiscal year 2012 enacted level. Of
    this amount, $1.2 million will be transferred to the Utah Reclamation
    Mitigation and Conservation Account for use by the Mitigation
    Commission.
                    central valley project restoration fund
        The fiscal year 2013 budget includes $39.9 million for the Central
    Valley Project Restoration Fund (CVPRF), a decrease of $13.2 million
    from the fiscal year 2012 enacted level. This budget is indexed to 1992
    price levels and determined on the basis of a 3-year rolling average.
    This budget is offset by collections estimated at $39.6 million from
    mitigation and restoration charges authorized by the Central Valley
    Project Improvement Act (CVPIA). The fund supports a number of programs
    authorized by the CVPIA, including anadromous fish restoration and the
    acquisition and delivery of water to State and Federal wildlife
    refuges.
                        california bay-delta restoration
        The fiscal year 2013 budget includes $36 million for CALFED,
    pursuant to the CALFED Bay-Delta Authorization Act, a decrease of $3.7
    million from the 2012 enacted level. The budget will support
    implementation of the Bay Delta Conservation Plan, under the following
    new program activities--$1.9 million for a Renewed Federal-State
    Partnership, $6.6 million for Smarter Water Supply and Use, and $27.6
    million for actions that address the Degraded Bay-Delta Ecosystem.
                       san joaquin river restoration fund
        The fiscal year 2013 budget funds activities consistent with the
    settlement of Natural Resources Defense Council v. Rodgers as
    authorized by the San Joaquin River Restoration Settlement Act. The Act
    included a provision establishing the San Joaquin River Restoration
    Fund to implement the provisions of the Settlement. The Settlement's
    two primary goals are to restore and maintain fish populations, and
    restore and avoid adverse water impacts. Under the Settlement, the
    legislation provides for approximately $2 million in annual
    appropriations from the Central Valley Project Restoration Fund for
    this purpose, as well as permanent funds of $88 million. The
    legislation also authorized appropriations and Reclamation proposes $12
    million of discretionary funds for the San Joaquin Restoration Fund
    account in 2013.
                        indian water rights settlements
        The fiscal year 2013 budget includes $46.5 million in the proposed
    Indian Water Rights Settlement account. Of this amount, $21.5 million
    is for implementation of the four settlements included in the Claims
    Resolution Act of 2010. These settlements will deliver clean water to
    the Taos Pueblo of New Mexico, the Pueblos of New Mexico named in the
    Aamodt case, the Crow Tribe of Montana, and the White Mountain Apache
    Tribe of Arizona. Reclamation is proposing the establishment of an
    Indian Water Rights Settlements account to assure continuity in the
    construction of the authorized projects and to highlight and enhance
    transparency in handling these funds.
        In addition to the four settlements, the account also budgets $25
    million for the on-going Navajo-Gallup Water Supply Project (authorized
    in title X of Public Law 111-11). The total for Reclamation's
    implementation of Indian Water Rights Settlements in 2013 is $106.5
    million, $46.5 million in discretionary funding and $60 million in
    permanent authority, which is provided in title VII of the Claims
    Resolution Act.
                           policy and administration
        The fiscal year 2013 budget for the Policy and Administration
    appropriation account, the account that finances Reclamation's central
    management functions, is $60 million.
                            research and development
        Reclamation's Science and Technology Program focuses on a range of
    solutions for supporting the bureau's capability to manage, conserve,
    and expand water supplies. This year Reclamation's budget includes $13
    million to support research and development programs which give the
    highest priority to address the impacts of drought and climate change;
    mitigation of invasive species such as zebra and quagga mussels;
    creating new water supplies through advanced water treatment; and
    advance renewable energy development on Reclamation lands.
                            permanent appropriations
        The total permanent appropriation in 2013 of $174.1 million
    includes $111.1 million for the Colorado River Dam Fund and $60 million
    for Reclamation's Indian Water Rights Settlements account.
                             campaign to cut waste
        Over the last 2 years, the Administration has implemented a series
    of management reforms to curb growth in contract spending, terminate
    poorly performing information technology projects, deploy state-of-the-
    art fraud detection tools, focus agency leaders on achieving ambitious
    improvements in high-priority areas, and open Government up to the
    public to increase accountability and accelerate innovation.
        In November 2011, President Obama issued an Executive order
    reinforcing these performance and management reforms and the
    achievement of efficiencies and cost-cutting across the Government.
    This Executive order identifies specific savings as part of the
    Administration's Campaign to Cut Waste to achieve a 20-percent
    reduction in administrative spending from 2010 to 2013. Each agency was
    directed to establish a plan to reduce the combined costs associated
    with travel, employee information technology devices, printing,
    executive fleet efficiencies, and extraneous promotional items and
    other areas.
        The Department of the Interior's goal is to reduce administrative
    spending by the end of 2013, $207 million from 2010 levels. To
    contribute to that goal, the Bureau of Reclamation is targeted to save
    $13.5 million by the end of 2013.
             fiscal year 2013 priority goal for water conservation
        Priority goals are a key element of the President's agenda for
    building a high-performing Government. The priority goals demonstrate
    that they are a high value to the public or that they reflect
    achievement of key departmental milestones. These goals focus attention
    on initiatives for change that have significant performance outcomes
    which can be clearly evaluated, and are quantifiable and measurable in
    a timely manner. Reclamation's participation in the Water Conservation
    priority goal helps to achieve these objectives.
        Reclamation's water conservation efforts are critical to sustain
    the economy, environment, and culture of the American West. Competition
    for finite water supplies is increasing because of population growth,
    ongoing agricultural demands, and increasingly evident environmental
    needs. With increased emphasis on domestic energy development,
    additional pressure is placed on limited water supplies, as significant
    amounts of water may be required for all types of energy development.
    At the same time, climate change, extended droughts, and depleted
    aquifers are impacting water supplies and availability.
        In response to these demands, by the end of 2013, Reclamation will
    enable capability to increase available water supply for agricultural,
    municipal, industrial, and environmental uses in the Western United
    States by 730,000 acre-feet cumulatively since 2009 through its
    conservation-related programs, such as water reuse and recycling (title
    XVI), and WaterSMART grants.
        Moreover, Reclamation's Water Conservation program addresses a
    range of other water supply needs in the West. It plays a significant
    role in restoring and protecting freshwater ecosystems consistent with
    applicable State and Federal law, enhancing management of our water
    infrastructure while mitigating for any harmful environmental effects,
    and understanding and responding to the changing nature of the West's
    limited water resources.
        Finally, the fiscal year 2013 budget demonstrates Reclamation's
    commitment to meeting the water and power needs of the West in a
    fiscally responsible manner. This budget continues Reclamation's
    emphasis on managing those valuable public resources. Reclamation is
    committed to working with its customers, States, tribes, and other
    stakeholders to find ways to balance and provide for the mix of water
    resource needs in 2013 and beyond.
                                   conclusion
        This completes my statement. I would be happy to answer any
    questions that you may have at this time.

        Senator Feinstein. Thank you very much. And, we'll now
    proceed with questions and, Mr. Connor, let me thank you for
    your constant cooperation and helpfulness. It's really been
    very special.
        I just want you to know how much it's appreciated.
        Mr. Connor. Thank you.

                       NATOMAS LEVEE IMPROVEMENT PROGRAM

        Senator Feinstein. Let me speak for a moment about a deep
    concern in California.
        I've had occasion to speak with people about it. It's the
    Natomas Project in Sacramento. My understanding is it's 42
    miles of levees, 18 have been repaired at a cost of about $320
    million by Sacramento Area Flood Control Agency (SAFCA). I've
    had a chance to talk with Secretary Darcy about it.
        It's priority number one for the City of Sacramento. I have
    been told that a failure could cause a flood which would flood
    as much as 20 percent of the city. Is that correct?
        Ms. Darcy. Madam Secretary, I believe that's accurate.
        Senator Feinstein. I know it's not included in what you're
    proposing. Can you tell us why it hasn't been included?
        Ms. Darcy. On this specific project, I may have to defer to
    the General, because that portion of the project is one that
    I'm not quite familiar with.
        Senator Feinstein. General Temple, could you speak directly
    into the microphone?
        General Temple. Sorry. I'll have to get back to you on the
    specifics pertaining to that, but I do know that we are
    diligently working to reduce flood risk in the Central Valley
    of California, and Natomas is certainly a key part of that.
        Senator Feinstein. Right. Well, I think I know what
    happened. In the 2010 Chief's report, the costs were identified
    to be $1.1 billion in necessary levee improvements which I
    understand is a high ticket item.
        The question I have is, can the work be segmented? So the
    work that's most critical, where there are people behind the
    levee, can be protected. Madam Secretary?
        Ms. Darcy. I believe that the portion that you're
    discussing needs authorization; that portion that you're
    discussing is currently not an authorized part of the project.
        Senator Feinstein. Well, that's interesting. Do you have
    any information as to why it's not authorized?
        Ms. Darcy. That Chief report is still pending; there has
    been no authorization for any projects since 2007.
        Senator Feinstein. So when would authorization be likely?
        Ms. Darcy. That Chief's report is pending; it's up to the
    Congress to authorize the project.
        Senator Feinstein. Right. Well, I can tell you this, I
    think this is the number one levee need in California, and
    Sacramento is the capital city. It's been confirmed that 20
    percent of the city would be flooded. It's a very serious
    problem and I know we've discussed it.
        Anything that can be done, would be very much appreciated,
    so I just want to publicly bring it to your attention.

                         HARBOR MAINTENANCE TRUST FUND

        I marked a question that I wanted to be sure to ask, and
    here it is. The subject is harbor maintenance taxes to the
    States which generated them.
        It's my understanding that California ports provide at
    least 30 percent of the funding that goes into the Harbor
    Maintenance Trust Fund. If we assume that the trust fund
    generates $1.5 billion annually, then California annually
    contributes $450 million into the fund, so how much dredging of
    eligible harbors and waterways in California were reimbursed by
    the trust fund in 2011?
        Ms. Darcy. I believe the figure, Senator, is $102 million.
        Senator Feinstein. $102 million. So, about 5 percent of the
    annual revenues?
        Ms. Darcy. Give or take, close to 5 percent.
        Senator Feinstein. So, this is one of the problems that----
        Senator Graham. California is getting ripped off.
        Senator Feinstein. So, it's a bipartisan issue now. You
    know, it's only so long that you can tolerate paying this money
    and not getting back adequate services.
        The question I have is, what would be the impact of
    changing the law in a manner that sets a percentage of the
    revenues generated in a given State to be returned to that
    State?
        Ms. Darcy. If the law were changed to do that, then the way
    we would budget for the revenues coming from the fund would be
    based on that percentage.
        Currently, we look at the appropriation that we have from
    the Harbor Maintenance Trust Fund. This year's President's
    budget includes $848 million. And what we do with that money
    now is look at where the needs are around the country.
        All ports pay into this Fund, so we look at the needs
    nationally. We don't do it on an----
        Senator Feinstein. I don't disagree with that. I think
    that's not a bad way to do it. I think it's a responsible way
    to do it.
        On the other hand, we have 50 percent of the container
    traffic coming into America, coming into LA-Long Beach, and
    harbor maintenance is a huge issue. Our harbors are decrepit.
        So this is my view, and I don't know that others on this
    subcommittee agree, but if you have a lot of traffic, harbor
    maintenance also relates to things like the ability to move
    those containers out.
        Intermodal transportation, roadways that are suitable, are
    also important because the delivery of a container doesn't end
    at a port. This is something I am really concerned about, and
    would like to ask your help on in the future as to how we might
    be able to work this.
        I think all of it should go to areas of need. I could make
    the argument to take all of it for California. Mr. Graham could
    make a pretty good argument to take it to a certain harbor
    called Charleston.
        Senator Graham. Not all of it.
        Senator Feinstein. Not all of it, but he'd take a part of
    it.
        So, I think we've got to work something out that is fair.
    I'd really like to have your cooperation in trying to do so in
    the future.
        Ms. Darcy. We'd be happy to work with you.
        Senator Feinstein. I appreciate that. Thank you very much.
        Senator Alexander.
        Senator Alexander. Thank you, Madam Chairman.
        Well, I think the chairman has roused up an ``amen'' corner
    over in the southern section of the subcommittee, and I'd just
    like to say as we begin this discussion, I have a pretty good
    idea what Senator Graham's going to be talking about when the
    time comes.
        And I agree with him. We've been having some discussions
    about--and Secretary Darcy, I think this is mainly aimed for
    discussion with you--and I'll leave it to him to explore this,
    I hope that's what he intends to do, is that we need to take a
    big look at these two trust funds, and think bigger than the
    funds.
        Think about what the needs of our country are, and outline
    a policy and a program and an idea, and think in a big way
    about it, and I very much agree with that. And part of that may
    be recognizing that in some cases, we need a different sort of
    formula for harbors.
        And it may mean we need different ways of collecting money.
    But my experience in Government is you don't start out by
    talking about the money, you start out by talking about the
    policy and the need and what our goals are. And then, it makes
    it a lot easier to figure out how we pay for it.
        Now, in that spirit, let me narrow down something that I
    think emphasizes the problems with one of the funds, the Inland
    Waterways Trust Fund. The problem with the Harbor Trust Fund,
    of course, it has a lot of money in it, we just can't spend it.

                          INLAND WATERWAYS TRUST FUND

        The Inland Waterways Trust Fund doesn't have much money in
    it, but it has a lot of needs. One of the reasons we don't have
    money for the dams and locks that it should be funding is this
    Olmsted Lock on the Ohio River that between last year and this
    year, according to the budget, increased its costs by $1
    billion from $2 billion to $3 billion.
        And this one lock is soaking up the money that ought to go
    for other priority projects. Have you given any consideration
    to changing the cost sharing on the Olmsted Lock from the
    current 50-50 to something such as 90 percent from the Treasury
    and 10 percent from the Inland Waterways Trust Fund so that we
    could consider other priority projects?
        Ms. Darcy. No, Senator. Under current law, we have to cost
    share 50-50 from the Inland Waterways Trust Fund.
        Senator Alexander. Well, why can't we change that to 90-10?
        Ms. Darcy. That would take an Act of Congress.
        Senator Alexander. Well, we're in a position perhaps to do
    that if you were to recommend it. You think it'd be a good
    idea?
        Ms. Darcy. I think what we'd have to look at is all the
    competing priorities on the system before we made any
    recommendation.
        Senator Alexander. Well, do you think it's a good idea for
    one big project to soak up virtually all of the money available
    for the Inland Waterways Trust Fund dams and locks?
        Ms. Darcy. Well, unfortunately, given the constraints of
    the incoming revenue from the tax, that's all that we can
    afford at this time. The priorities have been discussed with
    the industry.
        Unfortunately, it is a very expensive project.

                                CHICKAMAUGA LOCK

        Senator Alexander. Has this huge increase, 50-percent
    increase, just this year in the cost of this lock, changed the
    projected timeline to restart construction on Chickamauga Lock?
        Ms. Darcy. I don't believe so, but in general I----
        Senator Alexander. That would be encouraging news.
        General Temple. Do you mean whether it has changed the
    timeline for construction on Chickamauga Lock?
        Senator Alexander. To restart construction, right. Is the
    fact that they're going to spend an extra $1 billion on
    Olmsted, has that affected the timeline for restarting
    construction on Chickamauga Lock?
        General Temple. It will affect it in 2013, Sir, based on
    current projections of revenue and priorities.
        Senator Alexander. General, have you made projections about
    how much longer the current Chickamauga Lock can be operated
    and maintained?
        General Temple. Our asset management database system is
    going to be used to perform that analysis. We know that we can
    sustain operations on the Lock at least through 2013.
        How much longer we'll be able to do it given its current
    condition, which you're very aware of----
        Senator Alexander. You mean it might be closed after 2013?
        General Temple. There is that possibility, Sir, depending
    upon----
        Senator Alexander. You might close the Chickamauga Lock
    after 2013?
        General Temple. There is that possibility, Sir, depending
    on the status of the Lock itself and its integrity.
        Senator Alexander. Well, that is dramatic news for the
    people of the Southeastern United States which I've not heard
    before.
        What would it take to keep it open?
        General Temple. Sir, if we were able to continue to apply
    O&M dollars to keep it going because of the expensive concrete
    situation that I know you're familiar with there, we would be
    able to sustain it for some time longer.
        Senator Alexander. But you've recommended reduced funding
    for aggressive maintenance on the Chickamauga Lock?
        General Temple. That is correct, Sir, because of competing
    priorities and funds available, we had to make some difficult--
    --
        Senator Alexander. So you're going to spend, you're going
    to increase by 50 percent the cost of this one project, Olmsted
    Lock, by $1 billion and run the risk that after 2013, which is
    only a year plus a few months away, that the Chickamauga Lock
    might be closed which would cost thousands of jobs in the
    Tennessee-Georgia area, put 150,000 heavy trucks on I-75 and
    threaten the operations at the Tennessee Valley Authority, the
    Oak Ridge Laboratory, and many industries in the area.
        General Temple. Sir, that is the recommendation based on
    working with all of the stakeholders to determine the relative
    needs throughout the entire system.
        Senator Alexander. Thank you, Madam Chairman.
        Ms. Darcy. Senator, could I just add something? The 2013
    budget includes Operation and Maintenance dollars for the
    Chickamauga Lock. We just haven't added the enhanced
    maintenance.
        So the maintenance that we have ongoing, hopefully, will
    continue to keep it operable. We just haven't included funding
    for the enhanced maintenance. We will continue to monitor the
    effects of that.
        Senator Alexander. Well, I would hope so. Even the
    possibility that it might close at the end of 2013 is a
    startling development to me if that's what you're saying. Is
    that what you're saying?
        Ms. Darcy. We don't anticipate it closing, but it's a
    possibility. Right now, we are providing funding for ongoing
    maintenance, just not for the enhanced maintenance.
        Senator Alexander. Thank you, Madam Chairman.
        Senator Feinstein. Thank you very much, Senator Alexander.
        Senator Collins.
        Senator Collins. Thank you, Madam Chairman.

                            VERNAL POOL REGULATIONS

        Secretary Darcy, the Corps has permitting responsibilities
    under section 404 of the Clean Water Act for development
    activities that may occur in wetlands.
        And several of my constituents, including municipal
    officials, hospital on the coast that had a project underway,
    have raised concerns about the application of regulations in
    the New England district, particularly, as they differ
    dramatically from what is required under State law and
    maintenance, known for very strong environmental laws.
        And they seem to be far more demanding than those supplied
    by the Corps in other parts of the country. For instance, for
    significant vernal pools, the State of Maine regulates a 200-
    foot terrestrial buffer area that includes the vernal pool.
        The Corps published rule requires a 500-foot radial
    circumference. But more recently, guidance has been issued, not
    through the formal rulemaking process, but just guidance, that
    increases the radial distance to 750 feet for any vernal pool
    that may be perceived as having critical habitat.
        Now, just so I want to understand the difference, if you
    apply a 700-foot buffer to property, it results in a regulatory
    footprint of more than 40 acres for just a 50-foot diameter
    vernal pool.
        So going from 500 feet to 750 feet has enormous
    consequences and has brought to a halt several important
    development projects that municipalities have been pushing in
    Maine.
        I'm interested in first getting a better understanding of
    how your New England district determined to increase the
    regulated area to a 750-foot radius without going through the
    normal Administrative Procedure Act (APA) procedure and instead
    did it through informal guidance.
        Ms. Darcy. I can't answer that because I don't know, but I
    will commit to you that I will ask the New England district as
    soon as this hearing is over, and I will find out why.
        Senator Collins. Let me ask you a second question. In the
    New England district, it also appears that the Corps has
    abandoned the nationwide permit program and has begun to defer
    to the commenting agencies on protection of vernal pool habitat
    even in the less significant, and frankly, ubiquitous forested
    wetlands that are present throughout my State of Maine.
        Now, by contrast, again, the State distinguishes between
    significant vernal pools as well as natural and manmade vernal
    pools in its regulation. But the Corps does not make that
    distinction, and instead is regulating every vernal pool in the
    same way.
        And in my State there are literally thousands of vernal
    pools and forested wetlands that are different from other
    States and the application of this regulation in Maine has the
    potential to affect literally tens of thousands of acres of
    land. And that's why we're getting this slew of complaints.
        Now, by contrast, in the South Atlantic district, these
    nationwide permits are still available for projects with
    multiple acres, and in some cases, projects are allowed without
    permits.
        And, again, I'm trying to understand why is there such a
    great difference in the way the New England district regulates
    wetlands versus the South Atlantic district?
        Ms. Darcy. I'm going to say that it's probably because of
    the different topography and geography that we're dealing with,
    but I am not sure that is a good enough answer. I think I owe
    you a better answer than that as to why the New England
    district is considering these differently from other districts,
    considering the nationwide application of permits.
        Senator Collins. Well, I would ask that you respond to
    those questions in writing, and my time has expired. I have a
    couple more that I will submit for the record on this issue as
    well.
        I know it's a very technical issue, but what I'm hearing
    from everyone from officials in Brewer, Maine to a manufacturer
    in Auburn, to a hospital in Rockport, Maine, there's something
    going on.
        And, as I said, Maine has strict environmental laws. We
    prize our environment. But the implications of this new
    approach by the New England district is bringing to a halt a
    lot of very important economic development projects.
        I do want to thank the President for including $13 million
    in the budget request for the dredging of the Portland Harbor.
    That is a very important project to economic development in my
    State.
        And I am still concerned about those smaller ports and will
    be proposing a question for the record. Thank you.
        Senator Feinstein. Thank you, very much.
        Senator Lautenberg, I usually do early bird, and you've got
    a bird earlier than----
        Senator Lautenberg. I consider Senator Graham a friend, and
    I wouldn't want to deprive him of the opportunity to proceed,
    if necessary.
        Senator Graham. I will certainly defer, if you need to go
    Senator Lautenberg.
        Senator Lautenberg. All right. Now, it's my hand. Thank you
    very much. Thank you, members of the Corps for the wonderful
    work you do and for the dependence that we've built over a long
    period of time for you to fix things sometimes where nature's
    gone wrong, or where man's gone wrong.

                              PASSAIC RIVER BASIN

        But we need your work to continue and we need it to be
    appropriately budgeted. Last year, President Obama toured the
    Passaic River Basin in New Jersey following Hurricane Irene.
        And the budget includes $1 million for a study to find a
    long-term solution to chronic flooding in this area. However,
    I'm told it will take at least 3 years for construction to
    begin on a solution.
        Now, how can the Corps, General, expedite this project to
    ensure that families in the Basin have flood protection as soon
    as possible?
        General Temple. Well, thank you, Sir. We are re-looking our
    whole planning program in order to address this issue of
    timeliness, and this includes not only changing the process in
    order to get after timeliness, but also we are using six pilot
    projects to look at how we can compress studies in a way to
    provide these studies more quickly.
        We're taking a look at the entire inventory of all of our
    feasibility studies to determine how best to apply our limited
    capabilities against the highest priority studies, and we're
    improving our training and certification of all of our
    planners.
        That said, we're striving towards a goal of a three-by-
    three-by-three strategy which involves a $3 million effort at
    less than 3 years in order to provide these types of services,
    Sir.
        So, we're working to compress the schedule, and we'll
    certainly do that in this case.

                         ONGOING FLOOD CONTROL STUDIES

        Senator Lautenberg. Ms. Darcy, the budget requests funding
    for six new Army Corps studies is included. However, the budget
    doesn't include funding for several critical ongoing New Jersey
    studies including the Rahway River Basin, the South River
    Raritan River Basin, the Stone Brook Mill Stone River.
        Now, why does the budget request funding for these new
    projects while leaving out these three ongoing, flood control
    programs; do you know?
        Ms. Darcy. Well, Senator, we did provide some money in the
    work plan for these three studies. However, in evaluating the
    ongoing studies for funding in 2013, these did not compete as
    effectively as some other studies.
        Senator Lautenberg. Well, we'd like to make sure that we
    get these things in order because we know one thing, the three
    projects that I talk about are critical to the safety and
    wellbeing of people in those areas.

                      NEW YORK-NEW JERSEY HARBOR DEEPENING

        I'm pleased that the budget includes, Secretary Darcy, $68
    million to complete the deepening of the New York-New Jersey
    Harbor, a critical economic engine that supports more than
    230,000 regional jobs.
        Now, following completion of the construction phase, what
    are the Corps plans to maintain the Harbor so that large cargo
    ships have easy and sustained access to the port and that we
    don't lose these ships to other places?
        Ms. Darcy. Once the deepening is completed, we will
    continue to operate and maintain that harbor through the Harbor
    Maintenance Trust Fund, and it will compete within that trust
    fund for available dollars.
        Senator Lautenberg. The Corps is filled with experienced
    professionals that do great work. However, the most frequent
    complaint that I hear from local communities about the Corps is
    that it takes too long. I think, generally, you made reference
    to that in your comments.
        Is the Corps considering ways to decrease the time to build
    projects? Perhaps, General, that question should go to you?
        General Temple. Thank you, Sir.
        When I spoke earlier about the transformation of planning,
    that's a subset of Civil Works transformation, which includes
    four key elements.
        First, planning, which I described a little earlier. Also,
    a focus on performance based budgeting processes which are
    reflected, for instance, in the 2013 budget.
        Performing a complete inventory of our assets and
    performing better asset management across those facilities that
    we're responsible for.
        And last, but not least, we are looking at how we deliver
    these through changes in methods of delivery that allow us to
    leverage the expertise across each district, across each
    region, and indeed, across the entire enterprise, to ensure
    that we deliver our products and services in a more timely
    fashion.
        Senator Lautenberg. Now, we appreciate the fact that
    there's almost always an overload in the Corps because there
    are more projects than there are hands or dollars. But we
    encourage you to keep up your good work.
        Thank you very much.
        General Temple. Thank you, Sir.
        Senator Feinstein. Thank you very much, Senator Lautenberg.
        Senator Graham.

        IMPACT OF PANAMA CANAL EXPANSION ON UNITED STATES SHIPPING PORTS

        Senator Graham. Thank you, Madam Chairman.
        I want to recognize the Executive order issued by President
    Obama. It says, ``Improving Performance of Federal Permitting
    and Review of Infrastructure Projects'' dated March 22.
        I am very impressed by this document. It really does
    through the Executive branch lay out a way to speed up these
    projects and to come up with a better vision about how to
    execute and maintain major infrastructure projects.
        The one thing I would suggest is to look at putting port
    people on the steering committee, the people that are on the
    front lines. But I just wanted to recognize the
    Administration's efforts in that regard.
        Now, you also report, Secretary Darcy, in June?
        Ms. Darcy. Yes, Sir.
        Senator Graham. And as you can tell from a California
    perspective, the current system's not exactly where you would
    like it to be.
        And from Senator Lautenberg's question, you have a harbor
    that's been studied, designed, constructed, and he's worried
    about maintenance of large ships. Now, I'm worried about the
    Chickamauga Lock. I didn't know about it, but I'm worried about
    it now. So, good, I am sufficiently worried.
        What we're doing, among ourselves up here, is trying to
    create a vision, in collaboration with the Executive branch,
    that recognizes things are about to change dramatically.
        The ports on the west coast seem to have a real need in
    terms of interior infrastructure development, and the
    definition of harbor maintenance doesn't seem to get us to that
    need.
        I would argue that the best way for us to have a vision is
    to look at these trust funds anew. And try to find ways to get
    more money in the system, maybe more matching money.
        But what we're going to be working on among ourselves is
    when the Panama Canal expands in 2015, it has a direct impact
    on the east coast, and will change shipping as we know it,
    including the interior along the Mississippi River and other
    places; do you agree with that?
        Ms. Darcy. Yes, Sir.
        Senator Graham. So what we're looking at doing is seeing
    how can we reconstruct or redesign these trust funds to get the
    money in place to build toward a vision?
        So rather than worrying about funding up front, we're
    trying to create a vision, a vision that would allow west coast
    ports who have a different problem than the east coast to be
    able to access funds that they're helping generate to make sure
    that America on the west coast has the best facilities possible
    in an international competition for export jobs.
        And, if we don't get this right soon on the east coast,
    ports are going to pop up along the Caribbean, Cuba, and other
    places, and if we don't watch it, this change in shipping is
    going to be lost to the United States.
        Do you agree that's a possibility?
        Ms. Darcy. It's a possibility, yes.
        Senator Graham. So what we're looking at doing is that some
    ports need to be deepened along the east coast. Maybe we can
    look at the Harbor Trust Fund anew and say that, you know,
    dredging is a new activity allowed in the Harbor Maintenance
    Fund.
        And when it comes to Harbor Maintenance definitions on the
    west coast, allow money for interior development. Now, the
    inland piece is going to be affected by what happens on the
    east coast.
        So what I would suggest is that we try to create a vision
    of what happens to our interior ports, based on Panama Canal
    expansion, look at what the west coast needs, in terms of their
    harbors, and take these trust funds and redesign them to meet
    the reality of the 21st century.
        Do you think that's a good project for us to engage in?
        Ms. Darcy. I do. I think we need to look at both trust
    funds as to what needs need to be met that aren't being met by
    them right now as well as increasing the revenues to them.
        Senator Graham. And the trust funds, as I understand it,
    generate about $1.2 billion a year, right?
        Ms. Darcy. The Harbor Maintenance Trust Fund generates
    about $1.4 to $1.5 billion a year.
        Senator Graham. And how much do we spend each year?
        Ms. Darcy. The President asked for $848 million this year.
        Senator Graham. So I would just suggest that people are
    paying or investing in these ports through fees that we ought
    to be using the money to make sure that we meet the President's
    goals of doubling exports.
        Do you agree that one way to double exports in America is
    to have modern ports and shipping systems?
        Ms. Darcy. Yes, and we're trying to reach that goal by
    keeping what we have in working order.
        Senator Graham. Okay. Now, that's just not enough. We need
    to keep what we have in working order, but we also need to have
    the best in the world. So that's our goal, right?
        Senator Feinstein. Would you yield for just a moment?
        Senator Graham. Yes, I will.
        Senator Feinstein. I once took a little tour of ports, the
    Hong Kong port, the Singapore port, other ports. Our ports are
    so far behind in infrastructure that it's scary.
        Senator Graham. It's scary, isn't it.
        Senator Feinstein. We are nowhere close to modern.
        Senator Graham. And we're going to fix that together,
    aren't we?
        Senator Feinstein. Yes, I hope so. For existing ports as
    well as potential future port improvements.
        Senator Graham. Okay. Yes, Ma'am.
        So, my time is up. But here's what I would like in the June
    Report. I'd like you to detail, as much as you can, the
    reasonably known consequences of Panama Canal expansion,
    knowing that you're going to have limited funds no matter what
    you do, and give us some sense of prioritization.
        Look at the idea of changing the Harbor Maintenance Fund
    and allow dredging to come out of that pot of money. Change the
    definition of the Harbor Maintenance Fund when it comes to west
    coast port Interior infrastructure development.
        Look at the Interior Trust Fund and see if it can be
    married up with the Harbor Maintenance Fund to create a vision
    that goes from the east coast to the interior to the west
    coast.
        And give us some idea of what happens if the Panama Canal
    expands, and what affect the larger ships will have on the east
    coast as well as the interior of the country. What kind of
    ripple effect will it have?
        And not just try to maintain what we got, but think outside
    the box and suggest to us ways to leverage the current system,
    ask for matching funds that are not asked for today, maybe more
    money coming from the private sector.
        This effort should not be just to maintain what we have,
    but to get ahead of the world before it's too late. Because if
    we don't act in a reasoned, rational way, this shipping that's
    coming through the Panama Canal is going to be lost.
        And if we don't upgrade our west coast ports, we're going
    to lose jobs at a time we need jobs.
        Do you think the June Report could be that expansive and
    that forward leaning?
        Ms. Darcy. The report, the study as you know, is well
    underway, and I'm not sure that we are looking at the uses of
    the trust funds in that report.
        Senator Graham. Could you do that?
        Ms. Darcy. We can try; because the Corps is on track to
    have it completed by----
        Senator Graham. Well, just think big.
        Ms. Darcy. Think big.
        Senator Feinstein. Thank you very much, Senator.
        Senator Landrieu.
        Senator Landrieu. Thank you, Madam Chair.
        And I agree with the Senator that we have to think big, but
    we're going to need a bigger budget to do that. And there's
    absolutely no way around it.
        This budget that we have in front of us, despite the very
    good work that this chairman has done, and it is in no a
    reflection on the work that she has done, or that we've done
    over the course of the last years, simply does not have enough
    money to maintain or invest or build the structures that we
    have to to build an economy that lasts.
        And that's just the simple truth. There's no way around it.
    And until we can figure out a way to put more private and
    public money on the table, we're not going to get there.
        I want to thank the Chairwoman for her extraordinary help
    with the very limited resources that are in this budget, in the
    President's request, and reflected in our 302(b) allocation.
        To thank her very much for the $1.7 billion that you were
    able to find and direct, Madam Chair, last year for emergency
    flooding. It has been a tremendous help to not just Louisiana
    and to our communities that were flooded, but all throughout
    the Mississippi River, and I understand, the Missouri River as
    well, and around the country.
        So thank you very, very much for being supportive. I want
    to thank the Corps, even with this limited and wholly
    insufficient budget, that you were able to start two new
    projects in the country. And one of them is a project that we
    should have started 30 years ago. But at least it's getting
    started now.

                        LOUISIANA COASTAL AREA PROJECTS

        And that is the Louisiana coastal area projects. There were
    only two new starts. The sad story is that if we had started
    this project, and this isn't only the Corps' fault, there's
    enough blame to go around.
        We could have saved the size of the State of Rhode Island,
    which we have already lost, and we're not sure even with this
    new project, and the billions of dollars that we're finding
    through a variety of sources, to put towards saving Louisiana's
    coast, which is America's wetlands.
        We're not sure how much of that marsh we can ever recover.
    But we think we can stop the degradation. We think we can build
    safe communities for the millions of people that live near this
    shore, from Texas, Louisiana, Mississippi, and Alabama, that
    simply cannot be moved north.
        So we thank you for recognizing the significant importance
    of that. But I do want to talk about these trust funds because
    that is the first step. And Senator Levin has been particularly
    vocal on this, and I want to do a shout out for him.
        Because he's worked extremely hard. And I was wondering
    why, and then I looked at the map of all of the ports, and saw
    the cluster of ports in Michigan. And it dawned on me that that
    is one reason.
        But he's right. We have a cluster of ports in the southern
    part of the country, on America's energy coast. And the fact
    that we have not been allocating, Madam Chair, all of the money
    to these trust funds that the private sector is paying into
    them, I think this should be the major issue for our
    subcommittee.
        I mean the highway committees have done a pretty good job
    of building support to capture the gasoline dollars for surface
    transportation. We need to be very aggressive in gathering the
    maritime dollars that are being paid for our ports and for our
    dredging.
        I understand from looking at this issue that is a huge
    issue now for us in Louisiana. And I want to ask you if this is
    true? That of all of the waterways that taxpayers have put in
    money to build, that the average width and depth is only one-
    third, we're only maintaining about one-third of that capacity;
    is that correct?
        Or, do you think it's more close to one-half?
        Ms. Darcy. I would like to say it's more, closer to one-
    half, but I think it's probably somewhere in between.
        Senator Landrieu. So, Madam Chair, just think about this
    big picture for a minute. Of all the waterways in the country
    that bring in resources from the South, the East, and the West,
    our channels, this budget, is barely maintaining one-third of
    their capacity, either at width or depth.
        What that means is our economy is weaker every day that a
    ship has to be light-loaded or stand offshore because the
    channel isn't deep enough to come in. Senator, whether this is
    natural gas coming in or going out, or whether this is
    fabrication materials coming in and out. They're standing
    offshore because the channels are not wide enough or deep
    enough.
        This is really a shame. And people focus on infrastructure,
    thinking about roads and bridges and mass transit. I'm going to
    be on a tear this year to focus on our water transport because
    it's crucial.

                   MODIFIED CHARLESTON METHOD FOR MITIGATION

        And, finally, I know my time is out, I want to follow up on
    one other point. And this is of great concern to Louisiana. Our
    division down in Louisiana, the New Orleans Division of the
    Corps, has recently adopted what they call the Modified
    Charleston Method for Mitigation.
        Until I can get a better explanation, I'm going to try to
    insert money in this bill to prevent that from going in place
    until I can understand how the cost is going to affect our
    efforts to save our coast.
        Because just what Susan Collins--Senator Collins was
    speaking about the complaints in Maine, Madam Chairman, if we
    don't really understand this mitigation, sort of one for one,
    like if you take an acre of wetlands, you have to replace it,
    I'm all for that.
        I mean I don't think we can have a net loss of wetlands.
    But the Corps is now going to a method that's costing a three-
    to-one. So, instead of a levee, let's say that I have to build
    a lot of that you have to help pay for, this is why it's
    important to you, and to me, instead of it costing $100, that
    same foot of levee is going to cost $400.
        It's going to bankrupt us. We have a problem as it is under
    the one-for-one. If we go to a three-to-one method, the
    projects are going to become that much more expensive. So I
    know that there's an environmental reason for this, and I want
    to be sensitive to it.
        But we also have to be sensitive to the taxpayers that are
    picking up this tab, and be very clear before we implement this
    what the economic impacts are going to be.
        So would you make just a brief 30 seconds, and then I'll
    thank the Chair for allowing me to go a little over, on the
    increased cost for flood control if we use that Charleston
    method?
        Ms. Darcy. Thank you, Senator Landrieu.
        What's being referred to as the Modified Charleston Method
    is a different way of evaluating permit applications. As you
    say, there's an increase in the acreage that would be used for
    the mitigation on flood control and other projects.
        That method is just starting to be used in some of our
    districts, and what I think I need to do is take a look at what
    the impact is on all of our districts. Because not all
    districts are using it.
        One of the reasons for using it was to have some
    consistency throughout a State. And I think consistency is
    something that we need to have, but your concern about the cost
    impacts is one that I think we need to look at before we move
    forward.
        Senator Landrieu. So before we expand that, I would really
    recommend that we get an analysis of the economic impact for
    California, for Louisiana, for, you know, South Carolina, North
    Carolina, so at least we know what we're laying on people
        Because the final question, Madam Chair, we have an
    obligation to put up some money, but remember, the local
    governments have to put up some funding too. And this is
    substantially increasing their costs.
        And I'm getting nothing but complaint after complaint from
    our levee boards. My parish officials said, Senator, this will
    absolutely bankrupt us, and that's the last thing we need to
    do.
        Senator Feinstein. You have done yeoman's service to your
    State.
        Senator Landrieu. Thank you.
        Senator Feinstein. I don't know of anyone that's worked
    harder than anybody for their State than you have.
        Here's the problem. You know, we're the chorus talking to
    each other. The fact of the matter is that the Corps' budget is
    down 5.4 percent. The Bureau's budget is down 1.3 percent.
        Here's the overall issue in the energy and water portfolio,
    the security part of it, which is tens of billions of dollars,
    has projects that start out costing $600 million end up costing
    $6 billion. That's an actual case.
        It all has to do with the nuclear security and the warheads
    of this Nation. They are absorbing a bigger and bigger part.
    And you can't change that. It's a mandatory spending item.
        Who suffers? The Corps, the Bureau. They are pushed and
    compressed. Somehow people have to wake up to this, and talk to
    the Administration to help us because it simply isn't the right
    thing.
        At home, our infrastructure is poorer and poorer and
    poorer. Our ports are outdated. Our levees need fixing. The
    storms are bigger. The hurricanes are stronger. The tornadoes
    are much more volatile.
        Senator Landrieu. Yes.
        Senator Feinstein. The damage is much, much greater. There
    is no ability to respond to it proportionately. That's just a
    fact.
        Senator Landrieu. Yes.
        Senator Feinstein. That's why I love both these budgets
    because I said earlier, it's where the pedal hits the metal.
    It's really where we live. It's what we see.
        If 20 percent of Sacramento gets flooded, and I know that's
    going to happen, and the Corps confirms it to me, and the levee
    collapses, all I can say is it would have been an earmark. I
    would put it in, but I can't put it in.
        Senator Landrieu. Yes.
        Senator Feinstein. So the bottom line is, I have to fish
    around for a way to go around that. It's wrong. It's just plain
    wrong. I've been here for 20 years. I've never seen anything
    like it. I mean, why be on the Appropriations Committee if you
    can't do anything to be of help.
        Senator Landrieu. Right.
        Senator Feinstein. So I am overwhelmed with frustration. I
    asked the staff to give me a paper of the eight big nuclear
    projects and whether they're on budget and whether the costs
    have been borne out. Nothing done in the last 10 years there.
        Have the costs that it was initially scheduled to be, been
    accurate? So we're going to study root causes for this because
    I think Senator Alexander agrees, and you see it here now.
        I am really concerned about Sacramento. The major is
    concerned about Sacramento. The House delegation is concerned.
    In the old days, I'd just put an earmark in. I can't do that.
        Senator Landrieu. Well, Madam Chair, I'm with you 1,000
    percent. I serve on the Appropriations Committee, obviously,
    I'm on the subcommittee, but I can honestly say, of all the
    committees I serve on, there is no budget that is in more
    crisis than this one.
        We have strains on all the other budgets. They're strained.
    This is one wholly insufficient. And the reason I know I can
    say that is because if I asked you, Ms. Darcy, what your
    backlog is today, there are two new starts in the country that
    you have in your budget.
        They're probably 50 that are worthy to be started, and one
    of them might be your project, but they don't have the money to
    do it. So I'm happy to be one of the two. But the sad story is
    there should be 50 new starts.
        And, if I asked you what your backlog is, isn't it about
    $60 billion?
        Ms. Darcy. Yes, it is.
        Senator Landrieu. And so, how much money do you have this
    year if you could apply it to the backlog to get these
    projects? You have about $2 to $3 billion, right, in
    construction money, of the $60 billion?
        Ms. Darcy. Yes. It's $1.5 billion.
        Senator Landrieu. You see what I'm saying about this budget
    being in crisis? I don't think the defense budget is that far
    backlogged. I don't think the health budget is that far
    backlogged. It's strained.
        This budget is wholly insufficient, and it's not your
    fault, Madam Chair. It's our fault as the general
    Appropriations Committee, and we have to say to the President,
    and to our leadership, we cannot take it, the country cannot.
        And I'll just say this one more thing, if there was ever an
    example of what's going to happen, when the levees broke in New
    Orleans, in 52 places, and the cost has exceeded to fix it $140
    billion, is there any other case study that needs to be
    presented to thinking people that we cannot survive on this
    budget?
        That's the budget that produced the 52 breaks. Lord help us
    if something happens to Sacramento. You will feel waves across
    the whole country because of the products that come out of
    that.
        So I just have to say I'll do what you want, Madam Chair,
    but we have to do something extraordinary this year for this
    budget.
        Senator Feinstein. I think we have to find a way, and right
    now, I'll tell you, I don't know what that is. If anyone has a
    suggestion, I'm open to it.
        I think maybe we send a shock wave, and we just don't fund
    some of these other things.
        Senator Alexander. Well, Madam Chair. I think there's a way
    to deal with this. I think Senator Graham, you, and others have
    come up with a pretty good idea.
        We need to ask the Administration, starting with the
    thinking that's already done, to think with us, and provide a
    vision, an idea, for what we need to do about locks and dams
    and what we need to do about harbors.
        And then--and not think about the money, think about the
    vision. And then after we have the plan or the vision, then
    we'll see how much it costs, and then we'll see how we pay for
    it.
        Senator Landrieu. Could you put the gulf coast in that
    vision?
        Senator Alexander. Don't you have locks and dams and
    harbors, yes. Of course, I mean, for the whole country, for the
    whole country.
        And part of our problem is we're all tied up in the rules
    that we have around here which we can change. But if we start
    out just arguing about the rules that we have, that create the
    absurdity of having a fund with a lot of money in it that we
    can't spend, even though we have a lot of needs, and the other
    fund doesn't have any money in it.
        Even though we should be able to construct a way to do
    that, we just need to start with a vision, then with how to
    fund it, then how much it costs, and then with how to fund it.
    And I think we can do that in fairly short order, and I'd like
    to be a part of it.

                             PROJECT PRIORITIZATION

        Senator Feinstein. Well, for example, the Natomas Project
    isn't authorized. Why isn't it authorized?
        Are you planning to send your number one priority projects
    for a bill to get them authorized? Or have you been kiboshed?
        Ms. Darcy. As the Chiefs Reports are approved by the Chief
    of Engineers and cleared by the Administration, they are sent
    to the Congress. We have sent, since 2007, 14 Chiefs reports,
    and we probably have about another 12 to 13 that might possibly
    be completed this year. All of them would need to come to the
    Congress for an authorization.
        Senator Feinstein. So summarize that. What does that mean
    to you?
        Ms. Darcy. What it means is that by the end of this
    calendar year, we will probably have more than 20 Chiefs
    reports that will need to be authorized by the Congress. They
    range from harbor deepening projects to aquatic ecosystem
    restoration projects to flood control projects around the
    country.
        Senator Feinstein. Priority one? The highest priority?
        Ms. Darcy. Of those projects?
        Senator Feinstein. Yes.
        Ms. Darcy. I don't know that I could put one above the
    other.
        Senator Feinstein. Well, let me ask you, is there any way
    for the Administration to propose, award a bill, for the
    highest priority projects in the country based on protection of
    life and property?
        Ms. Darcy. That's a possibility. Any Water Resources
    Development Act (WRDA) proposal that would be developed would
    include other kinds of policy changes that we are looking at
    within the Administration.
        Within the President's budget, he talked about the White
    House Task Force on Navigation. In your conversations here
    today you discussed the need for revamping both the trust
    funds, that's something that I think this Task Force is going
    to have to tackle.
        In addition, we're working on a capitalization
    modernization program within the Administration, looking at
    ways on how we can recapitalize this aging infrastructure.
    We've all heard today we don't have enough money to do that, so
    we need to look at different ways.
        Senator Feinstein. Stop, stop. I don't mean to be rude, but
    here's the problem. The Administration has all of the clout.
    Therefore, it has the responsibility.
        Let me tell you a little story. When I was mayor, I used to
    have these Monday morning department head meetings. The
    Director of Public Works waited until after one of these
    meetings, and he said to me, ``Madam Mayor, I've got some news
    for you. I think if there were an earthquake, the rim around
    Candlestick Park would come down.'' I said, ``Oh, my God, Jeff.
    I don't have money.'' I said, ``How much would it be?'' He came
    back and said that to retrofit just the rim at $6 million.
        Then I thought, well, Candlestick is used so infrequently,
    you know, what is the real liability here? Then I thought, I
    now know, therefore, I have a responsibility. So we took and
    took from others. We had $2 million a year for 3 years.
        Who would have ever thought the San Francisco Giants would
    be in the World Series. At 5 o'clock on a weeknight in
    Candlestick Park when the big earthquake struck, and the rim
    held. And the estimate was you had a 60,000 seat stadium, 20 to
    30,000 people would have been impacted.
        As it is, one of the floors of the Bay Bridge fell down.
    So, you know, there's a responsibility. I think on a Federal
    level, we take this stuff too much for granted. I now know what
    will happen in Sacramento. You know. You have an obligation
    because this is administration.
        Anything we do is an earmark. Anything you do is not, and
    it gets done. So, I heard you on the public record say that you
    agree that 20 percent of the City of Sacramento would be
    flooded if that levee collapses.
        What are you going to do about it? You have a
    responsibility. I have a responsibility. The White House has a
    responsibility. So, you know, I think up there, there is this
    perception that, well, it's a low priority, you know, the W61
    warhead is more important, et cetera.
        Well, not if you get flooded. And, you know, the chances of
    it getting flooded are much greater than ever having to use the
    W61 warhead. So, we need to see some passion from the
    Administration to help because that's where it's at right now.
        Ms. Darcy. Yes, Ma'am.
        Senator Feinstein. We could put earmarks in the bill and a
    rule of order would lie against the bill, and I don't know
    whether we could get the votes or not to overcome it.
        But these are not private companies that somebody's doing
    an earmark for. These are major projects that protect the
    people and the property of the people. And I think that's
    really important, and it's the quality of life, and it's the
    ability to run an economy.
        So, Senator Landrieu is absolutely right. But right now,
    it's got to come from the Administration, and I've got to ask
    you all to be forceful and fight the fight, and we'll back you
    up.
        I'm going to write a letter to the President, and ask you
    all to sign it, and ask him to adjust his budget. Then, he can
    do it, and then it's not an earmark.
        It will be for the most serious projects that involve the
    safety of the people of this country. So, the projects for what
    hurricanes are doing, and what tornadoes are doing and the
    destruction that's caused. Those related to the climate getting
    warmer.
        In California, I've tracked the last 5 years of the water
    levels, and they're definitely changing from the historic
    average, and the snow pack is getting less and less. So it's
    just frustrating, to see the Corps and the Bureau take these
    cuts, and to see another part of our budget which is mandatory
    with billions of dollars of cost overruns.
        It's very frustrating.
        General Temple. Madam Chairman.
        Senator Feinstein. Yes, General, back us up.
        General Temple. Do you mind if I take us back to Chick Lock
    for just a minute?
        Senator Feinstein. Of course.
        General Temple. I did say earlier that there was a
    possibility that the Lock could close after 2013, but based on
    the monitoring that we've done, and assuming that we have
    normal operating and maintenance dollars to maintain the Lock,
    we don't anticipate that it would close within about the next 5
    years.
        It could, but we don't anticipate that it will. I just
    wanted to make sure it was clear.
        Senator Feinstein. Thank you. I know Senator Alexander is
    pleased.
        General Temple. Thank you. Thank you, Sir.
        Senator Feinstein. We have been joined by Senator Harkin.
    Senator, we're delighted to have you.
        Senator Harkin. Thank you very much.
        Senator Feinstein. You'd like to ask some questions?
        Senator Harkin. Madam Chair, thank you very much. I
    appreciate your indulgence, thank you very much. We all have
    other committees and many things that we're working on, so I
    appreciate this opportunity.
        And thank you for your wonderful leadership on these
    issues. I appreciate it very much.
        Senator Feinstein. Thank you.

                              FEASIBILITY STUDIES

        Senator Harkin. I just had a couple of questions I wanted
    to go over with General Temple and the Secretary.
        But, first, General Temple, I want to go over these
    feasibility studies and flexibility on feasibility studies.
    Well, I've been briefed and am supportive of your three-three-
    three concept to reduce the maximum level of cost and time
    taken to complete feasibility studies as outlined in your
    February 8 memorandum.
        I think this is an important advance. But I also think it's
    important for the Corps to move forward with specific guidance
    beyond just the question of scoping, regarding things like the
    use of older data, simplifying requirements, and providing for
    accelerated review in order to maximize the ability of your
    districts to reach the goal of keeping these feasibility
    studies to 3 years and costing under $3 million.
        So it's the issue of providing guidance. My question is,
    what actions will the Corps be taking to provide additional
    guidance to the districts regarding these issues? What degree
    can there be simplification, and the waving of certain current
    requirements that are now the law?
        And what would be the timing of providing more detailed
    guidance to the districts on this issue? If you need me to
    elaborate, I will, elaborate anymore on that. Okay.
        General Temple. No, that's fine, Sir. Thank you.
        Because what you're talking about is planning
    transformation within the Corps. And as you may know, we have
    six pilot projects that are ongoing, in addition to the
    guidance that we've already put out.
        We will use information that we collect from those pilot
    projects to adjust the guidance, to address many of the issues
    that you have just described. The planning transformation is a
    work in progress, and as we continue to learn, we will continue
    to adjust it to achieve the three-by-three-by-three goal that
    you mentioned earlier, Sir.
        Senator Harkin. Okay, General, let me pursue this just a
    little bit further. So you got the six pilot projects. You're
    using the data from that to inform you on the guidance
    principles that you will put out.
        Is there any way you can give me some kind of a timeframe
    on this at all? Some of these people are looking for detailed
    guidance on what they need to do, and so they're waiting on
    that kind of guidance.
        General Temple. We will address guidance pertaining to
    planning as we look at each feasibility study in addition to
    input that we get from the pilot studies.
        So it is a continuous process, Sir. I mean, I can't give
    you a time because we are working on this all the time, but
    we'll continue to make progress on it as we move forward
    together, Sir.
        Senator Harkin. Well, I hope at least I detect some sense
    of urgency on your part.
        General Temple. Yes, Sir, absolutely.
        Senator Harkin. Thank you. That's very important.

                                DES MOINES RIVER

        I'm also concerned about projects, and I think you'll pick
    up on this, where a local government is paying and conducting a
    feasibility study, but again, working to meet these
    requirements of what they call a ``work-in-kind credit.'' I'm
    specifically talking about Des Moines, Iowa.
        I'm facing a very difficult problem with the Corps, the
    Corps having made a determination of higher flows on the Des
    Moines River, which is probably true, which calls into question
    the current flood control system meeting these Federal
    Emergency Management Agency (FEMA) requirements for a 100-year
    event.
        The city is moving as fast as possible to take corrective
    action. What specific actions are best though, however, does
    require considerable analysis. I think we all should be doing
    whatever we can to allow the process to move forward as quickly
    as possible to provide appropriate flood protection and to
    avoid significant economic problems if large areas of Des
    Moines are determined to be in a flood zone.
        So again, I'm asking that the Corps be, I guess what I'm
    asking is the Corps be at least as helpful to these local
    sponsors as if the Corps was doing it themselves.
        General Temple. Absolutely, Sir. We're aware of the Des
    Moines situation. We will support the local efforts in
    addressing this particular issue. It is very important. Yes,
    Sir.

                                  OLMSTED LOCK

        Senator Harkin. I appreciate that. Third, I don't know if
    you covered this before I was here, if you have, did you cover
    anything about the Olmsted Lock at all on the Ohio? No.
        Well, people have suggested that it's logical for the Corps
    to do an in-depth study of the way Olmsted is being
    constructed, the amount of money that it's taking, which, of
    course, is keeping us from moving ahead on our whole plan for
    the Upper Mississippi Locks.
        Others have suggested it might be prudent to hold up
    additional work on Alton as a thorough study is conducted and
    move forward on other important navigation projects. I just
    wonder if you could tell me how you feel about that.
        Senator Alexander. Senator Harkin, if I may intercede.
        Senator Harkin. Yeah.
        Senator Alexander. We did discuss that a little bit and the
    Olmsted Lock on the Ohio River is increasing from $2 billion to
    $3 billion this year, a 50-percent increase, and it's soaking
    up all the money that could be used for other priority
    projects.
        And my question of Secretary Darcy was, have they
    considered changing the allocation or recommending a change in
    the allocation from 50 percent from the appropriations and 50
    percent from the trust fund to 90 percent from appropriations
    and 10 percent from the trust fund, which would free up trust
    fund money for other priorities.
        So thank you for letting me intercede there.
        Senator Harkin. No, I appreciate that. So where are we on
    this? Because I'm with you on this. I'm shocked at the amount
    of increase in the cost for that Lock.
        General Temple. Yes, Sir. We've asked the division and the
    district to take a look at multiple methods of delivery with
    respect to this project to see what we can do to deliver the
    project in a more speedy fashion at less cost if that's
    possible.
        And we expect that report back a little later this spring,
    Sir. And at that time we'll be able to make a better assessment
    of the way forward. Thank you.

                                 MISSOURI RIVER

        Senator Harkin. Okay. Thank you.
        One last thing on the Missouri River which General McMahon
    knows well. I appreciate the work that's being done to restore
    the levees on the Missouri River, but I want to raise a couple
    of issues.
        We do need to move forward with the master manual for the
    Missouri River, but again, I want to be on record as saying
    that it has to be balanced for flood protection but for
    hydroelectric generation and also for navigation. And these
    things all have to be put in balance. It can't just be one or
    the other. These all have to be balanced.
        So I guess you are going to have a vulnerability assessment
    on the Missouri River in May, is that right Jo-Ellen, Secretary
    Darcy?
        Ms. Darcy. I think it is next month that it's due, yes,
    Sir.
        Senator Harkin. Okay. Good. And the reason I mentioned
    General McMahon is because there's these levees north of
    Council Bluffs that I understand they've been included in an
    examination of those needs, in a vulnerability assessment.
        There's a problem with them that they were all private
    levees. But the impact on public property and public lands from
    not fixing those lands could be sizeable, and so we'd looked at
    those in the past, and as I understand it, they're at least
    going to be included in the vulnerability assessment.
        So I appreciate that very much. Thank you, Secretary Darcy.
    Thank you very much, Madam Chair.
        Senator Feinstein. Thank you very much. I just got a note.
    If you have the opportunity, you should ask Reclamation a
    couple of questions.
        Ms. Castle. We need you to justify our salary for the
    afternoon.

                             CENTRAL VALLEY PROJECT

        Senator Feinstein. Well, let me do that just with a couple,
    and I don't mean to exclusively focus on California. But we've
    got a big water problem coming up, Mike, and in contrast to
    last year's near-record level precipitation, 2012 looks to be a
    fairly dry year.
        The Central Valley Project allocation certainly reflects
    that, and the South of Delta agricultural service contractors
    have 30 percent of their contract. The snow pack is still about
    54 percent of normal. So these are really concerning things.
        Can you provide us with a status report of actions the
    Bureau intends to take to increase deliveries beyond the 30-
    percent allocation?
        Mr. Connor. Yes, Madam Chair. As a threshold matter, I just
    wanted to say I appreciate your kind words, but I've got to
    tell you, it's your leadership on these issues and your
    understanding that the current water supply situation
    infrastructure in California is just unsustainable. This is
    what necessitates us to act.
        And your urging that we do things better, that we don't
    accept the status quo, that we coordinate better, is much
    appreciated and very necessary, quite frankly.
        Senator Feinstein. Thank you.
        Mr. Connor. You're absolutely right about this year's water
    condition and I'll get to those actions. I just want to give
    you a statistic that just kind of blew me away on Monday when I
    received it.
        So last year at this exact time in the 2011 water year, we
    had combined releases from Shasta, Oroville, the State Water
    Project, and Folsom of 70,000 cubic feet per second (cfs). This
    year at this point in time, we're at 6,100 cfs, less than 10
    percent of what we were last year. So that gives you the
    context of the hydrology.
        And notwithstanding the fact that overall, there has been
    some precipitation that has moved into Northern California as
    of late, it's late in the season. It's certainly not near what
    it was last year, and it hasn't hit the San Joaquin Drainage
    Basin, which is at a record low, only comparable, I think, in
    the worst droughts of the late 1970s quite frankly.
        So it is a tough year. On the allocations, we're at 30
    percent South of Delta Water Service contractors as you
    mentioned. Based on some of the hydrology and the actions that
    we're taking. Hopefully, we will have another allocation
    announcement in the next 7 to 10 days.
        So look for that. I just wanted to put that on your radar
    screen. Based on specific actions recognized going into this
    year that we are in an extremely deficit situation, we've
    already started to take some actions.
        And we haven't done it alone. We've done it with our
    partners in the Central Valley Project. We made what we call
    ``Section 215'' Water, this is surplus water, available much
    earlier than we had and under much different conditions than we
    had historically.
        So I think in January we saw an opportunity to make some of
    the surplus water available through the pumps in the Central
    Valley Project and we made available about 70,000 acre-feet
    early on.
        That doesn't show up in the allocation, but at least that's
    good wet water that our contractors can use in this year. We've
    got a number of other actions that we're looking at that is
    reflected in the water plan now that we've put out.
        We just put out our Central Valley Project water plan for
    2012, and that's a result of the discussions we had back in
    2010, where we started identifying these other actions. So
    certainly shifting this partnership that we have with the
    Metropolitan Water District and the State Water Project to try
    and use some of their water from San Luis Reservoir early in
    the season to shore up our supplies.
        And we can pay them back later on. I think that's going to
    be an action that will yield a significant amount of water this
    year. We are working with the State of California and looking
    at the Yuba Accord water as a way to help make some additional
    water available to both the State Water Project and the Central
    Valley Project.
        Senator Feinstein. What was that?
        Mr. Connor. Yuba Accord. There was some water made
    available. I can't remember the year that the Yuba Accord was
    developed.
        Senator Feinstein. That's okay.
        Mr. Connor. But it does make some water available out of
    that system for both the State Water Project and now we're
    looking at a sharing arrangement with them that we will try and
    make use of.
        We are still actively trying to promote the water transfer
    program. So the first couple I mentioned, the 215 water, Yuba
    Accord, the source shifting activity, that is stuff that we are
    trying to bring to the table, those actions, this year, to help
    shore up water supplies.
        Also water transfers. We are looking at trying to
    facilitate, particularly, East-West transfers in the Central
    Valley, just because it's going to be tough to get water from
    North to South this year.
        So we will try and shore up and make additional water
    supplies available through water transfers. Beyond that, there
    are mid-term type of actions that we're looking at, at some
    additional infrastructure, interties East to West, that might
    facilitate additional transfers in the future above and beyond
    what we've been doing historically.
        New conservation programs that we can help fund and support
    that might allow our contractors in one area of the CVP to make
    new water supplies available for transfers to those with
    smaller supplies allocations.
        And finally, refuge diversification, which we've talked
    about since 2010. Even the last couple of years using Recovery
    Act funds, we were able to drill a significant number of wells
    that helped to diversify the Refuge Water supplies.
        It's not a whole lot, but 10 to 20,000 acre-feet is very
    helpful in splitting that between the level 4 refuges and
    diversifying the Refuge supply to make that and allow CVP base
    supplies to be used for other contractors is something that
    we're still looking at.
        So that's the array of things that we're doing short term
    and mid-term to try and improve water supplies.
        Senator Feinstein. Let me ask you this. In your judgment,
    what would be the amount of acre-feet that these administrative
    changes could provide?
        Mr. Connor. I think looking at this year if you throw in
    the surplus, the 215 water, we should be in that----
        Senator Feinstein. Source shifting with the Metropolitan
    Water District of Southern California in particular.
        Mr. Connor. Source Shifting, I think would add, we're
    looking at, if we can pull this agreement together, something
    in the neighborhood of 50,000 acre-feet. You add that to the
    70,000, Yuba Accord is still a little unclear.
        But I think we'll be in the 150,000 acre-foot range and
    depending on transfers that we can additionally facilitate
    somewhere in the 150 to 200,000 acre-foot range. So that's
    getting up to--not a lot of that water shows up on the
    allocations itself, but for context, that is an 8- to 10-
    percent range of south of Delta Water Service Contracts.
        Senator Feinstein. How about at the pumps? Can any changes
    be made in how the pumps are run, the reverse flow?
        Mr. Connor. Well, we are operating under the current
    existing biological opinions right now, notwithstanding the
    Court orders that have remanded to both Fish and Wildlife
    Service and National Oceanic and Atmospheric Administration
    (NOAA) Fisheries to go back and look at some of the reasonable
    and prudent alternatives.
        And because the court did not feel that those were defined
    or justified enough, we're operating under those Reasonable and
    Prudent Alternatives (RPAs) right now, and we're under a
    schedule for coming up with new biological opinion actions in
    response to court order, probably 2 years on the Fish and
    Wildlife Service biological opinion and about 4 years on the
    NOAA Fisheries biological opinion.
        Senator Feinstein. What does that translate to?
        Mr. Connor. Well, that means that until such time as there
    are new biological opinions in place as a result of the court
    orders, we're going to keep operating under the existing ones.
        Senator Feinstein. Even though they have been found to be
    wanting.
        Mr. Connor. Yes. And that's where the Court left it. I
    should say though that we have improved how we implement our
    actions under the biological opinions, and we're going to
    continue to try and do that.
        One of the criticisms of the Court was that our triggers
    for certain actions that restricted pumping were from their
    view not well-justified.
        So we've tried to work with the Fish and Wildlife Service
    and NOAA Fisheries to get better data collection, do more real-
    time monitoring. Whether it's turbidity as it relates to smelt
    or actually tracking the salmon, so that we can be better
    justified in when we restrict the pumps and we know it's
    because there's fish in the immediate area.
        That had significant effect in 2011 particularly with the
    Delta Smelt, the implementation of the Fish and Wildlife
    Service Pilot program.
        Senator Feinstein. Well, that's really what I mean by
    adaptive management of the pumps.
        Mr. Connor. Yes.
        Senator Feinstein. To really track the movement of fish and
    get a better sense of the predatory aspects of other fish too.
        Mr. Connor. Yes. We're doing it better as far as monitoring
    where the fish are. We still have some ways to go on the
    predatory aspects and better understanding that aspect of it,
    quite frankly.
        Senator Feinstein. You previously allowed a permit change
    for the Jones Pumping Plant which allowed for a 500 cfs
    increase. It helped in 2010. Can you do it again?
        Mr. Connor. I think in 2010 we were looking at increasing
    pumping at the Banks plant, the State Water Project plant. And
    we had some permitting left to do because they have more
    capacity.
        Senator Feinstein. Well, didn't you say the Army Corps had
    the Banks plant?
        Mr. Connor. Well, we have to go through an Army Corps of
    Engineers permitting process to get the additional capacity,
    the 500 cfs additional capacity late in the season. That's what
    we were looking at in 2010.
        Senator Feinstein. So are you saying that Jones is the same
    thing as Banks?
        Mr. Connor. Jones is our pumping plant in the Central
    Valley Project. Banks is the State Water Project.
        Senator Feinstein. Right.
        Mr. Connor. You know, adjacent pumping plant. And they have
    more capacity. We don't really have additional capacity at the
    Jones Pumping Plant.
        Senator Feinstein. So, in other words, if you increase
    Jones Pumping, it comes from Banks, is that right?
        Mr. Connor. Well, we would look at specifically the idea we
    talked about in 2010, which was increasing the pumping
    permitting, the ability to pump more, the permit, at Banks.
        So that late in the season, post July, when there are not
    nearly the restrictions in place on pumping because the fish
    have moved out of the system, near the pumps, that we could use
    that opportunity to pump more and get it in the reservoir south
    of Delta, San Luis Reservoir, south of Delta.
        But we do need to go through the Corps of Engineers
    permitting process. The State has to be lead in that particular
    effort, and we have to be their partners in that.
        Senator Feinstein. Well, as I recall in 2009, we got about
    450,000 acre-feet from a number of administrative changes, that
    you and Interior as well were very cooperative and very helpful
    with, to get to 45 percent of the allocation south of Delta
    which is enough to allow farmers to contract, to plant, to
    harvest, to get a minimal level.
        I've been told that they have to have at least 45 percent
    of their contract. Are you going to be able to get there this
    year?

                         ADDITIONAL COMMITTEE QUESTIONS

        Mr. Connor. I don't know that we'll be able to get to 45
    percent. With the allocation, it's going to very tough. We're
    going to try and look at the opportunities to move the
    allocation up.
        And then there are, as I mentioned before, those other
    mechanisms that don't necessarily show up in the allocation,
    where we can try and make water available. All told, we're
    certainly striving as a goal to get close to that 45 percent.
        Through the allocation and additional water supplies, it's
    going to be very tough this year.
        [The following questions were not asked at the hearing but
    were submitted to the Departments for response subsequent to
    the hearing:]
         Questions Submitted to Hon. Jo-Ellen Darcy and Major General
                              Merdith W.B. Temple
                Questions Submitted by Senator Dianne Feinstein
        Question. Why is flood control spending down in your budget for
    fiscal year 2013 when compared to fiscal year 2012?
        Answer. The fiscal year 2012 budget included $1.45 billion for
    flood risk management compared to $1.41 billion in fiscal year 2013.
    The fiscal year 2013 budget for flood risk management was developed to
    advance the highest priority studies and construction projects. Funding
    levels were based on the execution schedules identified for those
    studies and projects.
        Question. Of the six new study starts that you have proposed, five
    are for ecosystem restoration. Were there no flood control studies that
    ranked higher in your selection process?
        Answer. The one flood control new start study recommended in fiscal
    year 2013 is the ``Water Resources Priority Study''. This study
    supports the Corps flood risk management business line as a high-
    priority study that will provide a baseline assessment of the Nation's
    flood risks at both a regional and national level. The study will also
    assess existing Federal, State, and local programs and strategies for
    managing flood risk, which will provide a basis for significant
    recommendations on ways to better manage flood risks at the national,
    regional, State, and local levels.
        Question. What is your selection process for your proposed new
    starts?
        Answer. New starts are initially prioritized within their assigned
    business programs. One of the most difficult tasks in preparing a
    performance-based budget is balancing the most important work,
    including new starts, across multiple business programs and sub-
    programs in order to obtain the expected outcomes. New starts are
    selected when their expected outcomes are likely to be competitive with
    priorities for other high-performing activities supported in the
    budget. That prioritization is based upon overall performance
    guidelines, as follows:
      --projects funded to address dam safety assurance, seepage control,
            and static instability correction problems;
      --mitigation, environmental compliance, and treaty requirements or
            biological opinions;
      --projects funded to address a significant risk to human safety;
      --projects funded on the basis of their economic or environmental
            return;
      --nonstructural flood damage reduction projects and coastal
            navigation projects; and
      --coastal navigation projects (project phase would support jobs or
            economic activity).
        Question. One of your proposed new starts is a $2.2 billion
    project. At $150 million a year, which is an optimistic funding level,
    it would take 15 years to complete. With flat to declining budgets, how
    will this project get completed in a timely manner?
        Answer. The Administration continues efforts to fund more
    efficiently those projects and studies with the highest return to the
    Nation in order to bring those project benefits on line sooner. In this
    constrained fiscal environment, tough decisions will need to be made
    regarding funding for other remaining ongoing projects and studies that
    are not expected to provide as high of a return.
        Question. You have a new $8 million line item in your request
    called ``Reducing Civil Works Vulnerability'' with an estimated $10
    million annual continuing cost. What does this new program propose to
    do and how much is it ultimately going to cost? What benefits will it
    provide to the Civil Works program?
        Answer. The Reducing Civil Works Vulnerability (RCWV) Program will
    increase the resilience of Corps projects and programs to the effects
    of the dynamic, often strongly interacting changes in demographics,
    land use and land cover, social values and social vulnerability,
    economic conditions, ecosystem habitat suitability, and aging
    infrastructure that arise independently from climate change and
    variability. These changing conditions could interact with each other,
    or with climate change and variability, in ways that increase the
    vulnerability of Civil Works (CW) projects, programs, missions, and
    operations. Through RCWV, the Corps will develop comprehensive
    solutions to reduce vulnerabilities and improve resilience of U.S. Army
    Corps of Engineers (USACE) missions and operations. This activity will
    benefit all USACE business lines and requires close coordination with
    complementary activities, including responses to climate change, flood
    and coastal storm damage reduction, navigation, ecosystem restoration,
    hydropower, recreation, emergency management, and water supply.
        Question. In your budget request, you generally require a project
    to have a benefit to cost ratio of 2.5; however, for flood control
    projects, you have included a number of projects with benefit-to-cost
    ratios considerably less than 2.5. These are listed with the additional
    criteria of providing substantial life-saving benefits. What does that
    phrase mean?
        Answer. Providing substantial life-saving benefits is defined by a
    substantial reduction in risk to human life due to flood inundation.
    The risk factors that are generally understood to have the most
    significant, large-scale impacts on potential loss of life from
    flooding include population at risk, warning time, and inundation depth
    and are evaluated together to provide a relative assessment of the
    life-risk associated with each project.
        Question. I notice that you have finally increased funding for the
    Lower Mississippi River from the lower numbers of the last few years to
    a request of $81.7 million. How much have we spent on the Lower
    Mississippi to maintain the navigation channel for each of the past 5
    years? Do you believe that the request is sufficient? In light of the
    new policy to not reprogram funds to this project from other projects,
    what is your plan to ensure navigation is maintained if funding runs
    short?
        Answer. Navigation expenditures for the Mississippi River Baton
    Rouge to the Gulf project for the past 5 years, including all regular,
    American Recovery and Reinvestment Act, and Supplemental appropriations
    are as follows:
      --fiscal year 2007: $76,351,238.87;
      --fiscal year 2008: $87,787,717.33;
      --fiscal year 2009: $114,634,195.08;
      --fiscal year 2010: $134,291,130.03; and
      --fiscal year 2011: $106,740,907.01.
        Approximately $151 million is anticipated to be expended in fiscal
    year 2012. Funding needs for the project vary considerably from year to
    year depending on climatic conditions in the Mississippi River basin.
    The fiscal year 2013 budget amount of $81.67 million for the project is
    appropriate given the anticipated needs in fiscal year 2013. The Corps
    monitors the channel conditions on a regular basis and uses that
    information to schedule dredging activities and maintain navigation.
        Question. Your request for the Missouri River Fish and Wildlife
    Recovery is up significantly this year to $90 million. As you know,
    many people in that area question the need for this spending in light
    of the record flooding that occurred along the Missouri River in 2011.
    They believe that this funding would be better spent on flood control
    for the basin. How do you answer those critics? If this number were
    substantially cut, what would be the potential impacts to the
    operations of the Missouri River?
        Answer. The Missouri River Fish and Wildlife Recovery Program
    (MRRP) was designed to address mitigation requirements (loss of
    habitat) for the Bank Stabilization and Navigation Project (BSNP) and
    endangered species requirements of the 2003 amended Biological Opinion
    (BiOp). The program allows the Corps to continue to operate the
    Missouri River for all eight congressionally authorized purposes--
    including flood risk management and navigation--while meeting our
    environmental requirements of the Endangered Species Act (ESA).
        As stated, there is $90 million in the fiscal year 2013 budget for
    Missouri River Recovery. If that funding were cut or significantly
    reduced, the Corps would not be in compliance with the ESA and may not
    be in a position to serve all congressionally authorized purposes on
    the Missouri River.
        The Missouri River Recovery Program is not in competition with
    funding for repairs to the reservoirs, levees, and other Missouri River
    infrastructure damaged by last summer's record flows. Based on current
    estimates to date, the Corps has received all the funds required to
    return the system to pre-flood conditions in time for the 2012 run-off
    season.
        Question. There are a number of projects in your request that are
    designated as ``high performing projects.'' Many have benefit-to-cost
    ratios of 2.0 or less. What is it about these projects that makes them
    ``high performing?'' How were they chosen over projects with similar
    benefit-to-cost ratios?
        Answer. High-performing construction projects anticipate high-
    economic, safety, and environmental benefits to the Nation. Examples of
    selection criteria include projects that will significantly reduce risk
    to human safety, or restore a degraded ecosystem structure, function,
    or process to a more natural condition.
        Question. Based on your budget request, do you have concerns about
    potential failures of any of the Inland Waterway projects in fiscal
    year 2013? Some of them are in serious condition. Do you see a
    potential increase in unscheduled lock outages occurring due to this
    budget request?
        Answer. The Army is committed to facilitating commercial navigation
    by providing safe, reliable, highly cost-effective, and environmentally
    sustainable waterborne transportation systems. The fiscal year 2013
    budget prioritizes funds on those projects that have the highest level
    of commercial traffic, greatest risk of failure due to component
    conditions, and the greatest economic consequences of failure. The
    Corps continues to monitor the risk of component failures that could
    disrupt or stop traffic. Every effort is made to use the available
    funding in a way that will reduce the risk of scheduled and unscheduled
    outages due to mechanical failures on both high and moderate use
    waterways.
        Question. The Corps is the biggest Federal producer of hydropower
    in the country.
        What is the condition of these projects?
        Answer. The design life of these facilities is usually 35 years.
    Based on the condition assessment process used by the Corps within the
    last 3 years, 36 percent of the turbines and 17 percent of the
    generators are rated either in poor or marginal condition.
        The rating scale is as follows:
      --Good (Condition Index 8.0-10.0).--Expected to continue to provide
            reliable service for some time in the future. Continue routine
            maintenance and inspections.
      --Fair (Condition Index 6.0-7.9).--Expected to provide reliable
            service in the near future. Continue routine maintenance and
            inspections.
      --Marginal (Condition Index 3.0-5.9).--Expected to provide a marginal
            level of service in the near future. A more detailed
            investigation is needed to determine potential problems and
            plan a repair strategy.
      --Poor (Condition Index 0-2.9).--Immediate intervention is required
            to determine the problem and plan a repair strategy.
        These ratings are indicative of the aging hydropower infrastructure
    and the decaying nature of this type of equipment over time.
        Question. Has there been an increase in unscheduled outages?
        Answer. In 1999, the Corps' average unscheduled outage rate was
    1.97 percent and has steadily increased to 4.36 percent in 2011,
    compared to an electrical industry standard of 2 percent.
        Question. Is there a plan for reinvestment in these projects to
    ensure they continue to supply needed electricity?
        Answer. The Corps is implementing a Hydropower Modernization
    Initiative (HMI) to address aging hydropower infrastructure issues for
    197 generating units in 54 power plants that are not directly funded by
    the Department of Energy's Bonneville Power Administration. HMI study
    results show that an investment of approximately $4 billion over 20
    years would improve reliability, restore design level efficiencies and
    capture improvement and upgrade opportunities where they exist. The
    fiscal year 2013 budget for hydropower will fund minimum maintenance
    and does not include funding for major rehabilitation of any hydropower
    projects. In some areas of the country, the Corps is working with
    hydropower users on agreements for direct non-Federal financing of
    major maintenance work.
        Question. We provided $1.7 billion in disaster funds to repair
    damages to Corps projects in December 2011. Was this funding sufficient
    to repair all of the damages due to natural disasters? If not, did you
    include funding in your budget request for these repairs? If not, why
    not? Isn't it important to repair these projects to pre-disaster
    conditions to ensure they continue to provide the benefits for which
    they were constructed?
        Answer. Fiscal year 2012 supplemental funds focused on repairs
    resulting from historic flooding in 2011 in the Missouri and
    Mississippi River Basins that are covered by Presidential disaster
    declarations, using the following priorities:
      --Class I: Urgent and Compelling (Unsafe).--Heavily damaged projects
            that have breached or failed where there is a probable loss of
            life.
      --Class II: Urgent (Potentially Unsafe).--Damage projects that are
            likely to fail where there is a probable loss of life and
            economic damage.
      --Classes IIIA and IIIB: High Priority, including:
        --Class IIIB (Conditionally Unsafe).--Damaged systems that are
                likely to fail where there is a potential for economic,
                environmental, and an indirect potential for loss of life.
        --Class IIIA (High Impact to Navigation).--Damaged systems directly
                impacting high-use navigation.
      --Class IV: Priority (Marginally Safe).--All other damaged systems
            not meeting Class I, II, or III above.
        The Corps has made significant progress toward completing priority
    repairs. The Corps identified 11 Class I (urgent and compelling)
    projects and expects to complete interim protection for 10 projects by
    March 31, 2012. Full completion is expected (pre-event conditions
    restored) by March 31, 2013. There is one Class I project that
    anticipates completion by March 31, 2014. Similarly, the Corps
    identified 31 Class II (urgent) projects and expects completion of
    interim protection for 14 projects by March 31, 2012. Full completion
    is expected by March 31, 2013. Fourteen Class II repairs are
    anticipated to be complete by March 31, 2014, and three repairs expect
    completion after March 31, 2014. The Corps identified 31 Class IIIB
    (conditionally unsafe) projects and expects completion of interim
    protection for 19 projects by March 31, 2012. Full completion is
    expected by March 31, 2013. Twelve Class IIIB repairs are anticipated
    to complete by March 31, 2014.
        A small portion of the costs of damage repairs is not covered by
    Presidential declarations and, therefore, not eligible for disaster
    relief funding. Repairs not eligible for disaster relief funding were
    considered during development of the fiscal year 2012 work plans, and
    will again be considered during formulation of the fiscal year 2014
    budget.
                         harbor maintenance trust fund
    The RAMP Legislation (requires that receipts of the Harbor Maintenance
            Trust Fund be expended annually)
        Question. There seems to be considerable misunderstanding about the
    workings of the Harbor Maintenance Trust Fund (HMTF). Can one of you
    simply explain how it is collected and how it ties into the overall
    Corps budget?
        Answer. The Water Resources and Development Act of 1986 authorized
    the collection of an ad valorem Harbor Maintenance Tax (HMT) on cargo
    to recover costs associated with operating and maintaining Federal
    commercial navigation coastal and inland harbors within the United
    States. Most of the revenue comes from imports, but some comes from
    coastwise movement of some domestic cargo, and from passengers. Exports
    and commodities carried on the fuel-taxed inland waterways are exempt
    from the tax. The HMT is generally collected at the port of entry by
    Customs and Border Protection, based on the value of the imported
    commodities. The receipts are deposited in the HMTF by the Treasury
    Department. Spending from the HMTF is proposed in the President's
    budget for the Civil Works program and appropriated by the Congress.
    Appropriated funds are transferred from the HMTF to the Corps
    expenditure accounts to reimburse the General Fund of the U.S. Treasury
    for eligible navigation expenditures. In developing an overall budget
    for the Civil Works program, each project, program, or activity
    competes for funding on an equal basis.
        Question. Are either of you aware of the Realize America's Maritime
    Promise (RAMP) legislation (S. 412 in the Senate, H.R. 104 in the
    House)?
        Answer. Yes, we are aware of the RAMP legislation in the House and
    the Harbor Maintenance Act legislation in the Senate. These bills have
    almost identical language and seek significantly more spending for work
    that is authorized to be financed from the HMTF.
        Question. Can either of you provide us with a short synopsis of the
    bill?
        Answer. The House and Senate bills would direct the Congress to
    annually appropriate an amount equal to the total anticipated HMT
    receipts, plus interest, for any fiscal year for the operation and
    maintenance of the Corps coastal and inland navigation harbors, as well
    as the U.S. portion of the St. Lawrence Seaway, which is operated by
    the St. Lawrence Seaway Development Corporation.
        Question. I realize this is asking a lot but can either of you give
    this Committee your opinion on how the Administration might implement
    this bill if it were enacted into law? We're not going to hold you to
    this, but it is important to know what could happen.
        Answer. The Army and the Administration have emphasized the need to
    allocate Civil Works funding based on performance.
        Question. Based on what you know of the Administration's budget
    process, do you believe the Administration would provide the Corps with
    $700-800 million in additional budget ceiling or would they just
    rearrange funding within the previously planned Corps budget to meet
    the requirements of the law?
        Answer. Budget decisions are not made in advance. However, proposed
    increases generally compete for funding on the merits with other
    potential uses of those funds.
        Question. Do you believe additional resources might be worked into
    the budget to account for the law, or would other missions of the Corps
    suffer because of the law?
        Answer. As stated above, budget decisions are not made in advance.
        proposal to return harbor maintenance taxes to the states where
                                   generated
        Question. It is my understanding that California Ports provide at
    least 30 percent of the funding that goes into the HMTF. Can either of
    you confirm that number for fiscal year 2011?
        Answer. An estimated $432 million in HMT was collected on cargo
    shipped through California ports in fiscal year 2011, which was
    approximately 29 percent of the $1.469 billion in total HMT tax
    collected in fiscal year 2011.
        Question. If we assume that the Trust Fund generates $1.5 billion
    annually, then California annually contributes some $450 million to
    this Trust Fund. How much dredging of eligible harbors and waterways in
    California were reimbursed by the Trust Fund in fiscal year 2011? In
    other words, how much of our $450 million is returned to the State? It
    is my understanding that it is less than 5 percent of the annual
    revenues. This seems very inequitable.
        Answer. The HMT generated $1.469 billion in fiscal year 2011.
    Approximately $94 million was expended on California navigation
    projects in fiscal year 2011 and subject to recovery from the HMTF.
    Most of the revenue comes from imports, but some comes from coastwise
    movement of some domestic cargo and from passengers. Neither the ports
    nor the States pay this tax.
        Question. Would it be possible for the law to be changed in such a
    manner that a set percentage of the revenues generated in a given State
    would be returned to that State?
        Answer. The Congress could consider such a change or other changes
    to the current law.
        Question. What would be the impacts of such a change? Do you
    believe that the Corps would only rearrange port funding, or would this
    generate additional dredging resources?
        Answer. In the absence of a specific proposal, it would be
    difficult to say what the impacts might be or how it might affect
    Federal spending.
        Question. How can we best increase the amount of funding for the
    maintenance of our harbors and waterways without having a deleterious
    impact on other aspects of the Corps' program?
        Answer. In the current fiscal environment, the Administration
    generally has been seeking offsets for any proposed spending increases.
                          inland waterways trust fund
        Question. I note that your budget request anticipates additional
    funding being available from the Inland Waterways Trust Fund (IWTF) for
    fiscal year 2013. How do you anticipate that these additional funds
    will be generated?
        Answer. The revenues from the existing diesel fuel tax are expected
    to increase to approximately $95 million annually. This reflects an
    estimate of how forecasted changes in the broader economy will affect
    the amount of receipts collected from this excise tax. The budget also
    includes an estimate that enactment of the Administration's inland
    waterways user fee proposal, submitted to the Congress in September
    2011, would generate $80 million in receipts in fiscal year 2013.
    However, the IWTF share of the spending proposed in the fiscal year
    2013 budget is financed using the expected revenues from the existing
    tax, not from the user fee proposal.
        Question. How sure are you of these projections?
        Answer. The increase in receipts from the existing tax is a
    projection. It represents a reasonable estimate based on forecasted
    changes in the broader economy, but it is only an estimate.
        Question. If this amount is not generated, what work will you have
    to curtail?
        Answer. That would, in part, depend on how much is collected during
    the remainder of fiscal year 2012. However, if the amount collected in
    fiscal year 2013 is significantly below $95 million, the Corps would
    have to curtail some work. One option would be to spend somewhat less
    on one of our two largest ongoing inland waterways construction
    projects, either the Olmsted Locks and Dam project or the Lower
    Monongahela Locks and Dams 2, 3, and 4 project.
        Question. In light of the new cost ceiling that the Administration
    is proposing for Olmsted Lock and Dam, what is the projection of the
    share of the Trust Fund that will be utilized over the next 10 years by
    Olmsted?
        Answer. That would largely depend upon progress to enact a long-
    term mechanism to enhance revenues in the Trust Fund sufficient to meet
    the cost-sharing authorized in the Water Resources Development Act of
    1986.
        Question. Several of our other locks and dams are in serious
    maintenance and rehabilitation needs. Is the funding that will be left
    after spending the necessary amounts from the IWTF to keep Olmsted on
    schedule sufficient to ensure that we will not see major failures of
    this critical infrastructure?
        Answer. Lock and dam maintenance is not funded by the IWTF. Major
    rehabilitation, however, would be in competition for funding with
    ongoing inland waterways construction projects. The fiscal year 2013
    budget prioritizes funds on those projects that have the highest level
    of commercial traffic, greatest risk of failure due to component
    conditions, and the greatest economic consequences of failure. The
    Corps continues to monitor the risk of component failures, that could
    disrupt or stop traffic. Every effort is made to use the available
    funding to reduce scheduled and unscheduled outages due to mechanical
    failures on both high and moderate use waterways.
        Question. I don't want to see one of these projects fail and
    disrupt commodity movements. These projects are getting older every
    year and if funds are not available from the Trust Fund, they have to
    come from somewhere. Has the Administration considered an aggressive
    maintenance schedule to ensure that we do not have a failure?
        Answer. The IWTF is used to fund construction activities, rather
    than operation and maintenance activities. The Administration has
    provided increased maintenance funding for those projects that provide
    the greatest economic and safety return.
                                   work plans
        Question. Due to the fact that we had a continuing resolution in
    fiscal year 2011 and the Committee policy for fiscal years 2012 and
    2013 is not to include earmarks in appropriation bills, the Corps has
    been given extraordinary leeway to expend funds for the prosecution of
    water resource projects. Unfortunately, the Committee has little say,
    outside of providing criteria to consider, as to how these work plans
    are assembled. We are unsure who, within the Administration, has input
    into their preparation. It is all very mysterious to us. One thing I
    can assure you based on my review of your work plans is that funding
    would be applied differently if the Congress were doing the earmarking
    rather than the Administration.
        It appears that since fiscal year 2011, funding in some cases is
    being applied to bring projects for which the Administration has a
    policy issue of some type to a logical stopping point. Is that the
    case?
        Answer. All ongoing projects were first evaluated for a minimum
    level of funding, for example, to complete an increment of useful work
    or to otherwise meet ongoing requirements. However, all projects
    competed for such funding, whether or not there was ``a policy issue of
    some type'' with the project. After projects were funded on that basis
    where needed, the Corps work plan for fiscal year 2011 allocated the
    remaining funding to policy-consistent work.
        Question. I want to make sure we understand. All of these are
    projects that meet the standard definition used for years to determine
    funding such as technically sound, environmentally sustainable, and
    economically viable?
        Answer. Some unbudgeted projects and even some previously budgeted
    projects with changed conditions no longer meet those standards.
        Question. Are these projects that meet the tests that I just named
    being considered for funding in subsequent work plans?
        Answer. All ongoing projects that could use funding in the
    applicable fiscal year would be considered for funding, with priorities
    to be given to work based on performance and on criteria provided in
    reports accompanying the appropriations.
        Question. If not, it would appear that utilizing the work plan
    funding is a way for the Administration to shut down all projects
    except those that meet your specialized criteria for budgeting. Is that
    the case?
        Answer. The Administration is committed to maximizing the return on
    the investment in Civil Works projects. In some cases, it is clear that
    continued Federal investment in certain studies or projects is not the
    best use of available funding. Bringing those projects to a logical
    stopping point allows the Corps to invest its resources to provide a
    greater overall return to the Nation, while allowing local sponsors to
    complete the other projects if they choose to do so.
        Question. How are local sponsors being impacted by these decisions?
        Answer. The Corps works very closely with local sponsors to ensure
    that they are fully aware of funding decisions and can plan
    accordingly.
        Question. Aren't costs incrementally increased by trying to find
    these logical stopping points as opposed to continuing construction?
        Answer. While funding could be used to advance those projects,
    providing that funding would divert resources from higher priority work
    elsewhere. Therefore, for lower priority work, reaching a logical
    stopping point is sometimes the best use of available funding. Even for
    those projects that are funded to logical stopping points, the work
    plans sought to ensure safe site conditions, meet legal requirements,
    and complete useful increments of work.
        Question. Won't this end up costing the national economy more in
    the long run if you continue to curtail these projects?
        Answer. It is possible that some projects would cost more, but the
    national economy as a whole will benefit if the funding is allocated to
    higher performing activities. The intent is to optimize the use of the
    available funding and to efficiently fund those projects that are
    expected to provide the highest return to the Nation.
                               contributed funds
        Question. In fiscal year 2012, the Congress provided additional
    authority to the Corps for contributed funds. These are funds that
    local sponsors gratuitously contribute to the Federal Government with
    no expectation of repayment, is that correct?
        Answer. Yes, this authority authorizes State and political
    subdivisions thereof to voluntarily contribute funds, with no repayment
    authorized.
        Question. How is this authority being utilized?
        Answer. In accordance with the law, the Corps may accept
    contributed funds for authorized studies and projects for all water
    resources development project purposes and for all phases of authorized
    projects. Every request is reviewed to ensure that the acceptance of
    such funds is legally appropriate, that the accomplishment of such work
    is advantageous in the public interest, and that the work will not
    negatively impact other work in the affected Corps district for which
    funds have been appropriated by the Congress. Prior to acceptance of
    contributed funds, the Congress first must have appropriated some
    Federal funds for the study or construction of the project,
    respectively. Upon receiving a proposal from the non-Federal sponsor to
    provide contributed funds, the Army provides notification to the House
    and Senate Appropriations Committees prior to negotiating an agreement
    for the acceptance of contributed funds.
        Question. Concern has been expressed that contributed funds could
    be undertaken ahead of budgeted work or other work the Corps
    undertakes. How is this new authority impacting the Corps' workload?
        Answer. The Corps is required to evaluate whether the work to be
    undertaken with contributed funds will impact ongoing work for which
    the Congress has appropriated funds. The Corps has sufficient expansion
    capacity to accomplish work funded from both sources. We do not
    anticipate any negative impacts on the execution of other ongoing work,
    as demonstrated by the recent experience with American Recovery and
    Reinvestment Act (ARRA) funding where the Corps executed $4.5 billion
    of additional work without any negative impacts to ongoing work.
        Question. Concern has also been expressed that the Corps would try
    to take on more architect-engineer type work in-house with contributed
    funds. Are you continuing to contract out at least the same portions of
    work that you have in the past as required in congressional direction?
        Answer. Yes, the Corps is continuing to contract out at least the
    same portions of work as in the past, consistent with congressional
    direction.
        Question. Are there any negatives to this contributed funds
    authority that the Committee should be aware of?
        Answer. At this time, we are not aware of any negative outcomes
    associated with this contributed funds authority. We will continue to
    monitor the use of this authority.
                              section 104 credits
        Question. As you are aware, the new policy on crediting has been
    extremely controversial in California and other States. I appreciate
    how you have worked with us to ensure that the language in section 2003
    was interpreted appropriately. I am not completely happy with the
    guidance that you recently released, but it is much better than the
    draft guidance. It is my understanding that credit will not be afforded
    prior to the draft report stage of the project. Is that correct?
        Answer. Yes. When a project partnership agreement has not yet been
    executed, an in-kind memorandum of understanding (MOU) must be executed
    prior to a non-Federal sponsor initiating construction work in order
    for such work to be eligible for credit. As provided in the guidance,
    an in-kind MOU for construction work may not be executed prior to the
    release of the draft feasibility report for public review.
        Question. There could be cases where that may be too restrictive
    for some flood control agencies that are trying to maximize flood
    protection for their citizens. In those limited cases, will you
    consider exceptions to this policy?
        Answer. Yes, exceptions to this policy will be considered in those
    very limited cases where a compelling reason can be demonstrated why
    the construction work for which credit is sought must be undertaken
    prior to the release of the draft feasibility report for public review.
        Question. If lands are purchased as a part of the credited work,
    are those lands generally credited against the lands required for the
    overall project?
        Answer. Yes. Section 221 does not alter any responsibility of a
    non-Federal sponsor to provide or pay for lands, easements, rights-of-
    way, relocations and disposal areas (LERRDs) for a project, nor does it
    affect the affording of credit for such LERRDs. Any LERRDs required for
    a project, including LERRDs associated with work determined to be
    integral to the project, will continue to be credited as LERRDs toward
    the non-Federal cost share.
                 interagency performance evaluation task force
        Question. After Hurricane Katrina, the Interagency Performance
    Evaluation Task Force was charged with looking at the technical issues
    surrounding the levee failures in New Orleans. Another group was
    charged with reviewing the policy and decisionmaking process that led
    to the system that was in place at the time. It is now 6\1/2\ years
    after Katrina yet funding remains in the budget request, at an even
    higher level than in the past. The justification shows an allocation of
    about $12 million through fiscal year 2012, but an additional $53
    million in funding needed to complete.
        What exactly is this funding for?
        Answer. The Interagency Performance Evaluation Task Force (IPET)
    assessment reviewed the technical issues associated with the
    infrastructure performance during Hurricane Katrina. The Hurricane
    Protection Decision Chronology (HPDC) reviewed the policy and
    decisionmaking associated with the New Orleans hurricane protection
    system over several decades leading up to Katrina. Those two
    assessments were the drivers for the Chief of Engineers announcement of
    the ``12 Actions for Change'' initiative in August 2006. That strategic
    program was initiated to incorporate the lessons learned from the two
    post-Katrina assessments into Corps policy, practice, and culture in
    order to modify the way the Corps plans, designs, constructs, and
    maintains its infrastructure. The ongoing program continues to be
    funded under the IPET/HPDC Lessons Learned Implementation remaining
    item. This is an ongoing program, aimed at continuous learning and
    application of lessons from Katrina and subsequent experience.
        The strategic program continues being executed by four national
    teams. The four national teams established multiple project delivery
    teams to execute specific tasks in support of the program. The teams
    have been working on policy, guidance, methods, tools, technology, and
    training to expand USACE's use of systems-based approaches, increasing
    the use of risk management in our business practices and
    decisionmaking, communicating risk more effectively, and giving greater
    priority to technical competence and professional accountability. While
    all actions are interrelated, each of the four teams has a focus area:
        Comprehensive Systems Approach.--Emphasizes an integrated,
    comprehensive and systems based approach incorporating anticipatory
    management to remain adaptable and sustainable over time. These changes
    require USACE to use collaborative, adaptive planning and engineering
    systems throughout the project life cycle to effectively manage its
    aging infrastructure in an environmentally sustainable manner through
    explicit risk management. Approximately $3.6 million has been allocated
    to this team through 2012. The fiscal year 2013 budget includes $3.6
    million to continue development of supporting technologies to improve
    the effectiveness of post-authorization evaluations and assessments of
    incremental change over time; address climate change impacts to water
    resources projects, with particular emphasis on developing the
    framework for how climate change and sea level change should be
    considered in making decisions for existing infrastructure investments;
    and continue to implement the consistent nationwide project datum and
    associated subsidence standards and certification.
        Risk Informed Decisionmaking.--Emphasizes integrated risk
    management. These changes require USACE to use risk and reliability
    concepts in planning, design, construction, operations and major
    maintenance and to improve its review of completed works program by
    including an assessment component with the goal of ensuring safe,
    reliable, and resilient infrastructure. Approximately $2.5 million has
    been allocated to this team through 2012. The fiscal year 2013 budget
    includes an additional $2 million to further develop supporting methods
    and technologies to support the transformation of Inspection of
    Completed Works from project element inspection to a risk-based system
    assessment; advance the understanding of risk and reliability including
    establishment of a Risk Gateway containing resources for webinars,
    training, and the development of a second generation risk model to
    broaden the techniques used in New Orleans for Corps-wide use.
        Risk Communication.--Emphasizes clear and candid communication of
    risk both internally and externally, supporting risk-informed
    decisionmaking. These changes require USACE to improve its
    effectiveness in communicating risk; to coordinate a risk management
    approach and policy with all agencies and stakeholders; and to
    specifically establish ways and means to increase public involvement in
    informed risk decisionmaking. Approximately $1.5 million has been
    allocated to this team through 2012 focusing most on risk communication
    skills. The fiscal year 2013 budget includes an additional $300,000 to
    provide training on public participation skills and methods. A pilot
    will also be conducted to test those methods in the USACE
    infrastructure environment.
        Professional and Technical Expertise.--Emphasizes professionalism
    and technical competence. The purpose is to enable development of
    expert Corps capability to provide safe, reliable, adaptable,
    sustainable systems. Approximately $1.5 million has been allocated to
    this team through 2012. The funds have been used to assess
    competencies, gaps, methods of delivery, and sustainable strategies for
    maintaining and building core competencies. The fiscal year 2013 budget
    includes an additional $100,000 to survey technical staff and input
    technical competencies into Army's Competency Management System, a
    recently developed tool that will help USACE managers to better
    integrate competency gaps into the hiring process.
        The total cost for the four focus areas, before consideration of
    post-2011 assessment activities, is $62 million. This figure does not
    include $9.9 million to update the system assessment to learn from the
    historic flooding of 2011, and develop ways to apply those lessons, as
    the scope and cost for the update were only recently developed.
        Question. Why aren't the new activities split out as a new start
    studies? It seems like this Katrina study is just morphing to fit
    whatever crisis is at-hand.
        Answer. The 2011 flooding in the Greater Mississippi Basin was
    among the largest and most damaging in this century, comparable to the
    major floods of 1927 and 1993. Due to the historic nature of the
    flooding, a post-flood assessment of the entire system performance is
    needed to review the operational decisionmaking process and to identify
    opportunities for improving future system operation and performance.
    The assessment is intended to evaluate performance of the overall
    system and the decision and communication processes and recommend
    operational changes, both within and outside of existing authorities
    and policies.
        The post-flood assessment and the New Orleans assessment are
    interdependent in that they employ similar analytic methods, contribute
    to the same objective (to improve the operations and performance of
    Civil Works water resources systems), and will be applied jointly to
    the modification of policy, practice, and culture. Consequently, the
    post-2011 flood assessment was integrated into the IPET/HPDC Lessons
    Learned Implementation remaining item.
        Question. Do you envision this as a permanent line item in the
    budget or is there a definitive endpoint to the proposed activities?
        Answer. The total cost for the scoped activities described above is
    $71.9 million, before consideration of future price level adjustments.
    The activities will compete for available funding until completed.
             performance-based budget and development of work plans
        Question. The Administration claims the budget funds the highest
    performing projects and programs in its water resources missions. It
    appears to us that the budget, as proposed, is woefully short of
    funding those projects that contribute to the national economy and
    provide benefits and services to the Nation through navigation and
    flood control. The Congress generally has increased the agency's budget
    above the Administration's request and expanded the list of projects
    and types of projects funded. Still, fundamental questions about what
    the agency does and how it operates are being asked by some observers.
    The perspectives on how to proceed among Members of Congress, project
    sponsors, fiscal conservatives, environmental interests, and other
    stakeholders vary widely.
        What performance-based criteria does the Corps use in determining
    how much funding it proposes for planning and construction projects?
    Not the individual projects or studies but the overall funding levels
    for the accounts?
        Answer. Performance criteria are not used to set account totals.
    Rather, the Corps evaluates each planning and construction project
    based on its individual merits, using the criteria applicable for that
    type of project, and account totals are established by considering the
    relative returns of investments among the various accounts, within the
    totals available for Civil Works.
        Question. It seems that the monetary benefits that Corps
    infrastructure provide to the national economy is not considered when
    determining funding levels. How do you determine the level of funds
    within each business line?
        Answer. Funding levels within each business line are determined at
    the project level and considering the relative return of investments
    within each business line, within the totals available for Civil Works.
                       white house navigation task force
        Question. We read with interest in the Administration's budget
    proposal to create a White House navigation task force.
        What is the scope and intent of this task force?
        Answer. Details of the task force's scope, intent, and composition
    are being developed. The task force will provide a forum for developing
    a broad strategy for investments in support of navigation and may also
    seek to coordinate amongst the many Federal navigation programs. The
    task force would develop this strategy through a multimodal view of the
    Nation's investments in navigation, whereas the Corps is focused on the
    type of infrastructure that the Corps has constructed and maintains.
        Question. Who will be included on the task force?
        Answer. Details of the task force composition are being developed.
        Question. Will the Corps get a seat at the table?
        Answer. Details of the task force composition are being developed,
    but we anticipate that the Corps would be involved.
        Question. What about the navigation industry?
        Answer. Details of the task force composition are being developed.
                         water resources modernization
        Question. The President's fiscal year 2013 budget proposes a new
    Water Resources Modernization Initiative as the foundation of a
    comprehensive strategy for investing in the Nation's water
    infrastructure. We are pleased that the President is committed to
    investing in a 21st Century Infrastructure for America--including its
    water infrastructure--as a means to strengthen the Nation's economy,
    create jobs, and bolster our long-term global competitiveness.
        What specific proposals will the Administration include in this new
    modernization initiative?
        Answer. The Administration and the Corps are exploring options for
    modernizing water resources laws, policies, and practices, including
    project financing. This effort will be very broad in scope. We want to
    consider what improvements are possible within existing law and policy,
    what the limitations of those improvements may be, as well as whether
    policy revisions or new authorities should be proposed. On the topic of
    funding, which is a part of this effort, the Administration has already
    proposed a user fee to help finance inland waterways capital
    investments. Proposals to change the way that the Nation finances
    investments in our other program areas may also be considered.
        We are open at any time to a discussion with the Congress, our
    cost-sharing partners, or other stakeholders on your and their
    suggestions to help us to improve current water resources laws,
    policies, and practices.
                                     ______

                  Questions Submitted by Senator Patty Murray
                   army corps of engineers--levee vegetation
        Question. Assistant Secretary Darcy, as you know from our previous
    conversations my home State and the entire west coast are very
    interested in the ongoing process regarding levee vegetation. Let me be
    clear--we must make sure that our levees are safe. But we also have to
    balance levee safety with meeting other requirements, such as the
    Endangered Species Act (ESA) and our Federal tribal treaty
    responsibilities.
        As you know, in the West vegetation on levees has been a critical
    tool in ensuring that levee sponsors are meeting ESA requirements and
    tribal treaty obligations. My colleagues from Washington State, and I
    have been working with you and your staff for several years on the
    draft Policy Guidance Letter (PGL) that will ultimately completely
    transform the process by which the Corps issues variances to allow
    levee vegetation.
        As I read the latest draft guidance, published in February, I'm
    pleased that some of the issue we've brought to your attention have
    been included. However, I continue to have concerns about how this PGL
    will actually be implemented on the ground.
        In particular, I am concerned about the ambiguity in the PGL
    regarding the ESA and tribal treaty obligations. I'm pleased to see the
    Corps acknowledge that these important requirements must be met, but
    can you please provide clarity on how the Corps will address this in
    variance applications or System Wide Implementation Framework plans?
        Answer. The Corps recognizes that in executing its authorities and
    responsibilities to promote structurally sound levee systems in
    furtherance of life safety, the agency must also address environmental
    and natural resource needs and the rights and interests of tribal
    nations through compliance with all applicable laws, regulations, and
    treaties. In instances where multiple interests are involved, the Corps
    will collaborate with levee sponsors, natural resource agencies, and
    tribal nations to develop solutions to meet the mandates of all
    applicable environmental and tribal requirements, while recognizing the
    paramount importance of protecting human life. The Corps and the levee
    sponsors will be able to use either the vegetation variance process or
    a more comprehensive system-wide improvement framework (SWIF) process
    to develop strategies for addressing the multiple objectives and
    constraints that may apply to a particular levee system.
        The Corps believes that a reasonable approach to addressing these
    responsibilities and developing sustainable solutions is to review the
    environmental impacts of the application of levee system standards as
    they are applied to the site-specific circumstances. With this
    approach, the Corps recognizes that each levee system is a unique
    flood-risk reduction system that operates within the broader and
    equally unique local ecosystem. This approach also recognizes that the
    analysis of potential environmental impacts is dependent upon future,
    undetermined actions and decisions of the levee sponsors who operate
    and maintain the levee systems.
        The Corps will work closely with the levee sponsors, appropriate
    resource agencies and tribal nations, as well as other interested
    parties, to complete the environmental compliance process. As part of
    that process, the levee sponsors will be required to:
      --provide the background information and documentation necessary to
            complete environmental requirements; and
      --implement any measures that are required as a product of the
            environmental compliance as a condition of their choosing to
            participate in the program for rehabilitation assistance under
            Public Law 84-99.
    Environmental compliance on levee systems operated and maintained by
    the Corps remains the responsibility of the Corps.
        Question. The Seattle District in my home State of Washington has
    been intimately involved in managing vegetation on levees for many
    years and has an on-the-ground working knowledge of the region. I
    understand the need for Corps Headquarters to be involved in this
    process but have concerns about Headquarters employees who have never
    been on the ground in my State making final decisions on something this
    important. As you finalize the PGL, what steps will you take to
    delegate decision authority for the approval of variances and SWIF
    plans to the District or Division level?
        Answer. Both the vegetation variance process and SWIF policies will
    be reviewed periodically and process improvements will be considered,
    including future delegation of decision authority, based on
    demonstration of consistent application of the PGL nationally and
    lessons learned.
        Question. Ms. Darcy, making a change of this magnitude in the
    process for variance applications is likely to be costly to levee
    sponsors--particularly in the Washington, where as I mentioned we have
    had a District-wide variance in place for several years. What financial
    and technical resources will the Corps provide to levee sponsors who
    want to stay eligible for the Public Law 84-99 program, but do not have
    the capacity to develop the technical elements needed to complete a
    variance application or a SWIF plan?
        Answer. The Corps will work closely with levee sponsors to help
    determine the most viable option to meet Corps policies and standards.
    Both the vegetation variance process and SWIF policy encourage a
    collaborative approach. The Corps will assist levee sponsors through
    these processes by providing technical expertise, levee data (if
    available), and other applicable subject matter experts. For example,
    the vegetation variance process encourages involving the Corps
    vegetation experts as part of the scoping of variance packages, to
    determine early in the process the required environmental and
    engineering analysis.
        Question. The Corps' own Engineering Research Development Center
    (ERDC) analysis of levee vegetation produced--at best--mixed results.
    The ERDC report indicates that, in contrast to the standing Engineer
    Technical Letter (ETL), vegetation can actually be good for levees in
    some cases. It is critical that the Corps provide resources for
    continued scientific investigation into this issue. What are your
    plans, with ERDC, to implement a prioritized research program to
    provide a regionally appropriate, technical basis for a vegetation
    management policy that supports our shared objectives of safe levees,
    riparian habitat that supports salmon recovery and meets ESA
    requirements, and cost-effective management for levee sponsors and the
    Corps?
        Answer. The results of the initial ERDC vegetation research
    indicated that:
      --In some cases, tree roots could have a potential shallow
            reinforcing effect that improves slope stability, but the
            weight of the tree and wind loads on the tree could have a
            negative impact on overall deeper seated slope stability; and
      --At some locations where a tree was found to increase the factor of
            safety under one set of conditions, that same tree was found to
            decrease the factor of safety when other likely conditions were
            considered.
    Overall, impacts of vegetation on levees remains a complex topic, and
    the Corps intends to conduct additional research and work with external
    scientific professionals to further identify future vegetation research
    topics that address both short-term and long-term needs. A follow-up
    ERDC report on this topic is being developed.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu
        Question. Secretary Darcy and Major General Temple, thank you for
    your testimony today. As you know, Corps of Engineers projects are
    vitally important in Louisiana. For decades, the people of my State
    have been fighting a noble battle to save the most productive and
    environmentally significant coast and delta in the world. We are losing
    25 to 35 square miles of wetlands per year--about a football field an
    hour--which places millions of lives and critical national resources at
    alarming risk.
        While I have concerns about many Corps issues, I recognize that the
    Corps has consistently been woefully underfunded, which presents great
    challenges in addressing the needs of Louisiana and the Nation.
        I am pleased to see that the Administration requested funding for
    Louisiana Coastal Area projects. However, we simply must find a way to
    make greater investment in critical flood protection, navigation, and
    restoration projects. Some people may say that this country cannot
    afford these investments--I say we cannot afford not to make them. Last
    year's historic flooding along the Mississippi River provided a perfect
    example of how wise and timely investment in construction and
    maintenance can save lives and resources.
        Since 2008, the Corps' construction budget has been reduced by more
    than 50 percent, yet our backlog is greater than $60 billion in
    projects nationwide. This near halt in construction funding has dire
    consequences across the country. But it is most concerning after what
    we learned in Louisiana from Hurricanes Katrina and Rita--the approach
    of ``patch and pray'' when it comes to flood protection does not work.
        I also have continued concerns about insufficient funding to
    address the Nation's dredging needs, particularly when channel users
    pay a fee that would cover the costs, but the total amount being
    collected is not being used for dredging. On average, full channel
    dimensions are available only one-third of the time at the busiest 59
    harbors in the United States. I am pleased that the budget provides a
    12-percent increase from last year's request for use of Harbor
    Maintenance Fund dollars, including an increase for dredging on the
    Lower Mississippi, but this still will not meet the needs of the Nation
    or the State of Louisiana.
        As you know, I have been frustrated by the number of years the
    Corps spends studying projects. In Louisiana, time is not on our side,
    and we cannot afford 10 years to study flood control and restoration
    projects. I understand the Corps is working toward more efficient
    processes. Can you provide some details about the Corps efforts to
    decrease the number of years spent studying projects?
        Answer. A new planning modernization initiative was introduced in
    January 2011 that is focused on risk-based scoping to define the
    appropriate levels of detail for conducting investigations, so that
    recommendations can be captured, succinctly documented, and completed
    within a goal of 18 months. Corps leadership has issued guidance
    mandating all typical feasibility studies be completed in 18-36 months.
    The proposed process should dramatically shorten the amount of time and
    cost of conducting planning studies and increase corporate and
    individual accountability for decisions. This process will save time
    and money for both the Federal Government and the project sponsors.
        As part of this initiative, all ongoing feasibility studies are
    under review. The Corps will reclassify to inactive those studies with
    limited likelihood of success, so funding can be focused on the most
    credible and viable projects to improve feasibility study execution and
    delivery. Studies that are classified as inactive will be considered
    for future year funding, but this approach will enable the Corps to
    more efficiently fund those studies that are most likely to result in
    high-performing projects.
        I continue to hear from a number of concerned ports, businesses,
    and citizens about consistent navigability along the Lower Mississippi
    River. The Corps was responsive to these concerns and provided
    additional dredging dollars earlier this year, but I believe we need to
    be more proactive. The Mississippi is the central artery for navigation
    for nearly the entire Nation. As you know, 40 percent of the entire
    continent is drained by the Mississippi River Delta. This drainage
    basin (approximately 1,234,700 square miles) covers about 40 percent of
    the United States and ranks as the fifth largest in the world.
        The inland waterways of the United States include more than 25,000
    miles (40,000 km) of navigable waters. Much of the commercially
    important waterways of the United States consist of the Mississippi
    River System--the Mississippi River and connecting waterways.
        Question. I appreciate the increase for dredging on the Lower
    Mississippi, but does your request provide enough funds to ensure that
    the Mississippi River remains open for business at the maximum
    authorized depths?
        Answer. The Corps will continue to keep the river open for
    navigation, except during flood or other emergencies. The river will be
    dredged to the maximum authorized depth in some areas. In other
    reaches, there could be some reductions in channel width at certain
    times of the year, as is the case with other navigation projects around
    the country. The budget includes $81.7 million for the Lower
    Mississippi River Baton Rouge to the Gulf project, which is the highest
    amount ever budgeted for this project. The Corps monitors the channel
    conditions on a regular basis and uses the information to schedule
    dredging activities and maintain navigation.
        Question. How are you balancing this critical need with the needs
    that other essential waterways are facing across the State of Louisiana
    and the Nation?
        Answer. The Corps focuses on funding those navigation projects with
    the highest level of commercial usage, greatest risk of failure, and
    greatest economic consequences. Other factors taken into consideration
    include:
      --whether the project serves as a critical harbor of refuge or a
            subsistence harbor, or supports public transportation, U.S.
            Coast Guard search and rescue operations, the national defense,
            or other Federal agency use; and
      --the reliance on marine transportation for energy generation or home
            heating oil deliveries, and the level of commercial use (albeit
            less than a medium level of commercial use).
                                inland waterways
        Question. Ms. Darcy, I have grave concerns regarding the Olmsted
    Lock and Dam project. This project was authorized by the Congress in
    the Water Resources Development Act of 1988 at an estimated project
    total cost of $775 million. The most recent cost estimate is more than
    $3 billion. The August 1985 Corps of Engineers feasibility report that
    the Congress used to authorize the project in 1988 assumed a 7-year
    duration. Funds to initiate construction of the Olmsted project were
    appropriated in fiscal year 1991, which means the project should have
    been complete in 1998.
        Can you provide an update on the project's current status and an
    explanation of the inordinate delays and the cost increases associated
    with those delays? Would you say it about 50-percent complete? What is
    the Corps projection for completion year?
        Answer. The Olmsted cost increase to $2.918 billion (October 2011
    price levels) is attributed primarily to low initial estimate, which
    increased substantially in light of construction and contractual
    complexities associated with the innovative ``in-the-wet'' construction
    technique. This method also lengthened the duration of construction
    which pushed costs into an unanticipated period of higher than average
    inflation associated with building materials utilized for construction.
        There are several factors that have contributed to the low initial
    cost estimate. Factors that were unknown when the project was
    authorized include the negative impacts on productivity due to river
    conditions (elevation and velocities) and the complexity of shell
    fabrication necessitated by the seismic condition at the site. Early
    on, a decision was made to use the innovative ``in-the-wet''
    construction method. After constructing and setting the first set of
    shells in 2010, the government and contractor realized that the effort
    associated with fabrication and setting these large pieces of precast
    concrete and filling them with tremie concrete was not like any work
    they had previously experienced or previously had estimated. The
    construction challenges associated with developing this innovative
    method of construction have been overcome, but required a lot more
    effort than was originally envisioned.
        Roughly 77 percent of the increase in the estimated total cost of
    the project, in real terms (above inflation) is associated with the
    increase in the cost of constructing the dam.
        The project will be approximately 50-percent complete by the end of
    fiscal year 2012.
        The Army Corps is working on a Post Authorization Change Report on
    the Locks and Dams 52 and 53 Replacement project (Olmsted Locks and
    Dam), Illinois and Kentucky. The report re-estimates the project's
    benefits and costs and on that basis recommends that the Congress raise
    the authorized total cost for the project to $2.918 billion (October
    2011 price levels). This is roughly a 95-percent increase in real terms
    from the total cost now authorized--$775 million (October 1987 price
    levels). The budget includes a general provision to authorize this
    proposed increase in the total cost for the project, and provides $144
    million to continue construction of the project in fiscal year 2013.
    The Post Authorization Change Report is currently under review and is
    expected to be transmitted to the Congress shortly.
        The report estimates that the Olmsted Locks and Dam part of the
    project will become operational in fiscal year 2020, based on the
    minimal project features required for the dam to hold the pool and pass
    navigation through the locks. Physical Completion for the dam contract
    is projected to be in fiscal year 2021, including contractor de-
    mobilization and equipment salvage. The remainder of the work,
    including other required facilities, buildings and grounds, river
    dikes, demolition of Locks and Dams 52 and 53 and permanent operating
    equipment is projected to be finished in fiscal year 2024, thus
    completing the project.
        The schedule in the report assumes that the Corps will spend an
    average of about $150 million per year on this project, consistent with
    recent funding levels and the level of receipts to the Inland Waterways
    Trust Fund (IWTF) under current law.
        The report estimates that the maximum that the Corps could use
    efficiently and effectively on the remaining work on this project is
    around $215 million per year, or roughly $65 million more per year than
    the $150 million per year funding stream assumed in this report.
    Enactment of legislation that provides additional receipts to the IWTF
    would be necessary to reach the higher level of funding, which could
    cut up to 3 years from the project schedule, resulting in savings of
    approximately $150 million.
        Question. What is the Corps doing to address concerns about the
    experimental ``in-the-wet'' construction approach currently being used
    to construct the project? Have you considered going back to the
    traditional cofferdam construction approach?
        Answer. The Corps has assembled a team of experts to consider
    alternative construction techniques. The team is developing a concept
    level design for ``in-the-dry'' construction to a degree that can be
    used to prepare a reliable cost estimate and schedule suitable for
    comparison to the ongoing ``in-the-wet'' construction for the navigable
    pass portion of the dam. The Corps will evaluate the team's
    recommendation based on the concept level design and certified cost
    estimate by the summer 2012 to determine the most cost-effective way to
    complete construction.
        Question. What impact do the delays and cost increases have on
    other inland waterway construction projects? (Note: The Inner Harbor
    Navigation Canal Lock Replacement Project has been waiting for
    replacement for more than 50 years.)
        Answer. For the Civil Works program as a whole, completing the
    Olmsted project is a priority. Based on the current level of revenues
    to the IWTF, the Post Authorization Change Report includes a schedule
    based on continued funding of the Olmsted project at approximately $150
    million annually. Enactment of legislation that provides additional
    receipts to the IWTF would be necessary to reach the higher level of
    funding for the Olmsted project, which could cut up to 3 years from its
    schedule and also result in savings of approximately $150 million. Work
    on some other inland waterways projects is being suspended due to a
    lack of resources in the Trust Fund to continue construction. This
    highlights the importance of enacting a long-term mechanism to increase
    receipts to the IWTF.
        Question. I understand that by September 30, more than $748 million
    will have been allocated from the IWTF for the Olmsted project. This
    means that the inland waterway industry has already paid double the
    amount that was intended when the project was authorized, the same is
    true for the general taxpayer.
        What are the average annual economic benefits that the Olmsted
    project is expected to return to our national economy when the project
    is finally completed? Is this average annual economic benefits figure
    also a measure of the cost to the Nation's economy of each year that
    the Olmsted project's completion is delayed?
        Answer. Average annual net benefits, that is, total average annual
    benefits less the total annual construction, operation, and maintenance
    costs needed to generate those benefits, is an appropriate measure of
    the long-term economic impact of the Olmsted project. Economic analyses
    in the draft Olmsted Locks and Dam Post Authorization Change Report,
    which is currently under review, indicate that the Olmsted project will
    generate an estimated $875 million in total average annual National
    Economic Development (NED) benefits. The average annual cost required
    to generate those NED benefits is estimated as $235 million. Thus, the
    indicated average annual net benefit is an estimated $640 million.
        These estimates reflect differences in benefits and costs over a
    theoretical 50-year period, after discounting. They do not reflect the
    benefits and costs associated with any particular subset of those
    years, such as the actual construction period. The estimates also are
    based on a variable discount rate, as provided in section 80 of the
    Water Resources Development Act of 1974, which does not reflect the
    long-term opportunity cost of capital for the economy as a whole.
    Finally, any delay in project completion at this point is due to the
    low level of receipts in the IWTF. The Administration has proposed
    legislation to address that problem.
        Question. From this point forward, what is the amount of additional
    economic benefits that will be lost to the Nation's economy because of
    further delays in the Olmsted project's completion?
        Answer. The Olmsted cost increase to $2.918 billion (October 2011
    price levels) is attributed primarily to a low initial estimate, which
    increased substantially in light of construction and contractual
    complexities associated with the innovative ``in-the-wet'' construction
    technique. This method also lengthened the duration of construction,
    which pushed costs into an unanticipated period of higher than average
    inflation associated with building materials utilized for construction.
        The schedule for this project reflects the nature of the work that
    remains. It changes over time, as the Corps incorporates lessons
    learned and reassesses the challenges that it will encounter in
    completing this complex engineering project. When the project is
    complete, the Nation's economy will realize all of the project's
    benefits. The ``delay'' reflects the magnitude of the challenge, which
    has been more daunting than expected.
        For the 91 million tons of traffic that pass through Locks and Dam
    52 and the 81 million tons that pass through Locks and Dam 53 annually,
    Olmsted offers a new reliable project in place of the two aging and
    unreliable projects. Much of the savings estimated in the Post
    Authorization Change Report occur from avoiding anticipated cyclical
    lock maintenance service disruptions at Locks and Dams 52 and 53.
    Completing Olmsted will also save $32 million annually in Federal
    maintenance costs now spent to maintain the locks and dams to keep them
    operating.
                      beneficial use of dredged materials
        Question. I understand that approximately 50 million cubic yards of
    dredged material are dumped into the ocean annually.
        Can you provide any general data about how beneficial uses--such as
    nourishment of beaches with clean sand or development of wetland
    habitats--compare to current and other alternate disposal options?
        Answer. The Corps strives to use dredged material beneficially when
    technically feasible, environmentally acceptable, and cost effective.
    Corps regulations (CFR 335.7, 53 FR 14902) require the Corps to
    identify the least costly dredged material placement alternative that
    is consistent with sound engineering practices and meets all Federal
    environmental requirements. This is known as the Federal Standard or
    Base Plan. In some cases dredged material may be used beneficially at
    about the same cost as the Federal Standard. However, the majority of
    beneficial use options are typically more costly than other placement
    options, and there would need to be a non-Federal sponsor willing to
    pay all or a portion of the additional costs beyond the placement
    method found to be the least costly, environmentally acceptable method
    for the navigation project.
        Question. Can you tell us more about the Corps Regional Sediment
    Management Program? I understand it is still in its infancy but am
    interested in hearing about its successes and about plans to expand the
    program.
        Answer. The Regional Sediment Management (RSM) program supports
    sustainable solutions to optimize the use of sediments to benefit a
    region. Under the RSM program, the Corps has been successful in
    identifying and understanding regional sediment transport processes
    along the Nation's shorelines and is now applying this knowledge to
    implement solutions to better manage and use sediments. These solutions
    span multiple projects, programs, State, local, and political
    boundaries and allow the Corps to better manage sediment regionally.
        Examples of key successes of the RSM program include the
    Jacksonville District's St. Johns County, Florida RSM initiative, which
    linked navigation channel maintenance dredging with the adjacent shore
    protection project to leverage funds, technical capabilities, and most
    importantly, manage the sediment to accomplish the missions of both
    projects. The Mobile District is working with stakeholders to develop
    an RSM strategy to place material dredged from the Upper Mobile Harbor
    within Mobile Bay to create 1,000 acres of marsh habitat. The strategy
    will reduce the amount of sediment taken to the offshore placement area
    40-miles south of the Upper Mobile Bay navigation channel and provide
    environmental benefits. The Portland District has collaborated with
    stakeholders to identify and permit four near-shore placement areas for
    the mouth of the Columbia River. Rather than placing material in the
    offshore deepwater placement area, where sediment is lost to the
    system, the material will be placed in the new near-shore sites to feed
    adjacent shorelines, create environmental habitat, and assist with
    maintaining the jetty infrastructure by reducing erosion along the base
    of the structure.
        The RSM program will continue to move forward engaging stakeholders
    to adopt regional approaches to sediment management. Approximately $1.8
    million is included in the fiscal year 2013 budget for the RSM program.
                              wetlands mitigation
        Question. The Corps New Orleans District Office recently adopted
    the Modified Charleston Method (MCM) to determine mitigation
    requirements for 404 permits. I understand that in some cases, the
    mitigation ratio has more than doubled. This drastic increase in
    mitigation requirements has caused a significant economic impact and
    has the potential to bankrupt vital public works projects and
    development efforts.
        The New Orleans District's response to public comments on the
    adoption of the new method states that they did ``not have the
    resources to conduct an economic impact study'' regarding the impacts
    of MCM implementation. How is the Corps working to balance
    environmental impact, economic concerns, and the need to proceed with
    important public works projects?
        Answer. An economic analysis is not required prior to adopting and
    implementing impact and mitigation assessment methodologies. However,
    the Corps does consider the effects to the regulated public when
    adopting new policies or guidance. In this case, the need to provide
    applicants and our regulatory staff with a rapid and repeatable method
    to assess impacts and mitigation in a consistent and predictable manner
    was a major consideration in the adoption of the MCM. When planning
    projects that may require work in wetlands, applicants should be aware
    that the Corps evaluates each project to determine compensatory
    mitigation requirements for unavoidable impacts in accordance with the
    Federal mitigation rule. The applicant can use the MCM to assess the
    impacts and to determine the amount of mitigation that may be required
    and then contact existing mitigation banks within the watershed to get
    an estimate of the mitigation cost. This information may be used by the
    applicant in its economic analysis for its proposal. The applicant may
    determine that the cost of mitigation is excessive and then work to
    redesign the project to avoid or minimize wetland impacts so that costs
    associated with mitigation are reduced.
        We have examined the impacts of the MCM on mitigation requirements
    for permits issued between May 2011 and October 2011 and our analysis
    reveals that the mitigation ratios have increased from 1.6:1 to 2.4:1
    on an acre basis. Although this shows an increase, the ratio does not
    represent a doubling of mitigation requirements.
        Subsequent to the publication of the Federal Mitigation Rule in
    April 2008, applicants are required to include in their application ``.
    . . a statement describing how impacts to waters of the United States
    are to be avoided and minimized. The application must also include
    either a statement describing how impacts to waters of the United
    States are to be compensated for or a statement explaining why
    compensatory mitigation should not be required for the proposed
    impacts.'' Our mitigation rule encourages the use of assessment tools,
    if available, when determining mitigation requirements.
        A permit is issued if the district commander determines that the
    proposed project complies with the section 404(b)(1) guidelines and is
    not contrary to the public interest. Mitigation for unavoidable impacts
    is part of this determination. Our goal is to provide applicants with a
    balanced decisionmaking process to ensure aquatic resource protection
    while allowing economic development to move forward in accordance with
    Federal laws and regulations.
        New Orleans District MCM is an improvement over the previous
    process used for reviewing mitigation proposals. Previous mitigation
    estimates were based on the best professional judgment of the
    individual project managers reviewing the mitigation proposal.
    Comparatively, the MCM methodology provides a framework for more
    consistent, repeatable, and objective results. The MCM is rapid enough
    for the applicant to use and provides the applicant the ability to
    estimate their mitigation requirements based on the types of resources
    they propose to impact and other factors. Other factors that are
    considered include those that are related to the type of impact that is
    proposed, such as rarity of the habitat, habitat condition, degree of
    hydrologic disturbance, length of time impacts are expected to last,
    the type of impact (e.g. clearing, draining, dredging, filling, etc.),
    and potential cumulative impacts. Some of the mitigation factors
    considered include type of mitigation (re-establishment,
    rehabilitation, enhancement, etc.), the type of legal protection the
    mitigation site will have, the time it will take to restore lost
    functions, and when the mitigation will be performed.
                                     ______

               Questions Submitted by Senator Frank R. Lautenberg
        Question. I was pleased to see that the fiscal year 2013 budget
    includes $1 million for a study to find a long-term solution to chronic
    flooding in the Passaic River Basin. However, it will take at least 3
    years for construction to begin on a solution. How can the Corps
    expedite this project to ensure that families in the basin have flood
    protection as soon as possible?
        Answer. The Corps is currently realigning all feasibility studies
    to complete the most viable studies within 3 years. This process will
    expedite projects that are both likely to be found in the Federal
    interest and have strong sponsor support to be recommended for new
    start construction. The first phase of the Passaic River Basin study is
    designed to provide the non-Federal sponsor with an opportunity to
    determine alternative(s) on which to proceed to a Detailed Analysis
    Phase.
        Question. The budget requests funding for six new Army Corps
    studies. However, the budget does not include funding for several
    critical ongoing New Jersey studies, including the Rahway River Basin,
    the South River-Raritan River Basin, the Millstone River-Stony Brook
    and the Peckman River Basin projects.
        What criteria did the Army Corps use to determine which projects
    were included in the budget request? For all categories of project
    activity and budget accounts, please include specific factors as well
    as an explanation of how each factor influenced the decisionmaking
    process. If there was a benefit to cost-ratio threshold that had to be
    met, please indicate what that value was for each category.
        Answer. The four New Jersey studies, the Rahway River Basin, the
    South River-Raritan River Basin, the Millstone River-Stony Brook, and
    the Peckman River Basin are all flood risk management studies. The
    primary criteria that the Army used to determine which studies were
    included in the budget for the Flood Risk Management business line
    were:
      --study phase;
      --study completion date;
      --population at risk which is represented by the number of people
            living, working and transient located in the study inundation
            area for the design level recommended;
      --population affected by flooding which is the number of people
            located in floodplain afforded risk reduction by the project at
            the design level;
      --the flooding risk depth; and
      --benefit to cost ratio for preconstruction engineering and design
            projects.
    The Army also takes other factors into account, including the potential
    risk reduction, the environmental benefits to a community, and
    leveraging Corps resources to provide the highest return for the
    Nation.
        Question. What specific factors led to the decision to exclude the
    following New Jersey projects from the budget request: Rahway River
    Basin, South River-Raritan River Basin and the Stony Brook-Millstone
    River and the Peckman River Basin? Please include a detailed
    explanation for each project.
        Answer. While there are many worthwhile programs, projects, and
    activities nationwide, the fiscal year 2013 budget focused on the
    highest performing studies nationally. Each study was evaluated based
    on its performance, including public safety as well as economic and
    environmental benefits. The specific factors that led to the decisions
    to exclude the four New Jersey projects from the budget request are:
        Rahway River Basin, New Jersey.--The population at risk is
    approximately 23,000 people and the population affected by flooding is
    approximately 2,000 people. The flooding risk depth is 10 feet. This
    feasibility study was not included in the fiscal year 2013 budget due
    to low population affected by flooding relative to other competing
    needs elsewhere in the Nation.
        South River-Raritan River Basin, New Jersey.--The population at
    risk is approximately 146,000 people, and the population affected is
    approximately 21,000 people. The benefit to cost ratio for this project
    is 2.2 to 1. The flooding risk depth is 13 feet. This project was not
    included in the fiscal year 2013 budget due to low population affected
    by flooding relative to other competing needs elsewhere in the Nation
    and the benefit to cost ratio of 2.2 to 1 that would make this project
    a lower priority for consideration of future construction funding.
        Stony Brook, Millstone River Basin, New Jersey.--The population at
    risk is approximately 125,000 people and the population affected by
    flooding is approximately 5,000 people. The flooding risk depth is 9
    feet. This feasibility study was not included in the fiscal year 2013
    budget due to low population affected by flooding relative to other
    competing needs elsewhere in the Nation.
        Peckman River Basin, New Jersey.--The population at risk is
    approximately 265,000 people and the population affected by flooding is
    approximately 172,000 people. The flooding risk depth is 7 feet. This
    study was not included in the fiscal year 2013 budget due to the low
    population affected by flooding relative to other competing needs
    elsewhere in the Nation.
        Question. What specific factors led to the decision to include in
    the budget request only project monitoring funds for the Barnegat Inlet
    to Little Egg Harbor Inlet project and to exclude the Townsends Inlet
    to Cape May Inlet project? Please include a detailed explanation for
    each project.
        Answer. Both the Barnegat Inlet to Little Egg Harbor Inlet project
    and the Townsend Inlet to Cape May Inlet project were evaluated based
    on their performance, including contributions to public safety as well
    as economic and environmental benefits of each project. Barnegat Inlet
    to Little Egg Harbor Inlet was funded in fiscal year 2013 to continue
    project monitoring after construction. Construction funds for the
    Townsend Inlet to Cape May Inlet project were not included in the
    fiscal year 2013 budget due to the low benefit-cost ratio (BCR) (1.5 @
    7 percent) and relative ranking to many other competing needs
    throughout the Nation.
        Question. I am pleased to see that the Corps has initiated a pilot
    program to decrease the time it takes to plan and study projects. What
    has the Corps learned to date from this pilot program? What are the
    next steps in this review? Can the Corps expand this effort to include
    a review of potential options to increase the pace of the complete
    lifecycle of projects, from initial study through the completion of
    construction?
        Answer. The National Pilot Program for Feasibility Studies was
    initiated in February 2011 to identify means to shorten the timeframe
    for pre-authorization study completion while retaining the quality of
    the analyses and decisions. The Pilot Program has affirmed that
    increased focus on the scope of each study leads to more effective
    decision documents and that early characterization of the risk
    associated with each study, and management of that risk, reduces
    uncertainty in the iterative planning process. No additional pilot
    studies are being proposed at this time as the intent is to now apply
    the lessons learned from these pilot studies to all active feasibility
    studies by fiscal year 2014. The Corps continues to develop and refine
    methodologies and processes for feasibility studies across all business
    lines in a manner that will be sustainable, replicable, and will inform
    future Civil Works guidance.
                                     ______

                   Questions Submitted by Senator Jon Tester
                  missouri river flood infrastructure recovery
        Question. The Corps has been spending down the emergency funding
    that was provided last year to rehabilitate damaged flood control
    structures following the flood of 2011. Brigadier General McMahon will
    want to review the progress of those repairs, the remaining work to be
    done, and the funding available. Of particular interest to Montana is
    the maintenance to the Fort Peck Dam. The area beneath the spillway was
    substantially washed out due to sustained record releases from the dam,
    which the Corp will need to address. In addition, of the three channels
    for releasing water from Fort Peck (powerhouse, spillway, and bypass
    tunnels) for several years, only two have been operable as the ring
    gates leading to the two bypass tunnels at Fort Peck have been
    inoperative. As the spillway will be out of commission during repairs,
    unless the ring gates are brought back online, the powerhouse will be
    the only apparatus for releasing water from Fort Peck. Doesn't prudence
    require repairs to the ring gates as an adjunct to the spillway
    repairs, and shouldn't that necessity allow emergency funds to be used
    for both projects?
        Answer. The Corps is finalizing design for the spillway repair, and
    the current solution allows for flexibility to operate the spillway up
    to the levels observed in 2011 (if necessary) during repair activities
    without substantial additional damages. As a result, while the ring
    gates will require repair in the future, the current repair of the
    spillway structure is not dependent upon a fully functional ring gate
    system. Since the ring gates were not damaged during the flood of 2011,
    repair of the ring gates is not, on its own, eligible for use of
    emergency supplemental funding.
                        yellowstone river corridor study
        Question. The Corps is in the process of funding a study of the
    cumulative effect of the Yellowstone River, in cooperation with the
    Yellowstone River Conservation District Council. The council has
    requested funds to complete the study by the end of 2015. This decision
    was prompted by members of the Technical Advisory Council who have been
    working on the study in some cases well past their retirement, but
    whose institutional memory is vital to the project. These members can
    not make an unlimited time commitment but have elected to see the
    project through to completion given that it does not extend past 2015.
    Will the Corps make every attempt to provide sufficient funds to
    complete the study by the Council's deadline?
        Answer. The Corps is working with the project sponsor, as well as
    the State and Federal agencies involved in the study, to define what
    can realistically be achieved by the Council's 2015 deadline. The
    fiscal year 2013 budget includes $200,000 for this study. This study
    will be considered, along with many other worthwhile programs,
    projects, and activities for the funding necessary in fiscal year 2014
    to complete a high quality study by the Council's 2015 deadline.
                    missouri river authorized purposes study
        Question. For several years, a study has been conducting a
    comprehensive re-examination of the economic benefits of the various
    authorized purposes of the Missouri River. Recently, flooding on the
    Missouri has made the importance of completing this study even more
    apparent. However, at the urging of the House, last year's
    appropriations bill included a rider prohibiting any use of funds for
    Missouri River Authorized Purposes Study (MRAPS). At the same time,
    some members from the basin have advocated for legislative changes to
    the authorized purposes, even in the absence of the completed study.
    The prohibition on funds for the study was, to some degree, academic,
    because the Corps has not budgeted to advance the study in either the
    fiscal year 2012 or fiscal year 2013 budget request. How will the
    Corps, through budgeting and use of discretionary funds, advance the
    critical work of re-examining the way the management of the river has
    performed, and further inform the Congress as policy changes are
    contemplated?
        Answer. A limited amount of coordination may continue, as
    requested, utilizing unexpended carry over from fiscal year 2010, but
    the Corps is not expending any fiscal year 2012 funding to continue
    efforts on this study. The Army continues to evaluate each planning and
    construction project based on its individual merits, using the criteria
    applicable for that type of project and then to fund those projects and
    studies with the highest return to the Nation. This activity will
    continue to be considered along with many other worthwhile programs,
    projects, and activities competing for funds across the Nation.
                           intake dam rehabilitation
        Question. The Army Corps of Engineers is currently in the process
    of rehabilitating the irrigation diversion dam near Intake, Montana for
    passage of the pallid sturgeon. Since cost estimates for the original
    design skyrocketed to more than $100 million, USACE has been re-
    evaluating alternatives. It is critically important that whatever
    alternative is selected function well to meet the needs of both the
    irrigators and the wildlife. The intake to the irrigation canal must
    function well despite the absence of the originally modeled rock ramp.
    Furthermore, the fish passage must function to facilitate sturgeon
    recovery on the river. What has been the Corps's process of engaging
    with stakeholders as this project advances, and can they assure the
    subcommittee that the selected alternative will serve the needs of the
    irrigators and the sturgeon?
        Answer. Phase I of this project to construct new headworks with
    fish screens is complete and currently operational. The structure will
    meet the full needs of irrigators for this irrigation season. The
    structure will also prevent annual entrainment of hundreds of thousands
    of native fish, including pallid sturgeon, into the irrigation canal.
    The existing dam crest, which has historically been maintained by the
    irrigation district to provide required flows into the canal, will
    continue to require maintenance to the required elevations. The rock
    ramp alternative would have required similar adjustment to the dam
    crest. Any future fish passage alternatives will continue to
    investigate the dam crest elevations within the overall project
    objectives to ensure the best opportunity for successful fish passage
    to include recovery of the pallid sturgeon.
        Reformulation and feasibility evaluation of fish passage
    alternatives has been undertaken by a multiagency partnership including
    the Corps, Reclamation, Fish and Wildlife Service, Montana Department
    of Fish Game and Parks, the U.S. Environmental Protection Agency, the
    Lower Yellowstone irrigation district, and others. All of the agencies
    that are engaged in the decisionmaking process for this project are
    focused on meeting the needs of the irrigation district, the
    requirements of the Endangered Species Act as it applies to the pallid
    sturgeon, and all other applicable State and Federal regulations.
        Regular engagement of the stakeholder agencies has been maintained
    throughout the design process via both face-to-face meetings and
    periodic teleconferences. A revised Environmental Assessment is
    currently under development and will have numerous levels of review to
    include Independent External Peer Review (IEPR), State and Federal
    agency reviews, and public review. Technical aspects of the project
    related to pallid sturgeon recovery are reviewed and approved by a
    multiagency Biological Review Team comprising some of the Nation's top
    experts on pallid sturgeon. All the above methods are aimed to ensure
    that the preferred alternative provides the best chance for successful
    pallid sturgeon recovery by utilizing the latest science available.
                            st. mary rehabilitation
        Question. The fiscal year 2010 appropriations bill included report
    language requesting that the Bureau of Reclamation combine National
    Environmental Policy Act compliance activities and preparation of
    design, specifications, and contract documents for the entire St.
    Mary's project including the diversion dam, fish passage structure,
    drop structures, siphon, and canal be combined as a single activity.
    What is the Bureau's timeline for completion of the Environmental
    Assessment that is currently being conducted on the St. Mary project?
        Answer. The Army is not in a position to provide schedules for the
    Bureau of Reclamations' program and recommends that the question be
    referred to the Bureau.
                                levee task force
        Question. The fiscal year 2012 Homeland Security Appropriations
    bill contained language requiring Army Corps of Engineers' to convene a
    task force to develop common standards for Federal Emergency Management
    Agency's (FEMA) levee certification studies and the Army Corps of
    Engineer's Levee Safety Program, such that the levee inspections
    performed by the Army Corps of Engineers may be used to satisfy FEMA's
    levee certification requirements. What is the progress of that task
    force, and when can the committee expect a report?
        Answer. The language in Public Law 112-74 requires FEMA ``to
    convene a task force with the Corps to better align NFIP levee
    accreditation requirements with levee inspections performed by or for
    the Corps such that information and data collected for either purpose
    can be used interchangeable to the maximum extent practicable toward
    satisfying levee accreditation requirements. FEMA shall provide a
    report to the Committee on the progress of this task force within 6
    months after the date of the enactment of this act.''
        FEMA has convened the task force and, while FEMA continues to have
    the lead, the Corps is an active participant on that task force. It is
    the intent of the task force to meet the time requirement for the
    progress report in the legislation.
                                     ______

                 Questions Submitted by Senator Lamar Alexander
        Question. General Temple, it is my understanding that the Army
    Corps of Engineers (ACOE) owns more than 21,000 MW of power, and that a
    report put out by the ACOE indicates potentially enormous energy
    savings and a much lower carbon footprint for the U.S. Government if
    you modernize your existing hydropower assets.
        What is the ACOE doing on this issue?
        Answer. The Army is implementing a Hydropower Modernization
    Initiative (HMI) to address aging hydropower infrastructure issues for
    197 generating units representing 54 power plants that are not directly
    funded by the Department of Energy's Bonneville Power Administration.
    HMI was established to assess and prioritize investment needs and
    opportunities across the Army's hydropower assets, which include
    replacing turbines, generators, and other major generating components
    with modern equipment that can deliver better efficiency and additional
    generating capability. The John H. Kerr power plant modernization was
    completed in July 2011 adding 65 MW of additional capacity to the
    plant. The Webbers Falls, Ozark and Denison power plants are being
    modernized, which will improve operating efficiency and increase energy
    production by 57,000 MWh.
        Typically, when a hydroelectric power plant's generating unit is
    replaced or refurbished, efficiency improvements can range from 3
    percent to as high as 10 percent. If the Corps modernizes its top 20
    plants as identified in its Hydropower Modernization Initiative,
    efficiency gains on average would be 5 to 6 percent. This efficiency
    improvement represents a significant amount of additional renewal
    energy and avoided greenhouse gas emissions. For example, the initial
    assessment of prioritized equipment modernization and improvements in
    HMI would result in 830,000 MWh of additional renewable energy being
    produced. This amount of energy would avoid 630,000 tons of
    CO2 emissions into the atmosphere and serve 87,400
    additional American homes.
        Question. What would it take for the ACOE to modernize and upgrade
    its facilities to result in more clean-energy production?
        Answer. HMI study results show that an investment of approximately
    $4 billion over 20 years would improve reliability, restore design
    level efficiencies, and capture potential opportunities to improve and
    upgrade facilities.
                              olmsted lock and dam
        Question. Secretary Darcy, buried within the Administration's
    budget request is a legislative proposal to increase the total project
    cost of the Olmsted project to roughly $3 billion. That is an increase
    of nearly $1 billion since you last reported to this subcommittee.
        What has caused this spike in costs?
        Answer. The Olmsted cost increase to $2.918 million (October 2011
    price levels) is attributed primarily to a low initial estimate, which
    increased substantially in light of construction and contractual
    complexities associated with the innovative ``in-the-wet'' construction
    technique. This method also lengthened the duration of construction
    which pushed costs into an unanticipated period of higher than average
    inflation associated with building materials utilized for construction.
        There are several factors that have contributed to the low initial
    cost estimate for the innovative ``in-the-wet'' construction technique.
    Unknown factors when the project was authorized include the negative
    impacts on productivity due to river conditions (elevation and
    velocities) and the complexity of shell fabrication necessitated by the
    seismic condition at the site. After constructing and setting the first
    set of shells in 2010, the government and contractor realized that the
    effort associated with fabrication and setting these large pieces of
    precast concrete and filing them with tremie concrete was not like any
    work they had previously experienced or previously had estimated. The
    construction challenges associated with developing this innovative
    method of construction have been overcome, but required a lot more
    effort than was originally envisioned. Roughly 77 percent of the
    increase in the estimated total cost of the project, in real terms,
    (above inflation), is associated with the increase in the cost of
    constructing the dam.
        Question. Has an outside review of the cost, construction method,
    and schedule been performed?
        Answer. The Corps conducted an Independent External Peer Review of
    the Post Authorization Change Report, which concurred with the revised
    cost estimate. The schedule went through and Agency Technical Review
    but was not reviewed externally. The project is currently undergoing an
    internal review of the methodology of construction for the dam (``in-
    the-wet'' versus cofferdams) and the management controls in place for
    the cost-reimbursable contract.
        Question. How much confidence should we have that this estimate
    reflects the ultimate cost of this project?
        Answer. The cost estimate was developed using a variety of
    estimating methodologies by a diverse team of experienced U.S. Army
    Corps of Engineers (USACE) cost engineers and Hill International
    professional cost engineers and schedulers. A cost and schedule risk
    analysis was performed to establish the 80-percent confidence level for
    both cost and schedule. Quality control and quality assurance reviews
    were performed at various levels of product development. The Corps Cost
    Engineering Center of Expertise reviewed and certified the project cost
    and schedule estimates on November 9, 2011, confirming that the
    estimates and schedules were prepared in accordance with clearly
    established professional principles, practices, codes, and criteria.
        Question. What is the projected completion of the project?
        Answer. The schedule in the Post Authorization Change Report
    assumes that the Corps will spend an average of about $150 million per
    year on this project, consistent with recent funding levels and
    reflecting the level of receipts to the Inland Waterways Trust Fund
    (IWTF) under current law. Based on that assumption, the report
    estimates that the Olmsted Locks and Dam part of the project will
    become operational in fiscal year 2020, based on the minimal project
    features required for the dam to hold the pool and pass navigation
    through the locks. Physical completion for the dam contract is
    projected to be in fiscal year 2021, including contractor de-
    mobilization and equipment salvage. The remainder of the work,
    including other required facilities, buildings and grounds, river
    dikes, demolition of Locks and Dams 52 and 53 and permanent operating
    equipment is projected to be finished in fiscal year 2024, thus
    completing the project.
        Question. What is your confidence in this time and cost estimate?
        Answer. The cost estimate was developed using a variety of
    estimating methodologies by a diverse team of experienced USACE cost
    engineers and Hill International professional cost engineers and
    schedulers. A cost and schedule risk analysis was performed to
    establish the 80-percent confidence level for both cost and schedule.
    Quality control and quality assurance reviews were performed at various
    levels of product development. The Corps Cost Engineering Center of
    Expertise certified the project cost and schedule estimates on November
    9, 2011.
        Question. Have you considered changing construction methods to a
    more traditional construction method?
        Answer. The Corps has assembled a team of experts to consider
    alternative construction techniques. The team is developing a concept
    level design for ``in-the-dry'' construction to a degree that can be
    used to prepare a reliable cost estimate and schedule suitable for
    comparison to the ongoing ``in-the-wet'' construction for the navigable
    pass portion of the dam. The Corps will evaluate the team's
    recommendation based on the concept level design and certified cost
    estimate by the summer 2012 to determine the most cost effective way to
    complete construction.
        Question. Do you believe it might be prudent to consider a pause in
    this construction project in order for the Corps to re-evaluate the
    plan to complete this project in light of the cost increase?
        Answer. The Corps is still evaluating which method to use to
    construct a portion of the Olmsted Dam and the timeframe for completing
    construction of the overall project.
                          inland waterways trust fund
        Question. Secretary Darcy, as you know I represent a State with an
    extensive inland waterway system with several of our aging locks and
    dams. I am concerned that the Administration continues to not address
    enhancing the revenues of the Inland Waterways Trust Fund (IWTF). Your
    announcement of the $1 billion cost increase on Olmsted Locks and Dam
    would seem to make finding a solution more urgent than ever.
        It is my understanding that the current 20 cent per gallon fuel tax
    raises about $75-80 million annually. Is that correct?
        Answer. Fuel tax revenues in fiscal year 2010 and fiscal year 2011
    were approximately $74 million and $84 million, respectively. The
    projected revenues from the existing diesel fuel tax are expected to
    increase to approximately $92 million in fiscal year 2012 and $95
    million in fiscal year 2013.
        Question. With the projected funding needs for Olmsted over this
    time period, what else will the Corps likely be able to do to address
    the needs of this aging inland waterway system?
        Answer. In addition to providing $144 million for Olmsted, the
    fiscal year 2013 budget provides for completing major rehabilitation of
    Lock and Dam 27 on the Mississippi River and Lockport Lock and Dam on
    the Illinois Waterway, and continuing some funding for the Lower
    Monongahela River Locks and Dams 2, 3, and 4 project. Based on
    projected revenues from the current fuel tax, if Olmsted Locks and Dam
    is provided approximately $150 million annually, with $75 million
    funded from the IWTF, approximately $40 million to $45 million per year
    (depending upon the level of actual IWTF receipts) would be available
    annually for other IWTF cost-shared projects for several more years.
    One-half of those funds would come from the general fund of the
    Treasury; the other one-half would come from the IWTF. This highlights
    the importance of enacting a long-term mechanism to increase receipts
    to the IWTF.
        Question. Would you agree that simply raising the fuel tax, at best
    is a band-aid solution to the long-term funding issues of the Inland
    Waterways System?
        Answer. Yes, we do not favor that approach. The Administration
    submitted a vessel user fee proposal in September 2011, which if
    enacted in addition to the existing level of revenue from the fuel tax,
    as proposed, would raise sufficient revenues to finance needed
    construction. To enact an increase in the fuel tax substantial enough
    to provide the same level of revenues would require more than doubling
    the current fuel tax.
        Question. It would seem to me that what we need is an entirely new
    way to finance the Trust Fund. Has the Administration given any thought
    to an entirely new way to realistically fund this system? For the
    Harbor Maintenance Trust Fund every imported item contributes to the
    maintenance fund. Wouldn't a similar funding mechanism for inland
    waterways provide a more robust funding sources as well as inflation
    protection?
        Answer. The budget proposes an equitable way to finance the non-
    Federal share of this investment, which is the responsibility of the
    commercial users of these waterways under current law. In September
    2011, as part of the President's Jobs bill proposal, the Administration
    submitted a legislative proposal to the Congress to reform the laws
    governing the IWTF. The proposal would provide an additional source of
    financing for major new investments in the inland waterways to support
    economic growth. It includes a new vessel user fee, which, if enacted,
    would supplement the revenue collected from the fuel tax, and would
    increase the total paid by commercial navigation users sufficiently to
    meet their share of the costs of activities financed from the IWTF. The
    proposal has a provision to prevent the IWTF from accumulating too much
    revenue and from being depleted. It has the potential to raise an
    additional $1.1 billion in additional revenue from the users over 10
    years.
        Question. Has any consideration been given to changing the cost
    sharing on Olmsted from the current 50/50 to something else such as 75
    percent from the Treasury and 25 percent from the IWTF?
        Answer. We do not favor that approach. The Olmsted Locks and Dam
    project should continue to be funded as provided in current law, under
    which requires construction is to be funded one-half from amounts
    appropriated from the general fund of the Treasury and one-half from
    amounts appropriated from the IWTF.
        Question. Is the legislative proposal the same as proposed last
    year in the President's deficit reduction package?
        Answer. The legislative proposal to reform the laws governing the
    IWTF is the legislative proposal President Obama transmitted to the
    Congress in September 2011, as part of his Jobs bill proposal. It would
    provide an additional source of financing for major new investments in
    the inland waterways to support economic growth.
        Question. As I recall that proposal allowed the Assistant Secretary
    to raise fees as necessary to provide additional funds as well as
    continuing the current diesel tax?
        Answer. Correct. The diesel fuel tax would continue to be assessed
    at the current rate of $0.20 per gallon, although the diesel fuel tax
    would be assessed on the existing 27 inland and intracoastal waterways
    as well as an additional 40 waterways that are not subject to the
    current tax, and the Secretary of the Army would set the rates for new
    vessel user fees on all 67 of the inland and intracoastal waterways.
        Question. Do you know what these fees might consist of?
        Answer. The legislation would impose a flat annual user fee on each
    vessel that transports commercial cargo on the inland waterways of the
    United States, which would be paid by the owner of the vessel. The
    Secretary of the Army would determine the amount and structure of the
    fee each fiscal year, with the goal of ensuring that the balance of
    receipts in the IWTF is sufficient to cover the user-financed share of
    the costs of inland waterways capital investment.
        Question. Why are these additional revenues targeted for deficit
    reduction rather than for improving or replacing the aging
    infrastructure of the inland waterways system?
        Answer. The proposal is not for the purpose of deficit reduction.
    The revenues would enable an increase in investments in construction
    and rehabilitation of inland waterways infrastructure.
        Question. Have you been given any indication that legislation
    allowing fee increases is being considered in the House or Senate?
        Answer. No, although there are bills that would increase the fuel
    tax.
                     flood control and coastal emergencies
        Question. Can you update us on the progress you are making on
    repair flood and storm damages from the $1.7 billion that we
    appropriated in December?
        Answer. The Corps is tracking progress on the Class I, II, and IIIB
    repairs. The classes are defined as follows:
      --Class I is Urgent and Compelling (Unsafe).--Heavily damaged
            projects that have breached or failed where there is a probable
            loss of life.
      --Class II is Urgent (Potentially Unsafe).--Damaged projects that are
            likely to fail where there is a probable loss of life and
            economic damage.
      --Classes IIIA and IIIB are High Priority, including:
        --Class IIIB (Conditionally Unsafe).--Damaged systems that are
                likely to fail where there is a potential for economic,
                environmental, and an indirect potential for loss of life.
        --Class IIIA (High Impact to Navigation).--Damaged systems directly
                impacting high use navigation.
      --Class IV: Priority (Marginally Safe).--All other damaged systems
            not meeting Class I, II, or III above.
        The Corps has made significant progress toward completing priority
    repairs. The Corps identified 11 Class I (urgent and compelling)
    projects and expects to complete interim protection for 10 projects by
    March 31, 2012. Full completion is expected (pre-event conditions
    restored) by March 31, 2013. There is one Class I project that
    anticipates completion by March 31, 2014. Similarly, the Corps
    identified 31 Class II (urgent) projects and expects completion of
    interim protection for 14 projects by March 31, 2012. Full completion
    is expected by March 31, 2013. Fourteen Class II repairs are
    anticipated to be complete by March 31, 2014, and three repairs expect
    completion after March 31, 2014. The Corps identified 31 Class IIIB
    (conditionally unsafe) projects and expects completion of interim
    protection for 19 projects by March 31, 2012. Full completion is
    expected by March 31, 2013. Twelve Class IIIB repairs are anticipated
    to complete by March 31.
        Question. Will these funds allow you to make all of the necessary
    repairs to return these flood control structures to pre-disaster
    conditions?
        Answer. A small portion of the costs of damage repairs is not
    covered by Presidential declarations and, therefore, not eligible for
    disaster relief funding. The funds will allow the Corps to make all
    critical repairs in areas that are covered by Presidential
    declarations.
        Question. If not, are you budgeting for the necessary repairs
    through regular appropriations?
        Answer. Many of the noncovered repairs from the 2011 floods
    successfully competed for fiscal year 2012 or fiscal year 2013 funding.
    Only lower priority repairs, which did not compete successfully, have
    been deferred and will be considered during formulation of the
    President's fiscal year 2014 budget.
        Question. Will the flood control infrastructure on the Mississippi
    and Missouri Rivers, be able to provide protection from the high-water
    events expected this year?
        Answer. Yes, Corps-owned infrastructure on the Mississippi and
    Missouri Rivers impacted by the 2011 Mississippi and Missouri River
    flood is operational at this time and will be able to provide
    acceptable level of interim protection from potential high water events
    that take place during the upcoming flood season. Along the Mississippi
    River interim repairs were initiated in several critical areas
    including Birds-Point New Madrid (BP-NM), Presidents Island and
    Meriwether-Cherokee to withstand possible high water in 2012. Permanent
    repairs in the BP-NM Floodway area are scheduled either complete by the
    2013 flood season or to a level sufficient to provide protection from
    an event similar to the 2011 flood and are still needed to ensure
    future operational safety and reliability. Damage assessments continue
    and additional required repairs may be identified.
        In the lower Missouri Basin between Omaha and Kansas City
    Districts, repairs to the levee systems are in progress. Currently
    closure of breaches on 10 of the 13 systems has been accomplished. As
    we move into their flood season, traditionally late May through early
    July, we anticipate all breaches being closed. Any remaining
    vulnerabilities will be addressed through flood fighting, with on-site
    contractors available should that need arise.
        Work to restore levees to their pre-2011 flood condition continues
    and is expected to complete on the Mississippi River Levees within a 3-
    year time-frame. Damage assessments continue and additional required
    repairs may be identified.
        Question. How long do you project that it will take to restore
    these flood control structures to pre-flood conditions?
        Answer. By March 31, 2014, 96 percent of the highest priority
    repairs are scheduled to be restored to pre-flood conditions.
                           principles and guidelines
        Question. In fiscal years 2011 and 2012, the budget request
    proposed a new line item to prepare guidance for the revised Principles
    and Guidelines (P&G). It was not funded by the Congress in either year
    and the Congress directed that the current Principles and Guidelines
    should be used for fiscal year 2012. I note that this line is missing
    from your request for fiscal year 2013. Are the revisions of the P&G
    still going forward?
        Answer. Yes. The Council for Environmental Quality (CEQ) leads the
    Administration's process of modernizing the 1983 P&G for Water
    Resources Planning.
        Question. Are you aware of whether the Administration plans to
    release the revised P&G in fiscal year 2013?
        Answer. The product of the first step in that revision process--
    called the Principles and Requirements--is currently under review
    within the Administration. Agency guidelines would be developed
    following the release of the final Principles and Requirements.
        Question. Will the Corps still need new guidance to implement the
    revised Principles and Guidelines in fiscal year 2013?
        Answer. Yes. CEQ is expected to direct agencies to develop their
    own procedures to conform to the interagency procedures (guidelines).
    Within the Corps, ER 1105-2-100 (known as the Planning Guidance
    Notebook) will need to be updated to incorporate new policies and
    procedures to reflect the revised principles and guidelines.
        Question. Without this specific line item, how does the Corps plan
    to fund the guidance that needs to be prepared?
        Answer. The budget includes funding under the Planning Support
    Program for updating planning guidance in general, a portion of which
    would be used to fund the guidance that needs to be prepared to reflect
    the revised principles and guidelines.
                               regulatory program
        Question. The budget request proposes $205 million for the
    Regulatory Program. That is an increase of $12 million or nearly 7
    percent, over the fiscal year 2012 amount. As I recall, this program
    was funded at $189.6 million in fiscal year 2011, which is the last
    fiscal year that is completed. How many permits did the Corps issue in
    fiscal year 2011?
        Answer. In fiscal year 2011, the Corps issued approximately 56,000
    permits. In addition, the Corps finalized approximately 26,000 other
    regulatory actions in fiscal year 2011 and more than 58,000
    Jurisdictional Determinations.
        Question. For fiscal year 2012, the Congress provided $193 million
    for this program. Are you able to process permits in a timely manner in
    fiscal year 2012?
        Answer. Yes. Our data indicate that we are able to process the
    majority of applications in a timely manner. We have established
    national performance goals for processing time for both general permits
    and individual permits, based on anticipated funding levels. The fiscal
    year 2012 goal for General Permits (GP) is to process 75 percent of all
    GP in 60 days or less. The fiscal year 2012 goal for Individual Permits
    is to process 50 percent of these actions in 120 days or less. There is
    regional variance in performance, although thus far in fiscal year 2012
    the Corps is meeting or exceeding these goals on a national basis.
        Program performance data over the past 5 years shows a direct
    correlation between funding levels and performance: the more funding is
    received, the higher the level of performance is achieved. In most
    years, most performance targets are met nationally because the goals
    are tied to funding levels. Other program funding factors, such as
    increasing complexity, increased costs of litigation, and the need for
    technology and science to inform decisionmaking are not reflected in
    performance goal targets.
        The program strives to deliver excellent customer service while
    providing legally defensible decisions based in sound science as
    expeditiously as possible. An increase is proposed in fiscal year 2013
    to provide additional funds to Districts to sustain on-board staff,
    which will support increased performance and thereby increase the
    number of permit actions and associated program activities (e.g.
    mitigation site evaluations, compliance visits) completed by District
    staff. For the past years, funding increases have not kept up with
    increases in indirect expenses (rent, vehicle costs, etc.). Additional
    funds are needed to support existing staffing levels. The same or less
    funds will mean a decrease in full-time equivalents (FTEs), affecting
    permit review times and the number of jurisdictional determinations,
    permit evaluations, mitigation reviews, and compliance visits that can
    be completed.
        Question. What is the average length of time for the processing of
    your permits?
        Answer. The length of time to process an application depends on the
    type of permit requested and the complexity of the proposed action.
    Individual permit involve a public notice and agency coordination, are
    generally more complex, and are sometimes more controversial than
    activities that may be authorized by GP. In contrast, GP may require
    agency coordination but do not require a public notice and may only
    authorize projects that result in minimal adverse impacts to aquatic
    resources. To date, in fiscal year 2012, the average time to process an
    IP was 139 days and 28 days for a GP.
        Question. Are you anticipating a significant increase in permitting
    activities in fiscal year 2013 or is an increase in staffing driving
    this cost increase?
        Answer. The Army anticipates an increase in applications/decisions,
    jurisdictional determinations, agency coordination, and consultations,
    and other complex workload actions in fiscal year 2013. Staffing levels
    in fiscal year 2013 are anticipated to remain approximately equal or
    slightly decline from the current staffing levels in fiscal year 2012.
    Workload complexity is increasing as evidenced by a substantial
    increase in the number of projects requiring Environmental Impact
    Statements, projects requiring robust interagency coordination to
    include a marked increase in Endangered Species Act consultations. A
    10-percent increase was noted above fiscal year 2011 levels in the
    total number of permit activities evaluated by USACE Districts.
                         harbor maintenance trust fund
        Question. The budget request for fiscal year 2013 anticipates $848
    million to be contributed by the Harbor Maintenance Trust Fund for
    maintaining eligible harbors and waterways. That is a $90 million
    increase over what was proposed in the fiscal year 2012 budget. That is
    a good trend. Does this meet the needs of all of the eligible ports and
    waterways for the required maintenance?
        Answer. The budget amount of $848 million for Harbor Maintenance
    Trust Fund eligible projects reflects an appropriate amount for
    operation and maintenance of the Nation's coastal harbors and channels
    for fiscal year 2013.
        Question. How much additional funding would be required to maintain
    eligible ports and waterways to their authorized requirements?
        Answer. The cost to dredge and maintain eligible coastal harbors
    and channels to their authorized depths and widths is estimated at
    approximately $1.35 billion per year for high and moderate commercial
    use projects and an additional $0.5 billion per year for low commercial
    use coastal projects.
        Question. How many of the ports and waterways that you elected not
    to fund have not been proposed for funding in the previous 5 years in
    an administration budget?
        Answer. A total of 832 coastal navigation projects have not been
    proposed for funding in the last six budgets (from fiscal year 2008
    through fiscal year 2013).
        Question. Were these projects economically justified at the time of
    their authorization and construction?
        Answer. The majority of them were probably viewed as economically
    justified according to the laws and policies at the time of their
    authorization and construction, which may have been many decades ago.
        Question. Was the maintenance of the projects over their 50-year
    economic life factored into that economic analysis?
        Answer. Corps navigation studies typically evaluate project
    maintenance over a 50-year timeframe.
        Question. If these ports are meeting the tonnage projections in the
    studies for which they were analyzed and authorized wouldn't it follow
    that maintaining them would have a positive net impact on the national
    economy?
        Answer. Not necessarily. For example, the quality of the analysis
    has improved since many of these projects were authorized, and also
    varies from project to project. Even for a project that is meeting the
    tonnage projections from the project studies, the type of commodities
    and use of the project may have changed considerably since project
    construction. Operation, maintenance, and rehabilitation costs may also
    be higher than projected.
        Question. Then how are we not funding these projects?
        Answer. The allocation of funds considers the economic and safety
    return on investment, in comparison with other potential uses of the
    available funds throughout the Corps Civil Works mission areas, as well
    as the need to reduce the Federal deficit.
        Question. If the Administration has no intention of funding these
    in the future due to the economics of the projects, wouldn't it be
    appropriate for the Administration to propose that these projects be
    deauthorized rather than ignoring this Federal obligation year in and
    year out?
        Answer. The fiscal year 2013 budget is performance based. The
    condition of projects changes over time and projects that do not
    compete well in some years may compete better in the future. Projects
    with little or no Federal interest can be proposed for deauthorization.
                                     ______

                  Questions Submitted by Senator Thad Cochran
        Question. The President's fiscal year 2013 budget request shows a
    decrease in funding for nearly every important Civil Works account:
    Construction, Operation and Maintenance, Mississippi River and
    Tributaries, and Investigations. However, there is a funding increase
    for the Corps Regulatory Program for operational oversight and
    management. It concerns me that the Administration is increasing your
    ability to impose regulations but decreasing your ability to perform
    vital functions such as maintenance dredging and flood protection. Can
    you explain this concerning trend?
        Answer. In comparison to the fiscal year 2012 budget, the fiscal
    year 2013 budget includes increased funding for operation and
    maintenance, Mississippi River and Tributaries, Regulatory, and
    Emergency Management. The budget is performance-based and focuses on
    those investments that will yield high economic and environmental
    returns to the Nation or address a significant risk to public safety
    and the environment, as appropriate, within the bounds of our statutory
    authorities.
        Question. I understand that the reimbursement from the Harbor
    Maintenance Trust Fund (HMTF) needs to be around $1.3 to $1.6 billion
    annually to meet the basic maintenance dredging needs in the Corps'
    maintenance inventory. What percentage of Harbor Maintenance Trust
    revenue is actually allocated towards harbor operation and maintenance
    costs each year?
        Answer. Approximately 50 percent to 60 percent of HMTF receipts
    have been allocated toward harbor operation and maintenance costs since
    fiscal year 2007. The fiscal year 2013 budget increased funding for
    harbor maintenance and related work by $90 million, which is almost 12-
    percent above the level proposed in the fiscal year 2012 budget.
        Question. Are the Administration and the Corps of Engineers
    considering ways to maximize use of the HMTF to address the critical
    needs of ports that must be dredged and deepened in preparation for the
    Panama Canal expansion?
        Answer. The fiscal year 2013 budget allocated Civil Works funding
    based on performance. For activities funded from the HMTF the Corps
    uses performance criteria that focus on the economic and safety return
    from the investment in harbor maintenance and related work. In
    addition, the fiscal year 2013 budget gives priority to funding studies
    or preconstruction engineering and design for several proposed projects
    that would enable a port to accommodate larger vessels, which could
    transit the deepened Panama Canal, such as Boston Harbor, Brazos Island
    Harbor, Charleston Harbor, Houston Ship Chanel, Jacksonville Harbor,
    Savannah Harbor, and Wilmington Harbor; and also funds construction of
    ports such as New York and New Jersey.
        Question. There has been discussion of the needs of ports located
    on the east and west coasts. Is the Corps fully cognizant of the needs
    and the significance of our Nation's ports located in the Gulf of
    Mexico as they relate to the Panama Canal expansion?
        Answer. The Army is aware of the significance and needs of the gulf
    coast ports. The budget includes funding for deepening studies for both
    Brazos Island Harbor and the Houston Ship Channel.
                                     ______

                  Questions Submitted by Senator Susan Collins
        Question. Assistant Secretary Darcy, for any direct impacts to
    jurisdictional wetlands, the Corps' New England District has published
    ``guidelines'' for compensatory mitigation. In the case of permanent
    preservation, those guidelines call for a mitigation ratio of at least
    15:1. For some projects, this ratio is increased to 20:1, or even 25:1,
    based upon the discretionary application of the permit writers
    valuation of functions and values. Under the State of Maine's law, the
    mitigation ratio for preservation is 10:1.
        Under the Corps ``guidelines,'' if one acre of wetland area is
    impacted for a project, the Corps has required up to 25 acres to be
    permanently protected. This adds significant costs to potential
    projects that are key to our economic recovery.
        For one project in Western Maine, a constituent sought to reduce
    the wetland impact for a project that had been previously approved by
    the Corps under its prior mitigation ratios. However, due to the new
    higher mitigation ratios, and the requirement of both preservation and
    in-lieu fees, the project has not gone forward. It is my understanding
    that the wetland impacts would have actually been reduced, but that
    still the Corps was asking for greater mitigation.
        Does the Corps plan to review and revise its wetland mitigation
    guidelines, particularly in the New England District, so that well-
    designed and appropriately sited projects that would reduce wetland
    impacts are encouraged?
        Answer. As a general requirement, in accordance with section 404 of
    the Clean Water Act (CWA), an activity's impacts to waters of the
    United States must be first avoided, then minimized, and lastly
    compensated. Therefore, by nature of the law, projects that would
    reduce wetland impacts are already encouraged.
        The New England District's guidance has, for many years,
    recommended a 15:1 ratio for preservation, although this ratio may be
    lower or higher, depending on the functions of the wetland being
    impacted as well as the ecological value of the proposed preservation.
    The guidance is not binding and may be updated as necessary in the
    future based upon new policy, guidance, or science. The New England
    District works with applicants to avoid and minimize impacts to waters
    of the United States, consistent with the requirements in the Corps
    regulations. When projects result in less impact to aquatic resources,
    mitigation requirements may be substantially reduced.
        Question. Assistant Secretary Darcy, there remains a great need in
    my State and others around the Nation when it comes to the dredging and
    maintenance needs at our small ports and harbors. Without the ability
    to direct funding to such activity, I believe we need to pay careful
    attention to ensure the water infrastructure needs of all States are
    met.
        I am pleased to see $13 million included in the budget request for
    the dredging of Portland Harbor. Portland Harbor is the largest
    commercial port in Maine and it is one of the largest in New England.
    In 2009, the direct economic impact of Portland Harbor was estimated to
    be 3,668 jobs, $101 million in wages, and $209 million to the Gross
    State Product. An additional $142 million of economic impact extended
    beyond the immediate confines the harbor. This economic impact makes
    the maintenance dredging of the Federal Navigation Channel critically
    important.
        I would also like to highlight the $30 million for operations and
    maintenance projects at ``small, remote, or subsistence navigation''
    harbors and waterways that was included in the fiscal year 2012 enacted
    bill. This funding made a small project in Wells Harbor, Maine,
    possible, but many others in my State are still in need of funding.
        What funding is proposed under the fiscal year 2013 budget request
    to meet the dredging and maintenance needs of the Nation's small ports
    and harbors? How do you respond to concerns that the Nation's smaller
    ports and harbors may be disadvantaged under the current Corps' cost-
    benefit metrics?
        Answer. The President's fiscal year 2013 budget includes $40
    million for low commercial use coastal ports and harbors. The Army
    focuses first on funding those projects that provide the greatest
    economic and safety return on investment to the Nation. For ports and
    harbors with a low level of commercial use, the Army also considers a
    range of factors such as whether the harbor is a critical harbor of
    refuge or a subsistence harbor, or supports public transportation, U.S.
    Coast Guard search and rescue operations, the national defense, or
    other Federal agency use; the reliance on marine transportation for
    energy generation or home heating oil deliveries, and the level of
    commercial use (albeit less than a medium level of commercial use).
                                     ______

                 Questions Submitted to Hon. Michael L. Connor
                Questions Submitted by Senator Dianne Feinstein
                                 water banking
        Question. Does Bureau of Reclamation (BOR) need additional
    flexibility on water banking to better manage water resources in the
    West?
        Answer. BOR has authority for participation in water banks pursuant
    to section 101(d) of the Reclamation States Emergency Drought Relief
    Act of 1991 (Public Law 102-250, as amended). However, that authority
    is contingent upon Governors of the affected State or on a reservation
    making a request for temporary drought assistance and the Secretary of
    the Interior determining that assistance is merited, or upon the
    approval of a drought contingency plan. BOR was given additional
    specific authority to participate in water banks in the 2012
    Consolidated Appropriations Act in the State of California. This
    authority enhanced water management flexibility. In particular, the act
    allows BOR to buy interests in water bank facilities and to pay water
    banking fees with Central Valley Project (CVP) water. BOR and the State
    of California are satisfied with the authorization, but note that it
    expires with the act at the end of the fiscal year. Our Lower Colorado
    (LC) Region has existing authority to participate in existing State
    water banking programs, and has issued its own regulations to
    correspond with water banking agreements among its States. It is
    unclear at this point if the same authority would be useful in other
    BOR regions or States.
        Question. Is additional legislation needed to provide this
    flexibility?
        Answer. It is unclear what additional authority might be needed
    across BOR and would depend on the extent of activity desired of BOR by
    the Congress in relation to water banks. The Mid-Pacific (MP) Region
    expects to use the authority enacted in 2012 for California and further
    legislation would be needed to extend it. Further determinations are
    needed to understand what authority exists, and therefore, what more
    authority would be needed, in the regions other than MP and LC. Our
    preliminary research indicates that BOR may lack authority to buy
    interests in water banks in other States.
        Question. What impact does tiered pricing have on the agricultural
    water service contractors?
        Answer. Depending on how a tiered pricing program's rates are
    structured, tiered pricing may provide an incentive to use water more
    efficiently, i.e., to use less water for crop practices that provide a
    lower net return compared to those crops and practices with a higher
    net return. This incentive is based on the concept that a direct
    relationship exists between the amount of irrigation water delivered to
    the farm and the amount the farmer pays for that water. The primary
    determinant of the effectiveness of tiered pricing is the change in the
    amount demanded relative to a change in the price (or price elasticity
    of demand). A rate structure that encourages conservation must
    effectively communicate the price of water at different levels of use
    to users. However, if changes in price do not result in corresponding
    changes to demand, a tiered pricing program will have a relatively
    small impact on conservation. There are a number of factors and
    conditions that may influence a tiered pricing program's impact on
    irrigators. Some of these include:
      --the actual structure of the tiered pricing program;
      --the efficiencies of existing water management practices;
      --the cost of adopting new water technologies;
      --the quantity of available water supplies versus the quantity
            demanded based on existing (and projected) cropping patterns;
            and
      --the value of irrigated crops produced, as well as the potential for
            dryland crop production.
        In the CVP, tiered pricing provisions of the Central Valley Project
    Improvement Act (CVPIA) are triggered when a water service contractor
    takes more than 80 percent of its total contract entitlement. Thus, in
    dry years when allocations are below 80 percent, CVPIA tiered pricing
    provisions do not apply. In addition, contracting actions for
    settlement contractors, interim contracts, and section 215 water,
    (which is considered to be outside of the contractor's own water
    allocation) is not subject to tiered pricing. Consequently, contractors
    that have the ability to receive additional water through transfers may
    be able to circumvent any potential conservation intended through the
    implementation of CVPIA tiered pricing.
        One potential means of estimating the impact of CVPIA tiered
    pricing provisions to CVP water service contractors is to examine the
    amount of revenues collected through the application of tiered pricing
    provisions. BOR prepares and submits an annual financial report to the
    Senate Committee on Energy and Natural Resources, the Senate Committee
    on Appropriations, the House Committee on Natural Resources, and the
    House Committee on Appropriations describing CVP Restoration Fund
    revenues (receipts) and expenditures (uses). Revenues received from
    CVPIA tiered pricing provisions amounted to $327,067 in fiscal year
    2010. This was less than 3 percent of nondiscretionary CVP Restoration
    Fund revenues ($11,132,008) and less than 0.7 percent of total CVP
    Restoration Fund revenues ($47,968,797) received in fiscal year 2010.
    The fact that the application of tiered pricing results in such a small
    percentage of total CVP Restoration Fund revenues suggests that CVPIA
    tiered pricing provisions likely have a relatively small financial
    impact on water users. However, determining whether tiered pricing
    encouraged or discouraged water conservation efforts in fiscal year
    2010 is less clear.
        Question. Do you believe that tiered pricing encourages or
    discourages conservation among contractors?
        Answer. In general, charging higher rates for additional water
    tends to encourage conservation practices by water users (assuming
    water can legally be treated as a commodity and deliveries can be
    measured). However, irrigator response to a tiered pricing program is
    dependent on the factors listed above--with the primary determinant
    being how the tiers are structured.
        CVP contractors located south of the Sacramento-San Joaquin Delta
    receive, on average, about 66 percent of their contractual amounts. As
    a result, the tiered pricing provisions of CVPIA generally have limited
    impact on these contractors in terms of conserving water.
        Question. What about in dry years?
        Answer. Generally, we would expect the effects of a tiered pricing
    program, in and of itself, to have less of an effect in encouraging
    conservation among irrigators during short-term, intermittent periods
    of water shortages, primarily because the higher priced tiers would not
    be triggered with a reduced water supply. However, as indicated above,
    additional factors might cause irrigators to respond in unanticipated
    ways.
        As indicated above, the tiered pricing provisions of CVPIA do not
    take effect until contractors take more than 80 percent of their total
    contract entitlement. Thus, in dry years the higher tiered prices of
    CVPIA will not apply.
                 central valley project and state water project
        Question. How can BOR and the State Water Project (SWP) in
    California better improve their coordination so as to improve water
    supply reliability for both systems?
        Answer. The CVP operators and the SWP operators are co-located and
    closely coordinate the operations of both projects. The Delta Mendota
    Canal (Federal)--California Aqueduct (State) Intertie will be
    operational this summer to improve water supply reliability.
                                 sierra nevadas
        Question. Do you believe there could be potential water salvage
    benefits from better forest management practices in the forests of the
    Sierra Nevadas?
        Answer. Potential water salvage through restoration activities that
    improve water quality and quantity varies due to the distribution along
    the Sierra Nevada Mountains of precipitation, forest types, land
    designations, multiple-use management arrangements, and laws,
    regulations, and policies. In general, restoration activities on Sierra
    Nevada National Forest Service (NFS) forests and wet meadows improve
    water quality, water quantity, and streamflow regimens with the overall
    effect of improving California's water supplies. Restoration activities
    on these lands can protect water sources from degradation, as well as
    improve the capacity of our NFS lands to retain, filter, and release
    water during low-flow periods when it is needed the most.
        Question. Do you have any suggestions as to how to determine if
    this could result in significant water savings?
        Answer. In December 2009, six Federal agencies, including the U.S.
    Department of Agriculture (USDA), issued an Interim Federal Action Plan
    for the San Francisco Bay/Sacramento-San Joaquin Delta (Bay-Delta),
    describing a variety of Federal actions and investments the
    Administration has been undertaking or will take to help address
    California's water supply and ecological crises. Multiple agencies
    within USDA contribute to implement practices that have a high impact
    on water resources in targeted landscapes. In 2010, USDA identified
    landscapes of national importance including national forests and
    private working lands in and around the California Bay-Delta, and
    updated the contribution each agency will make to the high impact on
    water resources goal, in the immediate future. The Forest Service is
    working with Natural Resources Conservation Service (NRCS) and the Farm
    Service Agency (FSA) to develop outcome-based measures for 2012 and
    subsequent years.
        The Forest Service manages resources on NFS forests land to ensure
    that they are sustainable and productive for water, wildlife,
    rangelands, timber, and the multitude of other resources found on
    national forests and grasslands.
        The NRCS has been developing interagency and nongovernmental
    organizations (NGOs) partnerships to improve and protect the health of
    the Bay-Delta headwaters by restoring forest lands and wet meadows.
        USDA Secretary Tom Vilsack and Forest Service Chief Tidwell have
    made clear the Forest Service's important role in water and watershed
    management. Chief Tidwell has said that the Forest Service understands
    the need to manage for water rather than mitigate for water. Managing
    resources on NFS lands often involves striking a delicate balance. What
    one may perceive as less than desirable practices might actually be
    needed for restoration. Consequently, ``better'' forest management does
    not mean the same thing to everyone.
                                     calfed
        Question. Your funding for CALFED is down nearly $4 million from
    fiscal year 2012. What is the primary reason for this decrease? Is this
    the start of a downward trend?
        Answer. In the fiscal year 2012 enacted budget, BOR allocated an
    additional $2.5 million to support actions in the Interim Federal
    Action Plan from the additional $6 million in funds provided by the
    Congress under the Water Conservation and Delivery Studies, Projects
    and Activities Category that was not included in the President's
    request.
        The fiscal year 2013 request accounts for increases from fiscal
    year 2012 and does not represent the beginning of a downward trend as
    the California Bay-Delta Restoration appropriation provides critical
    Federal support toward the co-equal goals of improved water supply
    reliability and an improved Bay-Delta eco-system.
                               klamath settlement
        Question. Where are we on the Klamath settlement? Are we going to
    see significant increased budget requests for BOR when this settlement
    is resolved?
        Answer. The Department of the Interior has not signed the Klamath
    Basin Restoration Agreement (KBRA) and the Congress has not acted on
    legislation introduced in the House and Senate to authorize a
    secretarial determination under the terms of the Klamath Hydroelectric
    Settlement Agreement (KHSA). However under existing law, the Department
    has the authority to provide water and power benefits as well as
    addresses our tribal trust and Endangered Species Act (ESA)
    obligations.
        If the legislation is enacted, budget increases would be
    anticipated as the KBRA legislation would likely require specified
    levels of funding over the succeeding 15 years.
                             south dakota projects
        Question. I note that your budget request for rural water funding
    is increased. Will this funding level allow these projects to keep pace
    with inflation? My fear is that with these funding levels, these
    projects will never get completed. I am gratified to see that one of
    the projects in South Dakota is scheduled for completion in fiscal year
    2013, but where are we on the others? Will they be completed on any
    sort of a reasonable timeline?
        Answer. BOR is making progress on completing rural water projects
    throughout North and South Dakota, Montana, and New Mexico. The Mid-
    Dakota rural water project was completed in fiscal year 2006; numerous
    features within the Garrison Diversion Unit in North Dakota have been
    completed; and the Mni Wiconi Rural Water System is scheduled to be
    completed in 2013. Approximately $232 million in American Reinvestment
    and Recovery Act (ARRA) funds were provided to rural water to further
    construction on these projects. Due to the additional ARRA funding,
    Perkins County Rural Water Project received enough funding to complete
    construction based on the authorized appropriations ceiling.
        The budget request for rural water is a 7-percent increase from the
    fiscal year 2012 enacted amount and an 11-percent increase from the
    fiscal year 2011 enacted amount.
        The total Federal cost to complete the construction of ongoing
    projects in BOR is approximately $1.3 billion. The fiscal year 2013
    President's request balances several priorities, including funding for
    constructing authorized rural water projects. Given the need to work
    within the framework of today's budget realities, as well as the need
    to be attentive to priorities associated with existing water and power
    infrastructure throughout the West, BOR is unable to fund all of the
    ongoing rural water projects at their full-capability levels.
        We will continue to evaluate each project using the revised interim
    criteria and concentrate on finishing projects with the funding made
    available through appropriations.
        The first priority for funding rural water projects is the required
    Operations and Maintenance (O&M) component, which is $18 million for
    fiscal year 2013. The rural water request for construction was
    developed using revised interim criteria (BOR used the same approach to
    allocate additional fiscal year 2012 funds). These revised interim
    criteria address BOR's program goals and objectives by incorporating
    factors such as time and financial resources committed, regional
    watershed perspective, urgent and compelling need, tribal members
    served, economic impacts, and water use efficiency. BOR allocated the
    funds based on each project's ability to use those funds to complete
    distinct construction segments which would significantly advance the
    provision of potable water to people.
        Since 1980, the Congress has directed BOR to develop 13 individual
    rural water supply projects at a combined cost of more than $2.3
    billion. Projects have been authorized with non-Federal contribution
    requirements ranging between 0 percent and 25 percent.
        With a large backlog of rural water projects waiting to be
    constructed and limited funding available, BOR developed the revised
    interim criteria in order to apply a consistent and fair method for
    allocating funds.
                          san joaquin restoration fund
        Question. It is my understanding that the Friant surcharges that
    used to go into the CVP Restoration Fund now go into the San Joaquin
    Restoration Fund. However, where BOR used to appropriate those funds in
    the CVP Restoration Fund, that they are being treated differently in
    the San Joaquin Restoration Fund. Is it true that these funds are being
    collected but are not being appropriated as a part of the budget
    request?
        Answer. No, BOR has requested discretionary appropriations to use
    funds deposited into the San Joaquin River Restoration Fund (SJRRF) in
    both the fiscal year 2012 and fiscal year 2013 budget requests. As
    described in section 10009 of Public Law 111-11, funds deposited into
    the SJRRF include the following:
      --the Friant Division Surcharge;
      --the construction cost component of payments made by the Friant
            Division, Hidden Unit and Buchanan Unit long-term contractors;
      --proceeds from the sale of water or land pursuant to the Settlement;
            and
      --any non-Federal funds contributed for implementation of the
            Settlement.
        The request made for discretionary appropriations to use funds
    deposited into the SJRRF in fiscal year 2012 and fiscal year 2013
    reflects the funding needs of the restoration program.
                               california drought
        Question. What are the drought projections for this year?
        Answer. Water supply conditions have improved significantly in
    March and April, but we still may be looking at seasonal runoff indices
    falling below historical average, especially in the San Joaquin Valley.
    The water supply in the southern part of California has not shown as
    much improvement due to less precipitation relative to Northern
    California and the difficulty of moving CVP water through the Delta.
    The U.S. Seasonal Drought Outlook released by National Oceanic and
    Atmospheric Administration (NOAA) on May 17, 2012, is attached.

        Question. What are the CVP Reservoirs (capacity) current storage as
    of May 18, 2012?
        Answer. Shasta Reservoir (4,552,000 acre-feet) now 4,436,000 acre-
    feet; Trinity Reservoir (2,448,000 acre-feet) now 2,350,000 acre-feet;
    Folsom (977,000 acre-feet) now 908,000 acre-feet; New Melones
    (2,420,000 acre-feet) now 1,891,000 acre-feet; Millerton (520,000 acre-
    feet) now 430,000 acre-feet.
        Question. What is the latest projection on water deliveries from
    BOR projects in California?
        Answer. CVP is currently at 100 percent for the Sacramento River
    water rights settlement contractors, 100 percent for San Joaquin water
    rights exchange contractors, 100 percent of level 2 wildlife refuge
    supply, 100 percent for Agriculture and Municipal and Industrial (M&I)
    users north of the Delta, 75 percent of historical use for M&I users
    south of the Delta, and 40 percent for agricultural users south of the
    Delta.
                          bay-delta conservation plan
        Question. Commissioner Connor, a lot of concern has been expressed
    to me about the Bay-Delta Conservation Plan (BDCP) process. Can you
    tell us what your plans are for thoroughly studying all conveyance
    alternatives for moving water past the Delta, not just the large,
    isolated conveyance facility that has been identified?
        Answer. While the current BDCP effects analysis evaluates a 15,000
    cubic foot/second (cfs) facility, the BDCP Environmental Impact Report/
    Environmental Impact Statement (EIR/EIS) is evaluating a wide range of
    alternatives. There are 15 action alternatives and 1 no-action
    alternative which will be described in the BDCP EIR/EIS. The BDCP EIR/
    EIS is analyzing various combinations of water conveyance
    configurations including capacities ranging from 3,000 to 15,000 cfs,
    different operating scenarios, habitat restoration, and the effects on
    biological resources and water supply. In addition to conveyance, the
    alternatives include a variety of conveyance alignments and other
    specifications resulting from public scoping sessions conducted in 2008
    and 2009 and the California Water Reform Act of 2009.
        Question. How will studies of through-Delta conveyance figure into
    the overall BDCP process?
        Answer. The information resulting from the EIR/EIS studies
    (including the through-Delta conveyance) being conducted will be used
    for the selection of the proposed project submitted by the State of
    California as part of ESA section 10 application process.
        Question. After all diversion and nondiversion conveyance
    alternatives have been identified, it is essential that a thorough
    benefit-cost analysis be conducted for each. Can you tell us how you
    plan to go about that?
        Answer. As part of the overall BDCP process, several analyses are
    being completed that address costs and benefits. First, the current
    BDCP draft documents include initial cost estimates for construction
    and implementation of a preliminary project. Secondly, the State of
    California is conducting an economic analysis of the benefits
    associated with BDCP alternatives. Lastly, the BDCP environmental
    documentation will include an analysis of the socioeconomic impacts
    associated with alternatives. This information will be used to
    determine the proposed project to be included in the ESA section 10
    permit application.
                            delta and delta counties
        Question. Will the benefit-cost analyses you undertake include all
    foreseeable direct and indirect economic impacts of the Delta and Delta
    Counties, including the impacts of any new water infrastructure and
    habitat conservation projects? If not, why not?
        Answer. Yes, the cost and benefits analysis identified above will
    assist in identifying the direct and indirect economic impacts of any
    new conveyance facility in the Delta.
                          bay-delta conservation plan
        Question. It is essential that all decisions made through the Bay-
    Delta Conservation Plan (BDCP) process be based on the best possible
    science. What steps are taking to ensure that all BDCP proposals are
    given an independent review that involves all stakeholders, including
    the Delta Counties?
        Answer. BOR continues to reaffirm the Federal commitment to work in
    close partnership with the State and key stakeholders including the
    Delta Counties to pursue the development of the BDCP. BOR is fully
    committed to a sound and credible scientific basis for BDCP. This
    commitment has been unwavering and has been frequently reiterated.
    Credible science is essential for the BDCP to meet regulatory approval
    standards and to garner broad stakeholder support. The science issues
    underlying BDCP are long standing, complex, and, in certain cases,
    contentious. Federal agencies have engaged independent science review
    under the Delta Stewardship Council's Delta Science Program and are in
    partnership with the State, working towards a sound and credible
    scientific basis for the BDCP.
        Question. Does the BDCP process include establishing through-Delta
    flow standards, consistent with California's water rights priority
    system and statutory protections of area of origin prior to the
    adoption of BDCP? If so, please describe that process.
        Answer. The BDCP process is not establishing new through-Delta flow
    standards. However, any BDCP proposed project must comply with State
    water rights, including State Water Resources Control Board flow
    requirements.
        Question. Does the BDCP process include a science-based peer-
    reviewed analysis of water amounts and flows needed for use, under
    current law, in the Delta for determining available surplus water
    supply, and does the BDCP restrict the exporting of water from the
    Delta to only surplus water?
        Answer. Yes, any water conveyed as part of BDCP must meet
    beneficial use standards as required by State law. No, the working
    assumption of BDCP does not include any reliance on surplus water.
                     title xvi water reclamation and reuse
        Question. In your fiscal year 2013 budget request, you identify
    water conservation as one of BOR's priority goals. Can you tell us what
    role the title XVI Water Reclamation and Reuse program has played and
    will continue to play in your efforts to achieve that goal?
        Answer. BOR's Priority Goal for Water Conservation is to enable
    capability to increase available water supply by 730,000 acre-feet of
    water by the end of fiscal year 2013. As a result of fiscal year 2010
    and fiscal year 2011 funding, the title XVI program has contributed
    more than 25,000 acre-feet to the priority goal. Title XVI projects are
    a key part of BOR's efforts to address water supply sustainability and
    will continue to make an important contribution toward this priority
    goal. Fiscal years 2012 and 2013 funding for title XVI projects will
    result in additional contributions to the goal.
        Question. The subcommittee is aware of the priority that BOR places
    on title XVI projects that seek to address water supply needs on a
    watershed basis. Does BOR agree that there is an opportunity to enhance
    the program's effectiveness through the advancement of regional-scale
    projects that include multiple jurisdictions and generate environmental
    as well as water supply benefits?
        Answer. In 2010, BOR established funding criteria for the title XVI
    program after incorporating comments from title XVI project sponsors,
    members of the public, and others (including one Member of Congress).
    The criteria are intended to meet a number of important program goals,
    such as increasing water supply and reducing the need to develop new
    water supplies, addressing environmental concerns, and exploring the
    use of renewable energy as part of water reuse, among others. As you
    point out, the criteria also address the extent to which a project
    incorporates a watershed-based approach. In fact, the criteria provide
    significant consideration of the extent to which a project implements a
    regional planning effort or includes collaborative partnerships among
    multiple entities to meet the needs of a region or watershed. BOR
    agrees that regional scale projects that include multiple partners and
    generate significant environmental benefits are important, and we are
    confident that BOR's existing funding criteria provide ample
    opportunity for sponsors of those projects to receive additional
    consideration based on those benefits. At the same time, BOR plans to
    review this year's process prior to development of next year's funding
    opportunity to ensure that title XVI program funding is allocated as
    effectively as possible.
        Question. These regional projects can require longer planning and
    construction timeframes than other more narrowly focused projects. What
    steps has BOR taken within the overall title XVI program to advance
    regional-scale water reclamation and reuse projects?
        Answer. In fiscal year 2011, BOR used a Funding Opportunity
    Announcement (FOA) for the first time in the title XVI program to
    allocate available appropriations. This year, BOR made significant
    revisions to the FOA to address feedback and to ensure that the program
    works, as well as possible and in a way that minimizes the burden on
    project sponsors. For example, under the revised FOA, sponsors of large
    projects may request up to $4 million each year as planning, design,
    and construction activities continue, without being asked to divide
    those large projects into smaller phases. Again, prior to development
    of funding opportunities for fiscal year 2013, BOR plans to assess this
    year's process and will consider additional revisions, if necessary.
                            anadromous fish screens
        Question. To date, Federal funding provided through the CVP
    Restoration Fund's Anadromous Fish Screen Program (AFSP) has
    contributed to the completion of 29 projects resulting in screening of
    more than 4,833 cubic feet per second of unscreened diversions. Do you
    agree that this program has been contributed greatly to the goals of
    the CVPIA?
        Answer. Since CVPIA's enactment in 1992, AFSP has partnered with
    numerous water districts, the State of California, and other non-
    Federal entities in the screening of both large and small intake
    diversions on the Sacramento and San Joaquin Rivers. Through fiscal
    year 2011, 33 projects screening 5,054 cfs have been completed. The
    screening of these facilities has certainly reduced the entrainment of
    endangered fish species (winter-run Chinook salmon, Central Valley
    steelhead, etc.) and has contributed towards achieving the CVPIA's
    goals. The AFSP is funding studies and monitoring activities to help
    quantify fish screening benefits to Anadromous fish.
        Question. For fiscal year 2012, BOR received a total of $10,349,000
    for AFSP. Can you tell how those funds will be spent?
        Answer. The AFSP's budget for fiscal year 2012 is broken down as
    follows:
      --Agency Staff Labor = $1.072 million.
      --Studies and Monitoring = $0.765 million.
      --Planning (design, environmental compliance, permitting, etc.) =
            $0.165 million.
      --Construction = $8.347 million (available for the construction of
            the Natomas (Phase 2a), Meridian (Phase 2), and Reclamation
            District (RD) 2035 fish screen projects, depending on the
            availability of the non-Federal cost share. To date, no
            district has provided a non-Federal funding commitment).
        Question. Can you provide us with a status report, including
    funding needs for fiscal years 2012, 2013, 2014, and 2015, for each of
    the projects currently under construction or planned for construction
    under AFSP?
        Answer. The response for fiscal year 2012 was provided above. For
    fiscal years 2013, 2014, and 2015, all three projects expect to begin
    construction, depending on whether or not all funding sources are
    secured. For the Natomas (Phase 2b and 3), RD 2035, and Meridian (Phase
    2) fish screen projects, the approximate Federal share is estimated to
    be $9 million, $18 million, and $9.5 million, respectively.
    Construction periods for the Natomas, RD 2035, and Meridian projects
    are 3 years, 3 years, and 2 years, respectively. All Federal funding
    requires the district to secure a non-Federal funding match.
        In addition to the three fish screen projects mentioned above,
    another proposed project is the West Stanislaus Irrigation District's
    (WSID) fish screen project on the San Joaquin River. This project is in
    the early planning stage; therefore, its construction costs are not
    well defined at this time. Construction of WSID's project could begin
    as early as 2015, pending completion of all planning, environmental
    compliance, design, and permitting activities.
        Question. Is BOR committed to providing the 50 percent Federal
    share of the cost of construction of the fish screen projects for RD
    2035, the Meridian Farms Water Company, and the Natomas Mutual Water
    Company?
        Answer. Subject to sufficient Federal appropriations, BOR is
    committed to providing up to a maximum of 50 percent of these fish
    screen projects' costs. However, this commitment is dependent on there
    being a secured non-Federal funding match.
                             title xvi--watersmart
        Question. While Tennessee is not a Reclamation State, the work that
    BOR does in the West has an impact nationwide. While water reclamation
    and reuse is not currently a concern in Tennessee, it could have an
    impact in the future, and I am interested in the program that
    reclamation undertakes. How are the choices made for the projects that
    are funded under the WaterSMART grant program? Note: The question
    refers to water reclamation and reuse; therefore, these proposed
    responses focus on title XVI instead of WaterSMART.
        Answer. The extent to which each project will reduce demands on
    existing water supplies by making recycled water available; whether the
    project will make water available to address a specific local water
    supply concern and whether recycled water will continue to be available
    during periods of drought; the extent to which additional funding will
    bring a project close to completion; the extent to which the project is
    ready to proceed, including completion of necessary environmental
    compliance; the extent to which the project will improve water quality
    or provide water for endangered species; the extent to which the
    project incorporates renewable energy and addresses energy efficiency;
    the cost per acre-foot of water expected to be delivered by the project
    as compared to alternatives; the extent to which the project would help
    to meet the Federal Government's legal requirements such as providing
    water for water rights settlements or river restoration; the extent to
    which a rural or economically disadvantaged community would be served
    by the project; and the extent to which the project incorporates a
    watershed perspective, including use of regional planning efforts
    across geographically dispersed localities and collaboration among
    multiple entities.
        Funding criteria for WaterSMART Water and Energy Efficiency Grant
    proposals include the following:
      --The extent to which the project is expected to result in
            quantifiable water savings or would otherwise improve water
            management;
      --The reasonableness of costs for the improvements proposed;
      --The extent to which the project would increase the use of renewable
            energy in the management of water or otherwise would result in
            increased energy efficiency;
      --The extent to which the project is expected to benefit endangered
            species;
      --The extent to which the project proposes water marketing elements,
            such as establishment of a new water market or would contribute
            water toward an existing market;
      --Other contributions to water supply sustainability, including
            addressing specific local concerns, promoting collaboration
            among parties, or helping to expedite future on-farm irrigation
            improvements;
      --Project planning and readiness to proceed;
      --The applicant's description of performance measures that will be
            used to quantify actual project benefits; and
      --Connection to BOR project activities.
        Sponsors of authorized title XVI projects and applicants for
    WaterSMART Grant funding are asked to apply for funding by responding
    to a Funding Opportunity Announcement posted for the public. A team of
    BOR employees applies criteria to the applications received to rank
    proposals and projects are prioritized accordingly.
        Question. What is the maximum amount of the grants made under this
    program?
        Answer. Each of the 53 congressionally authorized projects includes
    an appropriations ceiling for the project--typically $20 million,
    although some authorized projects have a smaller or larger ceiling.
    This year, BOR's Funding Opportunity Announcement informed applicants
    that no more than $4 million in fiscal year 2012 appropriations would
    be made available to any particular project, up to the amount remaining
    under the appropriations ceiling for that project.
        Question. Is there any allowance made for providing larger grants
    to regional projects?
        Answer. To allocate the limited funding available under the title
    XVI program (approximately $19 million in fiscal year 2012 for title
    XVI funding opportunities) among a number of project sponsors seeking
    funding, grants in excess of $4 million were not possible this year.
    Project sponsors may apply for additional funding in fiscal year 2013
    as construction on projects continues.
        As BOR prepares a funding opportunity for fiscal year 2013, we will
    evaluate this year's process--including that funding level of $4
    million per project--and make revisions if necessary to ensure that the
    program works as effectively as possible for project sponsors.
                        indian water rights settlements
        Question. We provided about $51 million last year for Indian Water
    Rights Settlements. Has all of that funding been obligated to the
    various tribes for which it was specified?
        Answer. BOR will obligate the entire $51 million appropriated to
    BOR in fiscal year 2012 by the end of the year. The following
    represents the funding status of each of the acts within the Claims
    Resolution Act.
          Navajo Gallup Water Supply Project.--For fiscal year 2012, the
            enacted amount was $24.5 million of which, $17.7 million has
            been obligated to date. Through construction contracts and
            three financial assistance agreements (to provide funding to
            entities for design and construction portions of the project)
            we anticipate that all funds will be obligated by the end of
            fiscal year 2012.
          Taos Pueblo Indian Water Rights Settlement Act.--In fiscal year
            2012, $4 million of the $51 million enacted was appropriated
            for the Taos Pueblo Indian Water Rights Settlement Act. This
            settlement requires $36 million to be deposited into the non-
            interest bearing Taos Pueblo Water Development Fund in the U.S.
            Treasury. This funding will be made available after the
            settlement enforcement date of March 31, 2017, to provide
            grants to plan, permit, design, engineer, and construct the
            Mutual Benefits Projects. All appropriated dollars will be
            deposited into the Taos Pueblo Water Development Fund by the
            end of the fiscal year.
          Aamodt Litigation Settlement Act.--In fiscal year 2012, $9.3
            million of the $51 million enacted was appropriated for the
            Aamodt Litigation Settlement Act. As of May 1, 2012, $302,688
            of this funding has been obligated. The majority of the $9.3
            million is expected to be obligated by September 30, 2012, for
            planning and engineering design data collection efforts and a
            National Environmental Policy Act (NEPA) support services
            contract for the Pojoaque Basin Regional Water System.
          Crow Tribe Rights Settlement Act.--BOR and the Crow Tribe
            executed a Public Law 93-638 construction contract under
            section 405 on September 13, 2011. Under this contract, BOR has
            obligated the entire fiscal year 2012 appropriated amount of
            $8.2 million.
          White Mountain Apache Tribe (WMAT) Water Rights Quantification
            Act.--In September 2011, the $3.2 million discretionary funding
            received for the WMAT was obligated. To date, the $4.8 million
            discretionary funding received in fiscal year 2012 has not been
            obligated, however, is expected to be fully obligated by the
            end of the fiscal year.
        Question. Some of this Settlement funding was to be used for water
    systems on the reservations. Can you give us an update on the progress
    of these water systems?
        Answer. The following represents the status of each of the water
    systems within the Claims Resolution Act.
          Navajo Gallup Water Supply Project.--The authorizing legislation
            identified eight pre-construction activities that were required
            to be completed prior to commencing construction of the
            Project. All of those activities have now been completed and
            the corresponding agreements and contracts have been executed.
            Pre-construction work, including design, Right of Way
            acquisition, and environmental and cultural resource compliance
            activities continue in fiscal year 2012 for reaches that will
            be constructed in the future. The pre-construction land
            clearances and designs have also been completed to allow for
            the initial construction to begin in fiscal year 2012. In
            addition to the pre-construction activities discussed above,
            construction is scheduled to begin in several areas of the
            project in fiscal year 2012.
          Taos Pueblo Indian Water Rights Settlement Act.--BOR has
            requested $4 million to be deposited into the Taos Pueblo Water
            Development Fund. All of the $20 million in discretionary
            appropriations authorized by Public Law 111-291 (of which the
            $4 million is a part) must be appropriated and deposited in the
            Fund by the settlement enforcement date of March 31, 2017. None
            of the funds are intended to be used on water systems located
            on reservation lands. The funds are for the Mutual-Benefit
            Projects, which are intended to minimize impacts on the
            Pueblos' water resources by moving non-Indian ground water
            pumping away from the Pueblos' lands.
          A contract has been executed with the Pueblo of Taos for their
            share of San Juan-Chama Project (SJCP) water. The Taos
            Agreement should be ready for execution later this year. SJCP
            contracts have been negotiated with the Town of Taos and El
            Prado. Appraisal level designs and cost estimates are being
            prepared for some of the mutual benefits projects. This work
            has been accomplished with Native American Affairs Program
            funding.
          Aamodt Litigation Settlement Act.--Using fiscal year 2012
            appropriations, BOR has developed project management plans,
            begun engineering design data collection in coordination with
            the project stakeholders, and has initiated Government-to-
            Government consultations with the Pueblos of Nambe, Pojoaque,
            Tesuque, and San Ildefonso. BOR expects to award a contract for
            NEPA compliance support services in July and anticipates
            awarding contracts for geotechnical investigations in
            September.
          Crow Tribe Rights Settlement Act.--For the Crow Irrigation
            Project within the contract initiated under Public Law 93-638,
            BOR reviewed and provided comments on plans and specifications
            to the tribe for Lodge Grass #1 and #2 diversion structures,
            and the tribe prepared final plans and specifications, based on
            BOR's review. Procurement of materials for these facilities is
            starting this spring and the tribe plans to construct these
            facilities in the fall of 2012 after the irrigation season
            concludes.
          White Mountain Apache Tribe (WMAT) Water Rights Quantification
            Act.--The WMAT is currently in the process of soliciting for
            and awarding design contracts to complete the design work of
            the Miner Flat Project to the 30 percent stage to enable
            completion of an Environmental Impact Statement (EIS). The WMAT
            is also currently in the process of soliciting and awarding a
            contract for environmental services for EIS development.
                      central utah project completion act
        Question. You have proposed reintegrating the Central Utah Project
    back into BOR's budget as opposed to it being separate as it has been
    for the last 20 years. Why is this being proposed for fiscal year 2013?
        Answer. This consolidation fits in with broader Administration
    efforts to implement good Government solutions and consolidate and
    streamline activities where possible. The Central Utah Project
    Completion Act (CUPCA) is the only major water project within the
    Department of the Interior (DOI) not managed by BOR. The proposed
    consolidation is intended to ensure that all major water projects
    within DOI receive equal and consistent consideration and treatment.
        Question. Will this improve the management of the Central Utah
    Project?
        Answer. The proposed consolidation will leave the management of
    completing construction of the CUPCA with the Central Utah Water
    Conservancy District. Oversight and administrative responsibilities
    will move from the Department's Assistant Secretary for Water and
    Science to BOR. Consolidation of the CUPCA Office into BOR will enhance
    local responsiveness and program access to the functions within BOR
    that currently provide administrative support for implementation.
        Question. Are there any cost savings by making this change to the
    Central Utah Project?
        Answer. The consolidation will likely have very little impact on
    costs. No significant cost savings or increase in costs is anticipated.
        Question. What happens to the personnel that are currently
    responsible for the Central Utah Project, are they shifted to BOR's
    payroll?
        Answer. We anticipate that personnel in the CUPCA Office would be
    shifted to BOR; however, the details of the consolidation have not been
    finalized.
        Question. Will this change affect the responsibilities of the non-
    Federal partners on the Central Utah Project?
        Answer. The consolidation will not impact the non-Federal partners
    involved with the completing CUPCA. All non-Federal responsibilities
    and authority as described in the original CUPCA legislation would
    remain unchanged.
                                     ______

                  Questions Submitted by Senator Patty Murray
                          odessa subarea special study
        Question. Commissioner Connor, as you know the Odessa Subarea
    Special Study is nearing the end of a 5\1/2\-year effort to develop
    alternatives to maintain the economy and jobs base of the Columbia
    Basin region by substituting Columbia Basin Project water supplies for
    groundwater irrigation. The groundwater aquifer is being rapidly
    depleted which threatens not only continued agricultural production but
    domestic and municipal water supplies for the region's cities.
        I am concerned that the Study is being conducted using the rigid
    ``Principles & Guidelines'' study methodology that often does not take
    into account real world realities and that BOR applies overly cautious
    construction contingency margins that are out of line with current
    construction experience.
        Is BOR committed to timely completion of the Study and to playing a
    significant role in finding solutions to the water supply problem of
    the Columbia Basin Project area?
        Answer. Yes, BOR is committed to the timely completion of the
    Odessa Subarea Special Study and is in the process of completing the
    Final Environmental Impact Statement and planning documents by summer
    2012.
        The Preferred Alternative is being developed in consultation with
    our Study partners in response to public comment on the Draft
    Environmental Impact Statement. This alternative will provide a good
    opportunity for public private partnerships and maximizes the use of
    the existing Columbia Basin Project infrastructure.
        Question. The State of Washington has already invested millions of
    dollars in the Study and other Columbia Basin Project capital projects.
    What are BOR's plans for integrating funding for project elements in
    the Administration's budget request, starting in fiscal year 2014?
        Answer. BOR's cost is shared with the State of Washington on this
    Study as well as other Columbia Basin Project capital projects.
    Implementation of the project is dependent on completion of
    environmental compliance which is our focus in the near term.
        As stated above, BOR is committed to completion of the Study;
    however, future budget requests are contingent upon the completion and
    outcome of the Study.
                                     ______

                 Questions Submitted by Senator Lamar Alexander
                                   hydropower
        Question. Commissioner Connor, given the Bureau of Reclamation's
    (BOR) ownership of thousands of megawatts of hydropower facilities, and
    the March 31, 2011, Department of the Interior report on the potential
    to create clean energy at BOR facilities, what is the Bureau doing on
    this issue?
        Answer. BOR is focusing its efforts on creating new clean energy on
    two fronts. The first is by updating and improving the efficiencies of
    its existing hydropower generators and the second is by encouraging
    development of new hydropower on dams and canals where hydropower is
    currently unavailable.
        BOR currently owns and operates 53 hydroelectric powerplants with
    an installed capacity of 14,803 megawatts of installed capacity. While
    BOR has a long history of increasing the capacity and efficiency of its
    hydrogenerators, this initiative could be expanded. By replacing its
    older hydrogenerator turbines with more efficient turbines, rewinding
    generators to increase capacity and optimizing operation of existing
    generators, clean hydropower generation could be increased by an
    estimated 2 to 3 percent.
        To encourage new non-Federal development on BOR dams and canals,
    BOR has performed two hydropower resource assessments. The first
    identified 268 megawatts of additional hydroelectric capacity which
    could be developed primarily at 191 Reclamation dams. The second
    assessment identified 104 megawatts of hydroelectric capacity which
    could be developed on BOR canals and conduits. Together these studies
    identified 1,565 million megawatt-hours of new renewable energy which
    is enough to power 130,000 homes.
        BOR is also revising its process for development of power at BOR
    facilities through lease of power privilege which is currently under
    review. This effort will help make the process clear to developers.
        Due to these efforts, there are 20 new non-Federal hydropower
    plants being developed on BOR facilities.
        Question. What would it take for the BOR to modernize and upgrade
    its facilities to result in more clean-energy production?
        Answer. BOR could increase its clean hydropower generation by 2 to
    3 percent through hydrogenerator turbine replacements, rewinds and
    optimization projects. Within BOR, 22 percent of hydroelectric
    generator windings and 30 percent of our turbines are 40 years old or
    older and have not been refurbished. Using a risk and condition based
    approach of prioritizing rehabilitations, BOR continues to work with
    its Federal power customers to better identify and schedule these
    opportunities.

        Senator Feinstein. Okay. Just so everybody here knows the
    impact of this, California, I should say, America's largest
    agriculture State is California.
        In 2009 when we had a similar situation, you had 45 percent
    unemployment. You had farmers in bread lines. It was really a
    terrible, terrible situation. So what we're trying to do is
    essentially make certain adjustments that could provide at
    least a flow of water necessary to have a somewhat positive
    farming experience without throwing people into unemployment.
        It's a huge, huge industry. You've been wonderful, and we
    appreciate it. Please keep going because 150 to 200 acre-feet
    isn't going to do it.

                             CONCLUSION OF HEARINGS

        Senator Feinstein. Everybody, I think that completes our
    hearing. Thank you very much, General, two Secretaries, Mike,
    thank you very much. The hearing is adjourned.
        Ms. Darcy. Thank you, Madam Chair.
        Mr. Connor. Thank you.
        [Whereupon, at 4:30 p.m., Wednesday, March 28, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

        ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 2013

                                  ----------

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

                           NONDEPARTMENTAL WITNESSES

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

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

         Prepared Statement of the American Society of Civil Engineers
        Madam Chair and members of the subcommittee: The American Society
    of Civil Engineers (ASCE) is pleased to provide this statement for the
    record on the proposed budgets of the U.S. Army Corps of Engineers
    (USACE) and the Bureau of Reclamation (BOR) for fiscal year 2013.
                          u.s. army corps of engineers
        The fiscal year 2013 budget provides $4.7 billion, a decrease of
    more than 5 percent from the fiscal year 2012 enacted level of $5
    billion. The President's budget for fiscal year 2013 is inadequate to
    meet the needs of an aging waterways infrastructure and must be
    increased. The Congress must expand funding for fiscal year 2013.
        The fiscal year 2013 budget plan released by the House Budget
    Committee last week would further erode the Nation's ability to rebuild
    its aging water resources infrastructure by reducing total outlays in
    fiscal year 2013 by $94 billion.
        Under the Budget Control Act of 2011, the Congress has $1.047
    trillion in new discretionary budget authority for fiscal year 2013,
    with $686 billion set aside for security programs (defense,
    intelligence, and homeland security) and $361 billion for all domestic
    discretionary spending.
        ASCE recommends a minimum appropriation of $5.2 billion for USACE
    in fiscal year 2013 to account for inflation and to halt the decline in
    budget authority to ensure safe infrastructure and a sound economy.
        The administration proposal for fiscal year 2013 would reduce
    construction funding from $1.694 billion to $1.471 billion, a reduction
    of 13 percent. Operations and maintenance funding would be down
    slightly from $2.412 billion to $2.398 billion. The Mississippi River
    and Tributaries account would decline from $252 million to $234 million
    or 7 percent. Investigations--the money used to complete project
    feasibility studies--would go from $125 million to $102 million, a
    decline of 18 percent. In all, the Civil Works program budget for
    fiscal year 2013 would be cut from $5.002 billion in fiscal year 2012
    to $4.731 billion in fiscal year 2013, an overall reduction of 5.4
    percent.
        In 2005, Hurricane Katrina vividly demonstrated the perils of
    relying upon poorly funded infrastructure to protect lives and
    property. An ASCE investigation (conducted on behalf of USACE) reported
    in 2007 that chronic under funding was one of the principal causes of
    the levee failures after Katrina.

        ``Because of the congressional budgeting process, the stream of
    funding for the New Orleans hurricane protection system was irregular
    at best. If a project was not sufficiently funded, the USACE was often
    required to delay implementation or to scale back the project.
        This push-pull mechanism for the funding of critical life-safety
    structures such as the New Orleans hurricane protection system is
    essentially flawed. The process creates a disconnect between those
    responsible for design and construction decisions and those responsible
    for managing the purse-strings. Inevitably, the pressure for tradeoffs
    and low-cost solutions compromised quality, safety, and reliability.
        The project-by-project approach--in which projects are built over
    time based on the availability of funding--resulted in the hurricane
    protection system being constructed piecemeal with an overall lack of
    attention to `system' issues. The project-by-project approach appears
    to be associated with congressional limitations. The USACE was forced
    into a `reductionist's' way of thinking: reduce the problem into one
    that can be solved within the given authority and budget. Focus only on
    the primary problem to be solved, inevitably making the issues of risk,
    redundancy, and resilience a lower priority.''

    American Society of Civil Engineers, The New Orleans Hurricane
    Protection System 71-72 (2007).

        With this proposed budget, USACE would continue to suffer from
    under investment in essential infrastructure systems. If allowed to
    continue, this trend likely will result in ever greater system failures
    and the consequent expenditure of tens of billions of dollars to
    rebuild what could have been built more economically in the first
    instance.
        In the face of USACE's aging infrastructure needs, the President's
    budget for the Civil Works program in fiscal year 2013 reduces Federal
    investments in vital national civil works systems. Moreover, the
    negative budgeting trend is not likely to improve in future years.
    USACE estimates that its budget proposals will continue to decline
    through fiscal year 2015. USACE expects that inflation will reduce
    actual spending on key infrastructure programs by a further $3 billion
    over the next 5 years. ASCE believes that these levels of spending are
    inadequate to meet the Nation's security, economic, and environmental
    demands in the 21st century.
                       the harbor maintenance trust fund
        The Harbor Maintenance Revenue Act authorizes expenditures from the
    Harbor Maintenance Trust Fund (HMTF) to finance up to 100 percent of
    eligible USACE harbor operation and maintenance costs, including the
    operation and maintenance of Great Lakes navigation projects.
        The fund fully finances eligible operation and maintenance costs of
    the Saint Lawrence Seaway Development Corporation. The Water Resources
    Development Act of 1996 authorizes the fund to pay the Federal share of
    the costs for the construction of dredged material disposal facilities
    that are necessary for the operation and maintenance of coastal or
    inland harbors, the dredging and disposal of contaminated sediments
    that are in or affect the operation and maintenance of Federal
    navigation channels, the mitigation of impacts resulting from Federal
    navigation operation and maintenance activities, and the operation and
    maintenance of dredged material disposal facilities.
        The dredging of the Nation's ports and harbors has suffered from
    years of under investment in a system that is critical to America's
    ability to compete in the global marketplace. For fiscal year 2013 the
    administration has requested $839 million be appropriated from the
    HMTF--only 50 percent of total estimated revenues. Total revenues are
    now estimated at $1.659 billion for fiscal year 2013. The busiest U.S.
    harbors are presently under maintained. USACE estimates that full
    channel dimensions at the Nation's busiest 59 ports are available less
    than 35 percent of the time. This situation can increase the cost of
    shipping as vessels carry less cargo in order to reduce their draft or
    wait for high tide before transiting a harbor. It could also increase
    the risk of a ship grounding or collision.
        The fiscal year 2013 budget request does not come close to meeting
    the requirements of the Nation's ports and harbors, which have an
    annual need for maintenance dredging of between $1.3 and $1.6 billion,
    according to USACE.
        This trend toward reduced investments in our ports and harbors has
    led to ever greater balances in the HMTF, and the unexpended balance in
    the Trust Fund is growing with a bookkeeping balance of more than $8
    billion by September 30, 2013, according to the Office of Management
    and Budget.\1\
    ---------------------------------------------------------------------------
        \1\ We recognize that none of the U.S. Army Corps of Engineers'
    funding for ports and harbors is appropriated directly from the HMTF.
    The money is appropriated from the General Fund of the Treasury. The
    HMTF then reimburses the General Treasury for the actual dollars
    expended on projects that are eligible to receive funding through the
    HMTF.
    ---------------------------------------------------------------------------
        As a result, the great majority of our Nation's harbors--including
    8 of the top 10 largest ports--are not being maintained to their fully
    authorized width and depth. Ships carrying U.S. goods must ``light-
    load'', thus increasing the costs of the goods and decreasing American
    competitiveness in the global economy.
        This subcommittee should appropriate $1.6 billion from the HMTF in
    fiscal year 2013.
                             bureau of reclamation
        The fiscal year 2013 budget request for BOR is $994 million. The
    Water and Related Resources, BOR's principal operating account, is
    budgeted at $818.6 million, a decrease of 8 percent.
        The request includes a total of for water and energy, land, and
    fish and wildlife resource management and development activities.
    Funding in these activities provides for planning, construction, water
    conservation activities, management of BOR lands, including recreation,
    and actions to address the impacts of BOR projects on fish and
    wildlife.
        The Congress needs to maintain appropriate and vital levels of
    funding for the BOR's Water and Related Resources account to support
    construction and rehabilitation of critical western water projects.
        Population growth, climate change, drought, under financing and
    environmental protection needs have tightened water supplies in the
    West, and made BOR's infrastructure more important than ever for
    providing essential water supplies to rural and urban communities as
    well as agriculture economies throughout the West.
        While we recognize the urgent need to address the national deficit,
    we ask for your support for maintaining at least $1 billion in fiscal
    year 2013 for BOR. In particular, maintaining this level of funding
    will help address BOR's unfunded project backlog and create beneficial
    construction jobs throughout the West. Most significantly, the back log
    for congressionally authorized BOR water projects now stands at several
    billion dollars.
        We strongly encourage you to recognize through the appropriations
    process that the infrastructure built and maintained by the Bureau and
    local governments help power the economic productivity--and tax
    revenue--on which the U.S. Government depends. Job creation, efficient
    agricultural production, and reliable drinking water supplies are just
    a few of the benefits of these investments to the national economy.
        ASCE recommends an appropriation of $1 billion for BOR in fiscal
    year 2013.
                                     ______

     Prepared Statement of the Board of Levee Commissioners for the Yazoo-
                               Mississippi Delta
        There are investments, and then there are investments, just as
    there are priorities, and then there are priorities.
        Since its inception, the United States Congress has allocated
    approximately $14 billion to the Mississippi River and Tributaries
    (MR&T) project. According to the U.S. Army Corps of Engineers (COE),
    last year alone, throughout the Great Flood of 2011, the largest this
    Nation has ever known, the MR&T prevented $110 billion in flood damages
    to the Nation's heartland.
        That's a good investment.
        But such Acts of God as was that flood invariably produce
    consequences for man. More water than any living human being has ever
    witnessed was contained--in some instances, barely contained--by one of
    the greatest engineering and construction feats ever, the mainline
    Mississippi levee system. But that much water inflicts damages; that
    much water takes a toll.
        COE says that it will take approximately $2 billion to repair and
    strengthen the levee system that just saved the country $110 billion
    worth of damage. That's a benefit to cost ratio of 54-1. While less
    than one-half of an emergency allocation did go to the MR&T, not only
    is that inadequate, it is a dangerous gamble. Surely, we can adequately
    restore the levees that just saved us.
        That should be a high priority.
        We ask that the Congress provide $375 million in fiscal 2013
    funding for the MR&T--so that we might at least begin the process of
    getting ready for the next great flood that as always is a matter of
    when, not if.
        All of us, of course, are aware of the Congress's self-imposed
    moratorium on earmarks. And we can certainly understand such from a
    fiscal responsibility standpoint. But that said, we also think there is
    a fundamental flaw in that reasoning, a serious misunderstanding
    inherent in the very definition of the word, ``earmark''.
        When the men and women of this country think of earmarks, they
    think of pork-laden legislation which specifically benefits large
    political campaign contributors. They think of unnecessary public works
    projects that never seem to end or stay within budgets. They think of
    bridges that lead to nowhere.
        And ladies and gentlemen, that is not what we are talking about
    here today. Flood control is not a boondoggle. Flood control is a
    necessity for life as we know it within the greater Mississippi Valley.
    Public dollars for flood control projects are investments in the
    national infrastructure. Tax dollars for flood control can literally be
    thought of as premiums for flood insurance--not for flood damage, but
    for flood prevention.
        Beneath the umbrella of the MR&T, of course, are many component
    projects, and we would be remiss in our obligation to the citizens of
    our levee district not to point out the injustice related to one of
    them. The Upper Yazoo Projects (UYP) represents the virtual ideal of
    what any flood control project should be. It works--where it has been
    completed, that is--and absolutely no one, including the environmental
    community, in any way opposes it.
        The UYP has provided documented localized flooding relief to
    thousands at its southern stretches, while thousands more at the
    projects' northern end still suffer due only to a lack of funding. In
    last year's event, the town of Sledge and a heavily traveled State
    highway were under water, while those to the south of the same
    tributary were dry. And that is simply wrong.
        COE says it has the capability to do $16.5 million toward
    completion of the projects in 2013. Please give them at least some of
    the funding needed to continue.
        As always, we ask that the Congress also provide needed maintenance
    funding for Mississippi's four flood control reservoirs and also for
    the Delta Headwater Project which helps alleviate the stress on those
    structures and our interior steams by slowing runoffs from the hills to
    our east. COE's capabilities for those needed efforts are attached.
        But most critically, we feel, is that the Congress rejects the
    demonstrably false and potentially disastrous notion that flood control
    is optional or some luxury that can be discarded when money gets tight.
    Not only would lives and livelihoods be lost, but the Nation's economy
    would be wrecked should America's heartland be inundated by
    floodwaters.
        Flood control is literally a pay me now or pay me later
    proposition. We can pay to prevent the kind of disasters that last
    year's epic flood very nearly represented, or we can pay much, much
    more to try to restore that which is left in the wake of such an event.
        Thank you very much for allowing us the opportunity to testify on
    this matter that is so critical to the future of our Nation.
                                     ______

       Prepared Statement of the Board of Mississippi Levee Commissioners
        Madam Chair and members of the subcommittee: This statement is
    prepared by Peter Nimrod, Chief Engineer for the Board of Mississippi
    Levee Commissioners, Greenville, Mississippi, and submitted on behalf
    of the Board and the citizens of the Mississippi Levee District. The
    Board of Mississippi Levee Commissioners is comprised of seven elected
    commissioners representing the counties of Bolivar, Issaquena, Sharkey,
    Washington, and parts of Humphreys and Warren counties in the Lower
    Yazoo Basin in Mississippi. The Board of Mississippi Levee
    Commissioners is charged with the responsibility of providing
    protection to the Mississippi Delta from flooding of the Mississippi
    River and maintaining major drainage outlets for removing the flood
    waters from the area. These responsibilities are carried out by
    providing the local sponsor requirements for the congressionally
    authorized projects in the Mississippi Levee District. The Mississippi
    Levee Board and the Mississippi Valley Flood Control Association
    support an appropriation of $375 million for fiscal year 2013 for the
    Mississippi River and Tributaries (MR&T) project. This is the minimum
    amount that we consider necessary to allow for an orderly completion of
    the remaining work in the Valley and to provide for the operation and
    maintenance, as required, to prevent further deterioration of the
    completed flood control and navigation work.
        It is apparent that the administration loses sight of the fact that
    the MR&T project provides protection to the Lower Mississippi Valley
    from waters generated across 41 percent of the continental United
    States. These waters flow from 31 States and 2 provinces of Canada and
    must pass through the Lower Mississippi Valley on its way to the Gulf
    of Mexico. We will remind you that the MR&T project is one of, if not
    the most cost-effective project ever undertaken by the United States
    Government. The foresight of the Congress in their authorization of the
    many features of this project is exemplary.
        The many projects that are part of the MR&T project not only
    provide protection from flooding in the area, but the award of
    construction contracts throughout the Valley provides assistance to the
    overall economy of this area. The employment of the local workforce and
    purchases from local vendors by the contractors help stabilize the
    economy in one of the most impoverished areas of our country.
        In 2011, the MR&T project successfully passed the greatest flood on
    the Mississippi River. Every feature of the MR&T project including
    levees, floodways, and reservoirs were utilized. Not one acre of land
    was flooded that was not designed to flood. Not one life was lost. The
    MR&T system prevented $108 billion in damages in 2011 alone. All
    together since 1928, the Congress has invested $13.9 billion in the
    MR&T project, and it has prevented $478.3 billion in damages. This is a
    34:1 benefit to cost ratio. The flow carried by the Mississippi River
    in 1927 was 66 percent of a Project Design Flood. The flow carried by
    the Mississippi River in 2011 was 85 percent of a Project Design Flood.
    There is a larger flood on the horizon. In fact, stages will be 8-foot
    higher when we have the Project Design Flood than we just experienced
    in 2011. The MR&T project is only 89-percent complete. The Congress
    must be proactive and fully fund the MR&T project until it is
    completed. If not, the MR&T project will not pass the Project Design
    Flood.
        Even though the MR&T project worked, it suffered a lot of damage
    and many weaknesses were discovered during the 2011 Epic Flood. The
    Mississippi Levee Board would like to commend the Congress for
    appropriating $802 million for repairing the MR&T system following the
    historic 2011 Flood. This money will help reset and rebuild the MR&T
    system so that we can pass the next major flood event. Money spent on
    the MR&T project is money well spent that returns much more money in
    prevented damages.
        We are concerned about the ``earmark moratorium'' that the Congress
    has adopted. The Congress has essentially given up their right to
    appropriate money. They have relinquished this right to the Office of
    Management and Budget (OMB). OMB always provides a budget that
    undercuts our projects in the MR&T project because they know that the
    Congress will provide ``congressional adds''. Unfortunately people
    think that the ``congressional adds'' for the MR&T project are
    ``earmarks''. ``Earmarks'' account for less than 1 percent of the
    entire Federal budget, but it is these ``earmarks'' that provide money
    for much needed and essential projects and provide jobs for the
    economy. The stimulus money spent the past few years created jobs,
    built projects, and stimulated the economy. This ban on ``earmarks''
    will cause many projects to be stopped and jobs will be lost. The
    Congress needs to define what an ``earmark'' is and they need to be
    able to do ``congressional adds'' for our projects.
        Thanks to the additional funding provided by the Congress over the
    last several years over and above the administration's budget, work on
    the Mainline Mississippi River Levee Enlargement Project is continuing.
    Of the original 69 miles of deficient levees in the Mississippi Levee
    District, 32 miles of work have been completed and 8.1 miles are
    currently under contract. We are requesting $58.687 million for
    construction on the Mainline Mississippi River Levees in the Lower
    Mississippi Valley Division which will allow the Vicksburg and Memphis
    districts to keep existing contracts on schedule and award contracts to
    avoid any future unnecessary delays in completing this vital project.
        The President's fiscal year 2013 budget did not include funding for
    any construction projects within the Yazoo Basin. This action is
    especially difficult to understand during a time when our Nation needs
    an economic boost. These are all projects authorized and funded so
    wisely by the Congress. All of these projects are encompassed in the
    footprint of the Delta Regional Authority, an area recognized by the
    Congress as requiring special economic assistance to keep pace with the
    rest of our great Nation. We can not lose sight of the fact that all of
    these projects are required to return more than a $1 in benefits for
    each $1 spent.
        The recommended plan for the Yazoo Backwater Project included a
    pump that will lower the 100-year flood event by 4.5 feet thereby
    reducing urban and rural structural damages, providing benefits to the
    remaining agricultural lands, and reducing the frequency and duration
    of floods. The plan also includes reforestation easements to be
    purchased on up to 55,600 of existing agricultural land which will
    provide benefits in every environmental category--wetlands,
    terrestrial, aquatics, and waterfowl resources as well as vastly
    improving water quality. This was a model project that should be the
    standard for future public works projects in the United States. However
    on August 31, 2008, the Environmental Protection Agency (EPA) used it's
    authority under section 404(c) of the Clean Water Act (CWA) to veto the
    Yazoo Backwater Project even though it is exempt by section 404(r) of
    the CWA. The Mississippi Levee Board sued EPA in a lawsuit against EPA
    asking the Federal Court to determine if this project is indeed exempt
    from an EPA 404(c) veto by the exemption in section 404(r) of the CWA.
    The Federal court has ruled in favor of EPA. Unfortunately this model
    project is now completely stopped. If the Yazoo Backwater Project were
    in place in 2008, 2009, and 2011, the $220 million project would have
    prevented $257.5 million in damages. The Congress promised flood
    protection for the Mississippi South Delta back in 1941 when the Eudora
    Floodway was removed from the MR&T project. Arkansas and Louisiana have
    both benefitted from this floodway removal while Mississippi continues
    to be flooded. We urge the Congress to take up this backwater flooding
    problem again and find a solution for the Mississippi South Delta.
        We are requesting $4.575 million for the Yazoo Backwater less Rocky
    Bayou Project. This money will be used to start the Environmental
    Impact Statement for the Yazoo Backwater Levee Enlargement Project.
    This levee is designed to overtop during a project design flood, but it
    needs to be raised 5.8 feet to get to the required elevation. This
    backwater levee is supposed to overtop when we are within 2 feet of a
    Project Design Flood. In 2011 the Mississippi River was 8 feet below a
    Project Design Flood and the Yazoo Backwater Levee came within 4 inches
    of overtopping. We need this backwater levee raised immediately.
        Work on the Big Sunflower (Upper Steele Bayou) project has proved
    to be very beneficial. The Steele Bayou Sedimentation Reduction project
    has installed drop-pipe structures at headcut locations all along
    Steele Bayou. These control structures stop the movement of sediment
    into Steele Bayou. Sediment is bad for flood control and water quality.
    We are requesting $1.7 million to keep this project moving forward.
        Work on the Delta Headwaters project has proven effective in
    reducing sediments to downstream channels. To discontinue this project
    will only diminish water quality by increasing sediment, reducing the
    level of flood protection to the citizens of the Delta and increasing
    required maintenance. We are requesting $13 million to continue this
    project.
        Maintenance of completed works can not be overlooked. The four
    flood control reservoirs overlooking the Delta have been in place for
    50 years and have functioned as designed. Required maintenance must be
    performed to avoid any possibility of failure during a flood event. We
    are asking for $7.7 million for Arkabutla Lake, $7.245 million for Enid
    Lake, $7.346 million for Grenada Lake, and $11.397 million for Sardis
    Lake.
        We are requesting $12.754 million for Maintenance of the Mainline
    Mississippi River Levees in the Lower Mississippi Valley Division which
    will provide for repair of levee slides, slope repair, and repair of
    the gravel maintenance roadway which is so vital to access during high
    water.
        The Mississippi River and our Ports and Harbors need money for
    maintenance dredging. The Mississippi River carries tons of sediment
    every second. This sediment falls out in slack water areas such as
    entrances to our ports and harbors. The Greenville Port needs $1
    million and the Vicksburg Port needs $750,000 to perform annual
    maintenance dredging. This dredging is vital to keep these ports open
    during the low-water season when much of the farm harvest is ready to
    be transported.
        We are requesting $2.58 million for the Lower Mississippi Valley
    Division for Collection of Basic Data under General Investigations.
    This money is used to monitor and collect water-quality samples at
    gaging stations located throughout the Mississippi Delta. With the
    emphasis on water quality, water quantity, and total maximum daily
    loads (TMDLs), we must be able to continue to collect good data on
    water quality so we can get a baseline established to be able to
    monitor and improve water quality in the Mississippi Delta.
    Improvements in water quality in the Mississippi Delta will translate
    into improved water quality in the Gulf of Mexico and help the Gulf
    Hypoxia issue.
        EPA has been given too much power under section 404(c) of CWA which
    allows EPA to veto congressionally authorized projects. During the
    early 1990s, due to abuse of the 404(c) power by EPA, the Congress
    considered removing this authority from EPA. EPA has again invoked this
    veto power on the Yazoo Backwater Project. EPA is saying that you can't
    lower the water level with a flood control project. By killing this
    project with 404(c) veto authority, EPA is drawing a line in the sand
    over the future of flood control in our great Nation. EPA has vetoed
    the Yazoo Backwater Project even though it was approved, authorized,
    and funded by the Congress and exempt from a 404(c) veto by 404(r). It
    is now time to again take up this issue and remove the 404(c) veto
    power from EPA before they kill another flood control project that has
    been authorized by the Congress.
        The Council of Environmental Quality (CEQ) draft proposal of
    changes to the Principals and Guidelines (P&G) for Federal agencies
    fails to establish a clear, concise, and workable framework to guide
    development of water resources projects. It elevates environment
    considerations over economic benefits, social well-being, and public
    safety. Because of these critical and extensive failings, we recommend
    that this effort be put aside and restarted from the beginning.
        As Members of the Congress representing the citizens of our Nation
    who live with the Mississippi River everyday, you clearly understand
    both the benefits provided by this resource and the destructive force
    that must be controlled during a flood. On behalf of the Mississippi
    Levee Board, I can not express enough our appreciation for your efforts
    in providing adequate funding over the last several years that has
    allowed construction to continue on our much needed projects and thank
    you in advance for your kind consideration of our requests for fiscal
    year 2013.
                                     ______

            Prepared Statement of the Fifth Louisiana Levee District
        The Board of Commissioners for the Fifth Louisiana Levee District
    respectfully requests that construction funding for Mississippi River
    levees be increased from the $45,187,000 contained in the proposed
    budget for fiscal year 2013, to the U.S. Army Corp of Engineers' (COE)
    capability of $58,687,000.
        Reduced funding, combined with the inability to let construction
    contracts under a continuing contract clause, has left thousands of
    people in Louisiana vulnerable to the adverse effects of a deficient
    levee system. Construction of levee enlargements is essential if the
    levee is to contain the ``Project Flood'' which is estimated to be 20
    percent greater than the record Flood of 1927.
        The effect of fully funded contracts for levee construction, now
    required under Public Law 109-103, (sections 106 and 108), adopted by
    the 109th Congress in 2005, as opposed to the previous system of
    continuing contract clauses, has virtually halted enlargement of the
    Mississippi River levee system in Louisiana. Year after year, as the
    cost of projects and maintenance has increased, funding for levee
    systems and flood control has been reduced. The current proposed budget
    is no exception, with only $234 million allocated for the entire
    Mississippi River and Tributaries (MR&T) project. We request that be
    increased to COE's capabilities of $375 million.
        Since the MR&T project was established, $13 billion has been
    invested and more than 475 billion of flood damages have been
    prevented. This investment provides benefits far beyond their actual
    cost to the taxpayer by offering protection to more than 4 million
    citizens and allows people to live and work throughout a 35,000 square
    mile area in seven States.
        With the help of the Congress, great progress has been made in the
    Mississippi River Valley over the years, but there is still much to be
    done, and because of that, we urge the Congress to increase funding to
    COE in fiscal year 2013, to insure that COE is not forced to halt or
    delay contracts for levee construction essential to the well-being of
    this Nation. It is vital that the MR&T project(s) be completed at the
    earliest possible date.
                                     ______

            Prepared Statement of the Izaak Walton League of America
        I am Scott Kovarovics and the Conservation Director of the Izaak
    Walton League of America. The Izaak Walton League of America
    appreciates the opportunity to submit testimony concerning
    appropriations for fiscal year 2013 for programs under the jurisdiction
    of the subcommittee. The League is a national, nonprofit organization
    founded in 1922 with more than 39,000 members and 250 local chapters
    nationwide. Our members are committed to advancing common sense
    policies that safeguard wildlife and habitat, support community-based
    conservation, and address pressing environmental issues. The following
    pertains to programs administered by the U.S. Army Corps of Engineers
    (COE).
         corps of engineers, operations and maintenance, missouri river
        The League joins other groups in urging the subcommittee to
    appropriate $90 million in fiscal year 2013, as requested by the
    President, for the Missouri River Recovery Program. With this funding,
    COE, U.S. Fish and Wildlife Service (FWS), States, and other partners
    can continue important ecosystem restoration efforts that are producing
    long-term ecological and economic benefits.
        The Missouri River basin encompasses land in 10 States covering
    one-sixth of the continental United States. The Missouri is one of the
    most altered ecosystems on Earth. Although recovery and restoration
    efforts are on-going, they need to continue and expand.
        COE, FWS, and many State agencies have been restoring habitat for
    fish and wildlife along the river. This work is critical for the
    Interior Least Tern and Pallid Sturgeon, listed as endangered, and the
    Piping Plover, listed as threatened, under the Endangered Species Act.
    The restoration efforts also benefit many other species of fish and
    wildlife throughout the region. These habitat restoration projects are
    working with the river--not against it.
        These projects also generate additional economic activity in
    communities along the river. Anglers, hunters, boaters, birdwatchers,
    and others have been using these areas proving the old adage ``if you
    build it, they will come.'' The Missouri Department of Conservation and
    the Nebraska Game and Parks Commission found recreational spending
    provides $68 million in annual economic impact to communities along the
    Missouri River from Yankton, South Dakota to St. Louis, Missouri. A
    South Dakota Game, Fish, and Parks study shows that recreational
    benefits from angling on the Missouri River account for more than $107
    million in annual economic activity in the Dakotas and Montana. These
    projects are bringing more people to the river throughout the Missouri
    basin.
        In addition to the economic boost from tourism, restoration
    projects support job creation throughout the entire region. COE
    contracts with local construction companies, creating jobs, and
    injecting dollars into local economies through purchases of materials,
    fuel, food, and lodging. With the funding requested, COE could readily
    implement more of these important economic and river restoration
    projects.
        Missouri River Ecosystem Restoration Plan.--The League urges the
    subcommittee not to include any provision in its fiscal year 2013 bill
    limiting funding for the Missouri River Ecosystem Restoration Plan
    (MRERP). This long-term ecosystem study will lead to a comprehensive
    plan that Federal agencies, States, tribes, and communities along the
    river will be able to implement for a healthier Missouri River. A great
    deal of time and effort has already gone into development of MRERP.
    Funding must be allowed for this important effort to get back on track
    before the information already gathered loses relevance and will cost
    U.S. taxpayers more to gather again.
        Missouri River Authorized Purposes Study.--The League urges the
    subcommittee to provide funds to complete the Missouri River Authorized
    Purposes Study (MRAPS). The League strongly opposes the funding
    prohibition contained in the Consolidated Appropriations Act of 2012.
    It does not provide taxpayers with meaningful savings in the near-term
    and jeopardizes real-future savings. Delaying this analysis deprives
    the country of Missouri River management geared toward future needs
    rather than those identified during World War II.
        MRAPS for the first time will review the eight authorized Missouri
    River purposes established by the Flood Control Act of 1944. This
    thorough analysis of the purposes will determine the best management
    for the American taxpayer, all the residents of the basin, and fish and
    wildlife, taking in account today's economic values and priorities,
    rather than those imagined nearly 70 years ago.
        Full funding of MRAPS is a wise investment. A comprehensive review
    and accompanying changes will streamline future COE operational
    expenses saving tax dollars and bringing Missouri River management into
    the 21st century. MRAPS needs to be re-started in fiscal year 2013.
    corps of engineers, operations and maintenance, upper mississippi river
        The League is an active and long-time proponent of restoring the
    Upper Mississippi River (UMR) ecosystem. We have supported the Upper
    Mississippi River Restoration (UMRR) program (also known as the
    Environmental Management Program) since its inception and continue to
    support this vital restoration initiative. We urge the subcommittee to
    provide $33.2 million for UMRR in fiscal year 2013 as authorized by the
    Water Resources Development Act (WRDA). Although we are encouraged by
    the President's request for fiscal year 2013, pressing restoration
    needs on-the-ground require the full amount authorized for UMRR.
        The League has also strongly expressed its opinion that the large-
    scale navigation modifications included in the Recommended Plan for the
    Upper Mississippi Navigation and Ecosystem Sustainability Program
    (NESP), as authorized by the Water Resources Development Act of 2007,
    have not been justified by COE and should not be pursued. Previous
    reviews by the National Academy of Sciences and the Assistant Secretary
    of the Army, Civil Works found that the navigation construction
    component of NESP was not economically justifiable. A report released
    in 2010 by the Nicollet Island Coalition, of which the League is a
    member, provides additional evidence that proposed locks and dams in
    this region are not a good investment for American taxpayers. With this
    in mind, the League supports the administration's decision not to
    request funding for NESP in fiscal year 2013.
        While the lock and dam expansion authorized by NESP is not a good
    investment, the League recognizes the need for the Congress to invest
    in inland navigation to maintain the transportation infrastructure on
    the rivers. The Inland Waterways Trust Fund (IWTF) provides 50-percent
    cost-share for construction and rehabilitation on navigation
    infrastructure. The League agrees with the administration that the IWTF
    needs to be reformed because not enough revenue is generated by the
    $0.20 per gallon fuel tax on navigation to fund the multibillion dollar
    backlog of projects. The League supports the President's proposal to
    implement a user fee at the locks, while maintaining the 50-percent
    cost-share model on all inland waterway construction and navigation
    projects. The League strongly opposes including any provision in the
    subcommittee's fiscal year 2013 bill that increases the cost-share
    portion from the taxpayer funded general appropriation, as proposed by
    the Inland Marine Transportation System Capital Investment Strategy
    Team. Such a proposal will increase the national deficit and allow
    environmentally damaging and economically questionable projects to move
    forward.
        The UMR is one of the most complex ecosystems on Earth. It provides
    habitat for 50 species of mammals, 45 species of reptiles and
    amphibians, 37 species of mussels, and 241 species of fish. The need
    for ecosystem restoration is unquestionable. As COE correctly stated in
    its study of navigation expansion, this ecosystem is ``significantly
    altered, is currently degraded, and is expected to get worse.''
    Researchers from the National Academy of Sciences have determined that
    river habitat is disappearing faster than it can be replaced through
    existing programs such as UMRR, which was authorized at $33.2 million
    annually by the Congress in 1999, but has never received full
    appropriations. As habitat vanishes, scientists warn that many species
    will decline and some will disappear.
        Our Nation relies on a healthy Mississippi River for commerce,
    recreation, drinking water, food, and power. More than 12 million
    people annually recreate on and along the UMR spending $1.2 billion and
    supporting 18,000 jobs. More people recreate on the Upper Mississippi
    than visit Yellowstone National Park while barge traffic has remained
    static on the river for more than 2 decades.
        In assembling the UMR-IWW navigation study, COE recognized the
    critical need for ecosystem restoration and encouraged the Congress to
    invest approximately $130 million annually in UMR habitat restoration
    efforts. With this need in mind, the League strongly encourages the
    subcommittee to prioritize investment in ecosystem restoration by
    appropriating $33.2 million for the UMRR in fiscal year 2013.
    Additional funding for restoration will support economic development
    and job creation in communities along the UMR and provide long-term
    conservation and economic benefits for the region and the Nation.
                    clean water act guidance and rulemaking
        This year, the American people will be celebrating the 40th
    anniversary of passage of the Clean Water Act. With this in mind, the
    League strongly urges the subcommittee not to include or accept any
    provision in its fiscal year 2013 bill barring COE from finalizing and
    implementing Clean Water Act guidance or proceeding with the formal
    rulemaking process to revise its clean water regulations. We appreciate
    the subcommittee's leadership last year on this critical issue.
        Since proposing draft guidance last spring, COE has conducted a
    nearly unprecedented public engagement process for agency guidance.
    During this process, COE and the Environmental Protection Agency (EPA)
    held a 90-day public comment period. The agencies received nearly
    230,000 comments and have publicly described the overwhelming majority
    as supporting the proposal. In mid-February 2012, COE and EPA submitted
    revised guidance to the Office of Management and Budget (OMB) for
    another round of inter-agency review. This process also allows
    nongovernmental organizations to meet with OMB to share their
    perspectives on the policy.
        Guidance proposed by COE is based on sound science and clearly
    complies with the Supreme Court decisions in SWANCC and Rapanos.
    Allowing COE to proceed with guidance will partially restore
    protections for streams flowing to public drinking water supplies for
    117 million Americans. It will also begin--but only begin--to restore
    protections for some wetlands. Healthy wetlands are essential to
    waterfowl, fish, and other wildlife, provide cost-effective flood
    protection, and improve water quality. They also support hunting,
    angling, and wildlife watching, which together inject $122 billion
    annually into our economy. Finalizing the guidance will also provide
    more clarity and certainty about Clean Water Act implementation to
    landowners, developers, agency personnel, and State and local
    governments.
        Once again, we urge the subcommittee not to include or accept any
    provision in its fiscal year 2013 bill limiting COE's ability to
    finalize and implement Clean Water Act guidance or initiate formal
    rulemaking concerning clean water regulations.
        We appreciate the opportunity to submit this testimony.
                                     ______

            Prepared Statement of The Little River Drainage District
        My name is Sam M. Hunter, DVM. I am a veterinarian, landowner, and
    farmer, and I reside in Sikeston, in southeast Missouri.
        I am the president of the Board of Supervisors of The Little River
    Drainage District, the largest such entity in the Nation. Our district
    serves as a drainage outlet and provides flood control to parts of
    seven counties in southeast Missouri. We also provide flood protection
    to a sizable portion of northeast Arkansas. Our district is funded
    solely by the annual assessment of benefits of more than 3,500
    landowners.
        My remarks will address the Mississippi River and Tributaries
    (MR&T) project and specifically the St. Francis River Basin line item
    of the MR&T. These funds are investments yielding a return of
    substantial benefit to the Nation. They provide funding for flood
    control that protects numerous cities, farms, and industries. Funding
    through the MR&T also provides needed repairs and upgrades to locks and
    dams, modernization of hydroelectric plants, and environmental
    restoration. This project was authorized by the Congress in 1928 and
    remains incomplete, yet yields a return of $34 in damage reduction for
    every $1 spent. I know of no better investment of taxpayer dollars.
        We fully understand the financial constraints on our Government and
    the need to do more with less in order to reduce the national debt,
    balance the budget, and create jobs. Programs and projects have been
    eliminated or downsized; however, the MR&T is so critical to the Nation
    that it cannot withstand deep cuts without jeopardizing the safety of
    our citizens and our economy. The Mississippi River flood of 2011 would
    have been catastrophic without the MR&T. It is estimated that more than
    $112 billion in flood damages were prevented by the project. The system
    did suffer damage as a result of the flooding and the Congress did
    respond to that and appropriated additional emergency funds to restore
    and repair the system, and for that we are grateful. But the work to
    maintain and complete the project must continue.
        In the fiscal year 2013 budget submitted by the President the MR&T
    appropriation was $210 million. That amount is identical to the fiscal
    year 2012 request. It appears that the Office of Management and Budget
    (OMB) has again chosen to ignore the infrastructure needs of the
    Mississippi Valley. That amount will possibly keep the lights on, but
    does not allow for much needed maintenance. To allow the project to
    crumble away is inexcusable. The navigation element alone, which
    includes the necessary maintenance of locks, dams, and harbors, is
    vital to this Nation's economy. Moving products on the Mississippi
    River is the most economical and environmentally friendly method of
    transportation. It is dramatically more fuel efficient than truck or
    rail. It allows our commodity producers to compete in a global market.
    Continued underfunding of the MR&T is a dangerous course of action. The
    failure of just one lock and/or dam could have an impact on the entire
    Nation's economy, yet this fact appears to have been left to chance by
    OMB.
        Fortunately the power of the purse remains with the Congress. Even
    with an earmark moratorium, the Congress still retains the power to
    increase the President's budget request, as it has done annually since
    the administration of President Jimmy Carter. We believe that a minimum
    of $375 million is necessary to continue to keep the MR&T viable. The
    Corps of Engineers' (COE) stated capability for the MR&T is $375
    million due to the supplemental appropriations for flood repairs.
        Within the MR&T budget request is a line item for the St. Francis
    River and Tributaries that directly impacts our District. The
    President's budget request for fiscal year 2013 is slightly more than
    $5.9 million for maintenance, but COE's stated capabilities for the St.
    Francis Basin is $18.4 million. We maintain that a minimum of $15
    million is necessary for maintenance of the St. Francis Basin. This is
    not for new project construction but for maintenance at a minimum level
    of functionality.
        I can tell you that the 2012 Disaster Relief Act will assist our
    District by funding the cleanout of our floodway ditches, for which COE
    is responsible, at a cost of $7.9 million, and the Diversion Channel
    Stabilization at a cost of $3.5 million. We appreciate this help in
    recovering from the infamous Flood of 2011.
        Another program providing help for flood recovery is the Emergency
    Watershed Protection Program which is administered through the Natural
    Resource Conservation Service of the U.S. Department of Agriculture.
    This program is designed to assist districts such as ours restore
    drainage facilities that are non-Federal through a local cost share
    agreement, of which we provide 25 percent. Past experience with this
    program has been impressive. It allows local control of the project,
    offers quick approval of projects, and addresses our needs immediately.
    This year's program is laid out on a very short-completion deadline for
    the extraordinary amount of recovery work that needs to be done. We
    intend to request that the completion dates be extended past the
    current deadline of end of fiscal year 2012 and ask this committee to
    join in that request.
        In closing, I would like to thank each member of the subcommittee,
    their staff, and the Committee staff for taking the time to review the
    above-written testimony. We are appreciative of anything the Energy and
    Water Development Subcommittee can do to improve our environment and
    our livelihoods, and to ensure the safety of our communities. Your work
    is very important to our country and we feel it is important for us to
    thank you for your service, and for giving us the opportunity to share
    our viewpoints.
                                     ______

     Prepared Statement of the Mississippi Valley Flood Control Association
        The Mississippi Valley Flood Control Association respectfully
    requests that the sum of $375,000,000 be appropriated in fiscal year
    2013 for the Mississippi River and Tributaries (MR&T) project.
        The Flood Control Association was first organized in 1922 by a
    group of interested citizens from the States of Arkansas, Mississippi,
    and Louisiana. From that first meeting, held in Memphis, Tennessee, a
    delegation was selected to come to Washington in an attempt to convince
    both the Congress and the executive branch that the prevention of
    catastrophic floods in the lower Mississippi River Valley was beyond
    the capabilities of the local people and was in fact too large for any
    group other than the Federal Government. This group of dedicated
    citizens was without success until the record flood of 1927 swept
    through the Mississippi River Valley with the fury of devastation not
    seen before. An unknown number of people perished along with thousands
    of head of livestock and large numbers of many species of wildlife.
    Some 7 percent of all the productive land on this planet was under
    water for a period of almost one-half a year. The Congress, after
    extensive hearings, passed the Flood Control Act of May 15, 1928, that
    was signed into law by then President Calvin Coolidge.
        The Flood Control Association then disbanded, acting under the
    erroneous assumption that the United States Government would provide
    whatever was needed to prevent flooding in the valley. In 1935, it
    became apparent that additional legislation was required and the
    Association, under the leadership of Senator John Overton from
    Louisiana, was re-organized. It has been in continuous and active
    existence since for some 77 years.
        We have been fortunate since 1935 to have as our president and two
    vice presidents Members of the United States Congress with Senator
    Roger Wicker from the State of Mississippi serving as our president,
    Congressman Blaine Luetkemeyer from Missouri and Congressman Rodney
    Alexander from Louisiana serving as our vice presidents.
        We are a nonprofit agency made up of levee boards, drainage
    districts, harbor and port commissions, States, cities, and towns,
    including many other agencies and individuals that have an interest in
    the protection and betterment of the people and property in the
    Mississippi River Watershed, the third largest in the world. But we
    feel it is the greatest, because of its size coupled with its essential
    usefulness to the Nation. In a few words we are an agency through which
    the local people may speak and act jointly on all flood control, bank
    stabilization, navigation, and major drainage problems.
        Never before have we seen our Nation faced with such huge public
    debts and budget deficits as we do today. In our daily life we are made
    aware of the gut-wrenching sadness of seeing homes foreclosed and jobs
    disappear. We know all those things, but we also know that the country
    that is and has been for generations the bright light of freedom and
    prosperity, must not and cannot let its infrastructure deteriorate and
    fall into ruin; neither can we allow one of our vital forms of
    transportation become underutilized or useless due to the lack of
    proper and necessary maintenance.
        Unfortunately, today as usual you are considering a budget request
    from the executive department that has insufficient funding to prevent
    either of the cases just outlined. The only recourse we have is to
    request the Congress do, as you have always done, add the necessary
    supplemental funds to protect the lives, property, and livelihoods of
    the citizens of the river basin.
        Earlier in this statement, it was said that the Mississippi River
    Watershed that provides drainage for 41 percent of the Nation, moves
    almost 1 billion tons of commodities--60 percent of our grain, 25
    percent of our petroleum products, 20 percent of the coal to fire our
    power plants--was the greatest watershed on the planet because of size
    coupled with its usefulness. Useful because the river has been
    controlled and improved beginning with the first levee for flood
    protection built in New Orleans, Louisiana in 1717. Levees came early
    because ``without flood control, nothing else matters''. Over the
    years, the Congress, the Corps of Engineers (COE), and the local people
    have worked together to make the Mississippi River Watershed,
    stretching from New York on the east to Montana on the west and from
    the Canadian border to the Gulf of Mexico, the greatest and the envy of
    the developed world.
        Our great country has always been a maritime Nation, almost totally
    dependent during the earliest years on the oceans and unimproved
    waterways to move our commerce including, at that time in history, our
    people. Westward expansion used the rivers whenever possible and many
    of the earliest construction projects in the new country were the
    building of canals connecting commercial waterways. Our national
    security and economic well-being has always, now more than ever,
    depended on the seas, lakes, and inland waterways that give us
    accessibility to every corner of our great Nation.
        All improvements, great or small, sooner or later, require
    maintenance. We have been too lax in this great country with
    maintaining and improving our basic forms of transportation. We have
    not built new airports to keep up with the demand of a growing
    population nor have we improved and properly maintained those that we
    have. Our system of railroads is in such bad shape that we no longer
    even attempt to move human cargo by train except for a very few small,
    densely populated areas of the country. The interstate highway system
    that we constructed more than 50 years ago was a great source of pride,
    but we failed again to properly maintain it. Now we are paying a
    tremendous price to keep it functioning. A great majority of our
    waterway improvements, including our locks and dams and our flood
    control facilities, are well past their design life. Soon we will find
    ourselves in emergency mode of repairing and replacing failures. This
    will be very expensive, an economic disaster. Farmers will be
    especially hard hit with no efficient and economical way to transport
    their crops to the international market.
        Our principal, but certainly not our only concern, is with the
    funding of the MR&T project. This is a very unique project that was
    conceived and developed with consideration for the functional relation
    between all its parts and the whole. It is a project that covers all
    the aspects of development in the Mississippi River Valley below the
    vicinity of Cape Girardeau, Missouri, from flood control to navigation
    to environmental protection and enhancement. The MR&T project is well-
    planned, well-organized, well-engineered, well-constructed and until
    recently, well-maintained. Unfortunately, it is not yet completed and
    adequate funding from the Congress is imperative if it is to be
    completed and properly maintained. If, because of inadequate funding
    and uncalled for delays due to countless and repetitive studies and
    misguided lawsuits by the misnamed and misled environmentalists, the
    lower reaches of the Mississippi River are not usable by commercial
    boats and barges and sea-going ships, then no amount of improvement on
    the upper reaches of the Mississippi River can have any favorable
    effect. ``Without flood control nothing else matters.''
        One of the major opportunities that we have to increase the wealth
    of our Nation is to continue the improvement and development of our
    major river systems. As noted the major system is the Mississippi River
    Watershed. For that reason, we request that the Congress do what it has
    done since 1928. That is, to appropriate sufficient supplemental funds,
    allowing COE to continue what the Congress has directed them to do. We
    are not talking about ``earmarks'' or pork barrel politics. We are
    talking about funds to keep our navigation channels open and to provide
    necessary dredging in order that our smaller but no less critical ports
    may continue to function; funds to continue the on-going work to bring
    some miles of levee sections that are deficient in either grade or
    section up to the design required to protect our citizens against the
    ``greatest possible flood''; funds to bring our bank stabilization
    program to completion in the most efficient manner, both economically
    and environmentally.
        The Executive Committee of the Mississippi Valley Flood Control
    Association has carefully examined the President's budget request for
    fiscal year 2013. We have arrived at the unanimous conclusion that the
    required appropriation for the MR&T project is $375 million, just to be
    reasonably assured that the goals of navigation, flood control, levee
    improvement and bank stabilization are met; nothing more, nothing less.
        In a special message to the Congress on flood control in the
    Mississippi Basin, dated July 16, 1947, President Harry S Truman began
    with the following in his opening sentence: ``the major opportunity of
    our generation to increase the wealth of the nation lies in the
    development of our great river systems''. Later on in his message
    President Truman used these words: ``we must never forget that the
    conservation of our natural resources and their wise use are essential
    to our very existence as a nation. The choice is ours. We can sit idly
    by, or almost as bad, resort to the false economy of feeble and
    inadequate measures, while these precious assets waste away. On the
    other hand, we can, if we act in time put into effect a realistic and
    practical plan which will preserve these basic essentials of our
    national economy and make this a better and a richer land''. Mr. Truman
    was speaking about the MR&T project in this last quote. These words are
    still true today. On July 31, 1947, President Truman approved
    appropriations bills, including supplemental provisions for flood
    control on the MR&T project in fiscal year 1948 of $250 million. And
    that was in 1948 dollars.
        We have attached a breakdown of the requested funds of $375 million
    for the Mississippi River and Tributaries Project for fiscal year 2013.

                  MISSISSIPPI VALLEY FLOOD CONTROL ASSOCIATION
                  FISCAL YEAR 2013 CIVIL WORKS REQUESTED BUDGET
                MISSISSIPPI RIVER AND TRIBUTARIES APPROPRIATIONS
                            [In thousands of dollars]
    ------------------------------------------------------------------------
                           Project/Study
    ------------------------------------------------------------------------
    Fiscal year 2013 request...................................      375,000
                                                                ============
          MISSISSIPPI RIVER AND TRIBUTARIES INVESTIGATIONS
    Collection and study of basic data.........................          500
    Memphis Metro Storm Water Management, Tennessee (FEAS).....          100
                                                                ------------
          Total investigations.................................          600
                                                                ============
           MISSISSIPPI RIVER AND TRIBUTARIES CONSTRUCTION
    Atchafalaya Basin, Louisiana...............................        9,000
    Atchafalaya Basin Floodway System, Louisiana...............        4,000
    Channel Improvement, Arkansas, Illinois, Kentucky,                71,000
     Louisiana, Mississippi, Missouri, and Tennessee...........
    Mississippi River Levees, Arkansas, Illinois, Kentucky,           69,490
     Louisiana, Mississippi, Missouri, and Tennessee...........
    Yazoo Basin, Upper Yazoo Projects..........................        5,000
                                                                ------------
          Total construction...................................      158,490
                                                                ============
           MISSISSIPPI RIVER AND TRIBUTARIES MAINTENANCE
    Atchafalaya Basin, Louisiana...............................       12,865
    Atchafalaya Basin Floodway System, Louisiana...............        2,295
    Baton Rouge Harbor, Devils Swamp, Louisiana................           80
    Bayou Cocodrie and Tributaries, Louisiana..................           50
    Bonnet Carre, Louisiana....................................       55,029
    Channel improvement, Arkansas, Illinois, Kentucky,                62,615
     Louisiana, Mississippi, Missouri, and Tennessee--TOT......
    Channel improvement--dredging..............................       18,785
    Channel improvement--revetments and dikes..................       43,830
    Greenville Harbor, Mississippi.............................           30
    Helena Harbor, Arkansas....................................          210
    Inspection of completed works..............................        1,918
    Lower Arkansas River, North Bank, Arkansas.................          375
    Lower Arkansas River, South Bank, Arkansas.................          255
    Lower Red River--South Bank Levees.........................          565
    Mapping....................................................        1,063
    Memphis Harbor McKellar Lake, Tennessee....................        1,935
    Mississippi Delta Region--Caernarvon, Louisiana............          625
    Mississippi River Levees, Arkansas, Illinois, Kentucky,            8,645
     Louisiana, Mississippi, Missouri, and Tennessee...........
    Old River Control Structure, Louisiana.....................       10,625
    St. Francis River and Tributaries, Arkansas and Missouri...        7,800
    Tensas Basin, Boeuf and Tensas Rivers, Arkansas and                2,450
     Louisiana.................................................
    Tensas Basin, Red River Backwater, Louisiana...............        3,185
    Vicksburg Harbor, Mississippi..............................           55
    Wappapello Lake, Missouri..................................        5,360
    White River Backwater, Arkansas............................        1,510
    Yazoo Basin, Arkabutla Lake, Mississippi...................        7,200
    Yazoo Basin, Big Sunflower (Bogue Phalia), Mississippi.....          300
    Yazoo Basin, Enid Lake, Mississippi........................        6,795
    Yazoo Basin, Greenwood, Mississippi........................        1,000
    Yazoo Basin, Grenada Lake, Mississippi.....................        7,200
    Yazoo Basin, Main Stem, Missouri...........................        2,275
    Yazoo Basin, Sardis Lake, Mississippi......................        8,500
    Yazoo Basin, Tributaries, Mississippi......................        1,000
    Yazoo Basin, Will M. Whittington Auxiliary Channel,                  575
     Mississippi...............................................
    Yazoo Basin, Yazoo Backwater, Mississippi..................          700
    Yazoo Basin, Yazoo City, Mississippi.......................        1,000
                                                                ------------
          Total maintenance....................................      215,910
                                                                ------------
          Total Mississippi River and Tributaries..............      375,000
    ------------------------------------------------------------------------

                                     ______

                  Prepared Statement of The Nature Conservancy
        Madam Chair and members of the subcommittee: My name is Robert
    Bendick and I am the Director of U.S. Government Relations. Thank you
    for the opportunity to present The Nature Conservancy's testimony on
    the fiscal year 2013 appropriations for the U.S. Army Corps of
    Engineers (COE) and Bureau of Reclamation. The Nature Conservancy is
    dedicated to saving the lands and waters on which all life depends. Our
    on-the-ground conservation work is carried out in all 50 States and
    more than 30 foreign countries and is supported by approximately 1
    million members.
        We recognize the challenges of working in a constrained fiscal
    environment. But we also recognize the critical importance of our water
    resources and the benefits these resources provide to virtually every
    sector of the economy, the quality of life in our communities, and the
    health of our people. Our focus is on supporting the programs and
    investments needed to ensure these benefits are enhanced today and made
    sustainable for tomorrow.
        The Nature Conservancy supports building sustainability into the
    management of our Nation's water infrastructure, including the
    ecosystem restoration projects essential to ensuring that
    sustainability. These ecosystem restoration projects pay dividends
    through natural flood control, higher quality water, sustaining
    commercial fisheries, and supporting recreation and tourism. With
    impacts stretching out for decades to come, the projects and proposals
    that follow reap high returns on investment.
                           sustainable rivers project
        The Sustainable Rivers Project (SRP) is an initiative launched by
    COE in partnership with the Conservancy to update decades-old water
    management practices to meet society's needs today and in the coming
    decades. By managing dams in coordination with downstream flood-prone
    lands, the SRP is developing and demonstrating innovative approaches to
    maintain and enhance water supply, flood protection, hydropower
    generation, and recreation while restoring critical ecosystems and the
    economically valuable services they provide.
        This approach was recently studied by COE, The Nature Conservancy,
    and University of California--Davis in two river basins--Georgia's and
    South Carolina's Savannah and California's Mokelumne. The Savannah
    River study found that small changes in floodplain management enable
    the use of up to 50 percent of the existing flood storage capacity for
    hydropower and recreation, producing a net benefit of more than $12
    million per year, without increasing flood risk and with additional
    benefits for water supply and the environment. The Mokelumne River
    study found similarly modest shifts in floodplain management frees up
    25 percent to 50 percent of flood storage for public water supply--
    enough additional water for nearly 450,000 people--while maintaining
    flood protection and increasing hydropower generation and improving
    habitat for declining salmon. COE's budget includes three specific
    initiatives that support SRP efforts; the Conservancy supports all
    three at the levels provided by COE:
        Reducing Civil Works Vulnerability.--The Conservancy supports $8
    million.
        Response to Climate Change.--The Conservancy supports $5 million.
        National Portfolio Assessment for Reallocations.--The Conservancy
    supports $571,000.
              u.s. army corps of engineers construction priorities
        Hamilton City Flood Damage Reduction and Ecosystem Restoration.--
    The fact that COE again selected Hamilton City for its construction
    budget in fiscal year 2013 is a testament to the innovative dual nature
    of the project: increasing flood protection for Hamilton City while
    restoring approximately 1,500 acres of riparian habitat. Appropriations
    for the first phase will initiate construction of approximately 2 miles
    of levee, removal of one-half of the existing levee, and completion of
    roughly one-third of the habitat restoration. The Conservancy strongly
    supports the $7.5 million proposed in fiscal year 2013 to complete the
    first phase of construction.
        Chesapeake Bay Oyster Recovery.--This project will build on recent
    progress and continue to increase the scale of oyster restoration in
    the Chesapeake Bay. Scientists in Maryland have estimated that oysters
    in just one Chesapeake tributary--the Choptank River--remove pollution
    that would otherwise cost waste water treatment systems $300,000/year
    to remove. The $5 million proposed for the fiscal year 2013 budget and
    supported by the Conservancy will allow COE to conduct additional
    habitat restoration in the Choptank River, as well as new restoration/
    enhancement work in the Great Wicomico, Lynnhaven and Piankatank Rivers
    in Virginia.
        South Florida Ecosystem Restoration Program.--In recent years, the
    Federal Government has made substantial progress on Everglades
    projects, and we encourage continued funding for the three authorized
    Comprehensive Everglades Restoration Plan (CERP) projects. We also
    support inclusion of language to allow COE to carry over credit between
    studies and projects for which cost-share agreements have been executed
    with the South Florida Water Management District; such language would
    enable COE to more efficiently manage projects like the Kissimmee River
    Restoration Project (KRRP), a high priority for the restoration of the
    Everglades. The project is currently projected to be complete by 2015.
    The Conservancy supports the $153,324,000 proposed for the South
    Florida Ecosystem Restoration Program in fiscal year 2013.
        Upper Mississippi River Environmental Management Program.--
    Authorized in 1986, this program supports coordinated habitat
    rehabilitation and enhancement projects in the Upper Mississippi River
    system. Over the 25 years of the program, COE has completed more than
    54 projects, benefiting more than 100,000 acres of aquatic and
    floodplain habitat. Currently, 35 projects in the program are in
    planning, design, or under construction. Completion of these projects
    will benefit an additional 75,000 acres of aquatic and floodplain
    habitat. The Conservancy supports the $17,880,000 proposed for
    Environmental Management Program in fiscal year 2013.
        Missouri River Fish and Wildlife Recovery Program.--Record upper
    basin precipitation in 2011 brought historic flooding to the Missouri
    River. The Recovery Program is expending funds to compile information
    on the impacts of the floods to native species and various Recovery
    projects while conducting a study on how Recovery Program actions could
    reduce impacts from future floods. The Conservancy supports restoration
    of funding for the Missouri River Ecosystem Restoration Plan (MRERP) as
    part of the $90 million proposed for Missouri River Recovery Program
    (MRRP) in fiscal year 2013.
        Chicago Sanitary and Ship Canal Dispersal Barrier.--Invasive
    plants, invertebrates, and fish pose serious threats to the
    biodiversity and fisheries of the Great Lakes and Mississippi River
    basins, which are home to nearly 50 percent of our Nation's freshwater
    fish species and support sport and commercial fisheries worth billions
    of dollars. This project seeks to prevent the immediate invasion of the
    Great Lakes by Asian carp by completing three electronic barriers in
    the Construction phase. The Nature Conservancy supports the budget
    request of $24.5 million.
                        general investigation priorities
        Puget Sound Nearshore Marine Habitat Restoration.--This study, when
    completed, will identify restoration and protection needs and
    opportunities in the nearshore regions of Puget Sound. The Sound
    supports the second largest U.S. port (combined Ports of Seattle and
    Tacoma) for container traffic that has accounted for more than $70
    billion in foreign trade; it is an economic priority to ensure that
    Puget Sound maintains the ecological resiliency to sustain vital
    services for both people and nature. The Conservancy supports the
    proposed $850,000 in fiscal year 2013 to carry out this investigation.
        Great Lakes and Mississippi River Interbasin Study.--The
    Conservancy encourages the Congress to instruct COE to deliver
    recommendations in a much shorter timeframe--2 years--to address the
    urgent problem of invasive species in the Chicago Area Waterway System
    (CAWS), and to focus their attention and resources on the CAWS alone,
    as it is the most urgent and significant invasion threat, the only
    continuous connection, and only pathway with a proven invasion history.
    The Conservancy requests no less than $3 million for Great Lakes and
    Mississippi River Interbasin Study.
        Illinois River Basin Restoration Program.--This Federal-State
    partnership sustains the health of the entire Illinois River Basin
    through projects that restore habitats, species, and the natural
    processes that sustain them. It complements other Federal programs such
    as the Illinois Conservation Reserve Enhancement Program and
    Environmental Management Program of the Upper Mississippi, yet is
    unique in its basin-wide approach to restoration. The Conservancy
    supports the $400,000 funding proposed for this program in fiscal year
    2013.
        Lower Mississippi River Resource Assessment.--Flood control and
    drainage systems have accelerated erosion and habitat loss along the
    Lower Mississippi River and its tributaries. Working with the
    Department of the Interior, COE will evaluate river management,
    habitat, and public access to recommend actions for addressing current
    and future needs. The Conservancy supports the $571,000 included for
    this program in fiscal year 2013.
        Willamette River Floodplain Restoration Study.--COE and the
    Conservancy are working together to identify ecological flow
    requirements downstream of Corps dams on the Willamette River and
    incorporate those flows into dam operations to improve fish and
    wildlife habitat and community flood protection. Additionally, this
    study will assess the potential for floodplain restoration in the
    Middle Fork and Coast Fork tributaries of the Willamette River to
    reduce flood damage while restoring natural wetlands and promoting
    ecosystem restoration. The Conservancy supports the $380,000 proposed
    in fiscal year 2013 to continue this study.
        Yellowstone River Corridor Comprehensive Study.--Funding these
    ongoing economic, fisheries, and wetlands studies will help ensure that
    the longest free-flowing river in the lower 48 States maintains its
    natural functions while supporting irrigation and other uses of its
    waters. The study will help determine the significance of the
    cumulative effects of water use on aquatic species and riparian
    hardwood forests, while guiding the establishment of beneficial
    management practices. The Conservancy supports the proposed $200,000
    for fiscal year 2013.
                         continuing authorities program
        Section 1135, Project Modifications for Improvement of the
    Environment and Section 206, Aquatic Ecosystem Restoration.--Adequate
    funding for the Continuing Authorities Programs (CAPs) will ensure
    support for a section 1135 project at Spunky Bottoms and a section 206
    project at Emiquon East, both located in Illinois and both serving as
    model floodplain restoration and reconnection projects. Demand for
    these valuable programs continues to outstrip funding, which is why the
    Conservancy urges the subcommittee to match the fiscal year 2012
    funding level of $7,909,000 each for the 1135 and 206 CAPs in fiscal
    year 2013.
                             bureau of reclamation
        Upper Colorado River Endangered Fish Recovery and San Juan River
    Basin Recovery Programs.--These programs take a balanced approach to
    restore four endangered fish species by implementing a range of basin-
    wide strategies, including improved management of Federal dams, river
    and floodplain habitat improvement, stocking of endangered fish, and
    management of non-native fish species. The Conservancy supports the
    proposed $8,387,000 in fiscal year 2013 for the two programs and the
    extension of their full base funding through 2019.
        Platte River Recovery Implementation Program.--The program helps
    restore the four endangered or threatened species in the basin--
    whooping crane, interior least tern, piping plover, and pallid
    sturgeon--while enabling existing water projects in the basin to
    continue operations. Specifically, the program is working to increase
    stream flows in the central Platte River at ecologically and
    economically important times; enhance, restore and protect lands for
    target bird species; and offset post-1997 depletions. The Conservancy
    supports the proposed $8 million for this recovery effort in fiscal
    year 2013.
        Basin Studies and WaterSMART.--We support the request for the basin
    study programs and WaterSMART grant programs. These programs support
    sustainable water use and management by focusing on water conservation,
    reuse and recycling, and on environmental protection and restoration.
    We also support the proposed funding for the Bureau's environmental
    restoration work, including the programs in the California Bay Delta
    and Colorado River.
                              discretionary funds
        We support the approach that the Congress took in the fiscal year
    2012 budget to provide additional funds so that many important on-going
    projects could continue toward completion. Our Connecticut River
    Planning Study will be finalized in fiscal year 2013 and would benefit
    from such flexibility.
        Connecticut River Watershed Study.--This project will restore 410
    miles of river flow and thousands of acres of natural habitat in the
    Connecticut River Basin. The study identifies dam management
    modifications for environmental benefits while maintaining beneficial
    human uses. After more than $1 million in investments by the Federal
    Government, this study is entering its final year, ahead of schedule
    and under budget. We respectfully request $300,000 to complete the
    critical final phase of this study, enabling the use of study products
    in a Federal Energy Regulatory Commission relicensing of five dams what
    influence flow on a 175-mile reach of the river.
        The Conservancy would like to thank the subcommittee for supporting
    the restoration of large scale restoration programs over the last
    decade. These programs have been essential to restoring and maintaining
    some of America's most precious and imperiled ecosystems. We are also
    appreciative of past support for smaller-scale projects that provide
    cumulative benefits and serve as powerful demonstrations of effective
    restoration.
                                     ______

             Prepared Statement of The Red River Valley Association
        Madam Chair and members of the subcommittee: I am Dan York, Red
    River Valley Association (RRVA) President, and pleased to represent the
    Red River Valley Association, 629 Spring Street, Shreveport, Louisiana.
    Our organization was founded in 1925 with the express purpose of
    uniting the citizens of Arkansas, Louisiana, Oklahoma, and Texas to
    develop the land and water resources of the Red River Basin.
        The resolutions contained herein were adopted by the Association
    during its 87th Annual Meeting in Shreveport, Louisiana, on February
    23, 2012, and represent the combined concerns of the citizens of the
    Red River Basin area as they pertain to the goals of the Association. A
    summary of the Civil Works projects and requested funding is included
    in this testimony.
        The President's fiscal year 2013 budget included $4.731 billion for
    the Civil Works programs. This is $269 million less than what the
    Congress appropriated in fiscal year 2012. The administration fails to
    recognize Corps of Engineers' (COE) critical role as stewards of our
    Nation's water resources, and the vital importance of our water
    resources infrastructure to our economic and environmental well-being.
    The problem is also how the administration distributes funds. A few
    projects received the full ``Corps Capability'' to the detriment of
    many projects that receive no funding. The $4.731 billion level does
    not come close to the real needs of our Nation. A more realistic
    funding level to meet the existing needs of the Civil Works program is
    $6 billion for fiscal year 2013. The traditional Civil Works programs
    remain at the low, unacceptable level as in past years. These projects
    are the backbone to our Nation's infrastructure for waterways, flood
    prevention, water supply, recreation, and ecosystem restoration. We
    remind you that Civil Works projects are a true ``jobs program'' in
    that up to 85 percent of project construction funding is contracted to
    the private sector; 100 percent of the construction, as well as much of
    the architect and engineering work. Not only do these projects provide
    jobs, but provide economic development opportunities for our
    communities to grow and prosper, creating permanent jobs.
        We want to point out that we appreciate the funding the Congress
    enacted in the fiscal year 2012 Consolidated Appropriation Act and
    fiscal year 2012 supplemental. We encourage the Congress to increase
    the ``water'' share of the total Energy and Water Bill closer to the $6
    billion Corps capability.
        We have great concerns over the issue of ``earmarks''. Civil Works
    projects are not earmarks. Civil Works projects go through a process;
    reconnaissance study, feasibility study, benefit to cost ratio test,
    EIS, peer review, review by agencies, public review and comment, final
    Chief of Engineer approval, authorization by all of the Congress in a
    Water Resources Development Act (WRDA) bill and signed by the
    President. WRDA 2007 added an independent review of major projects. No
    other Federal program goes through such a rigorous approval process.
    Each justified project ``stands alone'', are proven to be of national
    interest and should be funded by project. For most projects there is
    local sponsor cost sharing during the feasibility study, construction,
    and for operations and maintenance (O&M). Those who have contributed,
    in most cases--millions of dollars--to the process, must have the
    ability to have a say for their projects to get funded. That voice is
    through their congressional delegation. We believe that earmarks are
    not in the national interest, but it does not pertain to the Civil
    Works program. For civil works it is an issue of priority of projects
    to be funded and who will determine that, Office of Management and
    Budget or the Congress. We hope the Congress takes back their
    responsibility to set civil works priorities and to determine how its
    citizens' tax dollars are spent.
        The Inland Waterways Trust Fund (IWTF) is inadequately funded by
    the existing fuel tax rate. There is no doubt that something must be
    done to increase the revenue in the fund. The needs of the IWTF should
    be analyzed and determine what increase to the existing fuel tax would
    maintain the necessary income flow to keep projects funded from the
    IWTF. The final proposal must be fair to tributary waterways and be
    applied equally to all industries using the waterways.
        I would now like to comment on some of our specific requests for
    the future economic well being of the citizens residing in the four
    State Red River Basin regions.
        Navigation.--The J. Bennett Johnston Waterway is living up to the
    expectations of the benefits projected. We are extremely proud of our
    public ports, municipalities, and State agencies that have created this
    success. This upward ``trend'' in usage will continue as new industries
    commence operations. A major power company, CLECO, has invested $1
    billion in its Rodemacher Plant near Boyce, Louisiana, on the lower Red
    River and has started moving more than 2.5 million tons of ``petroleum
    coke'' and limestone, by barge. This project is a reality and there are
    many more industries considering using our waterway and locating at the
    ports.
        We have a serious issue for the J. Bennett Johnston Waterway O&M in
    the President's budget. The administration allocated $8,434,000 for
    fiscal year 2013, $2,566,000 less than what is required for 24/7 lock
    operations and dredging. This drastic reduction will directly impact
    the ability to conduct maintenance dredging and the authorized 9-foot
    channel will not be maintained. It is difficult to understand why the
    administration would fund O&M at the $11 million range for 5 years and
    suddenly make a drastic reduction that will have such a negative impact
    on a waterway that has yearly increased its tonnage. If the required
    funding level of at least $11 million is not appropriated the waterway
    may actually shut down to all traffic and industry will see the
    waterway as unreliable and choose alternative modes of transportation,
    impacting ports, and jobs.
        The administration is introducing a new metric to determine lock
    operations. The hours of operations for each lock would be determined
    by the number of commercial lockages per year. Reducing the hours of
    operations will discourage industry from using the Waterway; therefore,
    further reducing the number of lockages sending the Waterway into a
    lower-use status. Instead of finding ways to close down waterways the
    administration should be promoting initiatives to increase waterborne
    transportation. The Congress must stop these destructive actions.
        Red River Navigation Into Southwest Arkansas Feasibility Study.--
    This region of Southwest Arkansas and Northeast Texas continues to
    suffer major unemployment and this navigation project, although not the
    total solution will help revitalize the economy. Due to the time lapsed
    in the study the ``freight rates'' calculated a number of years ago
    they must be re-evaluated. To date the local sponsor, Arkansas Red
    River Commission, has invested more than $4 million to cost share in
    this study. Since no funding has been appropriated for this study the
    Commission will fully fund a private company to conduct a full
    investigation to insure all benefits have been identified. This
    feasibility study has been ongoing for more than 10 years and the
    Commission is making every effort to bring it to a successful
    conclusion. The administration and the Congress needs to make the
    Federal contribution and the same commitment the local sponsor and
    State of Arkansas has made.
        Flood Prevention.--What will happen when we ignore our levee
    systems? We know the Red River levees in Arkansas do not meet Federal
    standards, which is why we have the authorized project line item, ``Red
    River Below Denison Dam, TX, AR & LA''. Now is the time to bring these
    levees up to standards, before a major flood event.
        We continue to consider flood control a major objective and request
    you continue funding the levee rehabilitation projects ongoing in
    Arkansas. Out of 11 levee sections, 5 have been completed and brought
    to Federal standards. The Red River Levee District (AR) is prepared to
    provide lands, easements, and rights of way for the next major
    rehabilitation of the Lafayette County levees.
        The levees in Louisiana have been incorporated into the Federal
    system; however, they do not meet current safety standards. These
    levees do not have a gravel surface roadway, threatening their
    integrity during times of flooding. It is essential for personnel to
    traverse the levees during a flood to inspect them for problems.
    Without the gravel surface the vehicles will cause rutting, which can
    create conditions for the levees to fail. A gravel surface will insure
    inspection personnel can check the levees during the saturated
    conditions of a flood.
        Bank Stabilization.--One of the most important, continuing
    programs, on the Red River is bank stabilization in Southwest Arkansas
    and North Louisiana under the authorized project; Red River Emergency
    Bank Protection. We must stop the loss of valuable farmland that erodes
    down the river and interferes with the navigation channel. In addition
    to the loss of farmland is the threat to public utilities such as
    levees, roads, electric power lines and bridges; as well as increased
    dredging cost in the navigable waterway in Louisiana. These bank
    stabilization projects are compatible with subsequent navigation into
    Arkansas, and we urge that they be continued in those locations
    designated by COE to be the areas of highest priority.
        Water Quality.--The Assistant Secretary of the Army (Civil Works),
    in October 1998, agreed to support a re-evaluation of the Wichita River
    Basin tributary of the Chloride Control Project. The re-evaluation
    report was completed and the Director of Civil Works signed the
    Environmental Record of Decision. The plan was found to be economically
    justified. Then the ASA (CW) directed that construction would not
    proceed until a local sponsor was found to assume 100 percent of the
    O&M for the project. The 2007 WRDA bill included language that
    clarified that all aspects of this project will be at full Federal
    expense, to include O&M. Over the past years, there has been a renewed
    interest by the Lugart-Altus Irrigation District to evaluate
    construction of Area VI, of the Chloride Control Project, in Oklahoma.
    They have obtained the support of many State and Federal legislators,
    as well as the Oklahoma Governor in support of a re-evaluation report.
    The western areas of Texas and Oklahoma are water deprived and sorely
    need the Chloride Control Project. The need for water quality and
    quantity will increase over time and this project will address those
    needs, as long as Federal funding is appropriated to keep the project
    moving ahead.
        Project Funding Requests.--Included in this testimony are tables
    displaying the Civil Works projects in the Red River Valley and the
    appropriation needs for fiscal year 2013.
        Thank you for the opportunity to present this testimony and project
    details of the Red River Valley Association on behalf of the
    industries, organizations, municipalities and citizens we represent
    throughout the four State Red River Valley region. The Civil Works
    program directly relates to national security by investing in economic
    infrastructure. If waterways are closed companies will not relocate to
    other parts of the country--they will move over seas. If we do not
    invest now there will be a negative impact on our ability to compete in
    the world market threatening our national security.
        Grant Disclosure.--The Red River Valley Association has not
    received any Federal grant, sub-grant or contract during the current
    fiscal year or either of the 2 previous fiscal years.

                             RED RIVER VALLEY ASSOCIATION OPERATION AND MAINTENANCE PROJECTS
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Red River
                                                                                         Valley        President's
                               Project                            Fiscal year 2012    Association      fiscal year
                                                                    appropriations    fiscal year      2013 budget
                                                                                      2013 request
    ----------------------------------------------------------------------------------------------------------------
    DE Queen Lake, Arkansas.....................................            1,654             3,393            1,870
    Dierks Lake, Arkansas.......................................            1,393             2,213            1,567
    Gillham Lake, Arkansas......................................            1,319             1,437            1,463
    Millwood Lake, Arkansas.....................................            2,507             6,690            2,680
    Bayou Bodcau Reservoir, Louisiana...........................            2,016             1,891            1,041
    Bayou Pierre, Louisiana.....................................               23                36               24
    Caddo Lake, Louisiana.......................................              215               522              216
    Wallace Lake, Louisiana.....................................              234               997              232
    J. Bennett Johnston Waterway, Louisiana.....................           11,165            25,633            8,434
        Basic Annual Operation and Maintenance..................            7,565            12,230  ...............
                                                                   (w/Suppl 3,600)
        Backlog Maintenance.....................................  ................           13,403  ...............
    Old River, Louisiana (MR&T).................................  ................           21,647            8,050
    Broken Bow Lake, Oklahoma...................................            2,017             7,025            2,425
    Hugo Lake, Oklahoma.........................................            1,519             1,716            1,716
    Pine Creek Lake, Oklahoma...................................            1,229             1,053            1,053
    Sardis Lake, Oklahoma.......................................              982             3,801            3,801
    Waurika Lake, Oklahoma......................................            1,507             1,616            1,616
    Chloride Control, Area VIII, Texas..........................            1,562             1,529            1,529
    Denison Dam and Lake Texoma, Texas..........................            6,803            13,837            7,137
        Basic Annual Operation and Maintenance..................  ................            6,393  ...............
        Backlog Maintenance.....................................  ................            7,444  ...............
    Estelline Springs, Texas....................................               43                42               42
    Lake Kemp, Texas--Total Need................................              179               241              241
        Basic Annual Operation and Maintenance..................  ................              214  ...............
        Reallocation Study......................................  ................               27  ...............
    Pat Mayse Lake, Texas.......................................            1,187             2,421            1,148
    Jim Chapman Lake, Texas.....................................            1,555             4,553            1,736
    Lake of the Pines, Texas....................................            3,393             8,848            3,529
    Wright Patman Dam and Lake, Texas...........................            3,771            12,888            3,513
    ----------------------------------------------------------------------------------------------------------------

                            RED RIVER GENERAL INVESTIGATION AND CONSTRUCTION GENERAL PROJECTS
                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                       Red River
                                                                                         Valley        President's
                                                                  Fiscal year 2012    Association      fiscal year
                                                                    appropriations    fiscal year      2013 budget
                                                                                      2013 request
    ----------------------------------------------------------------------------------------------------------------
                            Studies (GI)

    Navigation into Southwest Arkansas: Feasibility.............  ................              302  ...............
    Red River Waterway, Louisiana--12' Channel, Recon...........  ................              100  ...............
    Bossier Parish, Louisiana...................................  ................              270  ...............
    Cross Lake, Louisiana Water Supply Supplement...............  ................  ...............  ...............
    Southeast Oklahoma Water Resource Study: Feasibility........  ................              500  ...............
    Washita River Basin, Oklahoma...............................  ................              500  ...............
    Southwest Arkansas Ecosystem Restoration: Recon Study.......  ................               47  ...............
    Cypress Valley Watershed, Texas.............................  ................              175  ...............
    Sulphur River Basin, Texas..................................  ................            1,000  ...............
    Wichita River Basin above Lake Kemp, Texas: Recon...........  ................              100  ...............
    Red River Above Denison Dam, Texas and Oklahoma: Recon......  ................              100  ...............
    Red River Waterway, Index, Arkansas to Denison Dam..........  ................              100  ...............
     Mountain Fork River Watershed, Oklahoma and Arkansas, Recon  ................  ...............  ...............
     Walnut Bayou, Little River, Arkansas.......................  ................              100  ...............
    Little River County/Ogden Levee, Arkansas, Recon............  ................              100  ...............
    Red River Waterway, Index to Denison, Bendway...............  ................  ...............  ...............                  Construction General (CG)Red River Waterway: J.B. Johnston Waterway, Louisiana.......            1,000            22,000            2,000
    Chloride Control Project, Texas and Oklahoma................  ................            8,500  ...............
        Texas--7,500/Oklahoma--800..............................        \1\ 7,200         \2\ 1,300  ...............
    Red River Below Denison Dam; Arkansas and Louisiana.........               90            18,000  ...............
        Bowie County Levee, Texas...............................  ................  ...............  ...............
    Red River Emergency Bank Protection.........................  ................           20,000  ...............
    McKinney Bayou, Arkansas, PED...............................  ................  ...............  ...............             Continuing Authority Program (CAP)Big Cypress Valley Watershed, Texas: Section 1135...........  ................  ...............  ...............
    Palo Duro Creek, Canyon, Texas: Section 205.................  ................              100  ...............
    Millwood, Grassy Lake, Arkansas: Section 1135...............  ................              100  ...............
    Miller County Levee, Arkansas: Section 1135.................  ................  ...............  ...............
    Oklahoma Comprehensive Water Planning: Section 22...........  ................              500  ...............
    ----------------------------------------------------------------------------------------------------------------
    \1\ Texas
    \2\ Oklahoma

                              DEPARTMENT OF ENERGY

      Prepared Statement of the American Council for an Energy-Efficient
                                    Economy
        Dear Chairwoman Feinstein and Ranking Member Alexander: We write
    today to encourage the subcommittee to continue funding for the
    Department of Energy's (DOE) Combined Heat and Power (CHP) activities
    within the Advanced Manufacturing Office of the Energy Efficiency and
    Renewable Energy Office. CHP has been funded at the $25 million level
    for several years, and we encourage that level of funding to continue
    in fiscal year 2013 for development and deployment activities. This is
    the only CHP funding in the entire Federal Government.
        CHP--sometimes called cogeneration--is an integrated application of
    technologies for the simultaneous, on-site production of electricity
    and heat. It represents a cost-effective, near-term opportunity to
    improve our Nation's energy, environmental, and economic future.
    Currently, two-thirds of U.S. power generation fuel energy is simply
    thrown away as waste heat. CHP can be deployed in all 50 States, is
    fuel flexible, comes in many sizes, and for many applications;
    therefore, some CHP technologies are ready-for-market transformation
    activities while others are still in the development stages. In total,
    according to an Oak Ridge National Laboratory Report, these
    technologies can save 5.3 gigawatts of energy by the year 2030, the
    equivalent of one-half of all residential energy use in the United
    States today.
        Secretary Chu described DOE as ``bullish on CHP'' in his February
    16 testimony to the Senate Energy and Natural Resources Committee. He
    talked about his recent visit to the new CHP system at the Texas
    Medical Center in Houston, which, like many medical centers,
    universities, and cities is served by a district energy system. With
    DOE's support, a highly efficient CHP system producing steam and
    chilled water was recently installed at the medical center that saved
    customers more than $9 million in the first year. In the fiscal year
    2013 budget request, DOE has significantly changed both the focus and
    the presentation of their budget. What was ``Industrial Technologies
    Program'' has now become ``Advanced Manufacturing Office'' and the
    structure provides maximum flexibility for funding. The budget
    justifications, therefore, contain no mention of continued work on CHP.
    We believe this is an oversight and urge continued funding for this
    important program to address development, demonstration, and market
    transformation activities in CHP. Given the efficiency, environmental
    and grid reliability benefits of CHP and district energy, it is
    important that DOE programs specifically address development,
    deployment, and market barriers related to these systems.
        Thank you for your attention to this request.

    National Organizations
    Alliance for Industrial Efficiency
    American Council for an Energy-Efficient Economy
    American Gas Association
    Energy Solutions Center
    International District Energy Association
    Mechanical Contractors Association of America (MCAA)
    Sheet Metal and Air Conditioning Contractor's National Association
    (SMACNA)
    U.S. Clean Heat and Power Association

    Alaska
    University of Alaska, Fairbanks

    Arizona
    Affiliated Engineers, Inc.
    NRG Energy Center Phoenix
    NRG Energy Center Tucson

    California
    Affiliated Engineers, Inc.
    Capstone Turbine Corporation
    Chem-Aqua, Inc.
    Goss Engineering, Inc.
    Leva Energy
    NRG Energy Center San Diego
    NRG Energy Center San Francisco
    Solar Turbines Incorporated
    Syska Hennessy Group, Inc.
    University of California, San Francisco
    Vanderweil Engineers
    Veolia Energy

    Colorado
    Colorado State University

    Connecticut
    COWI North America Energy
    Fibrelite
    The Hartford Steam Company

    Delaware
    ICETEC Energy Services
    NRG Energy Center Dover

    Florida
    Affiliated Engineers, Inc.
    Chem-Aqua, Inc.
    ONICON Incorporated
    Syska Hennessy Group, Inc.
    TMEnergyLLC

    Georgia
    Chem-Aqua, Inc.
    RMF Engineering, Inc.
    Syska Hennessy Group, Inc.

    Iowa
    Statistics & Control, Inc.

    Illinois
    Affiliated Engineers, Inc.
    Caterpillar
    Eastern Illinois University
    Energy Resources Center, University of Illinois at Chicago IL
    Energy Solutions Center
    Gas Technology Institute
    Recycled Energy Development
    Stoneham Consulting
    Syska Hennessy Group, Inc.

    Indiana
    Applied Engineering Services
    Chem-Aqua, Inc.
    Citizens Energy Group

    Massachusetts
    Syska Hennessy Group, Inc.
    UMass Medical School
    Vanderweil Engineers
    Veolia Energy

    Maryland
    Affiliated Engineers, Inc.
    CPF Underground Utilities, Inc.
    Evapco, Inc.
    Piping & Corrosion Specialties, Inc.
    RMF Engineering, Inc.
    Veolia Energy

    Michigan
    Detroit Thermal
    Veolia Energy

    Minnesota
    Cummins Power Generation
    District Energy St. Paul
    Ever-Green Energy
    FVB Energy, Inc.
    Kattner Associates LLC
    NRG Energy Center Minneapolis
    Uponor

    Missouri
    Burns & McDonnell Engineering Company, Inc.
    Veolia Energy

    North Carolina
    Affiliated Engineers, Inc.
    RMF Engineering, Inc.
    SPX Flow Technology Systems
    Syska Hennessy Group, Inc.

    Nebraska
    Energy Systems Company

    New Hampshire
    TVC Systems
    Waldron Engineering & Construction, Inc.

    New Jersey
    Blue Sky Power
    Chem-Aqua, Inc.
    Concord Engineering
    DCO Energy LLC
    Energenic-US LLC
    Integrated CHP Systems
    Joseph Technology Corporation
    Kessler Ellis Products
    NRG Energy Center Princeton
    Syska Hennessy Group, Inc.
    Thermo Systems LLC
    Veolia Energy

    Nevada
    Chem-Aqua, Inc.
    Southwest Gas Corporation
    Vanderweil Engineers

    New York
    Alstrom Energy Group
    Cool Systems
    GI Endurant LLC
    Hudson Technologies
    Tricon Piping Systems, Inc.
    Vanderweil Engineers
    Veolia Energy
    Waldron Engineering of NY, P.C.

    Ohio
    Bahnfleth Group Advisors, LLC
    The Medical Center Company
    Youngstown Thermal

    Oklahoma
    Oklahoma Natural Gas Company
    Veolia Energy

    Oregon
    Veolia Energy

    Pennsylvania
    Center for Building Performance & Diagnostics, Carnegie Mellon
    University
    Elliott Group
    NRG Energy Center Harrisburg
    NRG Energy Center Pittsburgh
    Philadelphia Gas Works
    The Pennsylvania State University
    Vanderweil Engineers
    Veolia Energy

    South Carolina
    RMF Engineering, Inc.

    Texas
    Affiliated Engineers, Inc.
    Chem-Aqua, Inc.
    Siemens Energy, Inc.
    Syska Hennessy Group, Inc.
    Thermal Energy Corporation

    Utah
    Aquatherm, Inc

    Virginia
    APPA: Leadership in Educational Facilities
    Resource Dynamics Corporation
    Syska Hennessy Group, Inc.
    Vanderweil Engineers

    Washington
    Affiliated Engineers, Inc.
    Cascade Power Group
    Infinia Corporation
    VA:W

    Washington, DC
    Environmental and Energy Study Institute
    Syska Hennessy Group, Inc.

    Wisconsin
    Affiliated Engineers, Inc.
    Syska Hennessy Group, Inc.

                                     ______

            Prepared Statement of the American Geosciences Institute
        To the Chairwoman and members of the subcommittee: Thank you for
    this opportunity to provide the American Geosciences Institute's (AGI)
    perspective on fiscal year 2013 appropriations for geoscience programs
    within the subcommittee's jurisdiction. The President's budget request
    for the Department of Energy (DOE) research programs provides important
    and modest investments in research and development (R&D) that will help
    sustain energy resources for economic growth of resilient communities.
    AGI strongly supports the wise investments in the Office of Science ($5
    billion) and Energy Efficiency and Renewable Energy ($2.3 billion). AGI
    requests at least $5 million in additional funding for the Science
    Graduate Fellowship Program within the Office of Science's Workforce
    Development for Teachers and Scientists ($14.5 million fiscal year 2013
    request) which are zeroed out in the President's proposal.
        AGI is concerned about the limited investments in oil and natural
    gas R&D within the Office of Fossil Energy. Oil and natural gas supply
    62 percent of our Nation's energy (2010 consumption from Energy
    Information Administration) and will continue to play a major role in
    the future. These investments will drive innovation to support and
    improve safe and effective domestic development of cleaner fossil
    fuels. The bulk of DOE's oil and gas R&D investments go to institutions
    of higher education for training and research. The United States has a
    substantial workforce and significant investments in oil and natural
    gas research, development, exploration, and production. Steady, but
    modest Federal investments in fossil energy R&D with a longer-term
    strategic plan would benefit the academic, private, and public sectors.
        The Office of Fossil Energy suffers from an unbalanced portfolio
    that focuses primarily on coal, faces uncertainty about direction and
    investments, and receives inconsistent funding. We ask for the
    subcommittee's support for oil and gas, unconventional natural gas,
    methane hydrates, and carbon sequestration R&D so the Nation can
    develop a diverse portfolio of energy resources while enhancing carbon
    mitigation strategies to secure clean, affordable, and secure energy
    supplies for now and the future.
        AGI is a nonprofit federation of 50 geoscientific and professional
    societies representing more than 250,000 geologists, geophysicists, and
    other Earth scientists. Founded in 1948, AGI provides information
    services to geoscientists, serves as a voice for shared interests in
    our profession, plays a major role in strengthening geoscience
    education, and strives to increase public awareness of the vital role
    the geosciences play in society's use of resources, resilience to
    hazards, and the health of the environment.
                    department of energy's office of science
        The DOE Office of Science is the single largest supporter of basic
    research in the physical sciences in the United States, providing more
    than 40 percent of total funding for this vital area of national
    importance. The Office of Science manages fundamental research programs
    in basic energy sciences, biological and environmental sciences, and
    computational science and, under the budget request, would receive $5
    billion in fiscal year 2013. AGI asks that you support this funding
    level.
        The President's request would provide $14.5 million for Workforce
    Development for Teachers and Scientists, a program to ensure that DOE
    and the Nation have a sustained pipeline of highly skilled and diverse
    science, technology, engineering, and mathematics (STEM) workers. AGI
    strongly supports investments in geoscience education, training and
    workforce development within DOE and other Federal agencies. We are
    concerned that the request is $5 million less than fiscal year 2012
    enacted and that DOE proposes no funding for the Science Graduate
    Fellowship program. We would encourage support for graduate student
    fellowships through DOE to allow students to complete advanced training
    and to ensure a skilled workforce in energy-related sciences.
         department of energy's energy efficiency and renewable energy
        Within Energy Efficiency and Renewable Energy, the President's
    fiscal year 2013 budget request would increase investments for R&D for
    many renewable energy resources. AGI applauds the $65 million requested
    for geothermal R&D and greatly appreciates previous support from the
    Congress for this key alternative energy resource. The geothermal
    research program within the Renewable Energy account, which funds
    Earth-science research in materials, geofluids, geochemistry,
    geophysics, rock properties, reservoir modeling, and seismic mapping,
    will provide the Nation with the best research to build a successful
    and competitive geothermal industry. AGI supports the Energy Innovation
    Hub focused on critical materials and hope this hub will consider ways
    to improve exploration, extraction and processing of necessary raw
    materials as well as replacement materials.
         department of energy's fossil energy research and development
        AGI urges the subcommittee to provide more balanced support for the
    Fossil Energy R&D portfolio in the fiscal year 2013 Energy and Water
    Development appropriations bill. Many Members of Congress have strongly
    emphasized the need for a responsible, diversified, and comprehensive
    energy policy for the Nation. The growing global competition for fossil
    fuels has led to a repeated and concerted request by the Congress to
    ensure the Nation's energy security. The President's proposal, which
    provides no funding for oil R&D or for unconventional fossil energy, is
    short sighted and inconsistent with congressional and public concerns.
    No funding for oil and unconventional fossil energy R&D will hinder our
    ability to achieve energy stability and security.
        The research dollars invested in petroleum R&D go primarily to
    universities, State geological surveys, and research consortia to
    address critical issues like enhanced recovery from known fields and
    unconventional sources that are the future of our natural gas supply.
    This money does not go into corporate coffers, but it helps American
    businesses remain competitive by giving them a technological edge over
    foreign companies. All major advances in oil and gas production can be
    tied to research and technology. AGI strongly encourages the
    subcommittee to ensure a balanced and diversified energy research
    portfolio that does not ignore the Nation's primary sources of energy
    for the near future, fossil fuels.
        Thank you for the opportunity to present this testimony to the
    subcommittee.
                                     ______

          Prepared Statement of the American Public Power Association
        The American Public Power Association (APPA) respectfully requests
    funding for the Renewable Energy Production Incentive, Power Marketing
    Administrations, storage for high-level nuclear waste, the Nuclear Loan
    Guarantee Program, the Department of Energy Water Power Program, energy
    conservation, weatherization, clean coal, fuel cells, fuel and powering
    systems, the Navajo Electrification and Demonstration Program, and the
    Federal Energy Regulatory Commission.
        APPA is the national service organization representing the
    interests of more than 2,000 municipal and other State and locally
    owned electric utilities in 49 States (all but Hawaii). Collectively,
    public power utilities deliver electricity to 1 of every 7 electric
    consumers (approximately 46 million people), serving some of the
    Nation's largest cities. However, the vast majority of APPA's members
    serve communities with populations of 10,000 people or less.
        We understand that the Congress is operating in a tight fiscal
    environment. APPA's priority is to support programmatic requests that
    bring down costs, conserve resources, or benefit our public power
    customers in other ways. We appreciate the opportunity to submit this
    statement outlining our fiscal year 2013 funding priorities within the
    jurisdiction of the Energy and Water Development, and Related Agencies
    subcommittee.
        Renewable Energy Production Incentive.--APPA is disappointed that
    the administration and the Congress have decided to stop funding the
    Renewable Energy Production Incentive (REPI). REPI was the first
    attempt by the Congress to provide comparable renewable incentives to
    the nonprofit electric utility industry, and we continue to seek
    comparability to this day. The elimination of funding for the REPI
    program was a step backward in this process. Defunding not only
    decreases incentives for new production, but utilities who had been
    receiving the funding are stranded mid-program. Five million dollars
    would restore funding to the program for fiscal year 2013, but any
    funding would help restore payments to those already approved for the
    incentive.
                        power marketing administrations
        Power Marketing Administration Proposals.--The President's National
    Commission on Fiscal Responsibility and Reform proposed a measure for
    all four Power Marketing Administrations (PMAs) that would have had the
    effect of raising the rates for PMA customers. We appreciate that the
    fiscal year 2013 request did not include this type of proposal.
        Purchase Power and Wheeling.--We urge the subcommittee to authorize
    appropriate levels for use of receipts so that the Western Area Power
    Administration (WAPA), the Southeastern Power Administration (SEPA),
    and the Southwestern Power Administration (SWPA) can continue to
    purchase and wheel electric power to their municipal and rural electric
    cooperative customers. Although appropriations are no longer needed to
    initiate the purchase power and wheeling (PP&W) process, the
    subcommittee continues to establish ceilings on the use of receipts for
    this important function. The PP&W arrangement is effective, has no
    impact on the Federal budget, and is supported by the PMA customers who
    pay the costs. We support an increase over the funding levels of the
    administration's budget for fiscal year 2013, which are as follows:
      --$243 million for Western Area Power Administration (WAPA);
      --$88 million for Southeastern Power Administration (SEPA); and
      --$41 million for Southwestern Power Administration (SWPA).
        Construction.--We urge the subcommittee to authorize appropriate
    levels of funding for the construction budgets of WAPA, SEPA, and SWPA.
    These budgets have continued to decrease over the years; however, this
    funding remains critical to the operation and maintenance of the PMAs.
        Storage for High-Level Nuclear Waste.--APPA is disappointed that
    the administration has provided little funding for nuclear waste
    disposal or storage in the budget request. We support the work and the
    findings of the Blue Ribbon Commission on America's Nuclear Future and
    hope that the administration and the Congress start working to
    implement the recommendations.
        Nuclear Loan Guarantees.--APPA is disappointed with the
    administration's cancellation of the Nuclear Loan Guarantee program and
    requests that the Committee restore funding to this important program.
        Department of Energy Waterpower Program.--APPA was extremely
    disappointed that funding for water power was decreased to $20 million
    (from $59 million in fiscal year 2012) while most other renewable
    resources were increased in the administration's fiscal year 2013
    request. APPA believes there should be parity among renewable resource
    funding. APPA requests $100 million for fiscal year 2013 for the DOE's
    Water Power Program. At a time when utilities around our country must
    focus on finding carbon-free sources of energy because of pending State
    and Environmental Protection Agency regulations, the importance of
    hydropower research and development is more important than ever before.
    Not only is hydropower a renewable resource, but it can be used as
    baseload generation to back up more intermittent renewables such as
    wind and solar power.
        Energy Conservation.--APPA appreciates the funding increases for
    energy efficiency programs provided in the President's budget. The
    budget funding levels for fiscal year 2013 are as follows:
      --Building technologies: $310 million;
      --Advanced manufacturing: $290 million;
      --Federal Energy Management Program: $32 million; and
      --Vehicle technologies: $420 million.
        We urge the subcommittee to maintain these funding levels. While
    these requests are all lower than the President's fiscal year 2012
    requests, they still represent increases over current funding levels.
        Weatherization and Intergovernmental Activities.--We are pleased
    that the administration has requested $139 million for the
    Weatherization program in fiscal year 2013, a significant increase from
    fiscal year 2012, and we encourage the subcommittee to maintain that
    level of funding.
        Clean Coal Power Initiative and FutureGen.--APPA is disappointed
    that the budget did not include funding for large scale commercial
    applications of carbon capture and sequestration technology. We
    encourage the subcommittee to include funding for Clean Coal Power
    Initiative (CCPI) and FutureGen. APPA strongly believes that, as the
    need for clean energy increases, the FutureGen project, or something
    similar, will be critical in nearing us to the goal of the world's
    first near-zero-emissions coal fired plant. We urge the subcommittee
    and the Congress to work with the administration on finding an
    appropriate role and funding level for the FutureGen project and CCPI.
        Fuel Cells.--APPA was disappointed that the administration
    requested zero funding for fuel cell related research and development.
    We urge the subcommittee to allocate additional funding for this
    program for fiscal year 2013.
        Fuels and Power Systems.--We recommend these funding levels for the
    following programs:
      --Innovations for existing plants: $84 million;
      --Advanced integrated gasification combined cycle: $80 million;
      --Turbines: $45 million;
      --Carbon sequestration: $150 million;
      --Fuels: $25 million; and
      --Advanced research: $48 million.
        Navajo Electrification Demonstration Program.--APPA supports full
    funding for the Navajo Electrification Demonstration Program at its
    full authorized funding level of $15 million. The purpose of the
    program is to provide electric power to the estimated 18,000 occupied
    structures in the Navajo Nation that lack electric power. This program
    has been consistently underfunded.
        Federal Energy Regulatory Commission (FERC).--The fiscal year 2013
    budget requests $305 million for FERC, the same level as current
    funding. APPA supports this funding level.
                                     ______

          Prepared Statement of the American Society for Microbiology
        The American Society for Microbiology (ASM) is pleased to submit
    the following statement on the fiscal year 2013 appropriation for
    science programs at the Department of Energy (DOE). ASM is the largest
    single life science organization in the world with more than 38,000
    members.
        The administration's fiscal year 2013 budget request of $5 billion
    for DOE's Office of Science (SC) is a minimal 2.4-percent increase more
    than the fiscal year 2012 enacted level. We urge the Congress to
    approve increased resources for the research and development (R&D)
    managed by the SC, one of three Federal agencies identified as crucial
    to the future of our Nation's global competitiveness in science and
    technology. The SC sponsors research by multidisciplinary teams from
    various government institutions, academia, and the private sector. It
    leads the Nation in energy and environmental research and is the
    largest Federal sponsor of basic research in the physical sciences. DOE
    SC contributes to sectors of the U.S. economy, such as biotechnology,
    alternative energy, and environmental sciences. DOE-funded researchers
    and programs discover innovative technologies, methods, and commercial
    products that serve national priorities like climate change,
    environment cleanup, and renewable energy.
        DOE research initiatives are producing results not possible in
    other research settings. Two examples are the 46 Energy Frontier
    Research Centers established by the SC in 2009 at universities,
    national laboratories, and other U.S. institutions to advance basic
    energy related research and the three Bioenergy Research Centers
    created in 2007 to focus on next-generation biofuels. DOE facilities
    also provide non-DOE researchers with invaluable tools that might
    otherwise be inaccessible like the advanced xray beam sources currently
    being used by industry to study the enzyme RNA polymerase II, a project
    based on Nobel prize winning DOE research with potential for stopping
    RNA viruses causing polio, hepatitis, and other infectious diseases.
        SC oversees high-impact projects divided among R&D programs focused
    on advancing physics, computing, biology, chemistry, environmental
    sciences and other disciplines. It manages 10 DOE national laboratories
    and promotes education programs to encourage future scientists and
    engineers. Extramural SC funding supports about 25,000 researchers at
    nearly 300 U.S. universities and colleges. In fiscal year 2013, an
    estimated 26,500 researchers from industry, national laboratories,
    universities, and other nations are expected to use SC lab facilities,
    accessing one-of-a-kind instruments for their own research.
        In addition, DOE technology transfer efforts yield exemplary
    successes of commercial products arising from federally funded
    inventions. DOE announced in February that eight of its national
    laboratories will participate in a pilot program expediting the
    transfer of DOE intellectual property rights to private companies. The
    newly designed Agreements for Commercializing Technology will make it
    easier for companies to partner with the laboratories and are expected
    to help U.S. businesses create new products and jobs in the science and
    technology sector.
      department of energy funding stimulates novel approaches to biology
                                 based research
        The Biological and Environmental Research (BER) program within the
    SC is a source of groundbreaking research in genomics, climate change,
    greenhouse gas emissions, biofuels, contaminants in the environment and
    the interfaces between physical and biological sciences. Under the
    current DOE Strategic Plan, BER is tasked with delivering new renewable
    energy technologies, utilizing basic biological research to create
    efficient biofuels processes. BER also is expected to add significantly
    to our understanding of the role of microbes in geochemical cycling of
    carbon, nitrogen, sulfur and metals, processes that are critical to
    understanding climate and environmental processes.
        The BER program receives about $625 million in the fiscal year 2013
    request, a small 2.6-percent increase over fiscal year 2012. We urge
    the Congress to approve the administration's DOE budget that includes
    the resources for essential BER research. The budget increase is marked
    for developing synthetic biology tools and technologies, analyzing
    experimental data sets, and conducting climate studies in the Arctic.
    In fiscal year 2013, 65 percent of the BER budget will support research
    projects, while the remaining 35 percent will fund scientific user
    facilities that include the Atmospheric Radiation Measurement (ARM)
    Climate Research Facility, the William R. Wiley Environmental Molecular
    Sciences Laboratory (EMSL), and the Joint Genome Institute (JGI).
        The fiscal year 2013 budget would support the diverse R&D
    portfolios of BER's two divisions: the Biological Systems Science
    Division and the Climate and Environmental Sciences Division, allocated
    about $310 million and $316 million, respectively. In fiscal year 2013,
    resources will be increased for research on climate change in arctic
    and tropical regions, as well as for a shift in emphasis from global
    climate modeling to smaller, regional models. The funding on systems
    sciences will increase investments in the development of synthetic
    biology tools, computational analyses of genomic datasets and biodesign
    technologies.
        BER contributions include the Human Genome Project initiated in the
    1980s and some of the Nation's earliest climate change models. BER has
    significantly shaped our understanding of technical fields like
    genomics and natural phenomena like microbial communities and their
    interactions with the environment. BER-funded projects also have
    elucidated the biogeochemical processes at work under the Earth's
    surface that are critical to advances in both energy and environmental
    research.
      department of energy funding advances research in genome sciences,
                          biofuels, and biotechnology
        The BER programs biological systems sciences have a diverse R&D
    portfolio, focused on applying advances in systems biology research in
    support of DOE strategies in energy, climate, and the environment. BER
    supports the DOE Bioenergy Research Centers, which clearly are
    succeeding as innovation incubators for genetics based R&D and
    alternative energy development. The overarching goal of these research
    programs is a complete scientific portrait from the molecular to the
    community level of plants and microbes with potential to solve societal
    challenges like clean energy and pollutant decontamination. Another
    optimal outcome would be sufficiently detailed knowledge to develop
    predictive, computational models of these living systems necessary to
    enable synthetic biology approaches for biofuels production and
    understand roles of microbes in environmental and climate processes.
        Funding for BER research effectively combines interdisciplinary
    science with powerful new tools like bioinformatics and imaging
    technologies developed through past DOE appropriations. Microorganisms
    are frequently integral components in BER-funded projects that have
    implications for preserving healthy environments. One example is the
    DOE Joint Genome Institute project that recently identified previously
    unknown methane producing microbes in permafrost soils, which could
    become a major problem through their release of greenhouse gases as
    climate change thaws the Earth's arctic regions. Arctic permafrost,
    where these microbes are abundant, sequesters an estimated 1.6 trillion
    metric tons of carbon. BER-supported systems biology knowledgebase,
    which is community driven cyberinfrastructure for sharing and
    integrating data and analytical tools to accelerate predictive biology.
        Ongoing DOE research is aggressively seeking new biomass sources
    for biofuel production, to reduce demand on corn and other food plants
    considered too valuable for non-food purposes.
        In 2011, microbiology related results reported by DOE investigators
    included the following examples supported by BER genome science
    programs:
      --BER-funded researchers sequenced many fungal genomes, which contain
            enzymes that break down cellulose and lignin, the two most
            abundant biopolymers on Earth, in order to harness these
            capabilities for industrial applications such as biofuels
            production. Another application is biopulping for the paper
            industry, which requires that the lignin be degraded while
            leaving the cellulose untouched. Forest products such as pulp
            and paper account for 5 percent of the Nation's gross domestic
            product.
      --BER supported researchers have developed technologies that could be
            used to rewrite the genetic code of a living cell. Such
            technology could enable scientists to design cells that build
            proteins not found in nature, or engineer bacteria that are
            useful for bioenergy and environmental cleanups.
      --Researchers completed an advanced metabolic model of the alga
            Chlamydomonas reinhardtii that should expedite development of
            algae as a viable source of renewable bioenergy.
      --Genetically engineered E. coli have been manipulated to improve the
            bacteria's synthesis of terpene, a precursor of several
            biofuels, by 120 percent. Other scientists have modified E.
            coli and yeasts to produce the terpene called bisabolane as a
            promising biofuel precursor, one found to be relatively
            nontoxic to the microbes; unlike other biofuels like ethanol
            that can limit commercially viable biofuel production.
            Alternatively, scientists also have inserted a novel fatty acid
            synthesis enzyme into E. coli, a first step in biodiesel
            production from fatty acids.
      --BER-funded researchers, using integrated genomics technologies,
            discovered that microorganisms play crucial roles in regulating
            soil carbon dynamics through several microbially mediated
            feedback mechanisms. This demonstrated the importance of
            microbial communities in projecting future climate warming.
            Such studies are fundamental to understanding ecosystem
            responses to climate change and provides a mechanistic basis
            for carbon climate modeling.
        department of energy funding supports innovative studies of the
                                  environment
        BER also sponsors research that ranges widely from molecular to
    field scale studies of various threats to our environment. BER manages
    two scientific user facilities (ARM and EMSL) and supports three
    strategic research areas in environmental sciences: atmospheric
    systems, climate and earth system modeling, and environmental system
    science. BER-funded researchers investigate environmental challenges
    like increased levels of greenhouse gases and heavy metal soil
    contaminants.
        Several currently active CESD projects illustrate the division's
    unique expertise using microbial systems to protect and improve our
    environment:
      --BER-funded researchers found that the films from some bacteria and
            pilin nanofilaments from bacteria have electronic
            conductivities, which are comparable to those of synthetic
            metallic nanostructures. They can also conduct over distances
            on the centimetre scale. The property of allowing electron
            transport across long distances could revolutionize
            nanotechnology and bioelectronics.
      --Using EMSL equipment, a DOE university team was the first to
            describe the molecular structure of proteins in Shewanella
            oneidensis that allow the bacterium to transfer an electrical
            charge. The proteins exist within small ``nanowires''
            constructed by the bacteria that extend through their cell
            walls and trap minerals. The discovery is a step toward
            potentially using microbes as a source of electricity, perhaps
            as microbial fuel cells. The results also have possible
            relevance to microbial cleanup of environmental contaminants.
      --BER supported researchers found that the dual role of dissolved
            organic matter in mercury reduction and complexation in anoxic
            environments where both bacterial methylation and DOM reduction
            occur. Such studies, provide mechanistic insights into the
            factors controlling mercury species transformation, geochemical
            cycling and especially toxic methylmercury production, which
            are critical to mercury remediation in groundwater.
                                   conclusion
        ASM recommends that the Congress approve the proposed fiscal year
    2013 budget, in support of the DOE's SC. DOE science programs routinely
    generate discoveries of economic and societal impact that serve the DOE
    mission, often by collaborating with non-DOE partners or sponsoring
    multidisciplinary research teams. SC also maintains unique lab
    facilities and institutes with robust capabilities to solve difficult,
    large scale problems. We ask the Congress to recognize these invaluable
    contributors to the economy, environment and public health by
    supporting increased funding for the fiscal year 2013 DOE budget.
                                     ______

     Prepared Statement of the American Society of Agronomy, Crop Science
          Society of America, and the Soil Science Society of America
        Dear Chairwoman Feinstein, Ranking Member Alexander, and members of
    the subcommittee: The American Society of Agronomy (ASA), Crop Science
    Society of America (CSSA), and the Soil Science Society of America
    (SSSA), are pleased to submit comments in strong support of enhanced
    public investment in the Department of Energy's (DOE) Office of Science
    for fiscal year 2013. Specifically, ASA, CSSA, and SSSA urge the
    subcommittee to support DOE's Office of Science at a level of $5
    billion for fiscal year 2013, as requested in the President's proposed
    budget (a 2.6-percent increase over the fiscal year 2012 level). A
    strong level of funding will enable the Office of Science to continue
    to deliver the scientific discoveries and major scientific tools that
    transform our understanding of nature and advance the energy, economic,
    and national security of the United States.
        ASA, CSSA, and SSSA represent more than 18,000 members in academia,
    industry, and government, as well as 13,000 Certified Crop Advisers.
    The largest coalition of professionals dedicated to the agronomic,
    crop, and soil science disciplines in the United States, ASA, CSSA, and
    SSSA are dedicated to utilizing science in order to meet our growing
    food, feed, fiber, and fuel needs. With an ever-expanding global
    population and increasing food demands, investment in food and
    agriculture research is essential to maintaining our Nation's food,
    economic and national security.
                    department of energy's office of science
        ASA, CSSA, and SSSA understand the challenges the Senate Energy and
    Water Development Appropriations Subcommittee faces with the tight
    budget for fiscal year 2013. We also recognize that the Energy and
    Water Development Appropriations bill has many valuable and necessary
    components, and we applaud the subcommittee for the support provided to
    the DOE Office of Science. For fiscal year 2013, ASA, CSSA, and SSSA
    recommend a funding level of $5 billion.
        The Congress approved the America Creating Opportunities to
    Meaningfully Promote Excellence in Technology, Education, and Science
    (America COMPETES) Reauthorization Act of 2010 (Public Law 111-358),
    recognizing that an investment in basic (discovery) scientific research
    is essential to providing America with the brainpower necessary to
    maintain a competitive advantage in the global economy and keep U.S.
    jobs from moving overseas. Such an investment is necessary to keep U.S.
    science and engineering at the forefront of global research and
    development in the biological sciences and geosciences, computing, and
    many other critical scientific fields. The Office of Science supports
    graduate students and postdoctoral researchers early in their careers.
    Nearly one-third of the Office of Science's research funding goes to
    more than 300 colleges and universities nationwide. The Office of
    Science also reaches out to America's youth in grades K-12 to help
    improve student's knowledge of science, mathematics, and understanding
    of global energy and environmental challenges. The recommended funding
    level of $5 billion is critical to ensuring our energy self-sufficiency
    and addressing major environmental challenges. In addition, a funding
    level of $5 billion will allow the Office of Science to:
      --maintain and strengthen DOE's core research programs at both the
            DOE national laboratories and universities;
      --provide support for Ph.D.'s, postdoctoral associates, and graduate
            students;
      --ensure maximum utilization of DOE research facilities; and
      --allow the Office of Science to develop and construct the next-
            generation facilities necessary to maintain U.S. leadership in
            scientific research.
                             basic energy sciences
        Within the DOE Office of Science, the Basic Energy Sciences (BES)
    program is a multipurpose, scientific research effort that fosters and
    supports fundamental research to expand the scientific foundations for
    new and improved energy technologies and for understanding and
    mitigating the environmental impacts of energy use. The research
    disciplines that the BES program supports include condensed matter and
    materials physics, chemistry, soil, mineralogical, and geosciences.
    These subjects influence virtually every aspect of energy production,
    conversion, transmission, storage, efficiency, and waste mitigation.
        ASA, CSSA, and ASSA support funding the subprogram of Chemical
    Sciences, Geosciences, and Biosciences within the BES at a level of
    $349.4 million in fiscal year 2013. The Geosciences Research program
    supports research focused on developing an understanding of fundamental
    Earth processes that are a foundation for improved advanced energy and
    environmental technologies. Specifically, we support the Geosciences
    program to expand geochemical research and computational analysis of
    complex subsurface fluids and solids.
                     biological and environmental research
        Also within the DOE Office of Science, the Biological and
    Environmental Research (BER) program has advanced environmental and
    biological knowledge that supports national security through improved
    energy production, international scientific leadership, and research
    that improves the quality-of-life for all Americans. BER supports these
    vital missions through competitive and peer-reviewed research at
    national laboratories, universities, and private institutions. ASA,
    CSSA, and SSSA support the funding of BER at the President's requested
    level of $625.3 million for fiscal year 2013. A variety of programs
    within BER are essential to continued biological systems science
    fundamental research, geochemical observations, and determining
    environmental sustainability of our energy production systems. A few of
    these programs are further highlighted below:
      --ASA, CSSA, and SSSA support funding the Office of Climate and
            Environmental Sciences within BER at a level of $315.6 million.
            This funding will support essential subsurface biogeochemical
            research and basic research on the fate and transport of
            contaminants in the subsurface.
      --ASA, CSSA, and SSSA support the increase included in the
            President's budget for the Genomic Science Program at a level
            of $188.1 million for fiscal year 2013. The Joint Genome
            Institute (JGI) is an essential lab where synthetic molecular
            toolkits are developed to predict, construct, and test new
            biological systems for clean-energy solutions. It also uses
            plant and microbial systems biology to pursue breakthroughs
            needed to develop cellulosic biofuels.
        Thank you for your consideration of our requests.
                                     ______

           Prepared Statement of American Society of Plant Biologists
        On behalf of the American Society of Plant Biologists (ASPB), we
    submit this statement for the official record to support the requested
    level of $4.992 billion for the Department of Energy (DOE) Office of
    Science for fiscal year 2013. The testimony highlights the importance
    of biology--particularly plant biology--as the Nation seeks to address
    energy security and other vital issues.
        ASPB recognizes the difficult fiscal environment our Nation faces
    but believes investments in scientific research will be a critical step
    toward economic recovery. We would also like to thank the subcommittee
    for its consideration of this testimony and for its support for the
    basic research mission of the DOE Office of Science.
        ASPB is an organization of approximately 5,000 professional plant
    biology researchers, educators, graduate students, and postdoctoral
    scientists with members in all 50 States and throughout the world. A
    strong voice for the global plant science community, our mission--
    achieved through work in the realms of research, education, and public
    policy--is to promote the growth and development of plant biology, to
    encourage and communicate research in plant biology, and to promote the
    interests and growth of plant scientists in general.
        fuel, food, environment, and health--plant biology research and
                                america's future
        Plants are vital to our very existence. They harvest sunlight,
    converting it to chemical energy for food and feed; they take up carbon
    dioxide and produce oxygen; and they are the primary producers on which
    all life depends. Indeed, plant biology research is making many
    fundamental contributions in the areas of domestic fuel security and
    environmental stewardship; the continued and sustainable development of
    better foods, fabrics, pharmaceuticals, and building materials; and in
    the understanding of basic biological principles that underpin
    improvements in the health and nutrition of all Americans.
        In particular, plant biology is at the center of numerous
    scientific breakthroughs in the increasingly interdisciplinary world of
    alternative energy research. For example, interfaces among fundamental
    and applied plant biology, engineering, chemistry, and physics
    represent critical frontiers in both basic biofuels research and
    bioenergy production. Similarly, with the increase in plant genome
    sequencing and functional genomics, the interface of plant biology and
    computer science has become essential to our understanding of complex
    biological systems, ranging from single cells to entire ecosystems.
        Despite the fact that foundational plant biology research--the kind
    of research funded by agencies such as the DOE--underpins vital
    advances in practical applications in energy, agriculture, health, and
    the environment, the amount of money invested in understanding the
    basic function and mechanisms of plants is relatively small. This is
    especially true considering the significant positive impact crop plants
    have on the Nation's economy and in addressing some of our most urgent
    challenges like energy and food security.
        Understanding the importance of these areas and to address future
    challenges, ASPB organized the Plant Science Research Summit in
    September 2011. With support and funding from the National Science
    Foundation, U.S. Department of Agriculture, DOE, and the Howard Hughes
    Medical Institute, the Summit brought together representatives from
    across the full spectrum of plant science research to identify critical
    gaps in our understanding of plant biology that must be filled over the
    next 10 years or more to address the grand challenges facing our Nation
    and our planet. The grand challenges identified at the Summit include:
      --To fuel the Nation's future with clean energy, improvements are
            needed in current biofuels technologies, including breeding,
            crop-production methods, and processing.
      --To feed everyone well, now and in the future, advances in plant
            science research will be needed for higher yielding, more
            nutritious varieties able to withstand a variable climate.
      --Innovations leading to improvements in water use, nutrient use, and
            disease and pest resistance that will reduce the burden on the
            environment are needed to allow for increases in ecosystem
            services such as clean air, clean water, fertile soil, and
            biodiversity benefits like pest suppression and pollination.
      --For all the benefits that advances in plant science bestow--in food
            and fiber production, ecosystem and landscape health, and
            energy subsistence--to have lasting, permanent benefit they
            must be economically, socially, and environmentally
            sustainable.
        In spring 2012, a report from the Plant Science Research Summit
    will be published. This report will further detail priorities and needs
    to address the grand challenges.
                                recommendations
        Because of our membership's extensive expertise and participation
    in the academic, industry, and government sectors, ASPB is in an
    excellent position to articulate the Nation's plant science priorities
    as they relate to bioenergy and, specifically, with regard to
    recommendations for bioenergy research funding through the DOE's Office
    of Science.
        Within the Office of Science, the programs in Biological and
    Environmental Research (BER) and Basic Energy Sciences (BES) are
    crucial to understanding how basic biological processes work. For this
    reason ASPB is supportive of the fiscal year 2013 request to fund BER
    at $625.3 million and BES at $1.8 billion. Sustained funding for these
    programs is vital as the discoveries made in these areas will
    ultimately be the foundation for the next fuels and technologies we use
    in our daily lives.
        In addition:
      --We commend the DOE Office of Science, through their programs in BES
            and BER for funding the Bioenergy Research Centers and the
            Energy Frontier Research Centers. These centers provide a model
            for collective science innovation that complements DOE's
            essential investment in individual investigator and small group
            science. ASPB strongly encourages funding for the DOE Office of
            Science that would be specifically targeted to the funding of
            individual or small group grants for bioenergy research.
      --Photosynthetic research is one clear example of an interface
            between the physical sciences and biology. The DOE Office of
            Science has been the major source of funding for fundamental
            studies of photosynthesis, which is the primary source of
            chemical energy on the planet. However, the current funding
            available for photosynthetic research is not commensurate with
            the central role that photosynthesis plays in energy capture
            and carbon sequestration. Hence, ASPB calls for the Office of
            Science to expand its research portfolio in the area of
            photosynthesis and carbon capture.
      --Considerable research interest is now focused on the processing of
            plant biomass for energy production. If biomass crops,
            including woody plants, are to be used to their full potential,
            extensive effort must be expended to improve our understanding
            of their basic biology and development, as well as their
            agronomic performance. Therefore, ASPB calls for DOE to support
            research targeted at efforts to increase the utility and
            agronomic performance of bioenergy feedstocks.
        Thank you for your consideration of our testimony on behalf of the
    American Society of Plant Biologists.
                                     ______

                           Prepared Statement of ASME
        Madam Chairwoman, ranking member, and members of the subcommittee:
    The Energy Committee (EnComm) of ASME's Technical Communities is
    pleased to provide this testimony on the fiscal year 2013 budget
    request for research and development (R&D) programs in the Department
    of Energy (DOE).
                                  introduction
        ASME is a more than 120,000-member nonprofit, worldwide
    educational, and technical society. It conducts one of the world's
    largest technical publishing operations, holds more than 30 technical
    conferences and 200 professional development courses each year, and
    sets some 600 industrial and manufacturing standards, many of which
    have become de facto global technical standards. The Energy Committee
    of ASME's Technical Communities comprises 64 members from 10 ASME
    Divisions, 2 Institutes and Codes & Standards, representing
    approximately 40,000 of ASME's members.
        ASME has long advocated a balanced portfolio of energy supplies to
    meet the Nation's energy needs, including advanced clean coal,
    petroleum, nuclear, natural gas, waste-to-energy, biomass, solar, wind,
    and hydroelectric power. ASME also supports energy-efficient building
    and transportation technologies, as well as transmission and
    distribution infrastructure sufficient to satisfy demand under
    reasonably foreseeable contingencies. Only such a portfolio will allow
    the United States to maintain its quality of life while addressing
    future environmental and security challenges. Sustained growth in the
    energy systems on which the United States depends will also require
    stability in licensing and permitting processes not only for power
    generating stations but also for transmission and transportation
    systems.
                                 fossil energy
        The fiscal year 2013 budget request of $650.7 million for fossil
    energy represents a $86.3 million, or 15.3 percent, increase compared
    to the fiscal year 2012 appropriation. Fossil Energy (FE) research and
    development (R&D) would rise by 21.3 percent, or $73.8 million to
    $420.6 million. After 3 years of substantial budget cuts for FE, the
    EnComm is pleased to see that the administration is seeking to finally
    build upon the $3.4 billion that was devoted to FE R&D as part of the
    American Recovery and Reinvestment Act (ARRA).
        After proposing the elimination of funding for Natural Gas
    Technologies in last year's budget request, this year the
    administration has requested a $2 million, or 13.4 percent increase for
    the program that would bring it to $17 million in fiscal year 2013.
    Unconventional Fossil Energy Technologies would again be targeted for
    elimination by the administration in fiscal year 2013, after receiving
    less than $5 million in funding for fiscal year 2012, and no funding in
    fiscal year 2011. The United States has access to significant
    unconventional gas resources with the potential to provide abundant,
    affordable, clean low-carbon energy source for years to come. Prior FE
    R&D has contributed to making this possible. However, this potential
    will not be realized unless this resource can be produced reliably,
    economically, safely, and with minimal environmental impact.
    Accomplishing this task and keeping the United States in the forefront
    of unconventional fossil energy technology will require an investment
    in basic research, technology development, and investments in advances
    in low-impact environmental technologies that will not be undertaken by
    industry in the current economic climate. The budget for these efforts
    should be maintained at least at the fiscal year 2010 level.
        The EnComm encourages a restoration of funding for coal research
    programs to at least the levels appropriated for fiscal year 2010. The
    EnComm is very disturbed by the lack of research in basic coal
    combustion and in research that is needed to support the next
    generation of coal-fired plants. The use of coal today and in the
    future is vital to providing for a sustainable energy future. The
    current funding levels significantly hinder the ability to keep the
    United States in the forefront of coal technology. Coal is and will
    remain a critical resource for our Nation and its economy; and we must
    continue to invest in technological advancements that will reduce
    environmental impacts for this energy. The use of more efficient
    processes for coal combustion, such as advanced integrated gasification
    combined cycle (IGCC) technology, combined with carbon sequestration
    will allow the United States to utilize its coal resources in a more
    environmentally sound and cost-effective manner. We encourage strong
    and consistent funding for these programs now and in future years.
                    advanced research projects agency-energy
        The EnComm supports the $325 million budget request for the
    Advanced Research Projects Agency-Energy (ARPA-E), a $50 million or
    27.5 percent increase over the fiscal year 2012 appropriated amount.
    ARPA-E received its first funding as part of ARRA, but has stood out
    quickly among its fellow DOE programs. ARPA-E represents a significant
    opportunity for the United States to cultivate technological
    breakthroughs related to energy sources, and uses. A steady commitment
    to ARPA-E has begun to encourage new energy technology innovation, and
    the EnComm believes that this is a worthwhile endeavor for the DOE as
    we seek to accomplish technological breakthroughs in energy technology
    research.
                                 nuclear energy
        The EnComm is discouraged to see a 10.3 percent, or $88.2 million
    reduction in the fiscal year 2013 DOE Office of Nuclear Energy budget
    request. Total funding for fiscal year 2013 would fall to $770 million.
    The EnComm remains convinced that nuclear energy will hold an important
    role in the Nation's energy future, and that programs like Reactor
    Concepts, and Fuel Cycle R&D need sustained funding to aid the Nation's
    transition to a low-carbon energy future. The current proposed lack of
    funding may adversely impact the ability of the current U.S. fleet to
    continue to operate past its 60-year life. The loss of funding may also
    contribute to the loss of the U.S. nuclear technology competitive edge
    to overseas concerns. The Energy Committee remains interested in how
    the proposed Reactor Concepts RD&D program distinguishes itself from
    the traditional R&D program under the Office of Nuclear Energy. The
    administration's invocation of an ``all-of-the-above'' energy strategy
    at this year's State of the Union Address should be reflected in this
    budget request. President Obama has again proposed the creation of a
    national ``clean energy standard'' of 80 percent by 2035 the EnComm
    believes very strongly that sustained increases in nuclear power
    research are justified in light of this goal.
                     energy efficiency and renewable energy
        The Office of Energy Efficiency and Renewable Energy (EERE) manages
    America's investments in research, development, and deployment of DOE's
    diverse energy efficiency and renewable energy applied science
    portfolio. The fiscal year 2013 request of $2.37 billion, which is a
    $527 million, or 29.1 percent increase over the fiscal year 2012
    appropriated amount of $1.81 billion, demonstrates that the
    administration would like to restore EERE to pre-Budget Act levels
    (Public Law 112-25). Most of the key EERE programs, including Biomass,
    Solar, Wind, Geothermal, Building Technologies, Vehicle Technologies,
    and Advanced Manufacturing technologies, would receive substantial
    increases in funding to support the growth of renewable energy and
    energy efficiency. The EnComm is particularly pleased to see large
    increases for both the Advanced Manufacturing program ($290 million, or
    a 150.9 percent increase), formerly known as the Industrial
    Technologies Program (ITP), as well as the Building Technologies
    Program ($310 million, or a 41.4 percent increase).
        The EnComm believes that the development of transportation fuel
    systems that are not petroleum-based is a critical part of our future
    national energy policy. The fiscal year 2013 budget for biomass and
    bio-refinery systems R&D is slated to receive a $70.7 million increase
    to $270 million for fiscal year 2013, 35.5 percent above the fiscal
    year 2012 appropriated amount. We are also pleased to see the $91
    million, or 27.7 percent increase in the effort related to vehicle
    technologies emphasizing plug-in hybrid electric vehicles. However, the
    EnComm is concerned about the current level of mandated use of ethanol-
    based fuels.
        The integration of all cost-effective electric generating
    technologies into the operation of the electricity distribution system
    is critical to economic operation of the national electric grid. The
    EnComm believes that R&D related to the integration of the electric
    grid and its control as a truly national system is imperative for the
    growth of effective and economic energy generation technologies, and we
    encourage full funding for such research.
                                    science
        The mission of the Office of Science (SC) is the delivery of
    scientific discoveries and major scientific user facilities and tools
    to transform our understanding of nature and to advance the energy,
    economic, and national security of the United States.
        During these difficult budget times, the EnComm is pleased with the
    request for the Office of Science. The fiscal year 2013 budget proposal
    of $5 billion is an increase of $118 million, or 2.4 percent, from the
    fiscal year 2012 appropriation. As successive budget cycles come and
    go, the Nation seems to be getting further away from the funding
    trajectory mandated in the ``America COMPETES Reauthorization Act of
    2007'' (Public Law 111-358). Science programs in high-energy physics,
    fusion energy sciences, biological and environmental research, basic
    energy sciences, and advanced scientific computing, serve, in some
    small way, every student in the country. These funds support not only
    research at the DOE laboratories, but also the work at a large number
    of universities and colleges. We believe that basic energy research
    will also improve U.S. energy security over the long term, through its
    support for R&D on cellulosic ethanol and other next-generation
    biofuels, advanced battery and energy storage systems, and fusion.
    Fusion Energy Sciences, High Energy Physics, and Nuclear Physics would
    receive decreases under this budget, with specific cuts to domestic
    fusion in favor of honoring the Nation's commitments to International
    Thermonuclear Experimental Reactor (ITER). The EnComm respects the
    Office of Science's goals related to microbiological sciences, computer
    science, and basic energy sciences but urges a restoration of funding
    for these reduced programs at fiscal year 2011 levels. The Energy
    Committee supports the budget request for the Office of Science in the
    amount of $5 billion.
                      other department of energy programs
        DOE is also very active in areas outside of R&D. The environmental
    remediation program that funds the decommissioning and decontamination
    of old DOE facilities is one such research area. The EnComm questions
    the advisability of flat funding for the Environmental Management
    program. The Yucca Mountain (YM) Waste Repository is a critical part of
    the future of nuclear energy and the use of uranium as a resource for
    energy usage in the present and foreseeable future. The EnComm is
    concerned that the cancellation of the YM repository program will
    result in a difficult, and more costly, search for a new repository
    that will likely encounter similar obstacles. DOE and the Congress
    should honor their commitments with regard to disposal of Spent Nuclear
    Fuel. The EnComm has read the Blue Ribbon Commission (BRC) on America's
    Nuclear Future report and will be closely monitoring any efforts in the
    Congress toward implementing the BRC's recommendations. The coming
    resurgence in the commercial nuclear arena is likely to deplete the
    trained professionals available for this program as engineers choose to
    move to the more stable commercial environment. The Congress should
    appropriate the funds to ensure that this work is accomplished in an
    expeditious manner.
                                   conclusion
        Members of the EnComm consider the issues related to energy to be
    one of the most important issues facing our Nation. There is an urgent
    need for a strong and coherent energy policy. The EnComm is concerned
    that without a National Energy Policy the proposed and ongoing research
    will not be utilized to its full potential. We applaud the
    administration and the Congress for their understanding of the
    important role that scientific and engineering breakthroughs will play
    in meeting our energy challenges. In order to promote such innovation,
    strong support for energy research will be necessary across a broad
    range of technology options. DOE research can play a critical role in
    allowing the United States to use our current resources more
    effectively and to create more advanced energy technologies.
        Thank you for the opportunity to offer testimony regarding both the
    R&D and other parts of the proposed budget for the DOE. The EnComm is
    pleased to respond to requests for additional information or
    perspectives on other aspects of our Nation's energy programs.
                                     ______

                 Prepared Statement of APS Technology, Inc.\1\
    ---------------------------------------------------------------------------
        \1\ 9 Laser Lane, Wallingford, Connecticut 06492. http://aps-
    tech.com/.
    ---------------------------------------------------------------------------
        Madam Chairwoman and honorable Senators: Seven years ago, I
    submitted testimony \2\ regarding proposed cuts to the Department of
    Energy (DOE) budget for oil and gas exploration research. Much has
    happened since 2005, all of which reinforces the need for such funding.
    I wish to address, in particular, the cuts to the National Energy
    Technology Laboratories (NETL).
    ---------------------------------------------------------------------------
        \2\ Testimony to the House Committee on Appropriations Subcommittee
    on Energy and Water Development, submitted March 6, 2005.
    ---------------------------------------------------------------------------
        I wish to make perfectly clear that my company, APS Technology,
    Inc., has benefited from these programs. We have completed two cost-
    sharing research contracts \3 4\ from the NETL, one Small Business
    Innovation Research (SBIR) \5\ and one Small Business Technology
    Transfer (STTR) \6\ grant. This support has been critical to the growth
    of APS and its introduction of new products for the industry.
    ---------------------------------------------------------------------------
        \3\ DE-FC26-02NT41664, ``Drilling Vibration Monitoring and Control
    System''.
        \4\ DE-FC26-04NT15501, ``Novel High-Speed Drilling Motor for Oil
    Exploration & Production''.
        \5\ DE-FG02-02ER83368, ``Rotary Steerable Motor System for Deep Gas
    Drilling''.
        \6\ DE-AC26-98FT40481, ``Downhole Fluid Analyzer''.
    ---------------------------------------------------------------------------
        I will not repeat the general justifications that you know so
    well--the necessity of our striving toward energy independence or near-
    independence; the importance of new technologies to reaching this goal,
    while protecting the environment, et cetera. While these are clearly
    important considerations, I would rather focus on three particular
    aspects from my personal experience:
      --an outstanding success story;
      --the changes in the business environment for oil and gas
            exploration; and
      --some reasons that DOE support for oil and gas research and
            development is more important today than ever.
                 a success story--teleco oilfield services inc.
        In his State of the Union Address,\7\ President Obama reminded us
    that ``it was public research dollars, over the course of 30 years,
    that helped develop the technologies to extract all this natural gas
    out of shale rock--reminding us that government support is critical in
    helping businesses get new energy ideas off the ground.'' One of these
    key enabling technologies was measurements-while-drilling (MWD) and the
    leader in MWD was my former company, Teleco Oilfield Services Inc.
    ---------------------------------------------------------------------------
        \7\ http://www.whitehouse.gov/photos-and-video/video/2012/01/25/
    2012-state-union-address-
    enhanced-version#transcript.
    ---------------------------------------------------------------------------
        In 1972, I began this new venture with the support of my then
    employer, Raymond Engineering \8\ and the European oil company,
    SNPA.\9\ The sole purpose of this new company was to develop and
    commercialize this new MWD technology. Even then, before there was a
    commercial tool, the industry recognized MWD as a transformative
    technology. By transmitting data to the surface in real time from the
    bottom of a well as it was being drilled, it would open the door to
    directional and horizontal drilling, real-time analysis of the oil and
    gas content of a well, steering the well within a pay zone, things
    unheard of then that are now standard operating procedure in oilfields
    around the world.
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        \8\ Now a part of Kaman Corporation.
        \9\ Societe Nationale des Petroles d'Aquitaine, now a part of
    Total.
    ---------------------------------------------------------------------------
        In 1978, dozens of companies were trying to develop these
    systems,\10\ including large corporations within the oil industry and
    without. Most, however, were unsuccessfully trying to adapt existing
    wireline technology to the much more severe environment within a well
    during drilling. Teleco took the opposite approach;\11\ it adapted the
    proven reliable military and space technology of Raymond Engineering
    and applied it to the new environment in a effort to attain the
    reliability needed for such service.
    ---------------------------------------------------------------------------
        \10\ cf., ``MWD: State of the Art'', series of articles in the Oil
    & Gas Journal, 1978.
        \11\ R.F. Spinnler & F.A. Stone, ``MWD: State of the Art--4; MWD
    Program nearing commerciality'', Oil & Gas Journal, May 1, 1978.
    ---------------------------------------------------------------------------
        In 1975, after several years of intense and expensive self-funded
    development, Teleco was ready to build and field test its first
    prototype tools. The combination of their complexity and the
    requirement that they work in an extreme environment made this a
    prohibitive task. The oil companies were unwilling to invest in this
    technology without a successful field test. It was at this time that
    the company applied for, and received, $2 million in development
    funding from the DOE. With these funds, the field testing could proceed
    and proved successful.
        At this point, six major oil companies \12\ provided an additional
    $0.9 million funding in return for future repayment through the
    company's sales. These funds allowed the commercial launch of MWD in
    1978.
    ---------------------------------------------------------------------------
        \12\ Exxon, Shell, Chevron, Conoco, Amoco, and Placid.
    ---------------------------------------------------------------------------
        As anticipated, the commercial introduction of MWD by Teleco
    revolutionized oil and gas exploration, first primarily offshore, but
    now on land as well. What was the role of the DOE in this success? MWD
    would have certainly been developed in time, but it took more than 2
    years for other companies to enter the market. The Teleco system
    remained the leader in reliability over its entire existence. The
    support of the DOE was critical to making the leap from a laboratory
    demonstration to fully commercial systems in use worldwide. Thus, the
    small investment by the DOE led directly to the development of a
    company and an industry that served to improve the efficiency and
    safety of oil and gas exploration, led to many advances that help
    restrain the price of oil including such innovations as horizontal
    drilling, and created thousands of jobs in the United States.
         changes in the oil and gas industry over the past four decades
        In the past four decades, the oil and gas industry has undergone
    dramatic changes. In the 1970s the major production companies were the
    principal sources of new technology for the industry. Exxon, Mobil,
    Texaco, and ARCO, to name a few, maintained research facilities staffed
    by the most experienced experts in their fields. These companies
    developed many of the key innovations in the drilling and well logging
    industry despite their recognition that, as commodity producers, they
    were neither equipped to market, nor particularly interested in,
    technology per se. This was the province of the oil service companies,
    to whom the producers licensed their use, often giving nonexclusive,
    royalty-free licenses to any company that requested them.
        In the ensuing decades, the industry has consolidated. For example,
    all of the companies mentioned above have either merged or been
    acquired since then, also consolidating their research programs. In the
    volatile oil and gas industry, it difficult to justify to shareholders
    investments in long-term programs that will not produce any direct
    revenues or competitive advantage. Thus, companies have striven to
    ``right size'' their organizations, often at the expense of research.
        A similar contraction has taken place in the oilfield services
    business. New technologies were once transferred from the producers,
    developed by the major service companies, or introduced by small,
    specialized companies (such as Numar \13\ or Landmark Graphics \14\).
    Many of the researchers laid off in the consolidation of the producers'
    research labs found their way to service companies. The service
    companies also acquired many of the smaller companies, such as those
    listed above. Now, after significant consolidation and downsizing on
    the part of the service companies, and under the continuous, short-term
    scrutiny of the market, even they are cutting the costs associated with
    long-term development.
    ---------------------------------------------------------------------------
        \13\ Now a part of Halliburton Corp, see: http://
    www.halliburton.com/news/archive/1997/corpnws_093097.jsp.
        \14\ Now a subsidiary of Halliburton Corp, see: http://www.lgc.com.
    ---------------------------------------------------------------------------
        To cite one example, Schlumberger has closed its world-renowned
    Schlumberger-Doll Research Center in Ridgefield, Connecticut, and
    relocated to Cambridge, Massachusetts. They have transferred much of
    the work previously done by industry experts to university professors,
    research associates, and students. The service companies are also
    outsourcing many high-risk projects to small companies such as APS.
        In this environment, the growth and success of a Teleco would be
    impossible. The large companies have become more risk-averse and
    oriented toward current revenues. Small companies lack the resources to
    pursue high-risk, long-term developments. The government, through the
    DOE, is the backer of last resort for these efforts.
               current necessity for department of energy support
        The U.S. oil and gas province is quite mature. Production of oil
    peaked in the 1970s and gas production is nearly at its peak. To
    produce additional reserves, technical progress is needed in two areas:
      --drilling safely in deeper waters offshore requires new methods for
            dealing with the increased temperatures and pressures in the
            formations; and
      --producing oil and gas from the prolific shale deposits we possess
            requires sophisticated horizontal drilling \5\ and monitoring
            \3\ equipment.
        Some of the technology for these areas is being supported by the
    Research Partnership to Secure Energy for America (RPSEA), of which we
    are a member. These programs, however, tend to be on a larger scale and
    less suited for small businesses.
        DOE R&D support, through NETL, which requires cost-sharing by the
    applicant and outside sources, is an ideal model for a stimulant to
    small business and technological growth. To cite one example, consider
    our Drilling Vibration Monitor and Control System,\3\ currently
    entering commercial service. In 2002, NETL launched the Deep Trek
    initiative, aimed at developing new technologies to reduce the cost of
    deep gas drilling. After review by outside experts of both a pre-
    application and application, APS was granted a Cooperative Agreement to
    develop this new tool, with the DOE paying 75 percent of the first
    phase.
        During this period we designed and modeled this tool, which senses
    the vibration of the bit and drillstring, and continually adjusts the
    stiffness of an active vibration damper located above the bit. As a
    result, the bit does not bounce off bottom, and applies the optimal
    force to enhance the rate of drilling.
        Phase II drilling tests have shown\15\ that use of this tool can
    increase the drilling speed by 10-50 percent, and significantly extend
    the life of drill bits and other downhole components. None of this
    development would have been possible without DOE support. APS was not
    in a position to fund it; the major service companies were not
    interested until there was an indication of value to the end user and
    the production companies needed something more concrete before
    investing in the technology.
    ---------------------------------------------------------------------------
        \15\ M.E. Wassell et al. ``Active vibration damper improves
    performance and reduces drilling costs'', World Oil, September 2008.
    ---------------------------------------------------------------------------
        Now, with the help of these tests made possible by DOE support,
    there is considerable customer interest. This product should lead to
    major improvements in efficiency for the oil and gas drilling industry,
    and growth for our company. For example, APS has been recognized as one
    of the fastest-growing technology companies in Connecticut for the past
    9 years. We are in the midst of a hiring boom and plan to increase our
    U.S. employees by 60 during 2012.
        In summary, DOE research initiatives are essential to ``prime the
    pump'' of new technology development. This is even more important in
    these times of high fuel prices, ``lean'' corporations and increased
    dependence on foreign oil sources. I urge you, in the strongest
    possible terms, to maintain or increase the funding for these programs.
    Thank you.
                                     ______

                Prepared Statement of Carnegie Mellon University
        Madam Chairwoman, ranking member, and members of the subcommittee:
    My name is Timothy McNulty, and I am the Associate Vice President for
    Government Relations at Carnegie Mellon University. The great progress
    being made in America's pursuit of energy independence is a product of
    the synergy between the entrepreneurial strength of our energy sector
    and strategic research investments that have fundamentally changed the
    very nature of production. As our pursuit of energy independence gains
    momentum, it is critical to continue funding the programs that best
    foster this dynamic. A prime example of such a program is section 999,
    the Ultra-Deepwater and Natural Gas Supply Research and Development
    Program created by the Energy Policy Act (EPAct) of 2005.
        The section 999 program supports the dynamic research of the
    Strategic Center for Natural Gas and Oil at the National Energy
    Technology Laboratory (NETL SCNGO), as well as a consortium of U.S.
    energy research universities, industry, and independent research
    organizations under the Research Partnership to Secure Energy for
    America (RPSEA). This approach ensures that the program engages
    partners from across the United States and fully utilizes the
    capabilities of the Nation's fossil energy lab, which has a long
    history of strong collaboration with industry and a proven track record
    of moving technology from discovery to commercialization. The RPSEA
    partnership brings the best of highly competitive research to bear on
    the fundamental industry challenges that the United States must address
    in order to realize the full potential of new energy sources safely and
    effectively.
        At NETL, research is underway to address the central technological
    and basic scientific questions that will support continued expansion of
    shale production. These include novel techniques for water quality and
    treatment, research on well distribution and optimization, modeling to
    predict induced seismicity, and pre-competitive research on new end-use
    products and markets for natural gas.
        This research program also benefits from a unique collaboration
    between the National Lab and five universities--Carnegie Mellon
    University, Penn State University, Virginia Tech University, the
    University of Pittsburgh, and West Virginia University. Working with
    the Lab, these institutions comprise the NETL Regional University
    Alliance (NETL RUA), a ``virtual'' laboratory that taps leading
    capabilities in hydrology, water systems, drilling technologies, and
    risk assessment from across the region.
        The NETL research builds upon recent breakthroughs such as the
    development of potential new nanoparticles supporting enhanced oil
    recovery and new ways to model and image multiphase, multifluid flow in
    shale core. Other major research accomplishments include the
    development of remote sensing techniques to monitor shallow groundwater
    salinity, the effective utilization of airborne magnetic surveys to
    detect the location of unknown wells in an active enhanced oil recovery
    well in the western United States, and the assemblage of a 3-D geologic
    framework for the Marcellus Shale using commercially available
    software.
        In addition to aiding the pursuit of energy independence, the
    section 999 program is also vital to maintaining America's global
    leadership in energy-related technologies. As the discovery of shale
    sources continues across the world--on virtually every continent--one
    aspect of the energy race for the future will clearly be to develop the
    production-related technologies and expertise that will become a major
    source of export-related business and job growth.
        The question is whether American companies, workers and communities
    will benefit from leading this development. By bringing together the
    best of American industry, university and national lab research on
    practical problem-solving and opportunity-seizing innovation, the
    section 999 program funding is vital to laying the foundation for
    American leadership in what will be a major export market of the next
    two decades.
        In essence, the research NETL is leading as part of the section 999
    program spans breakthroughs that both extend the boundaries of
    discovery and production and strive to ensure that this production is
    undertaken in an environmentally safe manner. This program is critical
    to advance productivity, to establish the foundation for scientifically
    based, environmentally sound extraction, and to catalyze new industries
    related to new energy extraction.
        The Congress's support for restoring funding of section 999 in
    fiscal year 2012 was greatly appreciated and needed. It is enabling
    practical results that make a difference in both production and
    scientifically based environmental protection. Continued support of the
    section 999 program by restoring the full $50 million in funding for
    fiscal year 2013 is respectfully urged as an investment in emerging
    American energy innovation and continued progress toward
    environmentally safe energy independence.
                                     ______

          Prepared Statement of the Coal Utilization Research Council
                                  introduction
        This statement is submitted on behalf of the membership of the Coal
    Utilization Research Council (CURC), an organization of coal-using
    utilities, coal producers, equipment suppliers, universities and
    institutions of higher learning, and several State government entities
    interested and involved in the use of coal resources and the
    development of coal-based technologies (see www.coal.org). Members of
    CURC, together with the Electric Power Research Institute (EPRI), have
    developed a Technology Roadmap (Roadmap) that defines the research,
    development, and demonstration (RD&D) necessary to insure the enhanced
    utilization of coal in the United States. The recommendations for
    fiscal year 2013 appropriations discussed in this testimony are keyed
    directly to the 2012 update of the Roadmap.
           coal utilization research council fiscal year 2013 budget
                                 recommendation
        The President has requested $241 million for the coal RD&D program
    in fiscal year 2013, which is $93 million below the fiscal year 2012
    enacted level of $333 million. This fiscal year 2013 request is nearly
    40 percent below the $389 million fiscal year 2011 appropriated levels.
    The budget request being made for Fossil Energy represents the only
    area in Department of Energy's (DOE) budget for which less funding is
    being requested than the prior year. CURC recommends that the fiscal
    year 2013 coal research and development (R&D) program be funded at $372
    million (see chart below). Recommended increases in funding would be
    targeted to specific areas as well as new programs, all of which are
    keyed to the Roadmap (details below). This recommendation represents an
    increase of $131 million over the President's fiscal year 2013 request
    and $39 million above the funding level of $333 million (exclusive of
    the National Energy Technology Laboratory (NETL) in-house R&D program)
    that the Congress provided in fiscal year 2012.\1\
    ---------------------------------------------------------------------------
        \1\ The CURC figures are exclusive of the NETL coal research and
    development (in-house R&D) program budget of $35 million. While an
    important program, this funding supports salaries for research
    conducted by NETL in-house and is not a cost-shared program with
    industry. The Roadmap identifies programs that are undertaken in
    partnership between industry and government, and therefore, CURC's
    recommendations are focused on the competitive programs funded in the
    coal RD&D program.
    ---------------------------------------------------------------------------
    importance of coal and the department of energy fossil energy research
                            and development program
        Coal is essential to the U.S. energy economy. In 2010, coal
    provided 21 percent of total U.S. energy consumption and 48 percent of
    U.S. electric power.\2\ The U.S. Energy Information Administration
    (EIA) projects that coal will continue to provide nearly 40 percent of
    our Nation's electricity through 2035. Technology has enabled coal to
    address environmental and economic challenges in the past. The proven
    formula for success has been the collaborative, cost-sharing efforts of
    the Government and the private sector. This public and private sector
    partnership has provided great value to the taxpayer yielding a return
    of $13 for every $1 of Federal funding spent for coal RD&D.\3\ The
    National Academies of Science estimated that between 1986 and 2000, the
    DOE Fossil Energy Program generated $7.4 billion in economic benefits
    to this country.\4\ Today, 3 out of every 4 coal plants in United
    States are equipped with technologies that trace their origins to DOE's
    program, allowing coal use to increase by more than 63 percent in the
    United States over the last 30 years while the emissions of
    SO2 and NOX have decreased on the order of 70
    percent.\5\
    ---------------------------------------------------------------------------
        \2\ Coal plays a similar role in the global energy economy. Between
    2000 and 2010, coal accounted for nearly one-half the increase in
    global energy use, OECD/IEA 2011.
        \3\ Fossil Energy Research Benefits, Clean Coal Technology Program,
    USDOE/NETL.
        \4\ ``Energy Research at DOE, Was it Worth It?'', Energy Efficiency
    and Fossil Energy Research 1978 to 2000, National Academy of Sciences,
    2001 Report, pg. 6.
        \5\ EIA Annual Energy Review 2010, EPA National Air Pollutant
    Emissions Trends: 1900-1998.
    ---------------------------------------------------------------------------
                                  the roadmap
        The Roadmap represents a plan for developing technologies that
    convert coal to electricity and other useful forms of energy and
    manufacturing feedstocks. The Roadmap describes coal technology
    advancements that will achieve specific cost, performance, and
    environmental goals and in doing so, will benefit the Nation's
    environment, economy, and energy security. A significant conclusion of
    the Roadmap is that, with the combination of technology development and
    enhanced oil recovery (EOR), coal-based power plants designed and
    constructed in 2025 can provide electricity at a price competitive with
    natural gas and other fuels, and with 75 percent less CO2
    than today's new natural gas-based power plant. Other additional
    benefits of successfully implementing the Roadmap include aggressive
    reduction of traditional air pollutants and water use/discharge; and
    enhanced energy and economic security via production of low-cost power
    using the largest U.S. domestic energy resource. The key to successful
    technology development is:
      --adequate public support;
      --enhanced levels of funding targeted to specific technology areas;
            and
      --a regulatory and public policy framework that supports coal use.
                    funding needs to accomplish the roadmap
        Below is a chart that outlines CURC's proposed funding
    recommendations compared to the fiscal year 2013 proposed budget for
    Fossil Energy R&D. These CURC recommendations are targeted to achieving
    the Roadmap goals by directing funds to specific programmatic
    activities, including new activities not currently funded by DOE.
    Advanced Energy Systems
          Advanced Combustion.--CURC recommends a total of $65 million for
            the Advanced Combustion program in fiscal year 2013 to develop
            technologies for advanced combustion platforms, including
            focused work on waste heat recovery and integration, advanced
            power cycles, and alternative process configurations. The
            Roadmap envisions a pathway for the integration of these
            advanced ultra supercritical (AUSC) materials technologies into
            new, highly efficient advanced coal systems. CURC recommends
            $10 million in fiscal year 2013 for DOE to build upon the
            successes of the AUSC program and to develop a roadmap that
            identifies a pathway for moving the AUSC materials work forward
            and support industry efforts in commercializing AUSC
            technologies. CURC also recommends $10 million for DOE to
            initiate a mercury control technology program to develop
            technologies to allow new combustion plants to meet the mercury
            emissions standard imposed by Environmental Protection Agency
            (EPA) on new plants.
          Gasification.--CURC recommends $55 million in fiscal year 2013 to
            support dry feed system integration and scale up, advanced
            sensors work, simulation of fast ramp improvements, and
            refractory testing, as well as focus on the integration of ion
            transport membrane (ITM) technologies into the power generation
            process, which is important for overall cost reductions of
            gasification technologies.
          Turbines.--CURC recommends $24 million for the turbine program in
            fiscal year 2013 to validate advanced hydrogen turbine
            technology and components in full turbine test stand
            demonstrations, and to expand the program to development of
            components compatible with ITM integration.
        Cross-Cutting Research.--In addition to supporting university
    training and research and computational modeling through the National
    Risk Assessment Partnership (NRAP) and the Carbon Capture Simulation
    Initiative (CCSI), CURC recommends $12.4 million for DOE to initiate a
    water management program. The Roadmap defines a program to survey the
    industry's water management practices in order to model water use and
    management for a variety of coals, process steps and emission limits,
    and to develop technologies that reduce water withdrawal and
    consumption. CURC also recommends $16 million to fund research on
    breakthrough technologies. The Roadmap characterizes these technologies
    as ``out-of-the-box'' thinking, or fundamentally new approaches to
    solving coal's challenges.
        Carbon Capture.--CURC believes that it is a wise public investment
    to determine how to cost-effectively capture and use/store
    CO2 so that we do not eliminate any options for coal in the
    future, and sees a dual role for continued development of
    CO2 capture technology. The first role is the benefit for
    meeting current and future climate mitigation regulations. States have
    adopted CO2 regulatory requirements and on March 27, the EPA
    has proposed regulatory requirements for CO2 emissions from
    new coal-fueled power plants which would require the application of
    carbon controls. The second role is driven by energy security benefits.
    If the price of captured CO2 can be reduced through RD&D,
    the CO2 can be used to augment production of domestic crude
    oil through EOR, thereby increasing the potential to domestically
    produce trillions of dollars of oil over the next several decades,
    which would reduce reliance on imported oil and improve the U.S.
    balance of trade.
          Post-Combustion.--For both new and existing power plants,
            postcombustion capture technology must be made more efficient
            and cost-effective by reducing parasitic power and capital cost
            requirements. CURC recommends $60 million in fiscal year 2013
            to develop novel capture process improvements that can support
            coal power plant retrofits and natural gas combined cycle
            (NGCC) retrofits equally.
          Pre-Combustion.--CO2 capture for gasification is
            focused on improved capture processes in order to reduce costs.
            CURC recommends $17.4 million for pre-combustion capture work
            in fiscal year 2013 specifically to pilot new shift catalysts
            and reactor designs, accelerate hydrogen membrane pilot
            projects, address CO2 slurry feed integration,
            evaluate alternates to warm gas capture, and acquire data and
            design guidance from current demonstrations.
        Carbon Storage.--CURC supports the Regional Carbon Sequestration
    Partnerships (RCSP), and recommends a follow-on program that builds
    upon the success of the RCSPs. In our judgment this follow-on program
    will support the development of a commercial industry necessary for
    deployment of carbon storage. CURC recommends $40 million in fiscal
    year 2013 to initiate a ``carbon storage site certification'' program
    intended to characterize and qualify 5 regionally diverse sites that
    can each accept 50 million tons of CO2 at a rate of 5
    million tons per year.
                             loan guarantee program
        Demonstration of first-generation technology, as reflected in the
    projects currently supported by the DOE Clean Coal Power Initiative
    (CCPI) program and the DOE Loan Guarantee program, are critically
    important in proving the integration of these technologies. The success
    of these projects is necessary to support the development of second-
    generation technologies contemplated in the Roadmap. CURC supports the
    $8 billion authorization for DOE to provide loan guarantees to selected
    fossil energy projects.
                  department of energy practice of mortgaging
        The practice of partial funding of multiyear projects contingent on
    future appropriations has been a fundamental aspect of DOE's research
    program for many years and is embodied in DOE's Financial Assistance
    Regulations. Mortgaging provides DOE the flexibility to fund several
    projects, to discontinue projects that are not meeting objectives and
    redirect funds to other meritorious projects that are successfully
    achieving development targets. Any restriction on the DOE practice of
    mortgaging will reduce the portfolio of technologies emerging from the
    program and create public and private investment risks. CURC recommends
    that the current approach to funding projects be maintained at DOE.

                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                           Enacted            Request        CURC
                                                                 ---------------------------------------------------
         Carbon Capture and Sequestration and Power Systems       Fiscal year  Fiscal year  Fiscal year  Fiscal year
                                                                      2011         2012         2013         2013
    ----------------------------------------------------------------------------------------------------------------
    Carbon capture:
        Postcombustion..........................................       41,299       55,495       49,035       60,000
        Pre-combustion..........................................       17,404       13,403       11,403       17,600Carbon storage:
        Regional Carbon Sequestration Partnerships..............       77,160       83,190       66,980       56,600
        Geological storage......................................       24,946       14,978       11,255  ...........
        MVAA....................................................        8,122        6,738        6,738  ...........
        Carbon Use/Reuse........................................          967          778          778  ...........
        Sequestration Science focus area........................        9,717        9,726        9,726  ...........
        Carbon storage site certification \1\...................  ...........  ...........  ...........       40,000
        Advanced Compressor \1\.................................  ...........  ...........  ...........          960Advanced Energy Systems:
        Advanced Combustion Research, including:................       30,724       15,942       10,699       65,000
            --Advanced Ultra SuperCritical (High Temperature)     ...........  ...........  ...........       10,000
             materials \1\......................................
            --Mercury capture for new plants \1\................  ...........  ...........  ...........       10,000
        Gasification Research, including:.......................       47,614       39,000       31,905       55,200
            --Air Separation and Oxygen Production..............  ...........  ...........  ...........        4,800
        Hydrogen turbines.......................................       30,106       15,000       12,589       24,800
        Hydrogen from coal......................................       11,661  ...........  ...........  ...........
        Coal and coal biomass to liquids........................  ...........        5,000  ...........  ...........
        Solid oxide fuel cell...................................       48,522       25,000  ...........  ...........Cross-cutting research:
        Plant optimization (sensors, controls, NC, materials)...        7,789       13,663        7,000  ...........
        Coal utilization science:
            --Computational system dynamics--National Risk             12,462       11,800        7,800       10,000
             Assessment Partnership.............................
            --Computational Energy science--Carbon Capture             11,844       13,371        9,400       10,000
             Simulation Initiative..............................
        Energy Analyses.........................................        4,837        4,950          950  ...........
        University training and research........................        3,164        4,000        3,250        4,000
        International activities................................        1,350        1,350        1,350  ...........
        Water management \1\....................................  ...........  ...........  ...........       12,400
        Breakthrough technology research \1\....................  ...........  ...........  ...........       16,000
                                                                 ---------------------------------------------------
          Coal R&D subtotal without in-house R&D................      389,688      333,384      240,858      371,960National Energy Technology Laboratory Coal Research and       ...........       35,011       35,011       35,011
     Development (in-house R&D).................................
                                                                 ---------------------------------------------------
          Coal R&D subtotal with in-house R&D...................      389,688      368,395      275,869      406,971
    ----------------------------------------------------------------------------------------------------------------
    \1\ Program is CURC-EPRI Roadmap Program and does not have a comparable program in the DOE budget.

                                     ______

         Prepared Statement of the Coalition of Northeastern Governors
        The Coalition of Northeastern Governors (CONEG) is pleased to share
    with the subcommittee on Energy and Water Development this testimony on
    fiscal year 2013 appropriations for the Department of Energy's energy
    efficiency programs, the Energy Information Administration, and the
    Northeast Home Heating Oil Reserve. The governors request fiscal year
    2013 funding of no less than the fiscal year 2012 levels for the
    following Energy Efficiency and Renewable Energy Programs: $50 million
    for the State Energy Program and $220 million for the Building
    Technologies Program. The governors also ask that you provide at least
    historic funding levels for the Weatherization Assistance Program. In
    addition, the governors request at least $105 million for the Energy
    Information Administration, and sufficient funding for maintenance and
    operation of the Northeast Home Heating Oil Reserve.
        We recognize that this year the subcommittee faces a very difficult
    set of choices in this environment of severe fiscal constraints.
    Continued, adequate Federal funding for these energy programs is a
    vital step in helping businesses and households across the Nation
    manage their energy costs, and moving the Nation toward increased
    energy independence.
                              state energy program
        The CONEG governors request at least $50 million for the State
    Energy Program (SEP) in fiscal year 2013 with these funds provided as
    base SEP formula funding. This level of base funding is critical for
    the SEP to continue the successful State-Federal-private sector
    partnerships for many energy efficiency and conservation programs. The
    base SEP program is particularly important to smaller States since it
    allows them to dramatically enhance program delivery and leverage non-
    Federal resources with Federal funds.
        The 56 State and territory energy offices use SEP funds, along with
    leveraged State and private sector funds, to implement vital energy
    efficiency, renewable energy, and alternative energy demonstration in
    energy end-use sectors such as buildings, industry, agriculture,
    transportation, and power generation. In addition, States use SEP funds
    to prepare for natural disasters and increase the security of critical
    energy infrastructure.
        States use SEP funds to carry out a wide variety of activities most
    appropriate for the energy profiles of a State. These may include
    energy efficiency retrofits and installation of solar systems on State
    buildings that save taxpayers thousands of dollars in energy costs and
    reduce carbon emissions. These funds also support public outreach and
    education to local residents, small businesses, farmers, and others to
    make them aware of opportunities to reduce energy consumption and
    energy bills. Using SEP funds, States also work with the private sector
    to showcase new clean technologies and to invest in renewable energy
    projects.
        The SEP program yields proven energy and economic benefits. The
    most recent Oak Ridge National Laboratory cost-benefit analysis of the
    program found that every $1 in SEP funding yields $7.22 in annual
    energy cost savings, $10.71 in leveraged funding, and annual energy
    savings of 1.03 million source BTUs. The Department of Energy (DOE)
    estimates that, based on recent appropriations levels, the SEP program
    results in an annual energy cost savings of $300 million.
                       weatherization assistance program
        The CONEG governors request at least historic funding levels in
    fiscal year 2013 for the Weatherization Assistance Program (WAP).
    Weatherization is an immediate and effective tool to alleviate the
    energy burden of low-income households by making their homes more
    energy efficient. The fiscal year 2010 funding level of $210 million is
    the minimum level needed to ensure that States across the country can
    continue the program's successful efforts to reduce the costs of home
    energy and increase the safety of these vulnerable households.
        Low-income households pay a disproportionate share of their income
    on energy bills, often spending more than 19 percent of their annual
    income on home energy compared to just 4 percent for all other
    households. Through a State-managed network of more than 900 local
    weatherization providers, WAP makes cost-effective improvements to
    about 100,000 low-income households annually, permanently reducing
    energy costs for these vulnerable families.
        Cost-effective weatherization measures are tailored to specific
    homes and climates. Many of these measures are inexpensive yet
    effective services, such as installing insulation, sealing ducts, and
    tuning and repairing heating and cooling systems. The program uses the
    most advanced technologies and diagnostic equipment to develop a
    comprehensive cost-effective strategy to reduce household energy use.
    In fall 2011, DOE estimated that these measures save families an
    average of $437 annually in heating and cooling costs alone.
        In addition to the considerable energy benefits, weatherization
    services increase the health and safety of low-income homes by
    detecting carbon monoxide and gas leaks in tested equipment, replacing
    unsafe equipment, and checking for moisture damage. The program also
    fosters significant investments in local economies by creating jobs,
    offering professional training, and making housing more affordable in
    communities across the Nation. For every $1 invested, WAP returns $2.51
    in benefits, including $1.80 in energy savings, according to DOE.
                         building technologies program
        The CONEG governors request at least $220 million for the Building
    Technologies Program (BTP) in fiscal year 2013. According to DOE, the
    buildings sector consumes more energy than any other sector in the
    United States including transportation and industry. The potential
    energy savings are great. Through partnerships with State and local
    governments, national laboratories and universities, BTP supports
    research, demonstration and deployment of technologies and practices to
    make new and existing buildings less energy intensive. These RD&D
    partnership activities are a vital complement to other public policy
    incentives that encourage private sector investments in smart energy
    use.
        In the millions of existing buildings, BTP works to decrease energy
    consumption through retrofits or replacements that decrease energy use
    and improve safety and comfort. In new construction, BTP works to make
    improvements in technologies and techniques for the design,
    construction and operation of more energy efficient, productive, and
    affordable buildings.
                       energy information administration
        The governors request at least $105 million in fiscal year 2013
    funding for the Energy Information Administration (EIA). As the
    independent statistical arm of the DOE, EIA is a leader is providing
    reliable independent information, analyses and forecasts on U.S. energy
    production, demand, consumption, imports and prices. The information
    and analyses provided by EIA are vital to State and Federal
    policymakers as they develop critical energy and environmental
    strategies. Consumers rely on EIA's widely-available information and
    forecasts to make a variety of energy and household-related decisions.
        Increasingly complex global energy factors have greatly increased
    EIA's workload. Continued adequate appropriations in fiscal year 2013
    will ensure that EIA can provide the most accurate reliable information
    at the level of detail needed by policymakers and consumers to make
    informed decisions.
                       northeast home heating oil reserve
        The CONEG governors request sufficient fiscal year 2013 funding for
    maintenance and operation of the Northeast Home Heating Oil Reserve.
    The Northeast is uniquely dependent on home heating oil. More than 25
    percent of northeast homes use fuel oil for heating. These homes
    account for more than 80 percent of residential heating oil use
    nationwide, making the region particularly vulnerable to the effects of
    supply disruptions and price volatility.
        In the event of a supply disruption, the Reserve provides a buffer
    that allows additional time for supplies to reach the region. Reserve
    locations are strategically placed throughout the region to respond
    rapidly and efficiently to any emergency supply interruption.
                                    summary
        In summary, the CONEG governors request that the subcommittee
    provide at least $50 million for the State Energy Program for the base
    SEP formula program, $220 million for the Building Technologies
    Program, at least historic funding levels for the Weatherization
    Assistance Program, at least $105 million for the Energy Information
    Administration, and sufficient funding for maintenance and operation of
    the Northeast Home Heating Oil Reserve.
                                     ______

                       Prepared Statement of Cummins Inc.
                office of energy efficiency and renewable energy
    Office of Vehicle Technologies
                Advanced Combustion Engine Research and Development
        Advanced Technology Powertrain--Light Duty.--Increase the
    administration's request of $55.2 million by $5 million to bring the
    program total to $60.2 million in fiscal year 2013. $58.02 million was
    appropriated in fiscal year 2012. The Advanced Combustion Engine
    research and development (R&D) program includes important research
    areas for diesel and gasoline engines to develop more energy efficient
    and environmentally friendly technologies. The Department of Energy
    (DOE) has launched the ``Supertruck'' Initiative which includes the
    Advanced Technology Powertrain--Light Duty (ATP-LD) program. The goals
    of ATP-LD program are to deliver a standard light-duty pickup truck
    which can achieve at least 40 percent improvement in fuel economy over
    the state-of-the-art gasoline engines while meeting Tier 2 Bin 2
    tailpipe emissions (the same emissions standard required for gasoline
    powered vehicles). Diesel engine R&D is critically important to improve
    energy-efficiency and environmentally friendly technologies. This is
    accomplished through a better understanding of combustion processes
    which enable the use of significantly less petroleum while meeting or
    exceeding customer value. When this technology has fully penetrated the
    market, 40-percent fuel economy enhancement in light-duty trucks and
    SUVs would reduce U.S. petroleum consumption by more than 1.5 million
    oil barrels/day and greenhouse gas (GHG) emissions by more than 0.5
    million metric tons/day with energy security and trade balance
    benefits. Innovative high-risk technologies, such as low-temperature
    combustion, variable-valve actuation, closed-loop selective catalytic
    reduction (SCR) controls, lightweight structural and advanced materials
    are planned. The funding increase will help address significant
    technology hurdles in the areas of on-board diagnostics, parasitic loss
    reduction, aftertreatment requirements, minimizing fuel penalty due to
    the aftertreatment, and the use of renewable fuels. Without the
    increased funding, research activities would be significantly limited.
    Advanced Manufacturing Office (Formerly Industrial Technologies
            Program)
                Next Generation Manufacturing Processes
        Combined Heat and Power Generation--Advanced Reciprocating Engine
    Systems.--Support administration's request of $198.7 million for fiscal
    year 2013. $62.1 million was appropriated in fiscal year 2012. Next
    Generation Manufacturing Processes are cross-cutting activities which
    focus on energy efficient processes and reduce energy intensity of
    manufactured products. The Combined Heat and Power Generation
    initiative within the Advanced Manufacturing Office includes the
    important Advanced Reciprocating Engine Systems (ARES) program, a
    component of distributed generation. The objective of the ARES program
    is to develop high efficiency, low emissions and cost-effective
    technologies for stationary engine systems (500-6500 kW) that can use
    natural gas or domestic renewable resources such as ``opportunity''
    fuels. Natural gas-fueled reciprocating engine power plants are
    preferred for reliability, low-operating costs, and point-of-use power
    generation. Opportunity fuels can be renewable fuels (e.g., landfill
    gases) which exhibit low BTU, lower methane number and varying gas
    composition. Their use reduces the dependence on high-quality pipe-line
    natural gas. The technologies goals sponsored by the ARES program are
    being readied to demonstrate 47-percent engine efficiency (20-40-
    percent increase from the baseline), higher power densities than
    current products, with an expected reduction in life-cycle costs and
    GHG emissions. The administration's fiscal year 2013 budget will
    support advanced technological challenges including higher-base engine
    efficiency, combustion enhancements with low BTU and methane gases,
    nitrogen oxides (NOX) reduction, advanced sensors and
    controls, hardware durability and lower life-cycle costs. The
    development of distributed power generation supports lower life-cycle
    energy consumption of manufactured products, national energy security
    needs, improves protection of critical infrastructure and decreases
    dependence on the national electrical grid system through point-of-use
    energy production.
        Combined Heat and Power Generation--330kw Packaged Combined Heat
    and Power System.--Support administration's request of $198.7 million
    for fiscal year 2013. $62.1 million was appropriated in fiscal year
    2012. Next Generation Manufacturing Processes are cross-cutting
    activities which focus on energy-efficient processes and reduce the
    energy intensity of manufactured products. The 330kw Packaged CHP
    System project entails the development of a flexible CHP system that
    can be deployed to commercial and light industrial (100-500kw)
    applications at a lower total cost of ownership than current CHP
    solutions. This project will result in a CHP system that is easy to use
    and inexpensive to install, offering world class customer support while
    providing a high efficiency internal combustion engine for a CHP system
    of this size. CHP systems offer higher system energy-efficiency, lower
    emissions and overall economic benefits. Modern engine designs operate
    at significantly lower regulated exhaust emissions. Combined heat and
    power systems use internal combustion engines to produce electricity at
    point of use and recover waste heat for heating or cooling purposes.
    Energy intensity of the CHP customer can be reduced in excess of 35
    percent due primarily to more efficient electrical generation and
    recovered waste heat. The fiscal year 2013 budget will support
    prototype CHP system development and field testing.
                               office of science
    Basic Energy Sciences
                Fundamental Interactions Research
        Predictive Simulation for Internal Combustion Engines.--Support
    administration's request of $71.5 million for fiscal year 2013. $67.5
    million was appropriated in fiscal year 2012. Fundamental Interactions
    Research builds the fundamental science basis essential for
    technological advances in diverse range of energy processes. In support
    of the clean energy agenda, Predictive Simulation for Internal
    Combustion Engines (PreSICE) program is a simulation and diagnostics
    study addressing the interplay between combustion chemistry and
    turbulent flows in combustion systems. This will lead to the
    development of robust engineering design tools for computational
    analysis capability. This large-scale computational simulation
    initiative is targeted at achieving cost-effective means for even
    greater fuel efficiency. Models will be developed for advanced chemical
    kinetics, computational fluid dynamics (CFD) and large eddy
    simulations. These models will simulate advanced combustion regimes,
    transient events and cycle-to-cycle variability. Development of better
    solver algorithms will minimize cycle-to-cycle variations and more
    rapid optimization of overall engine design. The administration's
    fiscal year 2013 budget will accelerate the predictive simulation of
    internal combustion engines.
                                     ______

               Prepared Statement of the Diesel Technology Forum
        The Diesel Technology Forum (DTF) is a not-for-profit organization
    representing diesel engine and equipment makers, fuel suppliers, and
    emissions control technology companies. We appreciate the opportunity
    to submit outside witness testimony regarding certain aspects of the
    fiscal year 2013 proposed budget of the Department of Energy (DOE),
    particularly its Vehicle Technologies Program (VTP) and its various
    budget activities for commercial vehicles such as Advanced Combustion
    Engine R&D (ACE R&D), batteries and electric drive technologies,
    vehicle and systems simulation, fuels technology, and materials
    research.
        Diesel engines play a key role in the global economy. A 2011
    economic study commissioned by the DTF and completed by Aspen
    Environmental Group reported that more than 80 percent of all freight
    is moved throughout the United States by diesel trucks, ships, trains,
    and intermodal systems. Worldwide, 94 percent of all global trade is
    powered by diesel engines and equipment. In addition, the diesel
    industry contributes more than $480 billion annually to the U.S.
    economy and provides more than 1.25 million jobs.
        Medium- and heavy-duty trucks--the majority of which are powered by
    diesel engines--consume roughly one-fifth of transportation fuels in
    the United States. Petroleum consumption for heavy-duty vehicles is
    expected to increase 40 percent between 2010 and 2035. Increasing the
    efficiency of these vehicles can lower the costs of land-based freight
    and the industries that depend on it, while greatly reducing the
    Nation's dependence on imported oil.
        Last year, we expressed our concern with this subcommittee over the
    Department's fiscal year 2012 budget request that would have terminated
    or delayed commitments under the SuperTruck program, which focuses on
    improving heavy-duty truck efficiency. Today, we commend the Department
    for moving forward to meet commitments to prior awards within the
    SuperTruck program. We are pleased that the fiscal year 2013 Energy
    Efficiency and Renewable Energy (EERE) budget request proposes to
    retain the contracted investments in several key budget activity areas
    that impact heavy-duty diesel engines, commercial vehicles, and truck
    efficiency programs.
    Because of Well-Established Future Need, Proven Past Performance, and
            Extended Societal Benefits, Funding for VTPs Including ACE R&D,
            Fuels, Vehicle and Systems Simulation, Batteries and Electric
            Drive Technology, and Materials Technologies, and SuperTruck
            Activities Should Be Retained
        The subcommittee again faces a difficult task of setting priorities
    among many competing programs with limited resources. The subcommittee
    should seek to assure a proper balance between fully funding programs
    that are known to improve efficiency of existing energy-intensive
    sectors on a medium-term basis as well as more future-oriented, but
    uncertain other technologies. The current fiscal year 2013 budget
    request from DOE EERE properly funds those key heavy-duty vehicle
    programs and projects that bring a proven track record of real-world
    fuel savings, and we urge that it be retained.
        The commercial vehicle research activities have been cross-cutting
    in scope and shared risk and benefits between DOE, private industry,
    the Department of Defense (DOD), Department of Transportation and
    Environmental Protection Agency (EPA). This suite of programs to make
    commercial vehicles more energy efficient--the 21st Century Truck
    Partnership and diesel engine and fuel research--have been among DOE
    EERE's most successful investments. They are proven to have helped meet
    important societal goals of economic growth and small business
    development (economics of more energy efficient commercial truck
    acquisition and ownership); cleaner air (reducing diesel engine
    emissions), reduced reliance on imported oil (increasing truck energy
    efficiency).
        They have also enhanced our national security, through contributing
    to fuel savings of DOD military vehicles. Fuel accounts for 70 percent
    of the bulk tonnage transported to the battlefield and reducing
    consumption by 1 percent leads to 6,500 fewer soldier trips, which has
    been identified with saving lives on the battlefield through reduced
    risk in transporting fuel.\1\
    ---------------------------------------------------------------------------
        \1\ Bochenek, Grace. U.S. Army Tank Automotive Research Development
    and Engineering Center, 2010.
    ---------------------------------------------------------------------------
    The Need To Reduce Energy Consumption From Commercial Vehicles is
            Significant
        In August 2011, President Obama announced the finalization of the
    first-ever fuel economy and greenhouse gas (GHG) reduction standards
    for medium- and heavy-duty commercial vehicles. This new regulation
    requires vehicle and engine manufacturers to improve efficiency by
    anywhere from 7 to 25 percent for model years 2014-2017, with the
    potential for further reductions beyond 2017.
        Reaching these challenging goals will require substantial
    manufacturer investment in the next several years at a time when
    economic recovery and market potential for heavy-duty commercial trucks
    has shown some recent positive signs but still remains tentative. More
    than ever, the combined collaborative approach of the DOE program of
    shared research toward common energy-saving objectives is needed and
    necessary to assure continued progress and increase the speed of
    development, deployment of technologies, and societal benefits.
        While manufacturers are already well at work to meet these
    aggressive and brand new regulatory requirements, continued
    collaboration and partnership within truck research programs that are
    funded at the committed levels will enable more rapid development and
    deployment of these advanced technologies than could have been
    accomplished without the collaborative government and industry
    partnership. This translates into greater reductions in energy use and
    savings to the economy and reduced emissions occuring earlier than
    predicted as well.
    The 21st Century Truck Partnership and Related Research Programs Have
            Been Recently Reviewed and Found To Be of Significant Value and
            High Performance
        The prestigious National Research Council of the National Academy
    of Sciences recently conducted an exhaustive review of the government
    industry partnership program for commercial truck efficiency. In a 2011
    pre-publication report,\2\ the independent NAS review panel noted that:
    ---------------------------------------------------------------------------
        \2\ Review of the 21st Century Truck Partnership, Second Report,
    2012. National Academy of Sciences, National Research Council Pre-
    publication copy accessed from National Academies Web site March 22,
    2012. http://www.nap.edu/catalog.php?record_id=13288 ISBN-10: 0-309-
    22247-8; ISBN-13: 978-0-309-22247-1.

        ``Given the Federal regulatory requirements to reduce emissions and
    fuel consumption, it seems the sharing of research and development
    (R&D) costs between the government and U.S. manufacturers of trucks and
    buses or heavy-duty vehicle components are appropriate to develop new
    technologies. Thus, the 21CTP is providing access to the extraordinary
    expertise and equipment in Federal laboratories, in addition to seed
    funding that draws financial commitment from the companies to push
    ---------------------------------------------------------------------------
    forward in new technology areas.'' (Page S-3)

        ``The 21CTP should be continued to help meet the nation's goal of
    reduced fuel consumption in the transportation sector.'' (Page S-3)

        ``The three (see note) SuperTruck projects will be the flagship
    projects under the 21CTP for fiscal year 2011 through fiscal year 2014;
    the goals are in concert with recommendations made in the 2008 NRC
    Phase 1 report.'' (Page S-12)

    (Note: After the NAS report was drafted, one additional project was
    added (for a total of four) which falls into the same category as the
    projects mentioned.)

        The existing DOE EERE Commercial Vehicle and Engine Programs have
    delivered substantial and proven economic, environmental and energy
    saving benefits: For every $1 invested, advanced combustion research
    delivered $53 in benefits. According to a May 2010 study \3\ previous
    advanced combustion research for laser and optical diagnostics along
    with combustion modeling undertaken by DOE and now in commercial
    vehicles on the road today saved 17.6 billion gallons of diesel fuel
    over a 12-year period (1995-2007); a 4.5-percent savings in fuel
    consumption over what would have occurred without the program
    investments. This translates into a monetized saving of $34.5 billion
    in 2008 dollars, and reduction of more than 177 million tons of
    CO2 prevented.
    ---------------------------------------------------------------------------
        \3\ Link, Albert N. Retrospective Benefit-Cost Evaluation of U.S.
    DOE Vehicle Combustion Engine R&D Investments, Department of Economics,
    University of North Carolina at Greensboro; May 2010.
    ---------------------------------------------------------------------------
        The established goal of improving fuel economy by 20 percent for
    commercial vehicles in the ACE R&D has the potential to save more
    energy than the electrification of 1 million cars. Past investments
    have contributed to diesel engine manufacturers being able to meet the
    most stringent emissions standards on record, resulting in today's
    clean diesel technology with near zero emissions of ozone forming
    compounds (nitrogen oxides) and particulate matter. The total health
    and environmental benefits in terms of savings in air pollution and
    energy savings exceed $70 billion according to the previously
    referenced May 2010 study.
    Fully Funding Commercial Vehicle Research Budgets Assures Continued
            Gains and That Will Help Expedite Fuel-Saving Technology
            Development and Deployment
        Given the substantial progress made in the 21st Century Truck
    Program, a framework of continuous progress has been developed over
    time that is a predictive indicator of potential future success.
    Adequate DOE program funding can assure that the commercial vehicle,
    engine, and SuperTruck program goals of 50 percent increase in freight
    efficiency (ton-miles per gallon) will be more likely to be met. Truck
    and engine manufacturers face the unique challenge of competing
    societal demands of improved efficiency and near-zero emissions while
    meeting customer demands for lowest cost of operation. Significant
    investments in research are required but there are diminishing
    opportunities to recoup the substantial investments needed to meet
    these goals with only an average 200,000-250,000 heavy-duty trucks sold
    annually. Federal research investment in high-risk research is vital to
    the industry. DOE R&D programs are usually a 50-50 cost share between
    government and industry and this Federal match encourages companies to
    spend their R&D dollars in the United States. A fully funded SuperTruck
    program can assure these goals are more likely to be accomplished
    earlier than if companies alone shoulder larger research demands.
                                  conclusions
        There is an incontrovertible and established need to improve energy
    efficiency of the Nation's commercial vehicles. Commercial diesel-
    powered trucks are the backbone of the U.S. economy and the prime
    movers of the Nation's goods movement system, and will be for the
    foreseeable future. Fuel consumption in this sector is projected to
    continue to grow with the economy. Past EERE engine and vehicle
    efficiency programs have delivered substantial and well-documented
    economic, energy and environmental benefits to society. To assure
    uninterrupted progress of these efforts, we urge that the subcommittee
    retain the proposed fiscal year 2013 budget request for the committed
    levels of SuperTruck and related program funding.
        An adequate Government funding stream for the suite of VTPs like
    SuperTruck and the ACE R&D, Fuels Technologies, Batteries and Electric
    Drive Technologies, Vehicle and Systems Simulation, and Materials must
    be retained at DOE requested levels to assure continued progress and
    accelerate development and deployment of energy saving technologies.
    Any reductions to the fiscal year 2013 EERE proposed funding will
    jeopardize continued progress at an especially critical time as the
    industry moves to meet new GHG emissions and fuel efficiency goals,
    near-zero emissions levels along with competing customer demands with
    the backdrop of a weakened and recovering economy.
        The diesel engine is the prime mover of America's transportation,
    infrastructure, and goods movement today and for the foreseeable
    future. The 21st CTP has made substantial contributions to the new
    near-zero emissions performance of diesel engines in commercial trucks
    and with the continued investments will assure further efficiency gains
    to meet future societal goals.
        We appreciate the opportunity to file these comments.
                                     ______

              Prepared Statement of the Edison Electric Institute
        The Edison Electric Institute (EEI) respectfully submits this
    written testimony for the record to the Senate Appropriations
    Subcommittee on Energy and Water Development. We appreciate this
    opportunity to share our views on some of the Department of Energy's
    (DOE) programs for the fiscal year 2013.
        EEI is the association of U.S. shareholder-owned electric
    companies. Our members serve 95 percent of ultimate electricity
    customers in the shareholder-owned segment of the industry and
    represent approximately 70 percent of the U.S. electric power industry.
        EEI has long advocated for an ``all-of-the-above'' energy strategy.
    Different regions of the country use different fuel mixes to generate
    electricity. Embracing a diverse and balanced energy portfolio is
    crucial to reliable, affordable electricity. Therefore, we respectfully
    ask the subcommittee to direct sufficient resources toward these
    critically important activities.
                                 fossil energy
        As the administration notes in its Office of Fossil Energy budget
    request, ``the United States has 25 percent of the world's coal
    resources, and fossil fuels currently supply over 90 percent of the
    Nation's energy''. Accordingly, EEI urges the subcommittee to ensure
    that fossil energy research, development, and demonstration (RD&D)
    receive as much funding as possible under the tight budget constraints
    of the subcommittee's allocation. We further urge the preservation and
    funding of fossil fuel loan guarantee authorities pending completion of
    the Section 1703 Program review by the U.S. Department of Treasury.
        EEI urges strong support for carbon capture and storage (CCS) and
    advanced coal technology programs. Just this week, the Environmental
    Protection Agency (EPA) issued a proposal that effectively would
    require CCS on new coal-fired power plants, even though the technology
    is not commercially viable. CCS commercialization is still in the
    future, but demonstration technologies hold great promise, and we are
    working with the Congress and the administration to develop policies
    that will accelerate commercial availability and deployment. Coal is an
    important domestic energy resource; given this recent EPA rulemaking,
    commercially available CCS technologies are essential for coal to be a
    viable part of a diverse and balanced electric generation portfolio.
        In addition to coal, EEI strongly advocates for adequate funding of
    policies that allow the ready access to affordable natural gas for
    electric generation, including environmentally responsible development
    of shale resources by the gas industry throughout the United States.
    Natural gas is an increasingly important source for electric
    generation, especially given its availability and low prices. As a
    result, our industry is a strong proponent of developing our natural
    gas resources.
                                 nuclear energy
        Given that nuclear energy is the Nation's largest source of carbon-
    free electricity production, and that construction of new plants will
    create tens of thousands of jobs, EEI urges strong support for the
    nuclear power loan guarantee program. Under DOE's implementation,
    participating borrowers pay the entire credit subsidy costs, making
    this program different from other loan programs administered by the
    Department.
        EEI respectfully requests the subcommittee to oppose DOE's
    imposition of its decontamination and decommissioning tax on electric
    utilities for the cleanup of uranium enrichment facilities. As in past
    years, the administration is seeking this tax under a program in which
    the industry has already met its financial obligations while the
    Federal Government failed to pay its required share of the cleanup
    funds.
        EEI strongly supports nuclear R&D, including funding for the Energy
    Innovation Hub on modeling and simulation of advanced nuclear reactor
    operations. In addition to this essential investment, we urge funding
    for the acceleration of technology development and commercialization of
    small modular nuclear reactors (SMRs). EEI supports DOE's announced
    cost-shared program with private industry to support SMR design and
    licensing.
                            electric transportation
        The need for fuel diversity carriers over into the transportation
    sector, where plug-in electric vehicles (PEVs) give Americans the
    choice to fill up at the pump or recharge their battery at home. Using
    domestically produced electricity to fuel a range of both on-road and
    off-road transportation uses has the potential to transform our
    Nation's transportation fleet. Electric transportation funding will
    help our country reduce its dependence on foreign oil, thereby
    increasing our Nation's energy security.
        EEI supports the DOE's Clean Cities program, which has brought
    together thousands of stakeholders in States across the Nation to
    support the deployment of alternative fuel vehicles and infrastructure.
    We are also supportive of the recently announced EV-Everywhere program,
    which will bring down the cost of batteries, charging infrastructure
    and electric vehicles so they are affordable for more families.
        In 2011, according to the Oil Price Information Service, Americans
    spent more than $480 billion on gasoline, paying an average of more
    than $3.50-per-gallon, both record amounts. Already this year, gas
    prices are more than $4-per-gallon in many cities. Electrifying the
    Nation's light-duty vehicle fleet, which accounts for roughly 45
    percent of total U.S. oil consumption, would reduce oil imports by more
    than 3 million barrels per day in 2030.
        Another benefit of electric transportation is that real electricity
    prices historically have been more stable than real prices for both
    gasoline and natural gas. Electricity is produced domestically, using a
    wide variety of energy resources, which contributes to its greater
    price stability. Unlike oil and gas, electricity does not experience
    price volatility due to political instability or changes in the global
    markets.
                                   smart grid
        EEI urges robust funding of DOE's efforts to continue the
    deployment and commercialization of smart grid technologies. Research
    and development are also keys to accelerating America's shift to an
    information-enabled electricity grid. Modernizing the grid will
    increase operational efficiency, improve reliability, and provide more
    control and situational awareness both for utilities and their
    customers.
        More than 90 percent of EEI's members are involved in grid
    modernization activity. As of September 1, 2011, electric utilities in
    more than 43 States have installed 27 million digital smart meters.
    Sixty-five million smart meters--covering 54 percent of U.S.
    households--are expected to be deployed by 2015.
        DOE's smart grid program is a public-private partnership. To date,
    DOE funding has been matched by contributions of more than $5.5 billion
    from the private sector. In a time of large budget deficits, the
    subcommittee must ensure that funds are used to the greatest effect. We
    respectfully request that the subcommittee continue its support of
    these investments to achieve substantial cost savings and security in
    the Nation's grid.
                             energy innovation hubs
        EEI supports essential funding for DOE's Energy Innovation Hubs.
    Each of these Hubs will speed research and shorten the path from
    technological development to commercial deployment of highly promising
    energy-related technologies. Specifically, we support the Cyber
    Security Energy Delivery Systems Hub that conducts R&D activities
    addressing vulnerabilities within the Nation's electricity delivery
    system to reduce risk of energy disruptions due to cyber attacks. In
    addition, we support the Energy Efficient Building Systems Design Hub
    and the Battery/Energy Storage Hub, which will develop utility-sited
    energy storage as well as new batteries with improved lifetimes and
    strong capacities for expanding the range of electric vehicles while
    decreasing manufacturing cost.
        For fiscal year 2013, in particular, we support funding for DOE's
    proposed Electricity Systems Hub. This new Hub would bring together a
    multidisciplinary team of researchers to address barriers to
    modernization, both short-term and long-term, at critical points in the
    various regions. Establishing this Energy Innovation Hub is important
    to facilitating and accelerating the process of integrating power
    flows, information flows, markets, and regulation in a way that
    complements grid modernization and other ongoing efforts. More
    importantly, the Hub approach will promote technological innovation
    and, ultimately, lower electricity costs through better utilization of
    utility assets.
                       transmission and renewable energy
        New transmission lines are increasingly needed to maintain
    reliability and relieve congestion. However, obtaining regulatory
    approvals for new facilities is a complex process, and often leads to
    costly delays, particularly when siting involves Federal lands.
        EEI supports the administration's efforts to improve Federal
    coordination and ensure timely review of proposed renewable energy
    projects and transmission lines though the formation of two interagency
    Rapid Respond Teams, one for transmission and one for renewables.
        The Rapid Respond Team for Transmission would accelerate the
    permitting review of seven proposed transmission lines that cut through
    12 States. These projects will help increase electric reliability,
    integrate renewable energy projects and create thousands of jobs. In
    Pennsylvania and New Jersey, for example, PPL Electric Utilities (PPL)
    and Public Service Electric and Gas Company (PSE&G) have proposed a
    power line project which includes an approximately 145-mile long 500-kV
    transmission line from the Susquehanna Substation in Pennsylvania to
    the Roseland Substation in New Jersey, and several substations in both
    Pennsylvania and New Jersey. The project is expected to be in service
    in the spring of 2015, creating more than 2,000 new jobs in these two
    States alone.
                                     ______

      Prepared Statement of the Electric Drive Transportation Association
        The Electric Drive Transportation Association (EDTA) is the cross-
    industry trade association promoting the advancement of electric drive
    technology and electrified transportation, and we are writing regarding
    the fiscal year 2013 request for the Department of Energy's (DOE)
    Vehicle Technologies and other electric drive programs.
        Our members represent the entire value chain of electric drive,
    including vehicle manufacturers, battery and component manufacturers,
    utilities and energy companies, and smart grid and charging
    infrastructure developers. Collectively, we are committed to realizing
    the economic, national security, and environmental benefits of
    displacing oil with hybrid, plug-in hybrid, battery, and fuel cell
    electric vehicles.
        Since we import nearly 50 percent of the oil used in the
    transportation sector--at a cost of more than $1 billion per day--there
    is a strategic and economic imperative to move toward domestically
    generated electricity as an alternative to oil. The need is already
    clear to families and businesses paying almost $4 gallon (and in some
    places more) for gasoline and diesel fuel today. Energy Information
    Administration (EIA) projects barrel prices more than $100 through
    2013. Over the longer term, increasing global demand will put even
    great upward pressure on prices. The implications for the economy are
    also clear: every $10 per barrel increase costs the economy
    approximately $75 billion.
        Electric drive vehicles are being introduced into the market place
    in numerous configurations, including passenger cars, commercial
    trucks, buses, tractors, and ground support equipment. For instance,
    more than a dozen plug-in electric drive vehicles will be on sale by
    the end of 2012. These vehicles can provide substantial fuel savings
    and reduced emissions while contributing to our energy and economic
    security. Federal support for research, development and deployment can
    accelerate achievement of those benefits.
        The American Energy Innovation Council, a group of U.S. industry
    leaders working to ``foster strong economic growth, create jobs in new
    industries and re-establish America's energy leadership'' concluded in
    their 2011 report that Federal participation in energy innovation was
    imperative because ``ready access to reliable affordable forms of
    energy is not only vital for the functioning of the larger economy, it
    is vital to people's everyday lives and significantly impacts the
    country's national security and environmental well-being''.
        The Department's Vehicle Technologies program promotes innovation
    in transportation through public/private partnerships and it leverages
    private sector investments. Working with the diverse stakeholders of
    the electric drive industry, DOE is helping to accelerate technology
    breakthroughs, promoting investment in manufacturing capacity and
    speeding deployment of electric drive vehicles and infrastructure.
        We support the goals of the proposed EV Everywhere grand challenge
    to bring down electric vehicle costs and increase electric range and
    fast charging capability through expanded research in batteries and
    power electronics, electric drive motors and components, and advanced
    charging technologies. Specifically, we support the requested increase
    for Batteries and Electric Drive Technology and Vehicle and Systems
    Simulation and Testing activities that are advancing next generation
    charging, systems integration, and codes and standards for vehicle to
    grid communication.
        The Vehicle Technologies program also conducts critical research
    and development activities to advance electrification of the medium-
    and heavy-duty fleet, including hybrid, plug-in hybrid, battery, and
    fuel cell electric trucks and buses. Electric drive in the commercial
    and transit fleet has great potential for fuel savings and emissions
    reductions: putting just 10,000 hybrid electric trucks to work would
    reduce diesel fuel use by 7.2 million gallons per year and reduce air
    pollutants and carbon dioxide emissions by 83,000 tons. We ask that the
    subcommittee direct meaningful resources toward program activities,
    including work with industry partners, to reduce component costs and
    further enhance performance.
        Fuel cell vehicles are also critical assets in the advanced vehicle
    portfolio. Fuel cell cars, trucks and nonroad vehicles will provide
    ``zero emission/zero petroleum'' options that are integral to meeting
    national goals for energy security and reduced pollution. The budget
    request points out that foreign industries are growing rapidly and that
    ``sustained support of the [Hydrogen and Fuel Cell] program and
    continued progress toward its goals help enable the U.S. to maintain
    leadership in fuel cell manufacturing and hydrogen production
    technology. Success of the program will also support domestic
    employment and economic growth as well as increase our options for
    clean power''.
        The industry is meeting aggressive cost, performance and deployment
    milestones as it pushes toward commercialization in 2015. The ongoing
    partnership with DOE has already yielded substantial component cost
    reductions including reducing the cost of automotive fuel cells by more
    than 30 percent and doubling their durability. The industry is pushing
    vigorously toward commercialization in 2015. Specifically, we ask that
    funding for fuel cell electric vehicles and infrastructure deployment
    activities in Technology Validation and in early market development,
    including education and other testing and enabling activities, be
    provided at levels sufficient to enable the industry to build on
    technology and market achievements to meet 2015 commercialization
    targets.
        Finally, we strongly support the Department's deployment programs,
    including Clean Cities' work with local and regional coalitions to
    expand deployment of electric drive vehicles (hybrid, plug-in hybrid,
    battery, and fuel cell electric vehicles), other alternative fuel
    vehicles, and recharging/fueling infrastructure as a path to increased
    energy security. These efforts have a demonstrated record of success
    and we support expansion of these partnerships and allocation of
    additional resources for communities deploying electric drive vehicles
    and recharging infrastructure.
        Acknowledging the material budgetary constraints that the
    subcommittee faces, we respectfully request that the Committee direct
    the resources to the DOE's electric drive programs that are
    proportionate to the cost of our foreign oil dependence and that will
    enable the Department to build on its success, in partnership with the
    private sector, in accelerating the achievement of a secure and
    sustainable transportation sector.
        We thank you for your consideration.
                                     ______

        Prepared Statement of the Federation of American Societies for
                              Experimental Biology
        The Federation of American Societies for Experimental Biology
    (FASEB) respectfully requests a fiscal year 2013 appropriation of $5.1
    billion for the Department of Energy Office of Science (DOE SC). As you
    know, DOE SC funding in recent years has failed to reach the levels
    authorized in the America COMPETES Acts of 2007 and 2010. FASEB's
    broader goal is to support sustainable growth and a return to a funding
    trajectory reflective of the COMPETES reauthorization.
        As a federation of 26 scientific societies, FASEB represents more
    than 100,000 life scientists and engineers, making it the largest
    coalition of biomedical research associations in the United States.
    FASEB's mission is to advance health and welfare by promoting progress
    and education in biological and biomedical sciences through service to
    its member societies and collaborative advocacy. FASEB enhances the
    ability of scientists and engineers to improve--through their
    research--the health, well-being, and productivity of all people.
        DOE SC is the lead Federal agency supporting fundamental energy
    research and the Nation's largest supporter of basic research in the
    physical sciences. In addition to supporting research at more than 300
    universities and institutions in all 50 States, DOE SC funds and
    manages 10 world-class national laboratories. Research and development
    user facilities located at these national laboratories provide more
    than 26,000 researchers with access to particle accelerators, advanced
    light sources, supercomputers, and other state-of-the-art
    instrumentation. The large-scale scientific tools at DOE SC facilities
    serve as invaluable resources to academic and government scientists,
    and they are also critical to the research and development capabilities
    of more than 40 Fortune 500 companies, including Exxon Mobil, Ford
    Motor, Boeing, and Pfizer.
        A source of abundant, safe, and sustainable energy is essential for
    the Nation's future, and fundamental research supported by DOE SC
    provides the basis for discovering new energy technologies that can
    replace fossil fuels and reduce U.S. dependency on foreign oil. DOE SC-
    funded scientists and engineers are also making extraordinary
    discoveries in other areas of energy research that improve health,
    protect the environment, create economic opportunities, and strengthen
    national security. For example, a team of DOE SC-funded scientists have
    determined that certain bacteria can help facilitate the cleanup of
    toxic uranium particles by converting them to forms easily collected
    from the environment. Understanding the process by which these bacteria
    interact with materials is important for increasing and improving their
    use in contamination removal techniques. Other researchers supported by
    DOE SC have identified the gene that controls ethanol production in a
    well-studied microorganism, a breakthrough that could expand the
    availability of biofuels and reduce reliance on imported energy
    sources. Discovery of a single gene responsible for ethanol production
    allows scientists to begin engineering more efficient biomass crops and
    microorganisms capable of generating higher ethanol yields at reduced
    costs.
        In addition to its strong research programs, DOE SC supports user
    facilities that benefit the entire research community by providing
    unparalleled scientific and technological capabilities. For example,
    powerful xray light sources at DOE SC-supported national laboratories
    were used by the pharmaceutical company Plexxikon to develop a new drug
    treatment for malignant melanoma, the deadliest form of skin cancer. In
    this instance, scientists used the bright light sources to determine
    the molecular structure of a mutated protein, enabling the design and
    optimization of a drug to prevent the uncontrollable spread of cancer
    cells. Researchers from the life sciences community account for almost
    40 percent of all researchers using the DOE SC Basic Energy Sciences
    light source facilities, many of which are studying proteins involved
    in other diseases such as Alzheimer's disease, bird flu, and hepatitis.
    The number of researchers using DOE SC facilities grew from 20,241 in
    fiscal year 2007 to 25,876 in fiscal year 2010, an increase of 27.8
    percent. In recent years, the agency's funding has failed to keep pace
    with the growing demand for user facility access.
        DOE SC instrumentation and technical expertise make efficient use
    of precious research resources, bringing researchers across the Nation
    access to cutting-edge technologies without duplication or prohibitive
    cost to institutions. The agency's national lab system advances
    strategic national goals and creates a research infrastructure unlike
    any other in the world. With its crucial mission, national labs, and
    unique scientific facilities, investment in DOE SC programs should be
    one of our highest research priorities. Now is the time to provide
    robust Federal funding for DOE SC to support the fundamental energy
    research required to overcome the Nation's most pressing challenges.
        Thank you for the opportunity to offer FASEB's support for DOE SC.
                                     ______

        Prepared Statement of the Fermi National Accelerator Laboratory
        We are the Executive Committee of the Users Organization of the
    Fermi National Accelerator Laboratory (Fermilab), located outside of
    Chicago, Illinois. We represent the approximately 3,000 scientists who
    perform research at Fermilab--our country's premier particle-physics
    laboratory. Also known as high-energy physics (HEP), our field is the
    study of the fundamental particles that are the building blocks of the
    universe, as well as their role in astrophysics, and the accelerators
    used in their study.
        Eight U.S. national laboratories are actively engaged in HEP
    research. They operate facilities used by scientists and students from
    hundreds of U.S. universities, from other national laboratories, and
    from dozens of foreign institutions. Of these laboratories, Fermilab is
    the only one that is dedicated exclusively to HEP.
        The Department of Energy (DOE) Office of Science supports HEP
    research at U.S. national laboratories and universities. More than 160
    U.S. institutions in 43 States host physicists, astrophysicists,
    engineers, and accelerator scientists who work in HEP. More than one-
    half of these institutions are funded through the DOE Office of
    Science.
        We urge the Senate to support sustained funding for fundamental
    science within the DOE Office of Science. We request that the portfolio
    of funding for fundamental research be balanced. HEP research is a key
    part of these programs and yields valuable benefits to our Nation as
    described below.
        Our field is undergoing a transition, Fermilab's Tevatron
    accelerator program having come to a conclusion in 2011 after an
    extremely successful three decades. New programs are underway or just
    beginning that will provide the basis for vibrant, world-class research
    at Fermilab for the next several decades. This transition is a critical
    time for our field in the United States and requires sustained funding
    in order to maintain our role in world HEP research.
                             impact of budget cuts
        Continued funding of science research is critical to our Nation.
    Severe budgetary cuts will have devastating effects that will be felt
    for decades. Science opportunities will be delayed or lost to other
    nations. Our reputation as the place to be for the best and brightest
    will be damaged.
        We are therefore pleased that the administration's request for
    fiscal year 2013 includes a modest increase for the DOE Office of
    Science. However, we are concerned about the cuts for Fermilab included
    in that request: $30 million, or approximately 8 percent. This will
    require layoffs or furloughs. A large Fermilab project that will be key
    to sustaining our field in the United States over the next decade, the
    Long-Baseline Neutrino Experiment (LBNE), will be delayed. Such
    projects are critical to the near- and medium-term future of the
    laboratory and the U.S. HEP program.
        The proposed cuts come at a time when Fermilab has closed the
    Tevatron program, resulting in cuts in fiscal year 2012 as well. This
    was done in order to consolidate resources so as to focus on new
    projects, especially LBNE. The resulting savings ought to be reinvested
    at Fermilab, in order to maintain the United States' preeminent HEP
    facility at the forefront of world HEP.
        The largest and longest-lasting impact will be in our training of
    the next generation of scientists. Significant cuts will force us to
    train fewer students. They will demoralize our current students and
    post-docs, and some will quit. And we will no longer attract the best
    students. It will take a long time to recover from even a short-term
    cut to funding. These young people will be the foundation on which our
    economic growth depends. Without the advanced training offered by
    fields such as HEP, they will lack the skills to develop the next
    technology or the next new industry. Or they will be trained in other
    countries, and that innovation will occur overseas. It is critical that
    we remain attractive to United States and foreign students now and in
    the future.
                     value of high-energy physics research
        In our modern economy, science and technology (S&T) drive growth,
    as detailed in the National Academies' report, ``Rising Above the
    Gathering Storm: Energizing and Employing America for a Brighter
    Economic Future'', its 2010 update, Rising Above the Gathering Storm
    Revisited, the recent book, Knowledge and the Wealth of Nations, and
    many other publications. Continued leadership in S&T fields is critical
    to our economic growth, national security, and position vis-a-vis the
    rest of the world. Innovation by a highly trained workforce is key.
        Without new technological developments within the United States,
    our economy will not grow and other countries will surpass us. But the
    most revolutionary technologies often require revolutions in our
    fundamental knowledge and understanding, or are invented in the
    research struggle of our most talented minds in pursuit of testing,
    measuring, and understanding new ideas and concepts. As an example, no
    one could have predicted the nature of our current society from the
    first studies of the electron at the dawn of the 20th century; however,
    we would not be communicating via email, fax, cellphone, or text
    messages without them. It has also famously been said that the light
    bulb could not have been invented by incremental improvements to the
    candle! Revolutionary technologies arise from new ways of thinking
    about society's problems--often derived from new experiments that ask
    new questions that cannot be answered using existing technology.
        HEP strives to understand the most fundamental aspects of nature.
    While we can rarely predict the outcome, the quest for such knowledge
    has always led to numerous technological advances, a few of which are
    described below. What is predictable, is that we will educate and train
    some of the best and brightest students, who will contribute to our
    Nation in many different arenas.
                        value of technology development
        While the primary purpose of HEP research is not the creation or
    development of new technology, our work often requires it in order to
    accomplish our goals. Many of our experiments require technology that
    does not exist before the project is undertaken. Therefore, many of our
    researchers spend a significant part of their careers advancing high-
    tech particle detectors, developing complex computing algorithms,
    inventing new kinds of particle accelerators, or pushing the limits of
    high-speed electronics. Without continuous innovation, we would not be
    able to complete our experiments. And once these advances are made,
    they are often used in fields as diverse as medicine, materials
    research, and manufacturing.
        An example is the construction of the Fermilab Tevatron
    accelerator, which reigned as the world's most powerful device of its
    kind for nearly three decades. It required more than 1,000
    superconducting magnets, placed around a 4-mile ring. Creating
    superconducting magnets requires superconducting wire. At the start of
    the project in the 1970s, it was known how to make such wire, but the
    industry needed in order to make it on a large scale did not exist.
    Fermilab researchers helped to build up that industry and advance its
    production techniques through a very successful joint government/
    business venture. Once the accelerator was complete in 1983, these
    businesses looked around to see what other projects could use
    superconducting wire. MRI machines that are now commonly used for
    medical imaging are an example. Because of the work of Fermilab in
    building the Tevatron, starting in the 1980s, commercial MRI scanners
    have now become widespread.
        A current experiment led by Fermilab scientists is the Dark Energy
    Survey (DES). This requires a digital camera larger than any ever
    built. Its technological developments will ultimately influence the
    digital cameras available at your local electronics store as well as
    devices no one has yet dreamed up. A current research and development
    (R&D) effort by a university/national laboratory collaboration is
    inventing new, cost-effective particle detectors with unique power to
    resolve events on the picosecond (trillionth-of-a-second) time-scale.
    These will also doubtless lead to new industrial, research, and medical
    applications.
        High-energy physicists have invented particle accelerators and
    continue to steward their development. Our work requires the most
    powerful particle accelerators that can be built. However, thousands of
    smaller accelerators are now used in many areas of technology. Of more
    than 30,000 particle accelerators throughout the world, only a small
    fraction are dedicated to HEP. Most are used by industry or for medical
    treatment and diagnosis. The tire industry, for example, now uses
    particle accelerators to treat their tires, reducing both the amount of
    rubber needed (by 3 pounds per tire) and the amounts of chemicals used
    in the production process. This industry is both more efficient and
    better for our environment because of the application of particle
    accelerators. This success was unanticipated in the early days of
    accelerator development. Industrial accelerator applications now range
    from the manufacture of shrink-wrap plastic to the processing of
    industrial coatings and automobile parts.
                           value of science education
        The United States has long been the destination of choice for the
    best science students from around the world. Our universities provide
    an education that is second to none. Our national laboratories provide
    research opportunities that are unavailable elsewhere. Fermilab is an
    excellent example of this. Numerous students from foreign institutions
    travel to Fermilab to complete their research. Many of these students
    then choose to stay in the United States after completing their
    degrees.
        Our students learn a variety of skills that are applicable in
    numerous fields. They learn to work on problems to which the answer is
    unknown and to adapt to unforeseen challenges. They learn skills in
    computer programming, data analysis, simulation of complex problems,
    and electronics development, among others. They learn to work in teams
    as members of international collaborations, finding innovative
    solutions to challenging problems. They learn how to take a project
    from start to finish, write a document detailing it, and present it to
    an audience. The complex analytical thinking necessary to solve
    problems in fundamental science can't be taught in a classroom, but is
    nonetheless crucial for solving problems in business and industry in
    the 21st century.
        Many of our students choose to continue their immediate careers as
    postdoctoral associates. This provides a postgraduate education that
    further develops their skills. , docs generally take on more complex
    projects and develop leadership and management skills. Most HEP
    experiments involve 20 to 2,000 scientists and face challenges that are
    similar to those in many businesses.
        Scientists trained in HEP work in telecommunications, software
    development, aerospace, education, medicine, government, and finance,
    to name a few. About 90 percent of our Ph.D. students enter new fields.
    Private businesses are the largest and most diverse employers of
    scientists trained in high-energy physics. Several former HEP
    researchers have founded or led small and large companies, including
    Richard Wellner, chief scientist at Univa UD, a cloud management
    software company; Francisco Vaca, CEO of Vaca Capital Management LLC;
    George Coutrakon, former director of operations at Loma Linda
    University Medical Center and now technical director of the Northern
    Illinois Proton Treatment and Research Center; Homaira Akbair, CEO of
    SkyBitz, a satellite-based tracking company; Rolland Johnson, founder
    and president of Muons, Inc., an accelerator R&D company; and Nagesh
    Kulkarni, CEO of Quarkonics Applied Research Corp., a business and
    technology consulting company.
        Our researchers are engaged in education at all levels and
    understand the importance of scientific literacy in our society. For
    example, hundreds to thousands of public lectures are given around the
    country by high-energy physicists each year. Our scientists visit local
    schools to share the excitement of science through physics
    demonstrations or presentations of their work. The QuarkNet program,
    funded through the National Science Foundation, trains K-12 teachers in
    28 States in cutting-edge research that they can take into the
    classroom. More than 38,000 students attend Fermilab education
    activities each year.
                                    summary
        Scientific research in general, and HEP in particular, provides
    value to our Nation that will be lost without sustained funding from
    the U.S. Government. The knowledge that is gained will lead to future
    innovation that will maintain our world-class scientific capabilities.
    The path to that knowledge will lead to advances in technology that
    will help sustain our economic recovery. And the education of students
    from the United States and abroad will provide the knowledgeable
    workforce that will carry us through the next half-century.
        It is critically important to maintain our world-class position in
    scientific research. The repercussions of severe cuts will be felt for
    a long time. We urge the Senate Appropriations Committee to support the
    President's request to maintain our scientific research program for the
    long-term health of the Nation, and to restore funding to HEP and
    priority projects at Fermilab in order to reinvest in this core
    discovery scientific discipline.
                                     ______

               Prepared Statement of the Gas Turbine Association
        The Gas Turbine Association (GTA) appreciates the opportunity to
    provide the United States Senate Committee on Appropriations
    Subcommittee on Energy and Water Development with our industry's
    statement recommending fiscal year 2013 funding levels for the
    Department of Energy (DOE).
        GTA respectfully recommends that the fiscal year 2013 appropriation
    for DOE Office of Fossil Energy include $20 million for the Hydrogen
    Turbines Program to meet critical national goals of job creation, fuel
    conservation, greenhouse gas reduction, fuel flexibility (including
    syngas and hydrogen), and criteria pollutant reduction. A spending
    level of $20 million is more appropriate than the administration's
    recommendation $12.6 million considering that the fiscal year 2012
    spending level was $14.6 and years of under-funding for Gas Turbine
    Technologies is resulting in our Nation's loss of leadership in this
    important industry. A spending level of $12.6 million will result in
    pushing out the timeline for the development and deployment of
    environmentally advanced gas turbines by several years.
        Federal investment in research and technology development for
    advanced gas turbines that are more efficient, versatile, cleaner, and
    have the ability to burn hydrogen-bearing reduced carbon synthetic
    fuels and carbon-neutral alternative fuels is needed to ensure the
    reliable supply of electricity in the next several decades. Japan and
    China are quickly moving into leadership positions in this industry
    which in the United States has been responsible for hundreds of
    thousands of research and development (R&D), engineering, manufacturing
    and field service jobs for the past 75 years. Japan is consistently
    investing more than $80 million per year, and China has recently
    announced an indigenous F class gas turbine (F class represents 50
    percent of the gas turbine market). If our Nation continues to
    underfund research and development efforts in gas turbine technology,
    the resulting loss of jobs and U.S. technology will be long-term and
    possibly permanent.
        We believe that a modest Federal investment in future gas turbine
    technologies will be repaid many times over in reduced electricity
    costs, increased flexibility and increased reliability for our Nation's
    consumers. In addition, we believe that additional funding should be
    directed at encouraging university based research that will ``jump-
    start'' the careers of future engineering graduates in the gas turbine
    industry.
        The gas turbine industry's R&D partnership with the Federal
    Government has steadily increased powerplant efficiency to the point
    where natural gas fired turbines can reach combined cycle efficiencies
    of 60 percent, and quick-start simple cycle peaking units can reach 46
    percent. The gas turbine's clean exhaust can be used to create hot
    water, steam, or even chilled water. In such combined heat and power
    applications, overall system efficiency levels can reach 60 to 85
    percent lower heating value (LHV).
                            CO2 Emissions

        Gas turbines are both more efficient and typically burn lower
    carbon fuels compared to other types of combustion-based power
    generation and mechanical drive applications. The Nation needs to
    reinvigorate the gas turbine industry/government partnership in order
    to develop new, low-carbon powerplant solutions. This can be done by
    funding research to make gas turbines both efficient and more capable
    of utilizing hydrogen and synthetic fuels as well as increasing the
    efficiency, durability and emissions capability of natural gas fired
    turbines. If the Congress provides adequate funding to DOE's turbine
    R&D efforts, we believe technology development and deployment will be
    accelerated to a pace that will allow the United States to achieve its
    emissions and energy security goals.
        GTA respectfully requests $20 million in fiscal year 2013
    appropriations for the Fossil Energy Hydrogen Turbines Program to meet
    critical national goals of job growth, fuel conservation, fuel
    flexibility (including natural gas, syngas and hydrogen), greenhouse
    gas reduction, and criteria pollutant reduction.
                                     ______

                        Prepared Statement of GE Energy
                                    overview
        The following testimony is submitted on behalf of GE Energy (GE)
    for the consideration of the subcommittee during its deliberations
    regarding the fiscal year 2013 budget requests for the Department of
    Energy (DOE). GE recognizes that particularly difficult choices must be
    made in fiscal year 2013. These budget pressures make it essential that
    the subcommittee prioritize those programs that will contribute to
    economic growth and jobs creation and support core technology
    development. GE recommends:
      --in the Fossil Energy program, increased investment in pre-
            combustion carbon capture and gasification systems;
      --in Energy Efficiency and Renewable Energy, full funding of the
            budget requests for solar and wind technologies;
      --in Electricity Delivery and Energy Reliability, full funding of the
            budget request for research and development; and
      --in Nuclear Energy, full funding for the Small Modular Reactor
            Licensing Technical Support program and additional amounts for
            research and development (R&D) in Advanced Reactors Concepts
            and Small Modular Reactor Advanced Concepts.
                                 fossil energy
    Coal Program: Carbon Capture, Pre-Combustion Capture
        GE is concerned that the funding reductions proposed in
    gasification systems and pre-combustion carbon capture will negatively
    affect programs that are critically important to the future of power
    generation from coal. These programs are on the path to improve the
    cost and performance of Integrated Gasification Combined Cycle (IGCC)
    technology to enable IGCC to be a cost-competitive option for low-
    carbon power generation.
        IGCC is capable today of achieving the emissions standards of the
    Environmental Protection Agency (EPA) mercury and air toxics standards
    and new source performance standards for new coal plants without
    additional R&D. Compared with conventional coal plants, IGCC consumes
    less water, produces useful coal byproducts, and can co-produce
    valuable transportation fuels and chemicals that reduce oil imports.
    With its proven, pre-combustion carbon capture, IGCC also provides
    CO2 useful for enhanced oil recovery (EOR) at lower cost
    compared to combustion coal technology.
        GE therefore recommends that fiscal year 2013 funding for Carbon
    Capture: Pre-combustion Capture be increased by $6 million to $17.4
    million. This increased funding is needed to:
      --continue key programs that have met their early goals;
      --develop alternative capture processes; and
      --provide for new competitive solicitations.
    GE also recommends that fiscal year 2013 funding for Advanced Energy
    Systems: Gasification Systems be increased by $5.7 million to $37.6
    million. This increased funding is needed to support the next phase of
    R&D focused on reducing IGCC cost, increasing performance and improving
    availability.
    Clean Coal Power Initiative
        The Clean Coal Power Initiative (CCPI) is the key vehicle for
    commercial validation of technology emerging from the DOE R&D programs
    and from industry. Current CCPI projects are supporting first
    generation gasification and IGCC technology. DOE has not announced
    plans for a future CCPI solicitation. GE recommends that DOE move
    forward with the development of a CCPI-4 solicitation in preparation
    for the commercial demonstration of second-generation technologies, and
    that a modest level of funding for this solicitation be provided in
    fiscal year 2013. A CCPI-4 solicitation should focus on demonstration
    of technology that is specifically optimized for EOR so as to provide a
    revenue stream that will reduce the operating cost impact that could be
    a deterrent to cost-share participation by industry.
    Advanced Energy Systems, Hydrogen Turbines
        According to the DOE's 2011 performance report, the advanced
    turbine program has made consistent progress toward fully mitigating
    the cost and performance penalty associated with carbon capture. The
    funding reductions proposed in the fiscal year 2013 budget request
    will:
      --delay completion of Phase II development;
      --curtail Phase III implementation and prototype validation; and
      --significantly scale back important university research.
        GE, therefore, recommends that fiscal year 2013 funding for
    Advanced Energy Systems: Hydrogen Turbines be increased to $20 million.
    This amount would still represent a 33 percent reduction from the
    fiscal year 2011 funding level, but would better balance program needs
    and accomplishments.
    Water Management
        Large amounts of water are needed to produce or extract energy, and
    large amounts of energy are needed to treat or transport water. EPA is
    preparing to finalize its proposed rules for cooling water intake
    structures under section 316(b) of the Clean Water Act, which
    underscores the important linkage between water use and energy
    generation. In addition, CO2 capture can increase raw water
    usage by up to 125 percent, depending on the underlying technology. DOE
    has set aggressive goals of reducing freshwater withdrawals and
    consumption 50 percent by 2015 and 70 percent by 2020. Federal support
    for water-related R&D is necessary if these goals are to be reached.
    Unfortunately, the fiscal year 2013 budget does not contain any new
    funding for Water Management activities within the fossil energy
    program.
        GE believes that Federal investment in R&D for innovative water
    reuse technologies and demonstration projects is warranted. In addition
    to R&D focused on cooling tower blowdown water reuse, Flue Gas
    Desulphurization wastewater reuse and recovery, and ash pond solids
    reduction, treatment and reuse of source water for and flowback/
    produced water from unconventional oil and natural gas production would
    further reduce environmental impacts and operational costs of upstream
    energy processes. Advancement of reuse/treatment technologies for the
    conversion of impaired wastewater streams into renewable water sources
    in areas of water scarcity could reduce the need to use energy to
    transport water over long distances and to support electricity
    generation.
                     energy efficiency and renewable energy
    Wind
        GE supports full funding of the DOE's fiscal year 2013 request for
    wind energy. The cost of wind energy has declined significantly in
    recent years due to technological advances and manufacturing scale,
    both of which have benefited from past DOE R&D support. However, the
    decline in the price of natural gas generation accentuates the need for
    continued technological advances to support wind affordability and
    reliability. DOE funding support is critical for catalyzing next-
    generation innovations in both onshore and offshore wind. Related work
    in wind resource assessment and system integration will further enable
    higher levels of wind deployment and penetration.
    Solar
        GE supports full funding of the DOE's fiscal year 2013 request for
    solar energy. DOE research programs have been central to recent cost
    declines in solar electricity, and the SunShot Initiative to achieve
    cost-competitiveness with other electricity sources is both ambitious
    and necessary. While solar cost-competitiveness will not be
    accomplished through DOE funding support alone, the Government can play
    an essential role in leveraging additional industry and university
    research. GE also welcomes the PV Program's focus on lowering costs
    through conversion efficiency and manufacturing process improvements,
    as well as the overall program's investigation of balance-of-system
    issues.
    Fuel Cells
        R&D is required to develop advanced fuel cell technologies to drive
    efficiency to make this technology more commercially viable. Research
    into combined cycle technologies using fuel cell and aero derivatives
    or natural gas reciprocating engines is needed to achieve efficiency
    goals of 90 percent or greater.
                  electricity delivery and energy reliability
    Research and Development
        GE supports the fiscal year 2013 budget request for OE Research and
    Development. R&D on grid modernization technologies will advance
    reliable, affordable, efficient, and secure delivery of electric power
    to industrial, commercial, and residential customers, while at the same
    time preparing the grid to support greater quantities of renewable
    energy. Integration of traditional electric grid infrastructures with
    modern IT computer and communications systems will be necessary, and GE
    continues to work closely with national and international standards
    development organizations in the development of grid interoperability
    standards. Cybersecurity remains a fundamental design principle of this
    effort.
        In order to reduce risk and accelerate the adoption of new advanced
    grid modernization technologies, R&D funding will be required for the
    development of modeling, simulation, and visualization of both the
    transmission and distribution networks. Advanced modeling capabilities
    will serve as a critical tool in the modernization of the electric grid
    by assisting grid operators in identifying the technical limits of
    conventional grid technologies, and facilitating development of new
    technologies and solutions to respond to a changing energy mix and an
    increasingly responsive consumer base. In addition, advanced modeling
    capabilities can enable grid operators and power systems planners to
    aggregate, analyze, and act upon the vast quantities of data collected
    by grid modernization technologies. DOE should expand industry
    participation in programs to develop modeling and computational
    capabilities for grid applications to fully leverage work already
    underway.
        In conjunction with modeling and simulation research, R&D is
    required to develop advanced grid analytics software to optimize grid
    efficiency and reliability, including ``Big Data'' storage and real
    time analysis and exascale computing. Research into broadband wireless
    technologies will be required to collect the field data required in
    ``real time.'' Research into low costs sensors will be needed to
    monitor the status of a modern grid.
    Energy Storage
        GE endorses the requested funding for further research into energy
    storage technologies. The fiscal year 2013 budget request appropriately
    broadens the scope of interest to include innovations in new battery
    chemistries. This could lead to radical improvements in energy storage
    performance. Electricity storage is a critical technology to enable
    both deployment of electric vehicles and improvements in grid stability
    and efficiency through utility-scale storage.
        Equal attention should be given to both electric vehicles and
    storage. The requirements of utility-scale storage are quite different
    from those of electric vehicles. GE recommends inclusion of research
    into large-scale energy storage into this line item. This includes all
    potential storage modalities such as compressed air, pumped hydro, and
    flywheel technologies.
        In addition, investment should be made in research into broader
    applications of storage technologies such as ancillary services,
    including frequency regulation service to balance supply and demand on
    the transmission system as addressed in Order No. 755 issued by the
    Federal Energy Regulatory Commission in October 2011, energy arbitrage,
    and peak shaving.
                                 nuclear energy
    Next Generation of Nuclear
        GE Hitachi Nuclear Energy (GEH) wholeheartedly supports the efforts
    of DOE's Office of Nuclear Energy to research and develop the next
    generation of nuclear technologies for carbon free electricity
    generation and for the management of used nuclear fuel. In support of
    both of these goals, the Congress should provide the requested $65
    million for the cost-shared, industry partnership Small Modular Reactor
    Licensing Technical Support program (``SMR program'') for fiscal year
    2013. At the direction of the Congress, DOE opened the SMR program
    competition to all advanced reactor technologies providing 300 MW or
    less of power. GEH concurs with the Congress that a fleet of advanced
    reactor SMRs will play a key role in meeting the country's energy
    security, economic, and carbon-free, baseload generation goals.
    Recognizing the high cost and extreme importance associated with the
    design certification and licensing of first-of-a-kind SMR designs, GEH
    recommends that the SMR program, in which industry is providing a
    minimum 50-percent contribution, be funded at the requested amount.
        Advanced reactors, like GEH's PRISM reactor, can provide secure and
    clean baseload electricity while benefitting the back end of the fuel
    cycle. For this reason, it is important that the Reactor Concepts
    research, development, and demonstration program be provided sufficient
    funding. In particular, the Advanced Reactors Concepts and Small
    Modular Reactor Advanced Concepts R&D subprograms, which are facing 43-
    percent and 34-percent funding cuts, respectively, should be expanded.
    Both of these subprograms focus on high-value research to address near
    term challenges such as demonstration, simulation and training
    programs, and the application of advanced modularization and
    construction techniques to help reduce new plant capital costs.
        GEH further supports the funding of National Nuclear Security
    Administration's Nonproliferation Policy and International Security
    program. International civil nuclear cooperation is fundamental to
    implement our nonproliferation policy goals and to keep viable our
    domestic commercial nuclear capabilities. Recognizing the importance of
    U.S. commercial nuclear exports in achieving our nonproliferation
    objectives, GEH supports increasing the fiscal year 2013 budget for the
    Nonproliferation Policy subprogram.
                                     ______

        Prepared Statement of the National Association of State Energy
                                   Officials
        Chairperson Feinstein and members of the subcommittee: I am Malcolm
    Woolf of Maryland and chair of the National Association of State Energy
    Officials (NASEO). NASEO is submitting this testimony in support of
    funding for a variety of Department of Energy (DOE) programs.
    Specifically, we are testifying in support of no less than $50 million
    for the base, formula State Energy Program (SEP). We urge the
    subcommittee to strive for the $125 million figure, which is equal to
    the fiscal year 2012 authorization. SEP is the most successful program
    supported by the Congress and DOE in this area. This should be base
    program funding, with no competitive portion, which focuses primarily
    on DOE's internal priorities. SEP is focused on working with private
    business to help facilitate direct energy project development, where
    most of the resources are expended. SEP has set a standard for State-
    Federal cooperation and matching funds to achieve critical Federal and
    State energy goals. The base SEP funds are the critical linchpin to
    help States in building on these activities and expanding energy-
    related economic development, much as SEP has done for 30 years. We
    also support the $210 million level for the Weatherization Assistance
    Program (WAP). These programs are successful and have a strong record
    of delivering savings to low-income Americans, homeowners, businesses,
    and industry. We also support the budget request for the Energy
    Information Administration (EIA) of $116.4 million. EIA's State-by-
    State data is very helpful. EIA funding is a critical piece of energy
    emergency preparedness and response, and there are significant EIA
    responsibilities under the Energy Independence and Security Act (EISA).
    NASEO continues to support funding for a variety of critical buildings
    programs, including Building Codes Training and Assistance, ENERGY
    STAR, and residential energy efficiency at least at the fiscal year
    2012 level, and Building Codes at a $15 million funding level. NASEO
    also supports funding for the Office of Electricity Delivery and Energy
    Reliability (OE) at the level of the fiscal year 2013 budget request.
    Specific funding should be provided for the Division of Infrastructure
    Security and Energy Restoration of no less than $18 million, which
    funds critical energy assurance activities. We also strongly support
    the research and development (R&D) function and Operations and Analysis
    function within OE. The industries program (now renamed the Advanced
    Manufacturing program) should be funded at least at the fiscal year
    2012 level, to promote efficiency efforts and to maintain U.S.
    manufacturing jobs.
        Formula SEP funding provides a basis for States to share best
    practices among themselves. These best practices (even without stimulus
    funds) allow States to get a great deal accomplished. These types of
    activities include energy financing programs, revolving loans, utility-
    based programs, energy service performance contracts, et cetera. We
    greatly appreciate the support of the subcommittee for SEP in the past.
        In January 2003 (and updated in 2005), Oak Ridge National
    Laboratory (ORNL) completed a study and concluded, ``The impressive
    savings and emissions reductions numbers, ratios of savings to funding,
    and payback periods . . . indicate that the State Energy Program is
    operating effectively and is having a substantial positive impact on
    the nation's energy situation''. ORNL found that $1 in SEP funding
    yields:
      --$7.22 in annual energy cost savings;
      --$10.71 in leveraged funding from the States and private sector in
            18 types of project areas;
      --annual energy savings of 47,593,409 million source BTUs; and
      --annual cost savings of $333,623,619.
        Energy price volatility makes the program more essential as
    businesses and States work together to maintain our competitive edge.
                        stimulus funding implementation
        We have been working closely with DOE to implement the American
    Recovery and Reinvestment Act (ARRA) programs as quickly as possible.
    We have had regular calls with all the State energy officials to
    address implementation questions. We have also had a series of regional
    conference calls among the States, and we have seven regional
    coordinators helping to share best practices among the States. NASEO is
    sharing best practices and providing information to officials at all
    levels of government in order to more effectively coordinate this
    effort. We are convinced that these funds are helping to assist the
    private sector to implement major positive changes in the U.S. economy
    that will improve all sectors of the economy. NASEO believes it is
    important to maintain base levels of appropriations for critical
    programs, such as SEP and Weatherization, in order to avoid a huge
    decrease in funding after a rapid stimulus increase.
        With respect to ARRA spending for SEP, of the $3.1 billion
    appropriated, all the work is being implemented quickly. The deadlines
    set forth in the statute will be satisfied. We and DOE have worked
    through the barriers that slowed spending, including National
    Environmental Policy Act (NEPA) compliance, Davis-Bacon wage rates,
    Buy-American clauses, historic preservation, lead paint requirements,
    and general procurement issues. It is important to stress that the key
    figures are the ``commitment'' and ``contracted'' amounts, because that
    is when people get hired and work commences. States generally do not
    pay until projects are actually completed and milestones are met. We do
    not pay-up front in most cases. In economics jargon, the Federal
    spending figure is actually a lagging indicator. Of the ARRA funds
    dedicated to SEP and Energy Efficiency and Conservation Block Grant
    (EECBG), approximately $1 billion has been dedicated to energy
    financing programs in cooperation with the private sector. This has the
    greatest long-term potential.
        Examples of Successful State Energy Program Activities.--The States
    have implemented thousands of projects. We have previously supplied to
    subcommittee staff examples of programs and projects implemented. Here
    are a few representative examples.
        Alabama's SEP funds are being used to support the purchase and
    installation of energy efficient equipment in 118 Alabama K-12 schools.
    The energy improvements have generated cost-savings exceeding $1
    million a year. The Talladega County Board of Education replaced 31
    heating, ventilation, and air conditioning (HVAC) units in 17 schools.
    The new efficient units are saving the district more than $75,000
    annually. Winston County Board of Education replaced 14 HVAC units in
    two of its schools with new efficient units which are saving the school
    more than 20 percent on electricity costs a year.
        Alaska collected benchmarking data on 1,300 public facilities in
    order to identify high-energy using buildings. A total of 351 public
    buildings with a high Energy Use Index were identified and are
    undergoing Investment Grade Audits, which will pinpoint specific energy
    improvement projects. These energy measures will be funded through a
    loan program where the project's debt service will be paid entirely
    through the energy cost savings.
        California is improving energy efficiency in State-owned buildings
    through the State Property Revolving Loan Fund Program. This
    sustainable loan program is supporting energy upgrades in more than 60
    buildings located throughout the State--including energy retrofit
    projects in 18 California Highway Patrol Offices. As a result, a field
    office in Oakland now has energy efficient lights that are saving
    nearly $21,000 a year in energy costs. The Oakland lighting project
    will pay for itself in cost savings in just more than 2 years.
        Illinois is promoting the development of renewable energy and
    energy efficiency manufacturers and supply-chain businesses in the
    State. Since 2010, the Green Business Development Grant Program has
    awarded grants to 25 Illinois manufacturers that have expanded into the
    green technology sector by retrofitting their manufacturing processes.
    Ingersoll Machine Tools, Inc., a Rockford-based manufacturer of
    aviation components, used a Green Business grant to purchase and
    retrofit equipment so it can also produce wind turbine components. The
    retooling effort created 87 new jobs at Ingersoll. Funk Linko has been
    producing light poles at its Chicago Heights facility since 1925. With
    a Green Business grant the company retooled its existing steel mill
    equipment to produce components for wind power generation.
        The Iowa State Energy Office provided a $1.7 million matching grant
    funded by SEP to support the Sun Prairie Vista Court Apartments in
    reducing energy use by implementing and documenting the performance of
    new, energy-efficient technologies that include, for example, variable
    speed pumps, thermal solar collectors for hot water, and induction
    exterior lighting. To measure the benefits of the efficiency upgrades,
    the apartment complex will monitor before and after results, including
    real-life information on energy use. Tenants are benefiting from the
    energy efficiency improvement. The demonstration project employed
    approximately 21 individuals and produces projected annual energy
    savings of $111,417.
        In Kentucky $14 million has been dedicated to the Green Bank of
    Kentucky for energy efficiency financing for public buildings. To date,
    11 Green Bank loans have funded energy upgrades in 61 public buildings.
    The Kentucky Department of Veterans Affairs used a Green Bank loan for
    energy upgrades in three of its facilities--Thomas-Hood, and the East
    and West Kentucky Veterans Centers. These facility improvements are
    generating annual energy cost savings of $195,000, and $23,000 annually
    in water savings. The savings will repay the Green Bank loan in less
    than 12 years and after that all further savings will directly benefit
    the taxpayers of Kentucky.
        Louisiana's Transportation Efficiency and Alternative Fuels Program
    awarded a grant to Bossier City for two publicly accessible Compressed
    Natural Gas fueling stations and the purchase of 10 heavy duty
    compressed natural gas (CNG) vehicles for the city's fleet. The Bossier
    City project has resulted in the displacement of approximately 270,000
    gallons of diesel or gasoline per year and created 10 new jobs.
        Maine's Home Energy Savings Program, which launched in 2010, has to
    date resulted in approximately 5,000 residential energy audits with
    more than 3,000 of these homeowners receiving rebates for whole house
    energy upgrades. More than 100 licensed construction companies have
    been certified to participate in the program, which has resulted in
    excess of $27 million worth of residential energy retrofit projects.
    These energy improvements are saving homeowners an average of 40
    percent in energy costs, or approximately $1,454 per year, amounting to
    savings of approximately 405 gallons of heating oil per year.
        Mississippi's public buildings program is helping to finance
    energy-saving upgrades through performance contracting in 10 public
    institutions. The participating public sector partners include the
    Biloxi School District, Cleveland School District, Desoto County,
    Jefferson County, Lawrence County School District, Mississippi State
    Hospital, Monroe County School District, Claiborne County, Alcorn
    County School District and Hollandale School District. Under the
    program, 149 public buildings, representing more than 3 million square
    feet of space, have been completed. The Biloxi Public Schools project
    was completed in October 2011 and is expected to save more than
    $275,000 a year in utility costs.
        Montana improved its recycling infrastructure in communities
    throughout the State with the purchase of equipment to collect, store,
    and transport recyclables to market and assist local businesses use the
    materials collected. A total of 19 recycling projects were funded
    through the Montana Recycling Infrastructure Grants program, including
    recycling collection bins in Libby, Troy, Colstrip, St. Ignatius,
    Ronan, Polson, Bozeman, Havre, Shelby and at sporting events,
    performances and tradeshows held on the campus of Montana State
    University.
        New Jersey supported the development of six combined heat and power
    (CHP) projects at commercial and industrial customers. Results include
    a 3.2 megawatt (MW) CHP project at the National Gypsum Company facility
    in Burlington. Other projects include a 9.5 MW cogeneration unit at the
    DSM Nutritional Products facility in Belvidere, a 1.1 MW gas engine
    generator at Ocean City College, and a 4.6 MW cogeneration plant for
    the new University Medical Center at Princeton. All totaled, nearly 35
    MW of clean-energy production has resulted from this SEP-funded
    program.
        Rhode Island's Deliverable Fuels Program provides incentives and
    rebates for energy retrofits to customers who heat their homes and
    businesses with oil, propane, or other deliverable fuels. The program
    launched in August 2010, and in the first 6 months 1,431 audits had
    been conducted statewide. Of these audits, 546 customers implemented
    recommended heating system replacements or other energy saving
    measures. These initial retrofits will reduce heating oil consumption
    by 2 million gallons over the next 20 years, saving these customers a
    combined $7 million through lower heating bills.
        South Carolina's public building energy retrofit program has
    resulted in energy efficiency improvements in 579 buildings statewide.
    The buildings represent nearly 21 million square feet of public
    building space and include 32 2- and 4-year colleges, 22 State agencies
    and 85 school districts. Williamsburg Technical College used a grant
    from this program to upgrade lighting and replace outdated HVAC units.
    These upgrades will pay for themselves in energy costs savings in less
    than 2 years and will help the college save more than $30,000 annually
    going forward.
        South Dakota conducted energy audits of all State-owned buildings.
    Based on the audit's data, grants, and loans were executed to implement
    cost-effective projects in 55 public buildings. A boiler replacement in
    the 100-year-old State capitol building complex is among the completed
    projects. The boiler replacement is projected to save taxpayers more
    than $2 million in energy costs over the life of the new equipment.
        Tennessee's Volunteer State Solar Initiative's grant programs have
    awarded a total of 236 grants to date and more than $40 million of
    private funds have been leveraged. The grant-funded projects have added
    approximately 6.5 MW of solar power to the grid.
        Texas' Transportation Efficiency Program awarded 16 grants for the
    synchronization of traffic signals and/or the replacement of traffic
    signal lights with LEDs. A major traffic synchronization project in
    Missouri City retimed and synchronized traffic signals at 44
    intersections on 120 lane miles of six major roads. This one project is
    saving an estimated 47,000 hours annually for people traveling those
    roads during weekday rush hour.
        The Washington Community Energy Efficiency Pilot Program has to-
    date retrofitted 1,154 commercial buildings representing nearly 1.2
    million square feet, and more than 8,000 residential structures
    throughout the State. In addition, it created the foundation for a
    sustainable residential and non-residential energy retrofit industry
    and workforce in the State of Washington.
                                     ______

      Prepared Statement of the National Association for State Community
                               Services Programs
        The National Association for State Community Services Programs
    (NASCSP), urges the U.S. Senate Committee on Appropriations
    Subcommittee on Energy and Water Development to fund the Department of
    Energy's (DOE) Weatherization Assistance Program (WAP) at $210 million.
    In these difficult budgetary times, we understand that tough decisions
    have to be made. However, WAP is proven, cost-effective, measurably
    successful, and vital to the Nation's energy security and energy
    efficiency movements, delivering savings to low-income Americans,
    businesses, and industry. WAP faces an uphill battle in the immediate
    future do to a reduction in funding and leading to the loss of jobs and
    capacity to assist low-income Americans. It is necessary to fund WAP at
    this level in order to sustain its historic infrastructure in and
    widespread impact on all States and local communities as well as the
    expanded training and technical assistance expertise and activities
    enabled with the funding provided by the American Recovery and
    Reinvestment Act of 2009 (ARRA). This funding level is essential to
    continue and improve this outstanding program for our citizens. Due to
    the close of ARRA funding in March 2012 and the severely limited 2012
    funding, continued funding is even more critical to allow the WAP
    Network to fulfill its mandate duties and ensure continued quality and
    success at pre-Recovery Act levels.
        Some examples of the program's accomplishments include:
      --Creation and support of more than 13,000 full-time, highly skilled
            jobs within the service delivery network due to ARRA funds, the
            second highest in the Nation, with 8,000-10,000 additional jobs
            from annual grant funding, and many more in related businesses,
            such as materials suppliers;
      --Weatherization of an additional 700,000 homes occupied by low-
            income families, more than 100,000 homes above projected
            numbers, due to the ARRA and tens of thousands of more homes
            through annual appropriations, thereby reducing energy use and
            associated energy bills;
      --Served more than 7.1 million low-income homes since the program's
            inception, with an additional 38.3 million eligible;
      --Saves an estimated 35 percent of consumption for the typical home,
            with savings continuing year-after-year and actual $1 savings
            increasing as fuel prices increase;
      --Saves $437 in first year energy savings for households weatherized;
      --Returns $2.51 for every $1 spent in energy and nonenergy benefits
            over the life of the weatherized home;
      --Serves as a foundation for residential energy efficiency retrofit
            standards, technical skills, and workforce training for the
            emerging broader market;
      --Supports communities through local purchasing and jobs created
            nationwide;
      --Reduces residential and power plant emissions of carbon dioxide by
            2.65 metric tons/year per home; and
      --Decreases national energy consumption by the equivalent of 24.1
            million barrels of oil annually.
        WAP is the largest residential energy conservation program in the
    Nation and serves an essential function by helping low-income families
    reduce their energy use. The program was developed in the late-1970s as
    a response to rapidly rising energy costs associated with oil shortages
    created by oil embargoes. The Congress acknowledged that low-income
    families were particularly vulnerable to increased energy price
    fluctuations and created the program to assist those families by
    reducing the cost to heat their homes. WAP was institutionalized within
    the Department of Energy in 1979 and today operates in all 50 States,
    the District of Columbia, five U.S. territories, and several Native
    American Tribes. Approximately 1,000 local agencies provide services in
    every political jurisdiction of the country using direct hire crews and
    local contractors to do the work, thus investing in local businesses
    and communities. These network providers use program funds to improve
    the energy efficiency of low-income dwellings, utilizing the most
    advanced technologies and testing protocols available in the housing
    industry. Since the Program's inception, more than 7.1 million homes
    have been weatherized using Federal, State, utility, and other monies.
        WAP is still as relevant now as it was when it was formed in
    response to the energy crisis 30 years ago. The savings to America's
    most vulnerable citizens are significant and make a huge, immediate
    difference in their lives. These families have an average energy
    burden--the percentage of their income needed to pay residential energy
    bills--around 15 percent of their income as compared to around 3
    percent for non-low income households, or five times greater. And the
    poorest families have a much higher energy burden than that. For
    example, in the State of California, Subcommittee Chair Dianne
    Feinstein's home State, there are more than 718,000 households below 50
    percent of the Federal poverty level, making less than $12,000 per year
    for a family of four. Those families have an energy burden of 36.5
    percent--more than one-third of their income. With lower energy bills,
    these families can increase their usable income and buy other
    essentials like food, shelter, clothing, medicine, and healthcare and
    thus investing in local businesses and communities. WAP provides a
    positive return on investment to meet its primary objectives of making
    homes warmer in winter and cooler in summer and creating safer and
    healthier indoor environments.
        Because of the advanced diagnostics and technology developed in
    WAP, the program is the foundation for the emerging green energy
    efficiency retrofit workforce. There are approximately 25,000 jobs in
    the Weatherization network, with many more supported in related
    businesses, such as material suppliers. These jobs are good, living
    wage jobs, which are more important than ever due to the economic
    downturn in the housing and construction industries. Workers are highly
    trained and receive on-going instruction to further develop their
    skills. WAP is at the core of the larger energy-efficiency retrofit
    market, and its training curricula, methods, and centers play an
    integral role in developing tools and techniques and a workforce. WAP
    managers, trainers, and technical experts figure prominently in the
    Recovery through Retrofit initiative, contributing their expertise to
    the Workforce Guidelines for Residential Energy Efficiency Workers and
    playing a key role in the development of standardized training
    curricula, worker certifications, and training facility accreditations.
        In order to sustain the program, it is critical that the WAP
    maintain adequate funding so the network can continue to provide jobs
    and support local economies as well as promote energy efficiency
    nationwide. The fiscal year 2012 level of $68 million is not enough to
    continue nationwide coverage of the program and continued low funding
    will result in the loss of jobs, investment of local business, and
    energy efficiency services that ensure the health and safety of
    families across the country.
        NASCSP urges the subcommittee to fund WAP at $210 million for
    fiscal year 2013. The WAP remains a crucial component of our Nation's
    energy future. WAP is a clearly proven investment, has provided
    significant energy savings, and has helped more than 7.1 million
    families live in safer, more comfortable living conditions. This is a
    program that has proved its worth and effectiveness for more than 30
    years. NASCSP looks forward to working with subcommittee members in the
    future as we attempt to create energy self-sufficiency and good jobs
    for millions of American families through these invaluable national
    programs.
                                     ______

            Prepared Statement of the National Carbon Capture Center
        Madam Chairwoman and members of the subcommittee: Southern Company
    operates the Department of Energy's (DOE) National Carbon Capture
    Center (NCCC) (http://nationalcarboncapturecenter.com) at the Power
    Systems Development Facility (PSDF) in Wilsonville, Alabama for DOE's
    National Energy Technology Laboratory (NETL). The NCCC is the world's
    premier research and development (R&D) facility for cost-effective
    carbon dioxide (CO2) capture technologies for use at coal
    and natural gas fired power generation and industrial facilities. With
    the completion of its construction in 2011, research is now underway to
    screen the more than 300 capture technologies already identified and to
    ensure development of those concepts most likely to be commercially
    successful. To accomplish this, the NCCC is collaborating with
    technology developers world-wide as well as industrial, utility, and
    fuel co-funding partners \1\ and is bringing to the Nation a proven
    technology development business model at a scale that is more cost-
    effective than large demonstrations of single technologies. As the NCCC
    begins its first full year of operation in 2012, this partnership
    respectfully requests the support of the Congress for the fiscal year
    2013 DOE budget request at the fiscal year 2012 enacted levels for the
    annual operating costs of its NCCC.
    ---------------------------------------------------------------------------
        \1\ Current NCCC participants include Southern Company; the
    Electric Power Research Institute (EPRI); American Electric Power;
    Luminant; NRG; Peabody Energy; Arch Coal, Inc.; and Rio Tinto.
    ---------------------------------------------------------------------------
        I would like to thank the Senate for its past support of the NCCC
    and request the subcommittee's continued support of the DOE's Fossil
    Energy R&D core budget. At a time when our country's economy is
    recovering, we need to assure continued utilization of domestically
    produced, low-cost, coal and natural gas based power generation. DOE's
    Fossil Energy R&D efforts have already produced significant results to
    advance coal-based power. DOE's core R&D budgets, combined with
    investments by the private sector assure a sustainable technology base
    on which to address the environmental and economic challenges facing
    coal and natural gas use in the future. Operation of the NCCC in
    partnership with DOE will benefit the Nation by developing cost-
    effective CO2 capture technology for fossil-fueled power
    generation by teaming with technology developers and accelerating
    commercial deployment of viable technologies.
        The NCCC's CO2 capture efforts address all three areas
    of DOE's CO2 capture goals concerning postcombustion capture
    for conventional plants, pre-combustion capture for coal gasification
    power plants, and advanced oxy-combustion processes which produce a
    more CO2-rich flue gas than conventional combustion for
    easier CO2 capture. Southern Company also supports the goals
    of the Clean Coal Technology Roadmaps developed by the Electric Power
    Research Institute (EPRI) and the Coal Utilization Research Council
    (CURC). These Roadmaps identify the technical, economic, and
    environmental performance that advanced clean coal technologies can
    achieve over the next 25 years.
        The NCCC offers a flexible applied R&D test facility which provides
    commercially representative flue gas and syngas and the necessary
    infrastructure in which developers' technologies are installed and
    tested to generate data for performance verification under industrially
    realistic operating conditions. This effort is a less costly way to
    bridge the gaps between fundamental R&D and more costly large-scale
    commercial demonstrations. By operating a unique, but central R&D test
    facility, available to all CO2 technology developers,
    redundancy in testing sites and equipment is minimized and cost-
    effective use of R&D funds is achieved.
                                    summary
        The United States has historically been a leader in energy
    research. Adequate funding for fossil energy R&D programs, including
    environmental and climate change technologies, will provide our country
    with secure and reliable energy from domestic resources while
    protecting our environment. Current DOE Fossil Energy Research and
    Development programs, if adequately funded, will assure that a wide
    range of electric generation options are available for future needs.
    The Congress faces difficult choices when examining near-term effects
    on the Federal budget of funding energy research. However, EIA projects
    that coal will continue to fuel our country well into the future, and
    continued support for coal-based energy research will be essential to
    the long-term environmental and economic well being of the United
    States. Prior DOE clean coal technology research has already provided
    the basis for a 25-fold return in consumer benefits over research
    costs. To realize potentially even greater consumer benefits, the
    critically important R&D program in the CURC-EPRI Clean Coal Technology
    Roadmap must be implemented.
        One of the key national assets for achieving these benefits is the
    NCCC. The fiscal year 2013 funding for the NCCC will provide
    operations, maintenance, and modification of the facilities to test
    technologies that are critical to the development of cost-effective
    climate change technologies that will enable the continued use of
    fossil fuels to supply a share of the Nation's energy needs. Any budget
    cuts in the DOE Fossil Energy Core R&D budget from the fiscal year 2012
    enacted levels could proportionately impact the necessary work that
    will be conducted at the NCCC. A key NCCC feature is its flexibility to
    test new carbon capture technologies for power generation systems in an
    integrated fashion and under realistic industrial conditions. The NCCC
    can evaluate CO2 capture technologies as they are integrated
    into actual syngas (from gasification) or flue gas from actual power
    plant operations. Integrated operation allows the effects of system
    interactions, typically missed in un-integrated, laboratory-based,
    component development programs, to be understood. This integration
    provided by the NCCC is the key to ensuring component technologies are
    validated before they can be designed into large scale industrial
    applications. Furthermore, the NCCC is large enough to produce data to
    support commercial scale designs, yet small enough to be cost-effective
    (compared to typical large-scale demonstrations) and adaptable to a
    variety of technology research needs. The major accomplishments at the
    NCCC/PSDF to date and the current test program planned by DOE and the
    NCCC's industrial participants are summarized below.
                             prior accomplishments
        The PSDF test-bed has operated successfully for many years in
    support of DOE's advanced coal program. The two significant
    achievements are:
      --a new gasifier design (Transport Integrated Gasification
            (TRIGTM)) suitable for use with low-rank fuels,
            which represent more than one-half of the total coal reserves
            in the United States and the world; and
      --hot gas filtration to improve energy efficiency.
        These two technologies have progressed to commercialization with
    integrated gasification combined cycle (IGCC) power plants being built
    at Kemper County, Mississippi, and Dong Guan, China. Other highlights
    of the test program included development of novel pressurized coal feed
    and ash removal systems, and sensors and controls automation
    improvements. In some instances, testing has eliminated technologies
    from further consideration. Such screening is valuable in that it
    concentrates R&D efforts on those technologies most likely to succeed
    and is an essential part of managing the U.S. DOE's financial
    resources.
              national carbon capture center current test program
        Building on success with TRIGTM, the NCCC/PSDF facility
    has refocused its mission on supporting the development and scale-up of
    cost-effective, commercially viable carbon capture technologies for
    fossil-fueled power plants through collaboration with the DOE and
    third-party technology developers. Most of the current CO2
    capture technologies are being developed at laboratory- or bench-scale
    under ideal conditions. Continued R&D under realistic field conditions
    are needed to validate laboratory results and identify technical issues
    that are not present under ideal conditions. In collaboration with
    technology developers, the NCCC makes available coal-derived syngas gas
    and flue gas to carry out applied R&D on components or small pilot-
    scale systems to bridge gaps between fundamental R&D and large-scale
    commercial demonstration. This provides for a cost effective, seamless
    transition for promising technologies to migrate from laboratory into
    commercial demonstrations. And importantly, NCCC postcombustion test
    results are applicable to both coal and natural gas applications, new
    and existing.
        The NCCC is a unique applied R&D test facility containing two major
    sets of infrastructure to support CO2 capture technology
    development:
      --an existing pilot-scale coal gasification facility that produces
            syngas for pre-combustion CO2 capture technology
            evaluation; and
      --a Post-Combustion Carbon Capture Center (PC4) which enables testing
            of capture technologies on flue gas from an adjacent fossil-
            fueled power plant.
        Both are readily adaptable to test a variety of technologies at
    multiple scales and using different coals, providing data for scale-up
    to commercial applications. This flexibility, in conjunction with real-
    world operating conditions, allows the NCCC to support developers in
    advancing the CO2 capture technologies that are critical to
    continued use of fossil fuels for power generation. Jointly with the
    DOE, NCCC has developed a Technology Screening Process which is a key
    evaluation tool to assess and prioritize technologies for testing at
    the facility. Currently more than 300 carbon capture technologies have
    been identified as screening candidates.
        Postcombustion.--Today's postcombustion capture technology has been
    estimated to increase the cost of electricity (COE) by up to 80
    percent.\2\ For both new and existing power plants, postcombustion
    capture technology must be made more efficient and cost-effective by
    reducing parasitic power and capital cost requirements. In
    postcombustion capture, CO2 is separated from the flue gas
    in a conventional powerplant downstream of the boiler. Many
    postcombustion capture technologies need to be proven and integrated in
    an industrial powerplant setting. The PC4 test facility (completed in
    2011) was built to accommodate tests of a wide-range of capture
    technologies from flue gas and includes three major test areas:
    ---------------------------------------------------------------------------
        \2\ ``Cost and Performance Baseline for Fossil Energy Plants,
    Volume 1: Bituminous Coal and Natural Gas to Electricity, Final
    Report''; NETL, May 2007.
    ---------------------------------------------------------------------------
      --a pilot solvent test unit (PSTU) to test developers' next
            generation CO2 absorption solvents;
      --a second test bay to support evaluation of fully integrated test
            systems supplied by technology developers; and
      --a bench-scale test area to accommodate small tests of emerging,
            advanced technologies such as sorbents or membrane systems.
        Initial testing at the PC4 began in 2011 when researchers conducted
    trials with monoethanolamine (MEA) solvent to be used as a baseline to
    evaluate the performance of advanced CO2 capture
    technologies. Solvents being developed by Aker Clean Carbon and Babcock
    & Wilcox, as well as Membrane Technology Research's membrane-based
    technology, were also tested. Commitments are in place for the NCCC to
    provide other advanced technologies a scaled-up testing platform as
    development progress warrants.
        Precombustion.--In precombustion capture, CO2 is
    separated from the syngas produced by a coal gasification process,
    prior to the combustion of the syngas in gas turbine for power
    generation. CO2 capture is estimated to increase the COE
    from an IGCC facility by more than 35 percent.\2\ Reductions in both
    capital cost and power requirements of CO2 capture processes
    are needed for development of efficient and cost-effective pre-
    combustion technology, and the NCCC is focused on achieving those
    goals. R&D activities at NCCC for pre-combustion capture include:
          Advanced CO2 Capture Systems.--New solvents, sorbents,
            and gas separation membrane technologies are being assessed on
            syngas and are being scaled-up and tested based on fundamental
            R&D progress by third-party developers.
          Water Gas Shift Enhancements.--Water gas shift (WGS) catalyst
            test results have been conducted which reveal that parasitic
            steam consumption can be reduced, which in turn increases the
            net power output of an IGCC plant and reduces COE with
            CO2 capture. Results have been supplied to catalyst
            suppliers and findings are being implemented at a commercial
            IGCC plant currently under construction. Testing of various WGS
            catalysts continues.
          Advanced Syngas Cleanup.--New advanced syngas cleanup systems are
            being tested for reducing hydrogen sulfide, hydrochloric acid,
            ammonia, and mercury to near-zero levels.
        Oxy-Combustion.--The NCCC is also evaluating the potential benefits
    of oxy-combustion CO2 capture using the pressurized
    transport reactor operating in oxygen combustion mode. Preliminary
    screening studies have produced favorable results. Detailed system
    studies, modeling and additional economic analysis are being conducted
    to evaluate the commercial feasibility of this technology.
        Gasification.--In developing a cost-effective advanced coal power
    plant with CO2 capture, the NCCC also evaluates
    opportunities to reduce cost for the entire plant in order to optimize
    the plant processes with the integration of the CO2 capture
    processes. Some of these cost reduction opportunities include
    technology development for syngas cleanup, particulate control, fuel
    cells, sensors and controls, materials, and feeders.
                                   conclusion
        The collaboration among DOE, technology developers, and private
    industry is allowing the National Carbon Capture Center to make
    significant strides toward the next generation of CO2
    capture technologies. These technologies hold the promise of reducing
    the costs of CO2 capture to levels necessary to assure that
    affordable, reliable coal-based electric power can be produced for
    America's economy, while also meeting all of the environmental
    challenges associated with fossil fuel use. The Congress should sustain
    the DOE Fossil Energy R&D budgets at the fiscal year 2012 enacted
    levels.
                                     ______

         Prepared Statement of the National Community Action Foundation
        The National Community Action Foundation (NCAF) represents the 900
    local Community Action Agencies and their partner organizations that
    deliver the investments funded by the Department of Energy (DOE)
    Weatherization Assistance Program (WAP) in low-income homes. We urge
    the subcommittee to reject the President's fiscal year 2013 budget
    request for WAP in the Energy Efficiency and Renewable Energy (EERE)
    budget and, instead, provide $227.2 million for the fiscal year 2013
    program. We also hope the regulation regarding the process for formula
    allocations will not be set aside as requested.
        This figure, $227.2 million, is equal to the 2008 level; 2008 was
    the last program year before the massive, one-time expansion to create
    American Recovery and Reinvestment Act (ARRA) jobs was implemented. Our
    local members tell us that this is the minimum funding level for
    delivering a responsible and effective low-income residential
    efficiency program.
        WAP should also continue to play its role as the ``incubator'' of
    effective practices for the gradually developing conventional
    residential efficiency upgrade market; although the administration and
    many in the Congress have encouraged new demand for conventionally
    financed home energy upgrades by those with credit and assets, that
    market and the practices of the firms serving it has not yet matured.
    To deliver a high-impact, well-managed, low-income program, and set
    benchmarks for performance, energy savings, and transparent oversight,
    Weatherization must maintain the worker training, cutting-edge
    equipment and software, and the skilled managers and monitors. DOE
    Weatherization remains a valuable national resource because it serves
    as a model for quantifying investments, verifying performance, and
    provides the benchmark energy audit tools, testing, and verification
    protocols
        Energy Efficiency and Renewable Energy Budget Priorities.--First,
    we would like to address the issue of priorities in the EERE budget
    request. The request reflects a preponderance of research and
    development (R&D), of incentives and of some commercialization
    activities that, together, are intended to promote a ``market
    transformation'' in the near future and a technological transformation
    in the distant future. We believe the priorities demonstrated are
    impractical in general and unfair to a large part of the population.
    The lower priority which the budget gives to testing the results of
    building efficiency research as well as other research is a mistake.
    The results of the R&D that past years' appropriations have produced
    should be verified and moved to general use through deployment by real
    workers in real-world buildings. Further, offering taxpayer-financed
    incentives for consumers who can afford to invest in new homes and
    industry with credit to buy efficient equipment are only appropriate if
    a robust program can be maintained for the most inefficient of the
    millions of homes whose occupants lack the cash and credit to invest on
    their own.
        Energy Efficiency and Renewable Energy Claims About Lower-Income
    Consumers' Borrowing.--Secretary Chu's testimony before this
    subcommittee on March 14 suggests that the DOE's request erroneously
    assumes that large numbers of low-wage working families and retirees
    will be served by the minimal program requested because new types of
    lending will be available to such consumers so that they may buy their
    own improvements. Madam Chairman, the Department analysts are poorly
    informed about the financial situation of the WAP-eligible households,
    all of whom have incomes far below the median income of their State.
    The problem is not that they lack credit, which most do; the problem is
    that they lack adequate resources and income flow to purchase even
    immediate necessities.
        Minimum Program Capacity.--There is size and capacity threshold
    below which WAP can no longer function as an effective national
    program. It takes funding at least the level size of the 2008 pre-ARRA
    program to run a WAP that has trained, skilled, and well-equipped
    workers, with even more experienced energy auditors and with local and
    State inspectors checking and directing their work.
        As the subcommittee is well aware, the 2008 funding level we are
    requesting represented a drop from the program's resources a few years
    earlier. For some States, it meant less than a full-time monitor for
    the entire State and is still inadequate; however, our local members
    want you to know that. Given a similar core program, they are committed
    to finding enough additional partners with resources to serve every
    county in the Nation; however, with less to build on, they will not be
    able to offer utilities, building owners, and other investors the
    certainty of a well-trained, well-equipped workforce whose work will be
    backed by both local and State quality assurance. With the foundation
    of funding at the pre-ARRA period level, $227.2 million, community
    action will expand or develop partnerships with States; housing,
    economic development and public health organizations; utilities; and
    all manner of other local partners to create a robust and diversified
    portfolio of resources delivered as single, customized packaged to the
    dilapidated older homes on their waiting list.
        Maintaining a Nationwide Program and Formula.--At the proposed
    funding level, some States' formula allotments are particularly
    inadequate. Moreover, the administration requested a renewal of the
    one-time authority the subcommittee provided for 2012 which allows the
    Secretary to establish a formula without benefit of public regulatory
    process as required by law. We believe the subcommittee was wise to
    allow it in 2012 when information about uncosted balances was relevant
    and remained closely held by the Department. However, we believe it
    would be a major mistake to set aside the statute a second year in a
    row. It has turned out that the Department's information flow from
    States about uncosted balances was flawed at both ends. High-performing
    States now face imminent close-out of services, while other States are
    still catching up to large balances but received 2012 funds. More
    important, States must plan far ahead to match legislative and
    budgetary requirements; more instability in the WAP system will not
    contribute to good performance.
        Significant Private Partnerships Depend on the Programs' Competence
    and Transparency.--In 2008, the leveraged resources, including Low-
    Income Home Energy Assistance Program (LIHEAP) dedicated funds and
    nearly as much from private utility partnerships, amounted to almost
    three times the Department of Energy Weatherization Assistance funding
    the Congress provided. The reason partners turned funds over to
    Weatherizers to deliver on low-income communities was the robust
    Federal program foundation that gave local and private investors the
    confidence to allow their resources to be combined with Weatherization
    delivery. Federal standards, training, procedures, and oversight
    requirements, including financial, assure our partners that their funds
    go where they intend, that homes will not receive two or three
    different kinds of evaluations and measures, that their jobs will be
    inspected, and that there will be transparent accounting of each kind
    of funding at the end.
        Proven Capacity Should Not Be Wasted.--As Secretary Chu testified
    to this subcommittee, the program delivered investments and ARRA jobs
    at a dramatically higher scale than predicted, surpassing its total
    production goal last year, coming in under budget and ahead of the
    schedule planned. Weatherization ranked second in job creation last
    quarter. Now our production is at about 100,000 more homes than planned
    for delivery--700,000--and a number of States are still delivering
    homes.
        NCAF is certainly aware of the delivery problems that affected a
    few of the recipients of the ARRA Weatherization expansion in a few of
    the States represented on the subcommittee. Our organization worked
    closely with DOE to raise quality and performance among our members. We
    are confident these efforts worked, and we stand behind the Secretary
    of Energy's testimony to several committees, including most recently
    the Committee on Oversight and Government Reform (3/20/2012) that
    serious problems existed in only 3 percent of the homes that have been
    weatherized since 2010. All of these cases are being resolved, at no
    further taxpayer expense, by the responsible parties.
        Worker Skills and Standards.--Community Action is exceptionally
    proud of the training it provided and the meaningful jobs organizations
    filled with more than 20,000 construction industry workers, all of
    which added up to between 14,000 and 16,000 full-time jobs per quarter
    until major layoffs began this past winter as ARRA funds were
    exhausted. There is still considerable work to do using prior year
    funds or ARRA in many States for at least the next 6 months. After
    that, fewer and fewer States will be able to sustain their workforce,
    their quality control, and their State oversight through the end of the
    2012 fiscal year.
        The Weatherization Program leaders and field experts have worked
    for 2 years with to develop definition of retrofit worker jobs skills,
    the training required to achieve such DOE skills, and formal work
    specifications for all key tasks involved in retrofitting residential
    buildings of all types. Together with others in the emerging industry,
    we have developed a yet-to-be implemented credentialing hierarchy which
    could transform the sector of the building trades that has been
    delivering energy retrofits in conjunction with housing upgrades
    without benefit of common definitions and skill specifications.
        Industry Training Capacity Is Built With Weatherization Assistance
    Program Funds.--Weatherization has a network of tested of training
    centers which serve not only the public sector program but also the
    utility industry. Among the most distinguished is Montana State
    University. NCAF was fortunate to be able to contribute funding (which
    the Exxon-Mobil Corporation generously donated to us) to underwrite a
    unique initiative in Montana that produced hours of video and other
    online training built by these legacy centers and several partners in
    higher education. These videos are now available nationwide to
    introduce the industry to potential workers and to train those in the
    field in a number of the required skills. It also resulted in models of
    developing new small businesses to provide high-quality energy audits
    in rural America in Oregon and in Virginia. Many of the others have
    others have recently contributed to the intellectual capital and
    training tools for the entire industry.
        Worker and Contractor Access to Opportunity and Training.--It is a
    great accomplishment that tens of thousands of newly unemployed workers
    have left the program with skills and credentials they would never have
    gained were it not for their experience with the ARRA Weatherization
    program. The Weatherization program has served as an employment
    ``gateway'' to future opportunity for homebuilding industry workers who
    came in with only conventional skills, including many workers who were
    considered ``nontraditional'' in the construction field. The
    administration's inadequate request means this door slams shut.
                                   conclusion
        We urge you not to accept the administration's request; it
    represents the end-stage of access to Weatherization assistance for
    lower-income families; within a very short period such low funding
    would also spell the end of utility-community partnerships that assure
    skillful delivery of coordinated investments.
        We hope the subcommittee will take a different direction and
    continue to build on the firm foundation that already exists for WAP by
    allocating $227.2 million in fiscal year 2013. Thank you for
    considering our concerns.
                                     ______

             Prepared Statement of the National Consumer Law Center
        The National Consumer Law Center (NCLC) is a nonprofit organization
    which, during its 35 years of existence, has advocated for policies
    that assist low-income families and seniors who struggle to pay their
    energy bills. NCLC strongly recommends that the Senate approve a
    funding level for the low-income Weatherization Assistance Program
    (WAP) of $250 million for fiscal year 2013.
        Because low-income families often live in older and poorly
    weatherized homes,\1\ they tend to consume more energy than absolutely
    necessary. Living in poorly weatherized houses leads to higher energy
    bills and places these families at much greater risk of having their
    utility services terminated for non-payment.\2\ Families can find
    themselves without adequate heat in the winter, without lights, or
    without the ability to prepare food, simply because their energy bills
    are exorbitantly high.\3\ At the extreme, house fires can result when
    families lose access to gas, electricity, or delivered heating fuels
    and instead resort, out of desperation, to unsafe heating sources and
    the use of candles.\4\
    ---------------------------------------------------------------------------
        \1\ According to data from the U.S. Energy Information
    Administration, 2005 Residential Energy Consumption Survey, 40 percent
    of households at or below 100 percent of the Federal poverty level
    lived in housing units constructed before 1960. Less than 30 percent of
    households living above the poverty level lived in housing constructed
    prior to 1960. Housing constructed before 1960 was not subject to the
    stricter energy codes that apply to more recently constructed housing.
    In addition, newer construction is more likely to use newer, more
    energy-efficient heating, cooling, lighting, and refrigeration
    equipment.
        \2\ Electric and natural gas service disconnection rates are much
    higher in low-income households than middle- or high-income households.
    In California, for example, the low-income disconnection rate in 2010
    was 5.5 percent, compared with 2.9 percent for non-low-income
    households. (CA Division of Ratepayer Advocate, ``Status of Energy
    Utility Service Disconnections in California'', March 2011, p. 2.)
        \3\ 2011 National Energy Assistance Survey Summary Report, National
    Energy Assistance Directors' Association, Nov. 2011. Available at
    www.neada.org.
        \4\ John R. Hall, Jr., Home Fires Involving Heating Equipment
    (January 2010) at ix and 33. Also, 40 percent of home space heater
    fires involve devices coded as stoves.
    ---------------------------------------------------------------------------
        Over the past 3 years, WAP has helped 860,000 households to reduce
    their energy bills,\5\ while also increasing the comfort and health of
    those living in those homes.\6\ Weatherization generally decreases
    energy usage--and energy bills--an average of 25 percent (with a wide
    variation above and below that average).\7\ DOE estimates that the
    average household's annual heating bill will be reduced by $437 as a
    result of receiving weatherization.\8\
    ---------------------------------------------------------------------------
        \5\ Testimony of DOE Secretary Steven Chu Before the Committee on
    Oversight and Government Reform, U.S. House of Representatives, March
    20, 2012, p. 3.
        \6\ Various studies have shown that weatherization can result in
    reductions in a range of health problems, including asthma and
    bronchitis. See, e.g. National Center for Healthy Housing/Enterprise
    Community Partners, Inc., ``Case Study: Creating Green and Healthy
    Affordable Homes for Families Living at Viking Terrace, Worthington,
    Minn.'' (2010). That study showed significant declines in bronchitis,
    sinusitis, and asthma (in adults) and respiratory allergies and ear
    infections (in children) following renovations that employed ``green
    and healthy'' principles.
        \7\ L. Berry & M. Schweitzer, ``Metaevaluation of National
    Weatherization Assistance Program Based on State Studies, 1993-2002''
    (Oak Ridge National Lab, RNL/CON-488). Ex. Summ., p. x. The authors
    found that WAP achieved energy savings in gas-heated households of 21.9
    percent of the average pre-weatherization consumption of natural gas
    for all end uses and 30.8 percent of pre-weatherization space heating
    consumption.
        \8\ U.S. Department of Energy, Weatherization Assistance Program,
    http://www1.eere.energy.gov/wip/wap.html (last updated January 30,
    2012).
    ---------------------------------------------------------------------------
        Over those same 3 years, many States across the country have built
    up the infrastructure to reach far more low-income homes each year than
    before ARRA appropriated $5 billion for WAP.\9\ Under ARRA, States
    received approximately $1.6 billion per year over a 3-year period.
    Prior to that, annual funding for the program was between $224 million
    and $243 million in all but 1 year since fiscal year 2002. States not
    only increased the number of households served several fold, but also
    had to bring on new contractors and make sure new employees were
    properly trained.
    ---------------------------------------------------------------------------
        \9\ The American Reinvestment and Recovery Act (ARRA), Public Law
    111-5, section 2, division A, title IV, 123 Stat. 138.
    ---------------------------------------------------------------------------
        Choosing Massachusetts as one example, the State received
    approximately $5 million annually in the years immediately prior to
    ARRA. Under ARRA, the State will spend out its entire $125 million
    grant from DOE. Spending has increased eight fold on an annual basis.
    While the initial production goal was to weatherize approximately
    17,000 units, the State will actually weatherize 20,000 units. The
    quality of the weatherization work has been closely monitored by the
    local nonprofits that retain the weatherization contractors and by the
    State Department of Housing and Urban Development. In addition,
    auditors from the Massachusetts Office of the Inspector General, from
    the Federal Department of Energy, and from the Massachusetts Recovery
    and Reinvestment Office have all monitored the program more closely
    than in any year prior to ARRA, and found no instances of shoddy
    workmanship or financial fraud or mismanagement.\10\ Massachusetts has
    also helped develop a training pipeline for those interested in working
    within WAP and, more broadly, in the green energy field.\11\
    ---------------------------------------------------------------------------
        \10\ According to the Massachusetts Department of Housing and
    Community Development (DHCD), the State grantee of the Federal WAP
    funds, DHCD has met with the State Office of Inspector General (OIG)
    twice for formal interviews and with DOE WAP monitors four times during
    ARRA. The State OIG has also visited all of the State's WAP
    subgrantees. Despite this close monitoring, no instance of fraud has
    been identified nor have any ``significant findings'' been made.
    Rather, the Massachusetts WAP network has been praised by its DOE
    monitoring team for ``operat[ing] as a strong cohesive unit with good
    internal and external support.'' DHCD has also been cited for taking a
    ``measured, prudent approach to preparing for the ARRA Weatherization
    Program''.
        \11\ The Bureau of Labor Statistics (BLS) recently issued a report,
    ``Green Goods and Services Summary'' noting that in 2010, ``3.1 million
    jobs in the United States were associated with the production of green
    goods and services,'' comprising ``2.4 percent of total employment in
    2010.'' Green jobs (including ``weatherizing and retrofitting projects
    that reduce household energy'') now make up 6.8 percent of construction
    jobs, according to the BLS report, available at: http://www.bls.gov/
    news.release/ggqcew.htm.
    ---------------------------------------------------------------------------
        While no one expects that the Congress will fund WAP in fiscal year
    2013 near the ARRA level of approximately $1.6 billion per year, NCLC
    calls upon the Senate to recommend a funding level that will ensure
    that the funding is adequate to maintain a network of agencies that can
    deliver high-quality weatherization services and achieve substantial
    energy savings in each home served. We believe that funding below $227
    million, the level in fiscal year 2008, would completely fail to meet
    that goal. We urge the Senate to appropriate no less than that amount,
    and strongly recommend an appropriation of $250 million. Even at a $250
    million level, virtually all States will have to substantially
    dismantle the infrastructure that they successfully built up over the
    past 3 years. State agencies across the country will be serving far
    fewer households than in any of the past 3 years, leaving many needy
    and eligible households literally and figuratively in the cold. The
    network of contractors and workers who now possess the skills this
    country needs to help us move towards a cleaner and greener energy
    future will find itself without work.
        The Congress must recognize that below the pre-ARRA funding level,
    funding for WAP can be so low that States will not have the minimum
    amount necessary to adequately oversee and deliver weatherization
    services. There is a threshold below which States will not have the
    resources to provide the financial oversight and training that is
    needed to run a high-quality program, as well as actually providing the
    funding local agencies need to carry out the weatherization work.
    Moreover, as funding levels fall, States will likely reduce not only
    the number of households served, but also the number or level of energy
    efficiency measures delivered to each home, leaving the full
    weatherization work that the house needs incomplete.\12\
    ---------------------------------------------------------------------------
        \12\ This has been true historically: many homes weatherized pre-
    ARRA were only partially weatherized due to lack of funding; most
    States chose to reach more households rather than fully weatherize a
    smaller number of homes. For this reason, the Congress allows homes
    partially weatherized before 1994 to receive additional weatherization
    services. 42 U.S.C. 6865(c)(2). Post-ARRA, it is likely that a large
    percentage of households served by WAP will once again be only
    partially weatherized.
    ---------------------------------------------------------------------------
        This country is still in the grips of a serious economic downturn
    that leaves fully 1 in 12 Americans unemployed.\13\ Moreover, the
    nominal unemployment rate (8.3 percent) excludes the more than 1
    million workers who the Bureau of Labor Statistics counts as having
    given up looking because they are convinced the jobs just are not out
    there,\14\ well more than double the number of discouraged workers in
    2008. According to a Pew Fiscal Analysis Initiatives report, 4 million
    workers (more than the entire population of Oregon) were unemployed for
    1 year or longer, as of December 2011.\15\ Hard-working families who
    have been trying their hardest but are still unable to get work need
    the assistance of the Federal Government to get their energy bills down
    to more affordable levels. This is precisely the wrong moment to cut
    back too far on this much-needed program. Cutting back too deeply on
    WAP will also lead to substantial layoffs among the weatherization
    workforce at a moment when this country needs to build the green
    workforce. In the last quarter of 2011, as reported in January 2012,
    WAP ranked second among 200 Federal ARRA-funded programs in terms of
    job creation.\16\ WAP not only reduces energy bills for low-income
    households, but creates good jobs and helps build local economies.
    ---------------------------------------------------------------------------
        \13\ Bureau of Labor Statistics, ``Unemployment Rate'', available
    at: http://data.bls.gov/cgi-bin/surveymost (accessed March 22, 2012).
        \14\ Bureau of Labor Statistics, ``Not in Labor Force'', available
    at: http://data.bls.gov/cgi-bin/surveymost (accessed March 22, 2012)
        \15\ Pew Economic Policy Group Fiscal Analysis Initiative, ``Five
    Long-Term Unemployment Questions'' (February 1, 2012), question 1.
        \16\ Recovery.Gov, ``Track the Money'', available at: http://
    www.recovery.gov/Pages/
    TextView.aspx?data=jobSummaryProgram&topnumber=200&qtr=2011Q4 (accessed
    March 22, 2012).
    ---------------------------------------------------------------------------
        In summary, NCLC strongly recommends that the Senate approve a
    funding level for WAP of $250 million for fiscal year 2013.
                                     ______

           Prepared Statement of the National Hydropower Association
        The National Hydropower Association (NHA) \1\ appreciates the
    opportunity to submit this statement on the Association's priority
    programs within the Energy and Water Development Appropriations bill.
    The statement focuses on NHA's support of $59 million for the
    Department of Energy's (DOE) Water Power Program and its research and
    development (R&D) fiscal year 2013 initiatives. The Water Power Program
    dedicates its efforts to research, test, and develop breakthrough
    technologies and other sector innovations to increase generation of
    renewable, reliable, and affordable electricity from water resources.
    ---------------------------------------------------------------------------
        \1\ NHA is a nonprofit, national trade association dedicated to
    promoting the Nation's largest renewable electricity resource and
    advancing the interests of the hydropower, pumped storage and new
    ocean, tidal, conduit and in-stream hydrokinetics industries.
    ---------------------------------------------------------------------------
        This statement also provides support for two other areas:
      --additional funding to increase hydropower generation on the Federal
            system (Army Corps of Engineers and Bureau of Reclamation
            facilities); and
      --funding for the Energy Policy Act of 2005 (EPAct 2005) hydropower
            incentives.
      national hydropower association requests $59 million in fiscal year
         2013 funding for the department of energy water power program
        Funds should be directed with continued support of initiatives
    across all hydropower technology sectors. The types of technologies
    covered--conventional hydropower, pumped storage, marine and
    hydrokinetic (MHK), and conduit technologies--unlock clean energy from
    our country's rivers, oceans, tides, and water conveyances.
        In recognition of the tremendous constraints on the Federal budget,
    NHA's proposed fiscal year 2013 level of $59 million represents no
    increase over the congressionally adopted fiscal year 2012 level and is
    a significant reduction from recent NHA requests. The Association also
    supports the fiscal year 2012 funding breakdown of $25 million directed
    to hydropower and $34 million directed to MHK.
          making the case for federal research and development support
        Over the last 30 years, the Department of Energy's R&D budget for
    all energy technologies (renewable, fossil, and nuclear) has declined
    precipitously.\2\ For the Water Power Program, the numbers are even
    more discouraging. Always one of the smallest of the Office of Energy
    Efficiency and Renewable Energy programs, in 2007-2008 the Water Power
    Program was zeroed out. The administration's fiscal year 2013 budget
    request would now cut funding by 66 percent.
    ---------------------------------------------------------------------------
        \2\ 2006 GAO Report: ``Key Challenges Remain for Developing and
    Deploying Advanced Energy Technologies to Meet Future Needs'' (GAO-07-
    106).
    ---------------------------------------------------------------------------
        Federal Government R&D support is needed to promote hydropower
    development nationwide. Conducting business as usual will not provide
    the opportunity to fully realize the untapped potential available
    throughout the country.
        For MHK technologies, the R&D need is easy to demonstrate. The
    United States lags far behind Europe in its investment to harness ocean
    energy potential. While strides are being made, there are few actual
    U.S. MHK projects, and those in existence are at early-stage
    commercialization and deployment.
        However, for conventional hydropower technologies, the R&D case is
    no less strong and the need no less urgent. Some argue hydropower is a
    ``mature'' technology and not a candidate for R&D support particularly
    in a constrained budgetary environment. This is a false choice.
        Though a proven, reliable technology, hydropower owners, and
    operators are always seeking ways to increase generating efficiencies,
    improve water use, enhance environmental performance, and develop
    better operating regimes. And now the industry looks to address new
    issues resulting from the ever-changing electricity market and the
    challenges posed by integration issues and grid reliability concerns.
        Hydropower, like the automobile, is a technology that has
    transformed over the course of a century. No one argues that the
    government should stop investing in auto R&D--improving fuel efficiency
    and economy, safety, incorporating new materials, et cetera. The same
    holds true for continuing advancements in the hydropower sector. Since
    the re-establishment of the Water Power Program in 2008, the Department
    of Energy has begun several initiatives across the sector. These
    include:
      --Assessing resource potential (MHK, nonpowered dams, conduits);
      --Reducing the cost of energy;
      --Advancing technology readiness (new turbine designs for
            conventional, MHK and conduit applications, as well as other
            equipment and operational improvements);
      --Ensuring environmental responsibility (technology advancement to
            analyze and mitigate potential impacts);
      --Quantifying hydropower's value to the grid (determining how to
            increase the use of wind and solar through greater grid
            flexibility and stability utilizing hydropower for
            integration); and
      --Advancing hydropower upgrades (analyze, assess and maximize
            generation at existing facilities).
        It is these types of initiatives and strategies that will propel
    the hydropower and MHK industries forward, enhancing their contribution
    to the Nation's electricity portfolio.
         department of energy water power program goal: 15 percent of
                        electricity from water resources
        NHA commends and supports the DOE Water Power Program's new vision
    for water power technologies to provide 15 percent of the Nation's
    energy by 2030.\3\ Like the goal established to support increased wind
    generation, this is a fitting goal and one that recognizes hydropower's
    role in achieving our country's push to substantially increase clean-
    energy generation over the next 20 to 30 years.
    ---------------------------------------------------------------------------
        \3\ DOE Wind and Water Power program brochure: ``Water Power for a
    Clean Energy Future'' (p. 2) http://www1.eere.energy.gov/water/pdfs/
    wp_accomplishments_brochure.pdf.
    ---------------------------------------------------------------------------
        Ultimately, for clean-energy policies to succeed, support for
    increasing generation from all water power resources, conventional,
    pumped storage, and MHK, is critical.
        Not only does increasing hydropower generation provide more clean
    energy megawatts to the grid, but it also increases the amount of grid
    reliability, stability, and integrations services that hydropower
    provides in order to enhance the penetration of variable energy
    resources.
        This is yet another area where Europe leads the United States.
    Experience on the continent has clearly shown that increasing variable
    energy generation requires access to energy storage. And that demand in
    Europe is being met with storage from both conventional hydropower and
    pumped storage projects.
        NHA believes the hydropower industry is primed for growth to
    provide these services; and this leads to an important R&D discussion.
    While hydropower and pumped storage projects can provide regional and
    grid-scale energy storage and other ancillary services, doing so will
    require projects to operate in new ways and modes, and in some cases,
    utilize new technologies.
        As such, several R&D questions (ones that the DOE is positioned to
    help answer) include:
      --What is the impact of wear and tear on existing technologies due to
            new operational regimes to provide the needed ramping rates and
            other integration services?
      --Does the United States have the technology in place to meet this
            challenge?
      --Is there new technology better suited for this purpose? If so,
            where? If not, what innovations are needed in components,
            equipment, facilities to improve performance?
        As more is asked of the hydropower system to provide the ancillary
    services needed to meet clean-energy goals, more questions and R&D
    needs are sure to come into focus. The DOE Water Power Program will
    fulfill a crucial role in collaborating with the industry to make this
    transformation a reality.
                 other specific research and development needs
        Over the last several years, NHA, the Electric Power Research
    Institute (EPRI), and individual industry members have provided many
    recommendations for needed data, analyses, research initiatives, and
    other activities that would help to realize the full potential of the
    water power sector.
        While the following section briefly touches on some of those
    recommendations, the larger point is that a robust DOE Water Power R&D
    program is needed. With an industry consisting of facilities owned by:
    Federal agencies; investor-owned utilities; municipalities and other
    public power entities; independent power producers; along with new
    technology developers; the DOE plays an important role in gathering
    national baseline industry data and serving as a clearinghouse for this
    information.
        Past R&D recommendations included, but are not limited to:
      --Advanced materials testing/science for turbines, generators, and
            other components;
      --Meteorological forecasting and optimal dispatch of energy/water
            systems;
      --New turbine designs (including distributed generation applications)
            and operational regimes;
      --Enhanced water quality mitigation technology; fish passage
            bioengineering and mitigation;
      --Study on potential effects of climate change on operations; and
      --Updated resource assessments.
       support for increased hydropower development at federal facilities
        NHA also supports funding efforts within the Army Corps of
    Engineers Civil Works Programs as well as at the Bureau of Reclamation
    to operate, maintain, and upgrade their existing hydropower projects
    and build on their existing non-powered infrastructure.
        NHA specifically supports the work of the Corps on its Hydropower
    Modernization Initiative (HMI) to develop a long-term capital
    investment strategy. NHA also hopes that both Federal agencies will
    continue to dedicate resources and staff time to standardize and
    streamline their permitting responsibilities. Projects that can be
    developed on Federal facilities are often too-longed delayed to realize
    the significant energy potential due to the inconsistent support of
    hydropower development and approaches to working with industry members
    by agency staff at the local level.
    support for the federal hydropower incentives of the energy policy act
                                    of 2005
        In EPAct 2005, the Congress established incentive payments--subject
    to congressional appropriations--for the development of new hydropower
    at existing dams or conduits as well as to increase efficiency of
    existing hydropower facilities. To date these provisions have not
    received funding.
        NHA supports the provisions, and notes that at the time of passage,
    new projects in the hydropower industry were rare. Since EPAct 2005,
    the industry has seen a dramatic increase in interest and support for
    new development. In 2011 alone, the Federal Energy Regulatory
    Commission (FERC) issued 135 MW of project approvals and saw more than
    1,600 MW of projects file for approval.\4\ These incentives could help
    bring projects like these online in the coming years.
    ---------------------------------------------------------------------------
        \4\ http://hydro.org/wp-content/uploads/2012/01/OEP-Energy-
    Infrastructure-Update-Dec-2011.pdf.
    ---------------------------------------------------------------------------
      hydropower's role in america's energy portfolio and growth potential
        Hydropower is America's leading source of domestic renewable
    electricity, providing clean, affordable generation in every region of
    the country. This reliable and underutilized resource accounted for
    about 8 percent of total electricity generation and two-thirds of
    renewable electricity generation in 2011.
        Hydropower generation avoids approximately 200 million metric tons
    of carbon emissions each year. In fact, regions that rely on hydropower
    as a primary energy source reap the benefits of significantly cleaner
    air as well as the lowest electricity prices.
        While a proven renewable energy resource, hydropower is also an
    energy resource for our future with tremendous growth potential. One of
    the many myths about hydropower is that there are no new opportunities
    for growth in our industry. In fact, the opposite is the case. In
    addition to the numbers cited above, there are proposed projects
    totaling more than 82,000 MW before FERC today across all technologies
    in the waterpower sector.\5\
    ---------------------------------------------------------------------------
        \5\ http://www.ferc.gov/industries/hydropower/gen-info/
    licensing.asp.
    ---------------------------------------------------------------------------
                                   conclusion
        Unlocking the vast hydropower potential of our rivers, oceans,
    tides, and conduits requires Federal R&D initiatives that make
    innovative ideas a reality. Continued investment in the DOE Water Power
    Program will ensure that innovative new technologies and operational
    advancements come to market, increasing America's clean-energy
    portfolio and providing the economic benefits and jobs the country
    needs. With the potential to develop new projects on hundreds of
    potential sites, hundreds of thousands of jobs will be created through
    the manufacturing and installation of these projects.
        NHA appreciates and strongly supports the work of the Water Power
    Program and opposes the proposed 66 percent reduction in funding in the
    fiscal year 2013 budget request. NHA calls upon the Congress to
    champion R&D investment in hydropower--the Nation's most widely used
    renewable energy resource that, if properly supported, can provide the
    foundation of America's clean-energy future.
                                     ______

    Prepared Statement of National Insulation Association and International
          Association of Heat and Frost Insulators and Allied Workers
     federal funding for mechanical insulation will create immediate green
         energy jobs while saving energy and protecting the environment
        Chairwoman Feinstein, Ranking Member Alexander, and members of the
    Subcommittee on Energy and Water Development: on behalf of the National
    Insulation Association (NIA) and the International Association of Heat
    and Frost Insulators and Allied Workers (International Union), we are
    writing in support of a programmatic increase of $500,000 in fiscal
    year 2013 for the Department of Energy's (DOE) Advanced Manufacturing
    Program specifically to continue and expand their a national mechanical
    insulation education and awareness program.
        NIA represents 95 percent of the products utilized in the
    mechanical insulation industry, with members across the country at 800
    corporate locations, and the International Union represents more than
    25,000 workers and families employed in the mechanical insulation
    sector across the country. Together, our members, of which the vast
    majority are small businesses, have more than a century-long track
    record of providing large- and small-scale, long-term energy
    efficiency, emissions reductions, cost savings, and safety benefits at
    manufacturing facilities, power plants, refineries, hospitals,
    universities, and government buildings across the country.
        We have joined together to advocate for a national comprehensive
    advocacy program for increased use, maintenance, and retrofits of
    mechanical insulation in the commercial and industrial sectors because
    of its potential to create tens of thousands of jobs now, reduce carbon
    emissions, increase energy savings, and provide a safer working
    environment.
        Buildings are responsible for 40 percent of U.S. energy demand and
    40 percent of all greenhouse gas emissions, making efficiency gains in
    this area crucial if we are to markedly reduce America's energy
    consumption and effectively combat climate change. The industrial
    sector is similar in energy efficiency opportunities. At the
    residential level, insulation is well publicized for its efficiency
    benefits. However, the same cannot be said in the commercial and
    industrial sectors, which together consume 2\1/2\ times more energy
    than homes, according to the Energy Information Administration (EIA).
    Commercial and industrial insulation--collectively known as mechanical
    insulation--has the potential to slash the energy demand for the
    building and industrial sector.
        The Congress has already signaled its support for a mechanical
    education and awareness program through both the appropriations and
    authorization process. The Congress directed $500,000 be allocated in
    DOE's budget for a mechanical insulation education and awareness
    campaign in the fiscal year 2010 Energy and Water Development
    Appropriations bill (Public Law 111-85). This funding was a critical
    start, and we thank members of the Appropriations Committee for
    recognizing the value of this program, but more is needed to carry out
    a successful campaign. Further evidence of the Congress's support for
    such a program is the inclusion of language to authorize a 5-year, $3.5
    million a year national industrial energy efficiency education and
    training initiative focused on mechanical insulation in H.R. 2454, the
    American Clean Energy and Security Act of 2009 (section 275, page 521).
        By increasing awareness and use of this energy-saving technology,
    the Congress will both create jobs now and reduce carbon emissions.
    Creating jobs, particularly green jobs, is a top priority for the
    Congress and the administration. Using government data, NIA
    conservatively estimates that maintenance of insulation at
    manufacturing facilities and going beyond minimum levels in new
    construction can generate $4.8 billion in energy savings per year,
    reduce 43 million metric tons of carbon dioxide and other greenhouse
    gas emissions, and create 89,000 jobs annually.
        Best of all, these jobs don't require additional research and
    development. Mechanical insulation opportunities can be easily
    identified, with potential energy savings and emissions reduction
    determined with proven DOE-utilized software technology, and in many
    applications implemented in weeks, making projects truly shovel-ready.
        For facility owners and operators, the savings are swift and
    sustainable; the return on investment from mechanical insulation is
    typically less than 2 years (and sometimes as little as 6 months).
    Mechanical insulation also improves infrastructure in the public,
    educational, and healthcare sectors, among others.
        Fiscal year 2013 funding for mechanical insulation education
    programs is insufficient to make an economic impact in the industrial
    and commercial sector through energy savings, emissions reduction, and
    job creation. Increased funding from the Congress in fiscal year 2013
    would enable Federal agencies and industry partners to gather more
    data, work with engineering schools, and reach out to facility managers
    and owners, engineering and design professionals, and others to educate
    them about the benefits of increasing their focus on the benefits of
    mechanical insulation technology. Congressional funding would also
    ensure the promotion of the most energy-efficient uses of mechanical
    insulation in new construction, increased education about the energy
    savings that can be realized through proper maintenance and a renewed
    focus on retrofitting mechanical insulation in older buildings and
    manufacturing facilities that together will generate substantial carbon
    emissions reductions and sustainable jobs.
        NIA and the International Union have cumulatively contributed $3
    million in developing and beginning the implementation of the campaign
    and are full partners with the Energy Department in carrying out
    meaningful elements to prove and encourage the greater use of
    mechanical insulation made possible by $500,000 in fiscal year 2011
    funding appropriated by this subcommittee and enacted into law. As
    such, we have outlined proposed program elements to continue our
    comprehensive, persuasive awareness campaign to engage and motivate
    industrial and commercial decisionmakers to take action.
        Elements of the program would include:
    Education and Awareness
    Mechanical Insulation Basics and Energy Assessment Process:
      --DOE Industrial Assessment Centers.
      --Engineering, HVAC, and Mechanical Design Schools.
      --Inspection and Code Officials.
    DOE and Other Tool Utilization (Facility Management and Design
    Professionals):
      --Simple Calculators.
      --E-Learning Modules.
      --3E Plus.
    Tool Development
    Mechanical Insulation and Energy Modeling Programs.
    Building Simulation Programs--The Role of Mechanical Insulation.
    Mechanical Insulation--HVAC Energy Calculator.
    App development of simple calculators.
    Data Development
    Energy, Environment and Cost Reduction Impact Analysis of Mechanical
    Insulation:
      --Federal agency facilities.
      --Armed force facilities.
      --Manufacturing sectors.
      --Healthcare facilities (hospitals and medical facilities).
      --Education (schools and universities--colleges).
      --Underground--District heating applications.
    Energy and water conservation i.e., Energy--Water nexus.
    Research
    Materials--Systems:
      --New technologies.
      --Energy impact comparison on an equivalent basis (including aging)
            Inclusive of All Mechanical Insulation Type Applications.
      --Lifecycle analysis by product group.
      --Impact of duct liners and exterior duct wrap on air leakage--Energy
            efficiency.
        NIA, its members, and the International Union are committed to
    working with the Congress, DOE, other Federal agencies, and key
    stakeholder groups on these and other initiatives that will lead to
    greater energy efficiency nationwide. We have formed alliances with
    engineering and other industry trade organizations and have offered to
    work with DOE to bring together a coalition to help develop, implement,
    and provide educational awareness programs established and funded by
    the Congress.
        Thank you for the opportunity to submit testimony in support of a
    program that is critical to job creation, economic growth, energy
    savings, and emissions reductions.
                                     ______

     Prepared Statement of the National Research Center for Coal and Energy
        Dear Chairwoman Feinstein and Ranking Member Alexander: Thank you
    for the opportunity to submit our testimony in support of the programs
    of the Office of Fossil Energy, Department of Energy (DOE) for fiscal
    year 2013.
                             introductory comments
        The Office of Fossil Energy programs address two of our Nation's
    key energy needs:
      --Technologies for meeting our current demands for electricity; and
      --Ensuring our supplies of petroleum and coal-derived fuels for our
            transportation, industrial, and residential sectors.
        Coal technologies provide more than 40 percent of our electricity
    generation and are prominent in industrial applications for generating
    process heat. The control of criteria pollutants and technologies for
    the management of carbon emissions are important coal programs for
    protecting our environment, a challenge that becomes increasing complex
    as our Nation has legislated tighter limits on our energy-generating
    processes. Electricity generation based on natural gas fuels, currently
    providing 26 percent of our electricity generation, relies on
    components such as gas turbines and fuel cells and on emissions control
    technologies that were developed under the Fossil Energy program.
        However, despite the prominence of fossil fuels in our national
    energy mix for the present and for the foreseeable future, funding for
    Fossil Energy programs has been reduced dramatically over the past
    several years. Based on the fiscal year 2013 recommendations of the
    administration, overall funding for civilian energy programs would
    increase by 6 percent compared to fiscal year 2011 enacted funding.
    However, Fossil Energy, which impacts the vast majority of our energy
    extraction and utilization activities, would suffer a program reduction
    of 31 percent. Given our national goal of being more efficient in using
    our energy resources and being less dependent on imported energy, we
    recommend that Fossil Energy should be funded at $634 million for
    fiscal year 2013. Specific recommendations are provided in the Funding
    Recommendations section.
                benefits of investment in fossil energy research
        Our Nation has benefitted from investments in fossil energy
    research. In a study conducted by the National Research Council (NRC)
    covering the period from 2000-2020, the NRC concluded that investments
    in coal research, estimated to be around $9 billion in 2010 constant
    dollars, would return around $14 billion in Federal tax revenues, a
    ratio of 1.6:1. Related, but incomplete, studies for natural gas show
    that our cumulative investment of $352 million from 1978-1999 in coal
    bed methane, tight gas, and shale gas research have returned cumulative
    benefits of $13.13 billion by 2010, a ratio of 37:1. We recommend that
    the Congress conduct a more thorough study for natural gas as was done
    by the NRC for clean coal technology programs.
        In addition to the financial benefits to the U.S. Treasury, our
    economy benefits from reduced costs for energy. Programmatic funding
    supports jobs distributed over every State in our Nation. Research done
    by our university sector provides workforce training for our current
    and future fossil energy technology needs.
                            funding recommendations
    Core Coal Research Programs
        The core coal research program consists of a suite of projects in
    carbon management, the development of advanced energy systems, and
    cross-cutting research that provides new ideas for both making
    meaningful evolutionary improvements to present technologies and for
    developing new, revolutionary technologies that can be game-changers in
    our energy portfolio. These programs cover the environmental, economic,
    and efficiency aspects of energy.
        We recommend that funding for the core coal research program be
    maintained at or above $404 million, a level of funding that has been
    supported in the past (fiscal year 2010) and is both achievable and
    necessary for an effective fossil energy research program. Subprogram
    elements would be distributed as follows:
          Carbon Capture ($85 Million).--Most of the increase ($16 million)
            should be directed to existing plants (postcombustion capture)
            since existing plants will contribute the major portion of
            electricity generated from coal-based units for the next 20
            years. Funds should also be increased for developing advanced
            (revolutionary) technologies to reduce the cost of capture and
            for large pilot scale testing to validate the effectiveness of
            proposed capture technologies.
          Carbon Storage ($114 Million).--Most of the increase in this
            subprogram should be directed to carbon reuse technologies to
            use captured CO2 from power plants for enhanced oil
            recovery (EOR), a cost-effective way of storing CO2
            in depleted oil reservoirs while simultaneously increasing our
            production of petroleum to reduce our imports of foreign oil.
          Advanced Energy Systems ($145 Million).--Funding increases should
            be directed toward advanced combustion systems (+$25 million),
            advanced gasification systems (+$10 million), hydrogen turbines
            (+$19 million), coal and biomass to fuels and chemicals (+$10
            million), and fuel cells (+$25 million).
          Cross-Cutting Research ($60 Million).--Increases are recommended
            for plant optimization (+$16 million), computational modeling
            (+$5 million), and technical and economic analyses of new
            plants (+$7 million). Particular emphasis is recommended for
            polygeneration applications and advanced design plants.
    Natural Gas, Oil, and Unconventional Fossil Energy Technologies
        We recommend an increase of $23 million for the natural gas program
    and $10 million for the oil/unconventional fossil energy technologies
    program. Funding would be allocated as follows:
          Natural Gas Technologies ($25 Million).--Focal areas are shale
            gas, including resource characterization, drilling technology,
            and environmental protection.
          Gas Hydrates ($15 Million).--Continue research on the development
            of this major resource that exceeds our other reserves of
            natural gas.
          Unconventional Fossil Energy Technologies ($10 Million).--Focal
            areas would include oil shale resources and enhanced
            environmental safety, especially for off-shore operations.
        In addition, we recommend retention of the Ultra Deepwater and
    Unconventional Technologies program funded under section 999 of EPAct
    2005, which the administration has recommended for rescission. This
    program supports competitive, cost-shared research jointly conducted by
    academic, nonprofit, State government (geological surveys) and industry
    which serve the needs of small oil and natural gas producers.
    Other Programs
        Program direction funds support salaries of research and program
    staff in the headquarters offices and the field offices of the Office
    of Fossil Energy. We recommend that all program direction funds be
    allocated under the Program Direction sub-element. The level of funding
    for fiscal year 2013 should be in excess of $155 million.
        Administration recommendations for Plant and Capital Equipment
    should be increased to $17 million and Environmental Restoration should
    be funded at $8 million.
                                closing comments
        The funding requested by the administration for fiscal year 2013 is
    only 59 percent of the value of the equivalent program in fiscal year
    2010. This low level of funding is insufficient to support the fossil
    energy R&D program the Nation needs to maintain our ability to generate
    inexpensive electricity or to enhance our ability to produce
    transportation fuels from our own resources. America's ability to sell
    its energy technology abroad is also being severely restricted because
    of insufficient funding to develop revolutionary new research ideas or
    to successfully demonstrate viable technologies to reduce the financial
    risk concerns of Wall Street and other financiers. The recommendations
    for allocating $634 million in the program elements illustrated above
    would return funding to 95 percent of fiscal year 2010 levels. We
    strongly recommend restoration of a robust program of fossil energy
    research.
        We further recommend that the Congress also establish a mechanism
    to allocate funding on annual basis for the support of demonstration
    projects necessary to prove out promising fossil energy technologies
    for commercial development. In the past, $100 million has been
    allocated each year until a sufficiently large pool of funds was
    accumulated to offer a request for proposals for demonstration
    projects. We request congressional support for establishing a clean
    coal power initiative account for demonstration programs.
        Thank you for your support for fossil energy research and
    development to maintain America's energy, economic, and environmental
    strengths.
                                     ______

               Prepared Statement of the Nuclear Energy Institute
        The Nuclear Energy Institute \1\ (NEI) supports the
    administration's request for fiscal year 2013 funding for the Nuclear
    Regulatory Commission (NRC) ($1.053 billion), the Department of Energy
    (DOE) National Nuclear Security Administration (NNSA) Fissile Materials
    Disposition program ($921 million), and the DOE Office of Environmental
    Management ($5.7 billion). NEI recommends $117 million more for the DOE
    Office of Nuclear Energy ($792 million), and an increase of $1 million
    to restore the NNSA Export Control Review and Compliance program to
    $12.5 million.
    ---------------------------------------------------------------------------
        \1\ The Nuclear Energy Institute is the industry's policy
    organization, whose broad mission is to foster the beneficial uses of
    nuclear technology in its many commercial forms. Its membership, more
    than 350 corporate members in 17 countries, includes every U.S. utility
    that operates a nuclear power plant as well as international utilities,
    plant designers, architect and engineering firms, uranium mining and
    milling companies, nuclear service providers, universities,
    manufacturers of radiopharmaceuticals, universities, labor unions, and
    law firms.
    ---------------------------------------------------------------------------
    adopting the recommendations of the blue ribbon commission on america's
                                 nuclear future
        NEI supports the general policy recommendations of the Blue Ribbon
    Commission (BRC) on managing used nuclear fuel and high-level
    radioactive waste. A DOE task force is scheduled to provide a plan on
    implementing the recommendations to the Congress by the end of July,
    and industry believes that report should provide a basis for the fiscal
    year 2013 budget. The following programs deserve support and represent
    the highest priorities for the nuclear energy industry:
      --Fuel Cycle Research and Development--$191 million (an increase of
            $16 million);
        --Used Nuclear Fuel Disposition (the BRC recommendations)--$60
                million; and
        --Advanced Fuel Research and Development--$60 million (+$20
                million).
        NEI also supports the request of $10 million derived from the
    Nuclear Waste Fund to use on used fuel storage and disposal programs at
    DOE. NEI urges the subcommittee to support the following initiatives
    using $10 million from the Nuclear Waste Fund in fiscal year 2013. DOE
    should:
      --Work closely with utilities, and based on work performed by the
            Department in fiscal year 2012, develop timelines,
            specifications and costs for the development, licensing,
            construction, and operation of a consolidated storage facility
            for spent nuclear fuel and high-level waste;
      --Work closely with affected States, Indian tribes, and utilities to
            develop detailed transportation plans for moving spent nuclear
            fuel from the sites of nuclear power plants that have ceased
            operation to a consolidated storage facility;
      --Work closely with affected States, Indian tribes, and utilities, to
            develop and implement a plan for training first responders in
            preparation for transportation under section 180c of the
            Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101); and
      --Identify communities potentially interested in hosting a
            consolidated storage facility; and
      --Forward to the appropriate committees of the Senate and House of
            Representatives a budget and authorizing legislation for
            recommendations from DOE.
        Within the DOE Fuel Cycle R&D program, $5 million should be used in
    fiscal year 2013 to collect data on the aging characteristics of used
    nuclear fuel in dry cask storage systems, to support the extended use
    of these systems, and ensure their transportability after periods of
    extended storage. The Advanced Fuel R&D program includes the Accident
    Tolerant Fuel Initiative which is important to long-term light water
    reactor fuel development and should receive $60 million in fiscal year
    2013.
        The nuclear industry remains concerned about the termination of the
    Yucca Mountain project. The project should proceed and be funded so the
    technical review of the license application can be completed. Numerous
    State and local governments and the National Association of Regulatory
    Utility Commissioners are actively opposing DOE's withdrawal of the
    application for the Yucca Mountain repository at the NRC and in the
    courts. We urge the subcommittee to request a specific plan, including
    the resources required for completing the Yucca Mountain licensing
    process, assuming the courts rule the application cannot be withdrawn.
     uranium enrichment decontamination and decommissioning fund tax undue
                        burden on electricity consumers
        The administration's fiscal year 2013 budget proposes to reinstate
    the uranium enrichment decontamination and decommissioning fund, with a
    tax on electric consumers of $200 million a year until 2022. Electric
    utilities have already paid twice for decontamination and
    decommissioning at uranium enrichment plants that were originally
    operated by DOE--first as part of the price for uranium enrichment
    services from the facilities and again under the Energy Policy Act of
    1992. Under the 1992 law, the tax on utilities was to end after 15
    years or the collection of $2.25 billion, adjusted for inflation. The
    utilities paid this amount in full. Because the industry has fully met
    its obligation for the cleanup of the government facilities twice
    already, NEI strongly opposes the administration's proposal. The
    industry appreciates the support of the subcommittee in rejecting this
    proposal in prior years and encourages you to continue to oppose this
    proposal.
                ensuring a strong nuclear regulatory commission
        An independent, credible regulatory agency is required for public
    confidence in commercial nuclear energy facilities. During the next
    couple of years, the NRC must continue its inspection and licensing
    activities at America's nuclear energy facilities while implementing
    safety recommendations of the agency's task force based on lessons
    learned from the Fukushima Daiichi accident. Effectiveness of the five-
    member commission is essential to ensure NRC staff and licensees alike
    have clear policy guidance. The commission functions most effectively
    when it has a full complement of five commissioners, and the nuclear
    energy industry believes the Congress's highest priority should be
    ensuring that vacancies on the commission do not occur.
        The industry supports fiscal year 2013 funding at the NRC's
    requested level of $1.053 billion, an increase of $15 million above its
    fiscal year 2012 funding levels. The industry remains concerned,
    however, at the steep escalation in agency budgets and staffing levels
    over the last decade, from 2,763 staff in fiscal year 2001 to 3,927
    staff proposed in fiscal year 2013, and from $487 million in fiscal
    year 2001 to more than $1 billion proposed in fiscal year 2013. The
    industry is aware that the agency has $32 million in unobligated
    balances from prior years' appropriations. The NRC chairman has
    suggested that the additional Fukushima-related work would amount to
    nearly $30 million in new spending. If the agency does not plan to
    allocate these funds in this manner, the industry believes that the
    unobligated balances should be used to reduce licensee fees in future
    years.
        The industry applauds the oversight of the NRC by the Congress to
    ensure the agency effectively prioritizes its activities and achieves
    closure on open issues in a timely and appropriate manner. The agency
    should continue to achieve greater transparency in its budgeting to
    reveal planned staffing and resource needs by individual divisions.
    This is particularly true concerning the defense and national interest
    programs funded by taxpayers in appropriated funds. In any 1 year, the
    NRC should ensure that these programs are funded at the entire 10
    percent of available funds. A firewall should exist between fee-based
    sources of funds so the user fee is not used as an additional source of
    funding for appropriated programs. This would demonstrate to the
    Congress, the public and the industry (which pays 90 percent of the
    NRC's budget) that the budget fairly reflects industry-specific
    activities.
        Once again, the administration has proposed terminating the
    Integrated University Program, which supports the Nation's universities
    and community colleges. This program supports important nuclear science
    and engineering research and workforce training. Given that more than
    one-half of America's green jobs in the electric sector are at nuclear
    energy facilities, it is vital that the Congress provide financial
    support for students and junior faculty. The NRC program is managed
    jointly with DOE's Office of Nuclear Energy and DOE's National Nuclear
    Security Administration and has been authorized by the Congress. NEI
    supports $15 million for NRC to continue its participation in the
    program in fiscal year 2013 and recommends that NRC fund the program at
    that level.
             development of advanced reactor and fuel technologies
        The DOE Office of Nuclear Energy fiscal year 2013 budget is 12
    percent lower than fiscal year 2012 while other DOE non-nuclear
    programs are funded at much higher levels. Funding was reduced by 17
    percent in R&D programs that are vital to the Nation's interest in
    nuclear energy, science and technology. The cuts in DOE programs hinder
    the Nation's ability to manage used nuclear fuel and promote key
    research in innovative reactor concepts. The following programs deserve
    support and represent the highest priorities for the nuclear energy
    industry:
      --Small Modular Reactor Licensing Technical Support--$95 million
            (+$30 million);
      --Light Water Reactor Sustainability Program--$25 million (+$4
            million);
      --Energy Innovation Hub for Modeling and Simulation--$25 million;
      --Integrated University Program--$5 million (+$5 million); and
      --Next Generation Nuclear Plant--$41.5 million (+$20 million).
        The Secretary of Energy strongly supports the small modular reactor
    licensing program and has proposed a 5-year, $452-million program.
    Unfortunately, the DOE fiscal year 2013 request of $65 million falls
    well short of that obligation, and the industry requests that funding
    be increased to $95 million. DOE made a similar 5-year $250 million
    commitment for the Modeling and Simulation Hub and it is vitally
    important that this program receive the funding necessary to succeed.
    In addition, the Light Water Reactor Sustainability program that is
    cost-shared with industry should receive $4 million more than the DOE
    fiscal year 2013 request to implement research to extend the licenses
    of the Nation's operating reactors.
    industry supports the department of energy innovative technologies loan
                               guarantee program
        The nuclear industry appreciates the support provided by the
    subcommittee for the DOE loan guarantee program for nuclear energy
    plants and uranium fuel cycle facilities. NEI urges the subcommittee to
    maintain the appropriated funds for projects under development for
    fiscal year 2013.
        There is no cost to taxpayers for nuclear energy project loan
    guarantees, but there is significant benefit to consumers. The use of
    loan guarantees will lower the overall cost of nuclear energy projects,
    ultimately reducing the cost of electricity to consumers. Companies
    granted loan guarantees by DOE for nuclear energy projects must pay a
    premium for use of the program, plus cover all administrative costs.
    However, the clean energy loan guarantee program, although essential,
    is not yet a workable financing platform. NEI urges the subcommittee to
    exercise its oversight responsibilities on implementation by the
    executive branch, particularly on the issues of the credit subsidy cost
    that project sponsors are expected to pay.
                  environmental cleanup and national security
        DOE's budget for the Environmental Management Office should be kept
    at level funding to ensure DOE meets its fiscal year 2013 enforceable
    environmental compliance milestones. NEI remains concerned about NNSA's
    part 810 export control rulemaking. The industry has identified several
    issues that will impact the implementation of the program in fiscal
    year 2013. The NEI urges the subcommittee to consider the impact to the
    U.S. industry as a result of the inadequate funding of $11.4 million
    proposed for fiscal year 2013 for review of export licenses, about $1
    million less than last year. NEI supports the administration's request
    of $921 million for the Fissile Materials Disposition program.
                                     ______

        Prepared Statement of the Nuclear Engineering Department Heads
                                  Organization
        Chairwoman Feinstein, Ranking Member Alexander, and members of the
    subcommittee: on behalf of the faculty and students comprising the
    nuclear education system in the United States we wish to provide
    testimony on fiscal year 2013 appropriations for the Department of
    Energy (DOE) and other relevant agencies under the subcommittee's
    jurisdiction.
        As you begin to develop fiscal year 2013 appropriations
    legislation, we strongly urge you to reject the administration's
    request to enact a 10-percent reduction in the research and development
    (R&D) budget of DOE's Office of Nuclear Energy, and maintain funding
    for the Integrated University Program at fiscal year 2012 appropriated
    levels.
        The Nuclear Engineering Department Heads Organization (NEDHO) is an
    alliance of heads and chairs of academic programs emphasizing nuclear
    and radiological science, engineering, and technology across the United
    States. NEDHO provides a forum for discussion, coordination, and
    collaboration on issues such as academic accreditation, funding for
    scholarships, fellowships, and research, and funding for training and
    research reactors. NEDHO collaborates with the American Nuclear
    Society, the Nuclear Energy Institute, the Test, Research, and Training
    Reactors (TRTR) organization, ABET, and other similar societies and
    organizations that have a stake in nuclear education. We also have
    strong interactions with industry and government both of which hire our
    students and utilize our research results. At present NEDHO's
    membership includes 43 U.S. academic institutions in 29 States, plus 2
    military academies.
        NEDHO seeks to inform national decisionmakers on nuclear policy,
    science and technology, and related education through Hill visits and
    by providing testimony at various subcommittee hearings. NEDHO's
    ultimate goal is to preserve our Nation's historic leadership in the
    nuclear field, and to sharpen our competitive edge in the future by
    maintaining a tradition of excellence in nuclear academia that is the
    envy of the world. For decades we have sustained the nuclear enterprise
    with a highly qualified human resource that led the development of
    nuclear power as a viable, safe, and environmentally sound source of
    energy. Our graduates have also contributed to advances in nuclear
    medicine and a multitude of industrial applications, for example oil-
    well logging, and have engaged in international activities in the
    nuclear security and safeguards arena.
        In recent years interest in the nuclear science and engineering
    education enterprise has been on the rise in the United States driven
    by three primary factors:
      --U.S. economic and energy security;
      --global competitiveness; and
      --national nuclear security.
        First, with regards to U.S. economic and energy security we note
    that nuclear energy today accounts for 20 percent of the U.S. total
    electricity supply and more than 70 percent of non-carbon-emitting
    electricity sources. The U.S. nuclear power industry, under a rigorous
    yet robust regulatory regime administered by the U.S. Nuclear
    Regulatory Commission (NRC), has established itself as a safe,
    environmentally responsible, economic, and highly reliable (about 90
    percent capacity factors) provider of electric energy. Available
    forecasts for uranium ore indicate ample, reliable, and inexpensive
    supplies for the foreseeable future. The U.S. NRC's recent approval of
    two new AP 1000 reactors at the Vogtle site in Georgia, and their
    approval last week of two similar reactors in South Carolina, plus
    rising interest in Small Modular Reactors (SMR), ushers a new nuclear
    era in this country after a 30-year hiatus. The improving public
    perception of the safety of America's nuclear fleet will be sustained
    by the improved features in new designs and by incorporating lessons
    learned from Fukushima. Also the prospect of closing the backend of the
    fuel cycle that has been resuscitated by the Blue Ribbon Commission's
    report will hopefully kick into high gear to resolve this urgent issue
    once and for all.
        Second, on the global scale many developing and underdeveloped
    nations are ambitiously seeking to build up their nuclear power
    capacity, most notably in the two most populated countries in the
    world, China and India, whose economies are undergoing aggressive
    growth. A recent presentation by DOE personnel reported on the
    magnitude of the global market for nuclear power in the foreseeable
    future as follows: there are more than 430 reactors operating in 30
    countries, producing 370 GWe, or about 14 percent of the global
    electricity supply. There are currently 65 reactors under construction
    in 15 countries, with 26 of these in China alone. These operating and
    soon-to-operate reactors comprise a substantial global market for
    equipment (e.g., turbines, generators, instrumentation), fuel, and
    services. DOE also notes 154 power reactors planned in 27 countries for
    the next 8-10 years costing more than $740 billion, and a total of 331
    reactors proposed in 37 countries over the next 15 years at a projected
    cost of $1.6 trillion. Not only are the economic rewards of U.S.
    engagement in this growing global market necessary for providing highly
    paying jobs for Americans involved in the design, analysis, and
    potentially construction of new reactors, it is an essential means of
    spreading high U.S. technical standards in this sensitive industry
    across the globe. A safety culture that transcends national boundaries
    and that is based on a solid scientific foundation and supported by
    decades of excellent American experience is the best guarantee that
    nuclear power will remain an agent for improving the global
    environment.
        Third, the growing number of nuclear-hopeful nations and the
    widening footprint of nuclear power raises concerns about nuclear
    proliferation to historic highs and makes a strong case for developing
    novel and better detectors and methods for verifying that nuclear
    materials are only being employed for peaceful purposes. These concerns
    cannot be addressed solely by controlling the flow of scientific
    knowledge and underlying technologies and requires a revamped structure
    that better integrates the technical and policy aspects of this issue.
    In addition, the continued threat of nuclear terrorism is not likely to
    abate any time soon and demands the continuous and untiring vigilance
    of relevant agencies within the U.S. Government.
        Common to all these factors is the need for a highly educated
    nuclear workforce that is aware of national needs and that is well
    equipped to tackle them. The magnitude of this immense challenge was
    wisely recognized by the U.S. Congress and two administrations since
    2009 when two programs designed to reinvigorate nuclear education in
    the U.S. were inaugurated: The Integrated University Programs (IUP) and
    the DOE Nuclear Energy University Programs (NEUP). The Blue Ribbon
    Commission likewise recognized the importance of U.S. leadership in the
    nuclear area, and highlighted continued innovation in nuclear
    technology and workforce development as one of its eight major
    recommendations.
        A decade ago Federal investment in R&D and nuclear education
    infrastructure was administered by DOE's Office of Nuclear Energy (DOE-
    NE). Support through scholarships, fellowships, equipment grants,
    research reactor upgrades, et cetera was crucial to stemming the
    precipitous decline in the 1990s of nuclear academic programs and
    university research reactors. In 2008, foreseeing an impending nuclear
    human resource crisis fueled by an aging workforce and the rising
    prospect of mass retirements DOE-NE created NEUP that directed
    approximately 20 percent of NE's R&D funding towards universities in
    support of DOE-NE's research mission. And in 2009 the IUP was instated
    by the Congress to instill some degree of stability in the funding
    stream of nuclear education by diversifying sponsorship across three
    Federal agencies: DOE's NE, DOE's National Nuclear Security
    Administration (NNSA), and the US NRC. The three arms of IUP were
    directed to support broad educational objectives via programmatic and
    non-programmatic awards, and to coordinate their support mechanisms in
    order to minimize duplication.
        In the ensuing years these support schemes have succeeded in
    reviving nuclear academia, and expanded interest in nuclear research
    topics into other disciplines, e.g., material science, mechanical
    engineering, radiochemistry, leading to a fertile interdisciplinary
    research environment in support of the Nation's research agenda. All
    awards made via NEUP and IUP are competitive and have seen broad
    participation from across the Nation. To be specific, the NRC invested
    its share of IUP in curriculum development ($5 million), Junior Faculty
    Development, scholarships and fellowships awarded to selected
    universities, and support of community colleges (a total of $10
    million). NNSA now dedicates $5 million in support of the Nuclear
    Science and Security Consortium led by the University of California,
    Berkeley, and awards $10 million in programmatic support of basic
    research projects relevant to nuclear security.
        DOE-NE administers IUP through NEUP in two separate funding
    streams. First, NEUP spends $5 million in direct IUP funding on
    scholarships and fellowships awarded directly to student applicants.
    This program is distinct in its objectives from NRC's scholarship and
    fellowship program in that it is designed to attract top talent to the
    field without regard to the university where they seek their respective
    degree. While this type of recruitment is likely to raise the overall
    quality of students in the nuclear field, it is expected to concentrate
    these students in highly ranked schools creating severe discrepancy
    among the remaining nuclear academic programs. In contrast, NRC's
    program empowers awarded departments to use the funds in recruitment of
    high-quality students that will promote the reputation of the awarded
    department and ensure a diverse educational foundation that improves
    the chances of innovative breakthroughs. In addition, DOE-NE has
    committed up to 20 percent of its R&D funds to support university
    research via competitive awards of varying levels of programmatic
    relevance. Some of these funds have been awarded in support of nuclear
    infrastructure in U.S. universities.
        To appreciate the importance of IUP for the revival of nuclear
    engineering academia in the United States we note that the elements of
    IUP cover the three primary missions of a research intensive
    university:
      --education (undergraduate and graduate);
      --research; and
      --service.
    In the 3 years since its inception IUP has succeeded in reversing
    enrollment decline that all but dominated the 1990s, with enrollments
    continuing to climb even after the Fukushima event, and in revitalizing
    existing academic programs with several universities starting new
    nuclear engineering programs from scratch. Sustaining support of IUP
    sends a clear and loud message to university administrators who need to
    support nuclear programs and to prospective students that their career
    investment in this field is desirable and will be rewarded. In
    contrast, reducing DOE-NE's R&D budget, and eliminating support for IUP
    sends a confusing message to the same administrators and target
    students and steers them away from a field that we believe, and we hope
    you agree, is of prime national interest.
        In closing we hope that your subcommittee will reverse this
    damaging development. Continued funding for NEUP and IUP will protect
    the great progress achieved in nuclear academic programs in support of
    our Nation's ability to compete in the global nuclear marketplace and
    to enhance the safe and secure utilization of nuclear technology for
    the benefit of humanity.
        Thank you.
                                     ______

        Prepared Statement of the Sacramento Municipal Utility District
        Dear Chairwoman Feinstein: On behalf the Sacramento Municipal
    Utility District (SMUD), I want to thank you again for supporting the
    Department of Energy's (DOE) Water Power Program and your staff's
    excellent work in securing $59 million for the program in fiscal year
    2012. I am writing to respectfully request that the Senate
    Appropriations Committee fund the Water Power Program at the same level
    of $59 million for fiscal year 2013. This amount should be directed to
    support hydropower research and development including projects
    classified as ``conventional hydropower''.
        Investments during the past few years in what is labeled
    ``conventional'' hydropower technologies have resulted in the
    development of more efficient and environmentally friendly turbines,
    reduced costs in state-of-the-art small hydropower technology, and
    advances in technologies to integrate intermittent renewable energy
    resources into the electric grid. These advances could be lost if the
    administration's fiscal year 2013 budget request, which proposes
    cutting the Water Power Program's funding level to $20 million, is
    enacted and if no R&D funds are designated for conventional hydropower
    projects.
        Northern California electricity customers have benefitted directly
    from investments made by the Water Power Program. In 2011, SMUD was
    awarded two multiyear grants, including a $4.96 million award to assist
    with initial geotechnical studies for the proposed 400 MW Iowa Hill
    pumped storage project. While pumped storage technology has existed for
    some time, SMUD is researching advanced plant control systems featuring
    variable speed pump generators that have yet to be applied in the
    United States. Use of this new technology would enhance SMUD's ability
    to integrate high levels of intermittent renewable resources such as
    wind and solar power into our electrical system while maintaining
    electric reliability.
        The DOE also awarded SMUD $1.49 million to help implement a new
    low-head modular hydropower unit at the Slab Creek Powerhouse project
    featuring inward flow reaction turbine technology allowing creative use
    of existing tunnels to generate power from minimum releases of the
    existing reservoir.
        Each of these grants was awarded based on their ability to
    contribute to the development of new technologies that produce
    conventional hydropower more efficiently, reduce costs, and increase
    sustainable hydropower generation. Both projects will advance
    innovation in a traditional, carbon-free resource.
        Because SMUD's grants depend on future appropriations, including
    fiscal year 2013 funding, and to ensure continued Federal investment in
    these valuable and innovative initiatives, SMUD believes the current
    level of $59 million in funding for the Water Power program should be
    maintained.
        Thank you for your attention and support on these issues.
                                     ______

         Prepared Statement of the Society for Industrial and Applied
                                  Mathematics
                                    summary
        This written testimony is submitted on behalf of the Society for
    Industrial and Applied Mathematics (SIAM) to ask you to continue your
    support of the Department of Energy (DOE) Office of Science by
    providing $4.99 billion in fiscal year 2013. In particular, we urge you
    to provide significant support for the Applied Mathematics Program
    within the Office of Advanced Scientific Computing Research (ASCR)
    within the Office of Science. We also emphasize the importance of
    support for graduate students, postdoctoral fellows, and early career
    researchers.
                               written testimony
        We are Dr. Lloyd Nicholas Trefethen, President, and Dr. Reinhard
    Laubenbacher, Vice President for Science Policy, of the Society for
    Industrial and Applied Mathematics (SIAM). On behalf of SIAM, we are
    submitting this written testimony for the record to the Subcommittee on
    Energy and Water Development of the Committee on Appropriations of the
    U.S. Senate.
        SIAM has approximately 13,000 members, including applied and
    computational mathematicians, computer scientists, numerical analysts,
    engineers, statisticians, and mathematics educators. They work in
    industrial and service organizations, universities, colleges, and
    government agencies and laboratories all over the world. In addition,
    SIAM has more than 500 institutional members--colleges, universities,
    corporations, and research organizations. SIAM members come from many
    different disciplines, but have a common interest in applying
    mathematics in partnership with computational science towards solving
    real-world problems.
        First, we would like to emphasize how much SIAM appreciates your
    subcommittee's continued leadership on and recognition of the critical
    role of the DOE Office of Science and its support for mathematics,
    science, and engineering in enabling a strong U.S. economy, workforce,
    and society. DOE was one of the first Federal agencies to champion
    computational science as one of the three pillars of science, along
    with theory and experiment, and SIAM deeply appreciates and values DOE
    activities.
        Today, we submit this testimony to ask you to continue your support
    of the DOE Office of Science in fiscal year 2013 and beyond. In
    particular, we request that you provide the Office of Science with
    $4.99 billion, the level requested in the fiscal year 2013 budget
    request. SIAM is aware of the significant fiscal constraints facing the
    administration and the Congress this year, but we note that, in the
    face of economic peril, Federal investments in mathematics, science,
    and engineering remain crucial as they help to maintain U.S. pre-
    eminence in innovation, upon which our economy and fiscal health
    depend.
              the role of mathematics in meeting energy challenges
        The Nation faces critical challenges in energy, including in energy
    efficiency, renewable energy, improved use of fossil fuels and nuclear
    energy, future energy sources, and reduced environmental impacts of
    energy production and use. As DOE and the research community design a
    long-term strategy to tackle these issues, the tools of mathematics and
    computational science (theory, modeling, and simulation) have emerged
    as a central element in designing new materials, predicting the impact
    of new systems and technologies, and better managing existing
    resources. Already, mathematical and computing researchers in
    universities, national laboratories, and industry are providing
    insights that propel advances in such fields as nanotechnology,
    biofuels, genomics, climate modeling, and materials fabrication.
        To tackle many of these challenges, DOE must be able to understand
    complex systems such as the U.S. power grid, the dispersion of nuclear
    radiation after a disaster, and the Earth's climate system. These and
    other complex systems have high levels of uncertainty, lack master
    plans, and are susceptible to breakdowns that could have catastrophic
    consequences. Understanding complex systems helps mitigate these risks
    and facilitate the development of controls and strategies to make
    systems more efficient.
                     department of energy office of science
        Activities within ASCR play a key role in supporting research that
    begins to fulfill the needs described above. Particularly critical
    programs include:
      --the Applied Mathematics program;
      --the Scientific Discovery through Advanced Computing (SciDAC)
            program; and
      --programs to maintain the pipeline of the mathematical workforce.
        SIAM supports the $455.6 million requested for ASCR for fiscal year
    2013. SIAM appreciates that the requested increase for fiscal year 2013
    would be directed to the Mathematical, Computational, and Computer
    Sciences Research activity programs, helping to restore balance between
    research activities and facility investments.
        SIAM supports Office of Science plans to fund research to manage
    ever-growing data volumes in science. The explosion in data available
    to scientists from advances in experimental equipment, simulation
    techniques, and computer power is well known, and applied mathematics
    has an important role to play in developing the methods and tools to
    translate this shower of numbers into new knowledge.
        SIAM also supports funding for research to develop exascale
    computing and notes that investments in algorithm research and software
    development are essential to developing the next generation of high-
    performance computers, realizing the full benefits of these new
    machines, and transferring those capabilities to industry for broad
    economic benefit.
            supporting the pipeline of mathematicians and scientists
        Investing in the education and development of young scientists and
    engineers is a major step that the Federal Government can take to
    ensure the future prosperity and welfare of the United States.
    Currently, the economic situation is negatively affecting the job
    opportunities for young mathematicians--at universities, companies, and
    other research organizations. It is not only the young mathematicians
    who are not being hired who will suffer from these cutbacks. The
    research community at large will suffer from the loss of ideas and
    energy that these graduate students, postdoctoral fellows, and early
    career researchers bring to the field, and the country will suffer from
    the lost innovation.
        Maintaining the pipeline of the mathematical workforce with
    programs that fund research and students is especially important
    because of the foundational and cross-cutting role that mathematics and
    computational science play in sustaining the Nation's economic
    competitiveness and national security, and in making substantial
    advances on societal challenges such as energy. DOE programs support
    the educational and professional development of the researchers at
    universities, companies, and the national laboratories who will tackle
    the research problems needed to change energy usage in this country.
        Within the Office of Advanced Scientific Computing Research, the
    Computational Science Graduate Fellowship program is a highly
    successful and model program that enables students to receive robust
    training in mathematics and also learn to interface with a wide variety
    of other fields. We request that strong support for this program
    continue, as well as ongoing support for postdoctoral fellows at DOE
    national laboratories and universities.
                                   conclusion
        The programs in the Office of Science, particularly those discussed
    above, are important elements of DOE's efforts to fulfill its mission.
    They contribute to the goals of dramatically transforming our current
    capabilities to develop new sources for renewable and low-carbon energy
    supplies and improve energy efficiency to ensure energy independence
    and facilitate DOE's effort to increase U.S. competitiveness by
    training and attracting the best scientific talent into DOE
    headquarters and laboratories, the American research enterprise, and
    the clean-energy economy.
        We would like to conclude by thanking you again for your ongoing
    support of the DOE Office of Science and the actions you have already
    taken to enable DOE and the research and education communities it
    supports, including thousands of SIAM members, to undertake the
    activities that contribute to the health, security, and economic
    strength of the United States. The DOE Office of Science needs
    sustained annual funding to maintain our competitive edge in science
    and technology, and therefore we respectfully ask that you continue
    your support of these critical programs.
        We appreciate the opportunity to provide testimony to the Committee
    on behalf of SIAM and look forward to providing any additional
    information or assistance you may ask of us during the fiscal year 2013
    appropriations process.
                                     ______

     Prepared Statement of the State Teachers' Retirement System, State of
                                   California
                                    summary
        Acting pursuant to congressional mandate, and in order to maximize
    the revenues for the Federal taxpayer from the sale of the Elk Hills
    Naval Petroleum Reserve to private industry by removing the cloud of
    the State of California's claims, the Federal Government reached a
    settlement with the State in advance of the sale.
        The State waived its rights to the Reserve in exchange for fair
    compensation in installments stretched out over an extended period of
    time.
        In its fiscal year 2013 budget, the administration has requested
    the appropriation of $15,579,815 for the final installment of Elk Hills
    compensation to fulfill the Federal Government's obligations to the
    State under the Settlement Agreement. The State respectfully requests
    the appropriation by the Congress of $15,579,815 of the final Elk Hills
    compensation payment due to the State.
                                   background
        Upon admission to the Union, States beginning with Ohio and those
    westward were granted by the Congress certain sections of public land
    located within the State's borders. This was done to compensate these
    States having large amounts of public lands within their borders for
    revenues lost from the inability to tax public lands as well as to
    support public education. Two of the tracts of State school lands
    granted by the Congress to California at the time of its admission to
    the Union were located in what later became the Elk Hills Naval
    Petroleum Reserve.
        The State of California applies the revenues from its State school
    lands to assist retired teachers whose pensions have been most
    seriously eroded by inflation. California teachers are ineligible for
    Social Security and often must rely on this State pension as the
    principal source of retirement income. Typically the retirees receiving
    these State school lands revenues are single women more than 75 years
    old whose relatively modest pensions have lost as much as one-half or
    more of their original value to inflation.
              state's claims settled, as the congress had directed
        In the National Defense Authorization Act for fiscal year 1996
    (Public Law 104-106) that mandated the sale of the Elk Hills Reserve to
    private industry, the Congress reserved 9 percent of the net sales
    proceeds in an escrow fund to provide compensation to California for
    its claims to the State school lands located in the Reserve.
        In addition, in the act, the Congress directed the Secretary of
    Energy on behalf of the Federal Government to ``offer to settle all
    claims of the State of California . . . in order to provide proper
    compensation for the State's claims.'' (Public Law 104-106, section
    3415). The Secretary was required by the Congress to ``base the amount
    of the offered settlement payment from the contingent fund on the fair
    value for the State's claims, including the mineral estate, not to
    exceed the amount reserved in the contingent fund''. (Id.)
        Over the year that followed enactment of the National Defense
    Authorization Act mandating the sale of Elk Hills, the Federal
    Government, and the State engaged in vigorous and extended negotiations
    over a possible settlement. Finally, on October 10, 1996, a settlement
    was reached, and a written Settlement Agreement was entered into
    between the United States and the State, signed by the Secretary of
    Energy and the Governor of California, under which the State would
    receive 9 percent of the sales proceeds in annual installments over an
    extended period.
        The Settlement Agreement is fair to both sides, providing proper
    compensation to the State and its teachers for their State school lands
    and enabling the Federal Government to maximize the sales revenues
    realized for the Federal taxpayer by removing the threat of the State's
    claims in advance of the sale.
       federal revenues maximized by removing cloud of state's claim in
                              advance of the sale
        The State entered into a binding waiver of rights against the
    purchaser in advance of the bidding for Elk Hills by private
    purchasers, thereby removing the cloud over title being offered to the
    purchaser, prohibiting the State from enjoining or otherwise
    interfering with the sale and removing the purchaser's exposure to
    treble damages for conversion under State law. In addition, the State
    waived equitable claims to revenues from production for periods prior
    to the sale. The Reserve thereafter was sold for a winning bid of $3.53
    billion in cash, a sales price that substantially exceeded earlier
    estimates.
     the congress should appropriate $15,579,815 for fiscal year 2013 for
        the final installment of elk hills compensation due to the state
        The State's 9-percent share of the adjusted Elk Hills sales price
    of $3.53 billion is $315,099,815 (after deducting the State's share of
    the sales expenses). As the Congress had directed in the 1996 Act that
    mandated the sale of Elk Hills, 9 percent of the net proceeds were
    reserved in a contingent fund in the Treasury for payment to the State.
    To date, the Congress has appropriated seven installments of $36
    million and one installment of $48 million that was reduced to $47.52
    million by the 1 percent across-the-board rescission under the fiscal
    year 2006 Defense Appropriations Act, for total appropriations to date
    of $299.52 million of Elk Hills compensation owed to the State.
        The administration's budget for fiscal year 2013 requests the
    appropriation of $15,579,815 for the Elk Hills School Lands Fund to pay
    the final installment of Elk Hills compensation due to the State.
    (Budget of the United States Government, fiscal year 2013--Appendix, at
    p. 446, Account No. 89-5428-0-2-271). Thus, the provision for Elk Hills
    compensation is a line item in the Federal budget; it is not an
    earmark.
        The State respectfully requests the appropriation by the Congress
    of $15,579,815 to fulfill the Federal Government's obligation to the
    State under the Settlement Agreement.
                                     ______

       Prepared Statement of the University Corporation for Atmospheric
                                    Research
        On behalf of the University Corporation for Atmospheric Research
    (UCAR) and the university communities engaged in Earth systems research
    and education, I submit this written testimony for the record of the
    Senate Committee on Appropriations, Subcommittee on Energy and Water
    Development. UCAR is a consortium of 77 research universities that
    manages and operates the National Center for Atmospheric Research
    (NCAR) on behalf of the National Science Foundation (NSF) and the
    university community. I urge the subcommittee to fund the fiscal year
    2013 budget request of $4.992 billion for the Department of Energy
    (DOE) Office of Science, including $625.3 million for Biological and
    Environmental Research, and $2.337 billion for the DOE Office of Energy
    Efficiency and Renewable Energy (EERE).
        With the following, I highlight several science research and
    development programs that represent DOE's critical contributions to
    American leadership in science and technology:
                     department of energy office of science
        The DOE Office of Science directly supports university and
    laboratory research, increasing the Nation's capacity to understand and
    advance numerous fields of science, including the atmospheric sciences.
    More broadly, the DOE's world-class laboratories, the research
    conducted at the labs, and the scientific facilities accessible to the
    larger research community through the labs, are centerpieces of the
    robust innovation ecosystem that keeps the United States an
    international leader in science and technology and that stimulates the
    economy through technology development.
        Biological and Environmental Research.--The Biological and
    Environmental Research (BER) program within DOE Science makes
    fundamental contributions to the Nation's premier Earth system models
    and data analysis infrastructure that provide the scientific foundation
    for future decisionmaking on environmental change. Without BER-
    supported work, we would not know the level of risk that cities,
    states, and businesses face from long-term weather trends and what
    societal preparation and adaptation might be needed.
        In particular, the Climate and Environmental Sciences program
    within BER provides indispensable support to the Community Earth System
    Model (CESM), a comprehensive computer model supported by DOE and NSF
    to analyze Earth's past, present, and project future climate. CESM is a
    major contributor to national and international assessments of
    environmental change. And while CESM is housed and managed at NCAR, it
    is an open-source climate model, involving contributions and
    improvements from scientists across the Nation and around the world.
        Thanks in part to BER support, CESM is incorporating more complex
    and realistic representations of the natural and human processes that
    shape the global climate. For example, the model now has a dynamically
    coupled carbon and nitrogen cycle component that allows representation
    of realistic exchanges of CO2 between the atmosphere, the
    oceans, and the land surface. This new capability will allow realistic
    studies of the role of the ocean in absorbing and releasing
    CO2 to the atmosphere, thereby obtaining more accurate
    predictions of future CO2 concentrations that are
    fundamental to understanding the nature and magnitude of future changes
    in global climate. Carbon and nitrogen cycling in CESM provides the
    means to study in detail the contributions of land use change and
    vegetation disturbance to local, regional and global climate change.
    These new capabilities will allow the climate science community to
    address societally relevant questions in a way that has not been
    possible in the past.
        CESM performs exceptionally well on DOE's modern supercomputers,
    having been run at high resolutions in one experiment on more than
    100,000 processors of the Cray Jaguar-PE system at Oak Ridge National
    Laboratory. CESM scenario runs are now underway on this and other
    supercomputers to make projections for the U.N. Intergovernmental Panel
    on Climate Change's Fifth Assessment Report, expected to be released in
    2014.
        New in fiscal year 2013, climate and Earth system modeling research
    at DOE will develop an enhanced validation and verification capability
    to compare models and measurements against a unified framework using
    sophisticated software tools. This initiative promises to improve the
    efficiency of data management and analysis in the field. As in fiscal
    year 2012, atmospheric scientists will continue to receive grant
    funding for cutting-edge research on aerosols, clouds, and aerosol-
    cloud interactions, in order to improve estimates of how these
    feedbacks impact climate, an area of atmospheric research that can be
    better understood.
        In order to develop more accurate, increasingly realistic, and
    higher resolution Earth system models, with better environmental
    predictive capabilities for businesses, stakeholders such as water
    resource managers, and communities, I urge you to fund the Office of
    Biological and Environmental Research within the DOE Office of Science
    at the requested $625.3 million for fiscal year 2013, including $315.6
    million for Climate and Environmental Sciences within BER.
                     advanced scientific computing research
        According to a 2011 National Research Council report The Future of
    Computing Performance, Game Over or Next Level?, ``Virtually every
    sector of society--manufacturing, financial services, education,
    science government, the military, entertainment, and so on--has become
    dependent on continued growth in computing performance to drive new
    efficiencies and innovation.'' Within the atmospheric sciences, the
    advancement of our science rests on the continued growth of computing
    performance and capabilities. DOE Science's Advanced Scientific
    Computing Research (ASCR) delivers needed leading edge computational
    and networking capabilities to scientists nationwide, enabling the
    Office of Science and the larger university community to address and
    answer major scientific questions.
        In particular, the atmospheric sciences community depends on the
    ASCR Leadership Computing Facilities (LCFs), which are available to all
    researchers for scientific discovery and to address critical
    engineering challenges. The continued support of these programs is of
    particular importance to Earth system model development. Representing
    the complex processes and feedbacks of the Earth's systems, while
    efficiently harnessing the enormous amount of computing power
    necessary, requires very advanced software engineering, computer
    science, and numerical techniques. Because the climate simulations
    using the CESM (described above) are too computationally intensive to
    be run at NCAR alone, many computational experiments are run at the
    LCF's.
        At the Oak Ridge National Laboratory Leadership Computing Facility
    (OLCF), for example, a new 2.33-petaflop Cray XT5 system is already
    available to the scientific community, and OLCF plans to upgrade it to
    a 10-petaflop Cray XK6 system in upcoming years. The Argonne National
    Laboratory Leadership Computing Facility (ALCF) plans to upgrade its
    IBM Blue Gene/Q supercomputer to a 10-petaflop system this year.
    Alongside the NCAR-Wyoming Supercomputing Center and its 1.6-petaflop
    Yellowstone system soon to be delivered to this new facility, these DOE
    supercomputers will empower atmospheric scientists to push the
    boundaries of Earth systems modeling science.
        In the same way that more powerful telescopes enable new
    discoveries in astronomy, each major supercomputer upgrade enables new
    numerical experiences that reveal more details regarding how the Earth
    system works. This information is critical to efforts to understand and
    predict regional climate, as well as to develop and assess mitigation
    and adaptation strategies. A failure to maintain and continue to
    upgrade these LCFs would seriously undermine the steady progress in
    this and many other areas of science.
        Another important cross-cutting computing program that operates in
    partnership with ACSR and other programs within DOE Science is the
    Scientific Discovery through Advanced Computing (SciDAC) program.
    SciDAC accelerates scientific progress by breaking down the barriers
    between disciplines and fostering more dynamic partnerships between
    basic researchers and computational science applications. A SciDAC
    effort in partnership with BER, for example, is quantifying the
    uncertainty in next-generation integrated Earth system models in order
    to dramatically improve our ability to characterize the drivers of
    global climate and quantify the impact of energy production and use on
    the environment and human health.
        I urge you to fund the Advanced Scientific Computing Research
    within the DOE Office of Science at the fiscal year 2013 requested
    level of $455.6 million and to support SciDAC program throughout the
    Office of Science budget.
        energy efficiency and renewable energy research and development
        Renewable energy research, development, and technology transfer are
    among the most important investments we can make to ensure long run
    economic and environmental sustainability. Renewable energy technology
    contributes numerous cross-cutting benefits to society, including
    reducing our dependence on foreign oil and providing energy security,
    driving innovation and job creation in the energy economy,
    decentralizing the energy market, providing new high-tech jobs,
    reducing the human toll on the environment, and improving air quality
    and public health outcomes. DOE's Energy Efficiency and Renewable
    Energy (EERE) is at the heart of this transformation.
        Our national research universities, in collaboration with DOE
    laboratories and the private sector, are driving the country's
    innovation in renewable energy and energy efficiency. One example of
    such collaboration includes a partnership between NCAR, DOE's National
    Renewable Energy Laboratory (NREL), and Xcel Energy, Colorado's largest
    utility company, to develop sophisticated wind forecasts for
    operational use. These forecasts provide critical information to
    utilities to:
      --help them predict how much wind power will be generated over the
            next 24 to 72 hours;
      --enhance their ability to better integrate wind-generated
            electricity into the grid; and
      --assist with decisionmaking processes regarding whether to power
            down coal- and natural gas-fired plants when sufficient winds
            are predicted. To reduce the costs of integrating wind and
            solar energy into the electrical grid and make renewable energy
            more cost effective, significant improvements in weather
            forecasting technologies will be required, and additional
            weather observations in the lower atmosphere will be needed.
        Given the critical importance to the Nation of developing
    economically and environmentally sustainable technologies for energy
    production, I urge the subcommittee to fund the fiscal year 2013
    request of $2.337 billion for the Office of Energy Efficiency and
    Renewable Energy.
        I want to thank the members of the subcommittee in advance for
    supporting, through DOE, basic and applied scientific research in the
    environmental and other Earth sciences. By doing so, you advance the
    Nation's economic recovery, help stakeholders manage irreplaceable
    natural resources, and sustain the Nation's global scientific
    leadership.
                                     ______

                   Prepared Statement of the URS Corporation
        Mr. Chairwoman and members of the subcommittee: My name is Dr.
    Douglas Everett Wyatt, Jr.,\1\ and in my capacity as Director of
    Science Research for URS Corporation supporting the Department of
    Energy (DOE), Office of Fossil Energy, National Energy Technology
    Laboratory, I provide this testimony. Specifically, I will address the
    essential support of the Strategic Center for Natural Gas and Oil, a
    Program Office within the National Energy Technology Laboratory (NETL)
    for the Office of Fossil Energy.
    ---------------------------------------------------------------------------
        \1\ Douglas E. Wyatt works for the URS Corporation, a global
    Fortune 500 company and major support contractor to the U.S.
    Government. URS employs 57,000 people working in program management,
    engineering, design and construction, in site maintenance and
    operations, and in decommissioning and decontamination. URS has been
    named as the largest global environmental company and is consistently
    in the top ten in engineering and architecture, power, design,
    construction, transportation, and industrial processes. Wyatt holds a
    Ph.D. in geological sciences from the University of South Carolina, an
    MS in geology and geophysics from Vanderbilt University, a BA in
    physical geography, and BA in zoology from the University of Tennessee.
    He has more than 140 publications, papers, and presentations. Wyatt has
    30 years of experience including oil and gas exploration and
    production, nuclear energy, geothermal and renewable energy,
    environmental characterization and in creating and managing large
    multidisciplinary research programs. He lives in Aiken, South Carolina.
    ---------------------------------------------------------------------------
        The abundant availability of energy, in all of its various forms,
    has been a primary catalyst for the development of advanced
    civilization. While this is somewhat a philosophical thought I believe
    it to be as true today as it was for any time in the past. Simply put,
    there is no conceivable advanced future for the Nation without
    increasingly abundant energy. As a scientist for the past 30 years, I
    am keenly aware that energy can be produced cleanly and utilized
    efficiently as the following testimony will describe.
        No scientist or engineer believes that a single energy source is a
    viable solution for our national energy needs. We understand the energy
    systems of the past and present, and can reasonably predict the energy
    systems of the near future. However, because of the dynamics of
    discovery and imagination, our ability to predict energy needs and
    sources beyond six to eight decades is limited but the scientific
    community can predict energy utilization and resources for the next 30
    to 40 years. Oil and natural gas will continue to be a primary energy
    resource during this time and the research initiatives of the Strategic
    Center for Natural Gas and Oil strongly supports our Nation's ability
    to efficiently and cleanly use this resource as part of our global
    energy mix over the next several decades.
        Oil and natural gas exploration, development and production is
    well-understood by hundreds of oil and gas companies in the U.S.
    market. Yet only a few of the largest companies, i.e., ExxonMobil,
    ConocoPhillips, Chevron, have active self-funded research programs
    addressing new technology and science associated with oil and natural
    gas production, expansion, and efficiency. These companies, along with
    the larger industry support companies, i.e., Schlumberger, Halliburton,
    Weatherford, often support academic research in expanded and efficient
    oil and gas development, but the vast majority of their research is to
    develop a competitive advantage in the market; therefore, the knowledge
    gained is proprietary. Only when partnered with a Federal agency will
    the research become public. The Strategic Center for Natural Gas and
    Oil is unique in that it leverages Federal funding to integrate
    Federal, academic, and commercial research so that new science and
    technology, supporting national policy and energy needs, is performed
    with data available to the public. Therefore, I believe that it is
    critically important for the programs of the Strategic Center for
    Natural Gas and Oil to be more fully funded and expanded.
        In my capacity as a scientist, with a finger on the pulse of the
    state of the industry, I believe there are three critical areas in
    fossil energy oil and gas where a Federal research presence, through
    the Strategic Center for Natural Gas and Oil, is essential so that:
      --technologies are investigated under a variety of conditions and
            potential impacts are better understood;
      --technologies or concepts that may not seem immediately useful or
            marketable to industry in the short term are evaluated; and
      --the broadest distribution of knowledge and data is guaranteed.
        The three areas of Federal research with proposed budgets and
    rationale are:
        CO2 Enhanced Oil and Gas Recovery--The Use of
    CO2  in Enhanced Oil Recovery and Residual Oil Zone
    Production From Historic, Diminished and Depleted Oil Reservoirs.--
    Enhanced Oil Recovery (EOR) is common practice in the oil industry and
    CO2 is currently used for this purpose. However, there are
    known limits to the capability of the existing technology and
    utilization issues due to the limited availability of clean
    CO2. Current research suggests that there are a variety of
    high-technology options to improve the effectiveness of CO2
    in the oil reservoir such as chemically altering nanoparticles and
    enhanced geophysical monitoring of the CO2-oil interaction.
    In addition, there is a probability that CO2 can be
    beneficially reused as a replacement for water in the hydraulic
    fracturing of shale and other gas producing geological formations. The
    utilization of CO2 in ``fracking'' operations would
    eliminate many of the current environmental concerns associated with
    shale gas production. Other examples of CO2 use are
    available. Many new enhanced oil recovery concepts using CO2
    as the working fluid are subject to scientific analysis. I strongly
    recommend you fund this research program at $150 million over a 5-year
    period with $30 million annually. A $30 million annual budget would
    allow for 10 to 20 university research efforts to be completed, a
    robust extramural research competitive program to be completed,
    continuation of NETL intramural research, and for a joint industry,
    academic, Federal partnership to be formed to market and commercialize
    technologies developed from this program. The U.S. produces
    approximately 280,000 barrels of oil per day from 114 active fields
    from CO2 EOR. Considering the current price of oil, if only
    2 extra days' of oil production were generated from this research, then
    the value of the new CO2 EOR oil added to the national daily
    total would cover the cost of this critical research. However, new
    research into CO2 EOR might be expected to produce new
    efficiencies of 5 to 15 percent and more, above current production. I
    strongly urge you to fund the Strategic Center for CO2
    Enhanced Oil and Gas recovery research.
        Environmentally Safe Development, Production and Utilization of
    Natural Gas and Oil/Liquids From Unconventional Source Rocks.--The
    production of massive quantities of natural gas from organic-rich shale
    source rocks provides our Nation a path to energy independence. The
    effective use of shale gas has the ability to shift global energy
    markets to our Nation's substantial favor. In effect, a vision of our
    Nation no longer coupled to the global oil market can be realized. The
    oil and gas industry understands this possibility and is proceeding
    with the development and production of abundant natural gas. Research
    into best practices for shale gas reservoir development, new
    technologies for reservoir stimulation, water disposal, near surface
    environmental protection, and in the overall utilization of the gas are
    but a few of the issues that demand attention. All of these research
    missions are important but two deserve special attention.
        Current shale gas reservoir development by hydraulic stimulation,
    ``fracking'', only stimulates a portion of the total shale volume
    intersected by a horizontal well. It is probable that well bores might
    be drilled on a closer spacing increasing the volume of rock penetrated
    and the overall availability of gas. This possibility implies that the
    current recoverable volumes of natural gas from shale, or other organic
    rich gas-producing source rocks, might be doubled, or even tripled.
    Additionally, if wells can be drilled on a denser spacing then it
    becomes possible to strategically locate wells so that surface and
    human impacts could be maximized or minimized, depending on the need.
    Research to validate this concept and to develop best methodologies is
    required.
        New gas utilization concepts and technologies are also particularly
    important. Natural gas is a very clean and versatile fuel that can be
    used in fuel cells, chemical looping reactors, or directly burned in
    internal combustion engines. There are other advanced concepts which
    could be directly applied to the well-head and production area for
    electricity and industrial heat generation, converted to useful goods
    and merchandise such as plastics, among other probabilities. The wide-
    spread distribution of shale gas reservoirs and the abundant gas
    produced from a typical shale well implies that it might be possible to
    use shale gas derived energy in the form of heat and electricity in
    small-scale localized transmission grids and funneled into the overall
    national SmartGrid technology program.
        Possibly more important is the use of natural gas as a bridge fuel.
    Natural gas is a clean burning and abundant fossil fuel that can be
    used in a variety of existing and new applications, including
    transportation, to form a bridge from our current fossil energy mix to
    a future electrified energy mix that is projected over the next several
    decades. Not only can the gas be burned for heat for internal
    combustion engines or electrical generators it can be used directly in
    fuel cell applications to generate electricity. Since natural gas can
    be compressed, liquefied, and adsorbed it can be used in almost any
    system requiring electrical or heat energy. It is a natural bridge fuel
    for our Nation that requires your attention.
        There are many recent research successes in the development of
    environmentally safe natural gas. These include the recent DOE data and
    support to the Environmental Protection Agency for ``fracking'' related
    groundwater issues, the development of potential new nanoparticles
    supporting gas and oil EOR, and the development of new approaches to
    modeling and imaging multiphase, multifluid flow in shale and
    sandstones. However, new research into the utilization of natural gas
    for new and expanded markets is needed. I recommend that $300 million
    funding allocation over a 5-year period be authorized to complete
    research in this area. A $60 million annual allocation will allow for a
    variety of university collaborations consisting of 20 to 40 university
    research efforts covering a broad spectrum of research needs. A
    competitive extramural research program of joint industry and joint
    industry and academia can be completed to insure for the best market
    and technology applications. Additionally, a small-business industry
    program to develop, market, and deploy new technologies will insure
    wide-spread use throughout the industry. Finally, ongoing intramural
    research at the NETL will insure the brokering of environmental data
    necessary to insure safe gas development.
        Natural Gas Hydrates.--Gas hydrates are the largest source of
    natural gas, methane, on Earth. Hydrates are ubiquitous on the
    continental shelves of all major continents and are, therefore, a
    globally distributed fuel resource. Hydrates are also abundant in
    arctic sediments. Much research has been done for hydrates and their
    character and distribution is well known. However, there is still
    research necessary in hydrate stability, the environmental systems in
    which they exist, and in the best, most efficient, most environmentally
    safe method of production. The United States has led global hydrate
    research, but the world is beginning to develop hydrates for energy. It
    is important for our Nation to maintain a key role in overall hydrates
    research. I recommend a $15 million 5-year program, $3 million
    annually, to continue extramural university research and intramural
    National Energy Technology Laboratory research programs.
                                     ______

           Prepared Statement of the Worcester Polytechnic Institute
        We have been working with the Department of Energy (DOE) National
    Energy Technology Laboratory (NETL) for several years developing
    technology which is efficient and economical for simultaneous hydrogen
    production and carbon dioxide sequestration. The project has been very
    successful and is in the final stage of development and
    commercialization. The project has provided employment opportunity for
    8-10 people. The most recent two projects are DE-FC26-07NT43058
    (Project title: Composite Pd and Pd Alloy Porous Stainless Steel
    Membranes for Hydrogen Production and Process Intensification) and
    Phase I of DE-FE0004895 (Project title: Engineering Design of Advanced
    H2-CO2 Pd and Pd/Alloy Composite Membrane
    Separations and Process Intensification). We have achieved amazing
    success for the Phase I project and is ready to move into Phase II to
    construct pilot scale unit for the production of 100 pounds hydrogen
    per day and eventually to Phase III to design a plant for the
    production of 5 tons hydrogen per day. Unfortunately, the funding for
    Phase II and Phase III was cut and the project will be terminated. This
    untimely termination of the project not only causes people to lose
    their employment but also the United States to miss the opportunity to
    be a leader in simultaneous hydrogen production and carbon dioxide
    sequestration technology. In addition, it is sad that the technology is
    so successful due to the successful investment made by the DOE in the
    past several years has to be discontinued and set us back for several
    years. Therefore, I would like to urge the subcommittee to restore the
    appropriation to allow the project to continue and to provide the much
    needed employment. Moreover, the continuation of the project not only
    make good use of the U.S. investment already made in the past but also
    allow the technology to be commercialized to strengthen our prospect of
    stabilizing the fuel cost and energy independence.
        Thank you for your attention and please feel contact me for more
    information.

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    Prepared Statement of the Assiniboine and Sioux Tribes of the Fort Peck
                    Reservation and Dry Prairie Rural Water
                        fiscal year 2013 budget request
        The Assiniboine and Sioux Tribes of the Fort Peck Reservation and
    Dry Prairie Rural Water greatly appreciate $7.5 million that is
    included in the Bureau of Reclamation's (BOR) fiscal year 2013 budget
    request to continue construction of the Fort Peck Reservation Rural
    Water System. However, this level of funding is far below the need and
    project capacity for fiscal year 2013. Thus, we respectfully request
    $29 million within BOR fiscal year 2013 rural water program for this
    project, which will enable us to complete this project within the
    authorization time.
        Fiscal year 2013 funds will be used to construct critical elements
    of the Fort Peck Reservation Rural Water System, Montana, (Public Law
    106-382, October 27, 2000). The amount requested is based on need to
    complete transmission pipelines across the Fort Peck Indian Reservation
    and deliver regional water to the Reservation and Dry Prairie. The
    request is within capability to spend funds in fiscal year 2013 as set
    out in Table 1.
        Good construction progress has been made on the Reservation and
    will continue into 2013. By the end of fiscal year 2012, the project
    will:
      --complete the main transmission pipelines from the water treatment
            plant (WTP) to Wolf Point;
      --complete the main transmission system from Wolf Point to Frazer;
      --complete the main transmission system from Poplar to Brockton;
      --nearly complete the main transmission system from Brockton to the
            Big Muddy River, the first interconnection point with Dry
            Prairie;
      --serve rural homes of tribal members and others between Brockton and
            Frazer, that, when complete, will serve 75 percent of the
            Reservation design population with safe and adequate water; and
      --complete the Fort Kipp interim water project, poorest water quality
            in the region.
        Dry Prairie has continued to extend distributions projects in
    Valley County on the west side of the project and in Roosevelt and
    Sheridan Counties on the east side and has added several hundred new
    users.

                   TABLE 1.--FISCAL YEAR 2013 FUNDING REQUEST,
          FORT PECK RESERVATION RURAL WATER SYSTEM (PUBLIC LAW 106-382)
                            [In thousands of dollars]
    ------------------------------------------------------------------------
         Sponsor/Project Feature         Federal    Non-Federal     Total
    ------------------------------------------------------------------------
          FORT PECK TRIBES (MAIN
         TRANSMISSION PIPELINES)Brockton to Big Muddy Mainline...          725  ...........          725
        Brockton to Big Muddy Zone 1           750  ...........          750
         Branches....................
        Wolf Point to Poplar Zone 1          1,425  ...........        1,425
         Branches....................
        Wolf Point to Frazer Zone 1          3,905  ...........        3,905
         Branches....................
    Frazer to Porcupine Creek........        8,346  ...........        8,346
    FP Electrical, Meters, SCADA.....        2,114  ...........        2,114
                                      --------------------------------------
          Subtotal...................       17,265  ...........       17,265  DRY PRAIRIE (MAIN TRANSMISSION
         PIPELINES AND BRANCHES)E Medicine Lake..................        1,883          595        2,478
    ML to Plentywood.................        2,333          737        3,070
    Big Muddy to Culbertson..........          108           34          142
    FP Boundary to Scobey............        7,499        2,368        9,867
    DP Electrical, Meters, Easements.          752          238          990
                                      --------------------------------------
          Subtotal...................       11,823        3,734       15,557
                                      --------------------------------------
          Total......................       29,088        3,734       32,822
    ------------------------------------------------------------------------

                            funding status and needs
        As shown in Table 2, the project will be 44-percent complete at the
    end of fiscal year 2012 this includes the completion of the regional
    WTP. The construction contract for the final phase will be completed in
    mid-year 2012. The Project has also completed:
      --the extension of the raw water pipeline from the regional intake to
            the new WTP;
      --the pipeline between the new WTP and the tribal headquarter
            community of Poplar;
      --the pipeline between the WTP and the community of Wolf Point; and
      --part of the project from Wolf Point to Frazer.

                       TABLE 2.--FUNDING STATUS AND NEEDS
                             [Dollars in thousands]
    ------------------------------------------------------------------------------------------------------------------------------------------------
    Total Federal funding authority (October 2011)..........        $295,719
                                                             ===============Federal funds appropriated through fiscal year 2012:
        Energy and Water Appropriations.....................         $83,532
        ARRA Allocation.....................................         $46,249
                                                             ---------------
          Total.............................................        $129,781
                                                             ===============
    Percent complete........................................           43.89
                                                             ===============
    Amount remaining after fiscal year 2012:
        Total authorized (October 2010).....................        $165,938
        Overhead adjustment for extension to fiscal year            $215,579
         2020...............................................
        Adjusted for inflation to fiscal year 2020 at 4.54%         $261,903
         annually...........................................Years to complete.......................................               8Average annual required to end in fiscal year 2020,              $32,738
     requires amendment to extend...........................
    Fiscal year 2013 amount requested.......................         $29,088
    ------------------------------------------------------------------------

        While the project has made great strides and efficiently used every
    $1 made available to get to where we are, we are still less than 50-
    percent complete, which translates into approximately $166 million (in
    2010 dollars) of construction that must be completed. Currently, the
    project is $13 million underbudget and can be completed within the
    authorized construction ceiling if appropriations are adequate to
    complete on the statutory schedule of 2015, which we recognize as not
    realistic. However, the cost of extending the project construction to
    fiscal year 2020, for example, 5 years beyond the authorized ceiling,
    is an additional $50 million. We urge the Congress to address the
    problem of inadequate budgeting of projects that are well advanced in
    construction.
                              proposed activities
        The fiscal year 2013 request ($29.088 million) is needed to
    properly utilize the WTP and distribute water to all communities along
    the main transmission line within the Fort Peck Indian Reservation and
    is within the capability of the project. The fiscal year 2013 funds
    will:
        Fort Peck Indian Reservation
      --complete the main transmission pipelines along the southern
            boundary of the project;
      --serve the Reservation communities and all rural homes within the
            first pressure zone along the main transmission throughout the
            Reservation; and
      --permit delivery of water outside the Reservation to improve water
            quality and operation within the reservation by:
        --reducing flushing needs and costs;
        --reducing disinfection needs and costs; and
        --reducing potential for formation of disinfectant by-products.
        Dry Prairie
      --initiate construction of pipeline from northern boundary of
            Reservation to Scobey; and
      --complete the main transmission pipeline and branches from Medicine
            Lake to Plentywood.
        Jobs
      --create an estimated 233 full-time equivalent (FTE) construction
            jobs in an area of Montana with low per capita income, high
            unemployment, and high underemployment (based on 8 FTEs per $1
            million).
                            administration's support
        The project has reached 44-percent completion over a period of 12
    years and needs greater funding support to complete the project between
    2015 and 2020. Congressional support is needed for the authorized BOR
    rural program to complete projects in a more timely manner.
        The tribes and Dry Prairie have worked extremely well and closely
    with BOR since the authorization of the project in fiscal year 2000.
    The Commissioner, Regional and Area Office of BOR have been
    consistently in full agreement with the need, scope, total costs, and
    the ability to pay analysis that supported the Federal and non-Federal
    cost shares. There have been no areas of disagreement or controversy in
    the formulation or implementation of the project. As stated above, the
    project is under budget currently by more than $13 million.
        Cooperative agreements have been developed and executed between BOR
    and the tribes and between BOR and Dry Prairie. Those cooperative
    agreements carefully set out goals, standards, and responsibilities of
    the parties for planning, design, and construction. All plans and
    specifications are subject to review by BOR pursuant to the cooperative
    agreements. The sponsors collaborate to undertake activities that
    assure proper oversight and approval by BOR. Each year the tribes and
    Dry Prairie, in accordance with the cooperative agreements, develop a
    work plan setting out the planning, design, and construction
    activities, and the allocation of funding to be utilized on each
    project feature.
        Clearly, the Fort Peck Reservation Rural Water System is well-
    supported by BOR. The Congress authorized the project based on the
    Final Engineering Report that was formulated in full cooperation and
    collaboration with BOR, and major project features are successfully
    under construction with excellent oversight by the Agency.
                                     ______

                       Prepared Statement of Aurora Water
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

         Prepared Statement of Board of Water Works of Pueblo, Colorado
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

         Prepared Statement of Central Utah Water Conservancy District
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                    Prepared Statement of City of Farmington
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

       Prepared Statement of Colorado River Basin Salinity Control Forum
        Waters from the Colorado River are used by approximately 35 million
    people for municipal and industrial purposes and used to irrigate
    approximately 4 million acres in the United States. Natural and man-
    induced salt loading to the Colorado River creates environmental and
    economic damages. The Bureau of Reclamation (BOR) has estimated the
    current quantifiable damages at about $300 million per year. The
    Congress authorized the Colorado River Basin Salinity Control Program
    (Program) in 1974 to offset increased damages caused by continued
    development and use of the waters of the Colorado River. Modeling by
    BOR indicates that the quantifiable damages would rise to more than
    $500 million by the year 2030 without continuation of the Program. The
    Congress has directed the Secretary of the Interior to implement a
    comprehensive program for minimizing salt contributions to the Colorado
    River. BOR serves as the lead Federal agency in implementing the
    program. BOR primarily institutes salinity control through its
    Basinwide Program. Funding levels have fallen behind in recent years,
    and a funding level of $14.5 million is required in fiscal year 2013 to
    prevent further degradation of the quality of the Colorado River and
    increased downstream economic damages.
        Environmental Protection Agency (EPA) has identified that more than
    60 percent of the salt load of the Colorado River comes from natural
    sources. The majority of land within the Colorado River Basin is
    administered by Bureau of Land Management (BLM). In implementing the
    Colorado River Basin Salinity Control Act (Act) in 1974, the Congress
    recognized that most of the salts in the Colorado River originate from
    federally owned lands. Title I of the Salinity Control Act deals with
    the United States commitment to the quality of waters being delivered
    to Mexico. Title II of the Act deals with improving the quality of the
    water delivered to U.S. users. This testimony deals specific with title
    II efforts. In the early years of the program, BOR implemented salinity
    control in large projects which were funded with specific line item
    amounts. In 1995, the Congress amended the act and created BOR's
    Basinwide Program. Under this program, BOR funds proposals which will
    decrease the salt load to the Colorado River. Most of the received
    proposals target off-farm irrigation distribution systems such as
    canals and laterals. It is generally more efficient for BOR to perform
    the off-farm distribution system improvements prior to Natural
    Resources Conservation Service (NRCS) treating the on-farm acres with
    salinity control practices (i.e., BOR pipe a canal or lateral prior to
    NRCS putting a pressurized sprinkler system on farm). Shortfalls in
    recent basinwide funding have led to inefficiencies in the
    implementation of the overall program. The funding amount identified
    above and in the graph below are required to get the Basinwide Program
    back on pace with the overall program implementation.
        Concentrations of salt in the Colorado River cause approximately
    $300 million in quantified damages and significantly more in
    unquantified damages in the United States and result in poor water
    quality for United States users. Damages occur from:
      --a reduction in the yield of salt-sensitive crops and increased
            water use for leaching in the agricultural sector;
      --a reduction in the useful life of galvanized water pipe systems,
            water heaters, faucets, garbage disposals, clothes washers, and
            dishwashers, and increased use of bottled water and water
            softeners in the household sector;
      --an increase in the cost of cooling operations and the cost of water
            softening and a decrease in equipment service life in the
            commercial sector;
      --an increase in the use of water and the cost of water treatment,
            and an increase in sewer fees in the industrial sector;
      --a decrease in the life of treatment facilities and pipelines in the
            utility sector;
      --difficulty in meeting wastewater discharge requirements to comply
            with National Pollutant Discharge Elimination System permit
            terms and conditions and an increase in desalination and brine
            disposal costs due to accumulation of salts in groundwater
            basins; and
      --increased use of imported water for leaching and cost of
            desalination and brine disposal for recycled water.
        The Colorado River Basin Salinity Control Forum (Forum) is composed
    of gubernatorial appointees from Arizona, California, Colorado, Nevada,
    New Mexico, Utah, and Wyoming. The Forum is charged with reviewing the
    Colorado River's water quality standards for salinity every 3 years. In
    so doing, it adopts a Plan of Implementation consistent with these
    standards. The Plan of Implementation, as adopted by the States and
    approved by EPA, calls for 368,000 tons of additional salinity control
    measures to be implemented by BOR by 2030, or approximately 20,000 tons
    of new control each year. Based on current cost levels, BOR's funding
    under its Basinwide Program needs to be $14.5 million. The level of
    appropriation requested in this testimony is in keeping with the
    adopted Plan of Implementation. If adequate funds are not appropriated,
    significant damages from the higher salt concentrations in the water
    will be more widespread in the United States and Mexico.
     basinwide program: funding based on controlling 19,763 t/yr beginning
                              in fiscal year 2013

        In summary, implementation of salinity control practices through
    BOR's Basinwide Program has proven to be a very cost-effective method
    of controlling the salinity of the Colorado River and is an essential
    component to the overall Colorado River Basin Salinity Control Program.
    Continuation of adequate funding levels for salinity within this
    program will prevent the water quality of the Colorado River from
    further degradation and significant increases in economic damages to
    municipal, industrial, and irrigation users.
                                     ______

          Prepared Statement of the Colorado River Board of California
        This testimony is in support of fiscal year 2013 funding for the
    Department of the Interior for the title II Colorado River Basin
    Salinity Control Act of 1974 (Public Law 93-320). In the Act, the
    Congress designated the Department of the Interior, Bureau of
    Reclamation (BOR) to be the lead agency for salinity control in the
    Colorado River Basin. For nearly 28 years this very successful and
    cost-effective program has been carried out pursuant to the Colorado
    River Basin Salinity Control Act and the Clean Water Act (Public Law
    92-500). California's Colorado River water users are presently
    suffering economic damages in the hundreds of millions of dollars per
    year due to the River's salinity.
        The Colorado River Board of California (Board) is the State agency
    charged with protecting California's interests and rights in the water
    and power resources of the Colorado River system. In this capacity,
    California participates along with the other six Colorado River Basin
    states through the Colorado River Basin Salinity Control Forum (Forum),
    the interstate organization responsible for coordinating the Basin
    States' salinity control efforts. In close cooperation with the U.S.
    Environmental Protection Agency (EPA) and pursuant to requirements of
    the Clean Water Act, the Forum is charged with reviewing the Colorado
    River's water quality standards every 3 years. The Forum adopts a Plan
    of Implementation consistent with these water-quality standards. The
    level of appropriation being supported by this testimony is consistent
    with the Forum's ``2011 Plan of Implementation'' for continued salinity
    control efforts within the Colorado River Basin. If adequate funds are
    not appropriated to BOR's Basinwide Program, significant damages
    associated with increasing salinity concentrations of Colorado River
    water will become more widespread in the United States and Mexico.
        The Plan of Implementation, as adopted by the States and approved
    by EPA, calls for 368,000 tons of additional salinity control measures
    to be implemented by BOR by 2030, or approximately 20,000 tons of
    additional salinity control measures each year. Based on current
    program cost levels, BOR's funding under its Basinwide Program needs to
    be at least $14.5 million. This level of appropriation requested in
    this testimony is in keeping with the adopted ``2011 Plan of
    Implementation''.
        Waters from the Colorado River are used by approximately 35 million
    people for municipal and industrial purposes and used to irrigate
    approximately 4 million acres of agricultural lands in the United
    States. Currently, the salinity concentration of Colorado River water
    causes about $300 million in quantifiable damages in the United States
    annually. Economic and hydrologic modeling by BOR indicates that the
    quantifiable damages could rise to more than $500 million by the year
    2030 without the continuation of Basinwide salinity control measures as
    identified in the ``2011 Plan of Implementation''. Significant
    unquantified damages also occur. For example, damages occur from:
      --a reduction in the yield of salt-sensitive crops and increased
            water use for leaching in the agricultural sector;
      --a reduction in the useful life of galvanized water pipe systems,
            water heaters, faucets, garbage disposals, clothes washers, and
            dishwashers, and increased use of bottled water and water
            softeners in the household sector;
      --an increase in the use of water for cooling, and the cost of water
            softening, and a decrease in equipment service life in the
            commercial sector;
      --an increase in the use of water and the cost of water treatment,
            and an increase in sewer fees in the industrial sector;
      --a decrease in the life of treatment facilities and pipelines in the
            utility sector;
      --difficulty in meeting wastewater discharge requirements to comply
            with National Pollutant Discharge Elimination System permit
            terms and conditions, an increase in desalination and brine
            disposal costs due to accumulation of salts in groundwater
            basins, and fewer opportunities for recycling and reuse of the
            water due to groundwater quality deterioration; and
      --increased use of imported water for leaching and the cost of
            desalination and brine disposal for recycled water.
        Some of the most cost-effective salinity control opportunities
    occur when BOR can improve irrigation delivery systems in a coordinated
    fashion with the activities of the U.S. Department of Agriculture's
    (USDA) programs working with landowners to improve on-farm irrigation
    systems. With the USDA's Environmental Quality Incentive Program, more
    on-farm funds are available and it continues to be important to ensure
    that there are adequate BOR funds available to maximize BOR's
    effectiveness in addressing water delivery system improvements.
    Shortfalls in recent Basinwide Program funding have led to
    inefficiencies in the implementation of the overall salinity control
    program. The funding amount identified above, and in the following
    graph, are required to get the Basinwide Program back on pace with the
    implementation schedule identified in the ``2011 Plan of
    Implementation''.
     basinwide program: funding based on controlling 19,763 t/yr beginning
                              in fiscal year 2013

        In addition, the Colorado River Board recognizes that the Federal
    Government has made significant commitments to the Republic of Mexico
    and to the seven Colorado River Basin States with regard to the
    delivery of quality water pursuant to the 1944 Water Treaty with
    Mexico. In order for those commitments to be honored, it is essential
    that in fiscal year 2013, and in future fiscal years, that the Congress
    provide funds to the BOR for the continued operation of current
    projects.
        The Colorado River is, and will continue to be, a major and vital
    water resource to the nearly 20 million residents of southern
    California, including municipal, industrial, and agricultural water
    users in Ventura, Los Angeles, San Bernardino, Orange, Riverside, San
    Diego, and Imperial counties. The protection and improvement of
    Colorado River water quality through an effective salinity control
    program will avoid the additional economic damages to users in
    California and the other States that rely on the Colorado River.
                                     ______

         Prepared Statements of the Colorado River Energy Distributors
                                  Association
        Dear Chairwoman Feinstein and Senator Alexander: We request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. We thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

        Dear Chairwoman Feinstein and Ranking Member Alexander: On behalf
    of the Colorado River Energy Distributors Association (CREDA), I
    respectfully request that the subcommittee appropriate $11,387,000 to
    maintain capital projects and base funding activities for the Upper
    Colorado River and San Juan River Recovery Implementation Programs
    (RIP).
        CREDA is a nonprofit organization representing consumer-owned
    utilities, political subdivisions, State agencies, tribes and rural
    electric cooperative utilities in Arizona, Colorado, Nevada, New
    Mexico, Utah, and Wyoming, serving more than 4 million electric
    consumers. CREDA's member utilities purchase more than 85 percent of
    the power produced by the Glen Canyon, Flaming Gorge, Aspinall Unit
    Dams, and other features of the Colorado River Storage Project (CRSP).
        As purchasers of the power generated at CRSP facilities, CREDA's
    members pay more than 95 percent of the costs of these multipurpose
    projects. Changes in the operation of these facilities to provide for
    the recovery of the endangered fish have resulted in significant costs
    to the power users.
        CREDA members are willing participants in the recovery programs,
    which have been a model of Federal/non-Federal collaboration and
    participation. However, the most recent authorization (Public Law 106-
    392) to use CRSP power revenues to provide annual base funding for the
    RIP expired at the end of fiscal year 2011. There is currently no
    legislative authorization to use CRSP power revenues for other than
    those activities authorized by Public Law 106-392. However,
    stakeholders continue to seek legislation to extend the use of CRSP
    power revenues for base funding from fiscal year 2012-2019.
        CREDA is extremely troubled by the administration's fiscal year
    2013 Bureau of Reclamation (BOR) budget which says, ``In the absence of
    legislation to extend this specific authority, BOR may rely on existing
    authority to continue the use of CRSP power revenues or use
    appropriated funds to ensure full base funding.'' It is inappropriate
    for the administration to continue use of power revenues without a
    specific authorization, and despite repeated inquiries CREDA has not
    been informed by BOR what ``existing authority'' is being referred to
    in the budget request language.
        To maintain uninterrupted annual/base funding for the RIP, CREDA
    supports Federal appropriations in the amount of $11,387,000 to fund
    not only the administration's request for capital projects, but an
    additional nonreimbursable $3 million for base funding activities.
    CREDA requests that, in the absence of a specific authorization, the
    subcommittee expressly prohibit the use of CRSP power revenues for
    activities beyond those authorized by Public Law 106-392.
                                     ______

                Prepared Statement of Colorado Springs Utilities
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

               Prepared Statement of the Colorado Water Congress
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                       Prepared Statement of Denver Water
        Dear Chairwoman Feinstein and Senator Alexander: On behalf of
    Denver Water, I request your support for an appropriation for fiscal
    year 2013 of $8,387,000 to the Bureau of Reclamation within the budget
    line item entitled ``Endangered Species Recovery Implementation
    Program'' for the Upper Colorado Region, consistent with the
    President's recommended budget. Substantial non-Federal cost-sharing
    funding is occurring pursuant to Public Law 106-392, as amended. This
    appropriation will allow continued funding in fiscal year 2013 for the
    Upper Colorado River Endangered Fish Recovery Program and the San Juan
    River Basin Recovery Implementation Program as authorized by Public Law
    106-392. These two successful ongoing cooperative partnership programs
    involve the States of Colorado, New Mexico, Utah, and Wyoming; Indian
    tribes; Federal agencies; and water, power, and environmental
    interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

          Prepared Statement of Grand Valley Water Users' Association
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

     Prepared Statement of Irrigation and Electrical Districts Association
                                   of Arizona
        The Irrigation and Electrical Districts Association of Arizona
    (IEDA) is pleased to present written testimony regarding the fiscal
    year 2013 proposed budgets for the Bureau of Reclamation (BOR) and the
    Western Area Power Administration (WAPA).
        IEDA is an Arizona nonprofit association whose 25 members and
    associate members receive water from the Colorado River directly or
    through the facilities of the Central Arizona Project (CAP) and
    purchase hydropower from Federal facilities on the Colorado River
    either directly from WAPA or, in the case of the Boulder Canyon
    Project, from the Arizona Power Authority, the State agency that
    markets Arizona's share of power from Hoover Dam. IEDA was founded in
    1962 and continues in its 50th year to represent water and power
    interests of Arizona political subdivisions and other public power
    providers and their consumers.
                             bureau of reclamation
        IEDA has reviewed the BOR budget and found, not unexpectedly, that
    it does not address the enormous backlog of needs of the agency's aging
    infrastructure. We support the important projects and programs that are
    included in the proposed budget. We are especially mindful that the
    Yuma Desalting Plant is an essential element of the problem solving
    mechanisms being put in place for the Colorado River and especially the
    Lower Colorado River. Problem solving on the Lower Colorado River will
    be substantially improved by using the plant as a management element.
        We also wish to call to the subcommittee's attention to several
    other issues of concern to us and Arizona water and power customers.
        First, we are concerned that the Congress has not extended the
    Upper Colorado River Recovery Implementation Plan. That Plan focuses on
    recovering three endangered fish in the Colorado River and its
    tributaries above Lake Powell. It is a three-party agreement:
      --Federal agencies with appropriations;
      --monies from the four Upper Colorado River Basin States (Colorado,
            New Mexico, Utah, and Wyoming); and
      --power revenues from our members and other Colorado River Storage
            Project customers.
    Without the extension there are no Federal appropriation dollars to
    continue the program. This breaks the ``deal'' that we cut to keep the
    Endangered Species Act (ESA) from being used to attack our water and
    hydropower. No money, no plan. BOR appropriations should be provided
    but, if not, the subcommittee should recognize that the Plan is
    suspended and neither the power users nor the States have any
    obligation to continue it. BOR shouldn't try to backdoor money for this
    use. The subcommittee should hold them accountable.
        Second, we continue to be concerned about BOR's spending on post-9/
    11 security costs. The Congress gave BOR specific directions on this
    subject several years ago. That included adjustments for declines in
    the Consumer Price Index and non-reimbursability of certain costs.
    However, the Congress did not instruct BOR with regard to how this
    program should be implemented. Like many reaction programs, this
    program experienced some overreaction. We believe a close review of the
    ongoing levels of staffing and other expenses is in order.
                       western area power administration
        IEDA has reviewed the proposed budget for the WAPA. We wish to call
    the subcommittee's attention to the limited appropriation for
    construction funding proposed for fiscal year 2013. We believe this
    shortfall is irresponsible. WAPA has more than 17,000 miles of
    transmission line for which it is responsible. It has on the order of
    14,000 megawatts of generation being considered for construction that
    would depend on that Federal network. The existing transmission
    facilities cannot handle all of these proposals. Moreover, the region
    is projected, by all utilities operating in the region, to be short of
    available generation in the 10-year planning window that utilities and
    Western use.
        The appropriation proposed in this category cannot come even close
    to keeping existing transmission construction going. Repairs and
    replacements will have to be postponed and considerable hardships to
    local utilities that depend on the Federal network are bound to occur.
    In WAPA's Desert Southwest Region, our region, work necessary just to
    maintain system reliability will have to be postponed.
        The President's budget, once again, assumes that unmet capital
    formation needs will be made up by WAPA's customers. We would be the
    first to support additional customer financing of Federal facilities
    and expenses through the Contributed Funds Act authority under BOR law
    that is available to WAPA. However, programs utilizing non-Federal
    capital formation require years to develop. One such program that was
    proposed by the Arizona Power Authority in a partnership with Western
    died because it was enmeshed in bureaucratic red tape at the Department
    of Energy. There is no way that WAPA customers can develop contracts,
    have them reviewed, gain approval of these contracts from WAPA and
    their own governing bodies, find financing on Wall Street and have
    monies available for the next fiscal year. It is just impossible,
    especially in this economy. Moreover, scoring and ``cut/go'' rules are
    providing major disincentives for WAPA's customers and others in this
    regard.
        There also are impediments to using existing Federal laws in
    facilitating non-Federal financing of Federal facilities and repairs to
    Federal facilities and the Congress should examine them. Artificially
    designating customer funding for construction, in lieu of real
    solutions, is bad public policy and should not be countenanced. We urge
    the subcommittee to restore a reasonable amount of additional
    construction funding to WAPA so it can continue to do its job in
    keeping its transmission systems functioning and completing the tasks
    that it has in the pipeline that are critical to its customers
    throughout the West.
        However, there is one subject about which we urge you not to
    provide funding. On March 16, 2012, Secretary of Energy Steven Chu
    announced that WAPA would be participating in a gigantic Energy
    Imbalance Market (EIM) in the Western United States. This is an
    untested, unanalyzed, unproven boondoggle being promoted to force
    utilities in the West to add layer upon layer of bureaucracy over their
    existing operations, when doing so elsewhere has only escalated
    electricity costs and hampered economic recovery. We urge you to
    expressly prohibit WAPA from funding this attack on the West's economy
    and require peer-reviewed scientific and economic analysis before any
    money is spent to facilitate WAPA's participation in an EIM.
                                   conclusion
        Thank you for the opportunity to submit this written testimony. If
    we can provide any additional information or be of any other service to
    the subcommittee, please do not hesitate to get in touch with us.
                                     ______

               Prepared Statement of The Jicarilla Apache Nation
        Dear Chairwoman Feinstein and Senator Alexander: On behalf of the
    Jicarilla Apache Nation, I request your support for an appropriation
    for fiscal year 2013 of $8,387,000 to the Bureau of Reclamation within
    the budget line item entitled ``Endangered Species Recovery
    Implementation Program'' for the Upper Colorado Region, consistent with
    the President's recommended budget. Substantial non-Federal cost-
    sharing funding is occurring pursuant to Public Law 106-392, as
    amended. This appropriation will allow continued funding in fiscal year
    2013 for the Upper Colorado River Endangered Fish Recovery Program and
    the San Juan River Basin Recovery Implementation Program as authorized
    by Public Law 106-392. These two successful ongoing cooperative
    partnership programs involve the States of Colorado, New Mexico, Utah,
    and Wyoming; Indian tribes; Federal agencies; and water, power, and
    environmental interests.
        Jicarilla has been an active participant in these programs since
    1992 and the requested Federal appropriations are critically important
    to these efforts moving forward. The past support of your subcommittee
    has greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

    Prepared Statement of the Oglala Sioux Rural Water Supply System; West
     River/Lyman Jones Rural Water System; Rosebud Rural Water System; and
                       the Lower Brule Rural Water System
                            fiscal year 2013 request
        The Mni Wiconi Project beneficiaries respectfully request $23.137
    million in appropriations for construction and $12.224 million for
    operation, maintenance, and replacement (OMR) activities for fiscal
    year 2012, a total request of $35.361 million:

                         FISCAL YEAR 2013 TOTAL REQUEST
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Construction............................................     $23,137,000
    OMR.....................................................      12,224,000
                                                             ---------------
          Total.............................................      35,361,000
    ------------------------------------------------------------------------

        The construction request includes $0.960 million for Bureau of
    Reclamation oversight, and the OMR request includes $1.447 million for
    oversight.
                               construction funds
        Construction funds would be utilized as follows:

    ------------------------------------------------------------------------
                                                               Construction
                          Project area                        request fiscal
                                                                 year 2013
    ------------------------------------------------------------------------
    Oglala Sioux Rural Water Supply System:
        Core................................................         ( \1\ )
        Distribution........................................     $13,838,000
    West River/Lyman-Jones RWS..............................       2,231,000
    Rosebud RWS.............................................       7,068,000
                                                             ---------------
          Total.............................................      23,137,000
    ------------------------------------------------------------------------
    \1\ Complete.

        As shown in the table below, the project will be 95-percent
    complete at the end of fiscal year 2012. Construction funds remaining
    after fiscal year 2012 will total $23.137 million within the current
    authorization (in October 2010 dollars). The funds will not be adequate
    to complete the project as originally planned.

    ------------------------------------------------------------------------------------------------------------------------------------------------
    Total Federal Construction Funding (October 2011            $471,300,000
     dollars)...............................................
    Estimated Federal spent through fiscal year 2012........    $448,163,000
    Percent spent through fiscal year 2012..................          95.09%
    Amount remaining after 2012 (estimated 2013 dollars)....     $23,137,000
    Completion fiscal year (Statutory Fiscal Year 2013;                 2013
     Public Law 110-161)....................................
    ------------------------------------------------------------------------

        Cost indexing over the last 5 years has averaged 4.72 percent for
    pipelines and last year was 7.83 percent. Pipelines are the principal
    components yet to be completed (see following chart).
       rate of construction cost increase for annual and 5-year running
                   averages since 1992, bureau of reclamation

        The extension of the project from 2008 to 2013 did not provide for
    budgeting of Reclamation oversight, administration and other
    ``overhead'' costs, which will total $22.472 million by the end of
    2013. These costs have been and will continue to be incurred at the
    expense of construction elements. The slow pace of budgeting and
    appropriations has caused the diminishment of construction elements to
    cover non-construction overhead costs.
        The support of the administration to allocate adequate
    discretionary funds in fiscal year 2012 and budget adequately for
    fiscal year 2013 to enable the allocation of remaining authorized funds
    is recognized and greatly appreciated.
        The request will create an estimated 210 full-time equivalent (FTE)
    construction jobs and 94 OMR jobs in an area of the nation with the
    lowest per capita income and deepest poverty.
        Poverty is the harbinger of the severe healthcare crisis facing the
    Indian people in the Northern Great Plains. The present value of extra
    costs of healthcare during the lifetime of each 24,000 members of the
    Indian population in the Mni Wiconi Project is estimated at $1.12 to
    $2.25 billion (in 2010 dollars). The costs are based on extraordinarily
    high rates of mortality due to heart disease, cancer and diabetes. The
    Mni Wiconi Project has the direct effect of employing part of our
    unemployed and underemployed Indian population and creates the
    necessary infrastructure for more employment in indirect commercial and
    industrial development. This will reduce poverty, mortality, and the
    national cost burden of Indian healthcare.
                     oglala sioux rural water supply system
    Core System
        The Oglala Sioux Tribe has completed the core system that serves
    all distribution systems of West River/Lyman-Jones, the Rosebud Sioux
    Tribe, the Lower Brule Sioux Tribe, and the Oglala Sioux Tribe.
    Distribution System
        The Pine Ridge Indian Reservation will continue to receive more
    water from the Oglala Sioux Rural Water Supply System (OSRWSS) core
    system in fiscal year 2012. Major segments of the main transmission
    system will be completed across the Reservation and connect many of the
    larger communities with safe and adequate drinking water. OSRWSS
    pipelines now deliver water from the Missouri River to the communities
    of Georgetown, Wanblee, Crazy Horse School, Lakota Fund Housing, and
    Potato Creek Community and the large number of rural homes between the
    communities. The communities of Hisle, Kyle, Manderson, Red Shirt,
    Porcupine, and Wounded Knee can be served with Missouri River water by
    the end of 2012.
        Fiscal year 2013 will be another historic year, but considerable
    work remains to distribute the water supply throughout the Reservation.
    More than 40 percent of the project's population resides on the Pine
    Ridge Indian Reservation, and only 85 percent of the distribution
    system will be complete at the end of 2012. The Reservation public
    received its first Missouri River supply in 2009 after waiting 15 years
    for construction of core facilities to the Reservation.
        Project funds in fiscal year 2013 will continue building the on-
    Reservation transmission system. Funding will be used for transmission
    and service line development east of Pine Ridge Village between
    Wakpamni, Batesland, and Allen and south toward the Nebraska State
    line. This area has been deferred in the past due to funding
    constraints. The supervisory control and data acquisition (SCADA)
    facilities will be installed with state-of-the-art electronic
    equipment.
        As set forth above, activity on the Pine Ridge Indian Reservation
    in fiscal year 2013 continues to focus on constructing the transmission
    system that serves as the ``backbone'' of the Project on the
    Reservation from the White River in the northeast corner of the
    Reservation to Pine Ridge Village. The Tribe will continue focus on the
    disinfection requirements to blend Missouri River water and high-
    quality groundwater without creating harmful contaminants. State-of-
    the-art designs are being implemented for water quality control.
        The Oglala Sioux Tribe is supportive of the funding request of
    other sponsors.
                   west river/lyman-jones rural water system
        West River/Lyman-Jones (WR/LJ) RWS projects for fiscal year 2013
    include standby generation facilities, storage reservoirs, SCADA, and
    cold storage additions.
        The upper Midwest and specifically the Mni Wiconi project area
    regularly experience power outages as the result of winter weather
    conditions. Regulatory authorities in South Dakota have recommended
    standby generation as the result of statewide power outages experienced
    during the winters of 2005-2006 and 2009-2010. The Bureau of
    Reclamation has concurred in the addition of standby generation to the
    Mni Wiconi plan of work. WR/LJ has outlined a 3-year standby generation
    project schedule.
        Water storage needs include an elevated tower in the Reliance
    service area, a ground storage reservoir in Mellette County, and
    supplemental storage in the Elbon service area.
        SCADA capability provides accurate and efficient transmission of
    data and allows remote control of pumping and storage facilities. The
    WR/LJ SCADA system will be completed using the requested funding.
        Storage facilities at the Murdo and Philip operations centers will
    complete the building components of the WR/LJ project.
        Previous Federal appropriations to the Mni Wiconi project have made
    possible the delivery of much needed quality water to members of the
    West River/Lyman-Jones RWS and to the livestock industry in the project
    area. This would not have been possible without State and Federal
    assistance.
                        rosebud sioux rural water system
        The Rosebud Sioux Tribe is faced with difficult decisions on how
    best to use the remaining authorized construction ceiling for the
    Rosebud Sioux Rural Water System or Sicangu Mni Wiconi. It has been
    more than 20 years since the tribe completed its Needs Assessment and
    engineering plan. There have been significant changes in the tribe's
    development plans and their water resources since 1993. The use of the
    remaining $7.068 million in construction funding strikes a balance
    between recent developments and original plan developed 20 years ago.
        The majority of funds will go toward completion of the Sicangu
    Village Pipeline. This project extends the water system to the new
    housing area being developed in the southern portion of the Reservation
    near the Nebraska border. While potential demands for this area were
    included in the original plan a pipeline from the north was not
    envisioned because it was believed that the High Plains (also known as
    ``Ogallala'') aquifer was capable of providing a reliable source of
    high-quality water. Development of local wells has proven otherwise and
    the increased demands have required bringing surface water south to the
    area.
        While lack of sufficient yield from the aquifer is the primary
    problem at Sicangu Village, the problem is exacerbated by high
    concentrations of nitrates at two schools north of the housing area.
    The tribe is attempting to leverage Mni Wiconi funding with Indian
    Health Service and Environmental Protection Agency funds to address the
    issue and provide water that meets primary safe drinking water
    standards for the schools.
        The last major project in fiscal year 2013 will be the replacement
    of the treatment facility for the Rosebud well field. This facility was
    constructed prior to Mni Wiconi and is ``showing its age''. While the
    facility has been used since 1997 as a core component of the Sicangu
    Mni Wiconi and even treated water that was exported to the WR/LJ
    service area, the Bureau's current policy does not allow for
    replacement under the replacement, additions, and extraordinary (RAX)
    maintenance program. The project completion plan proposed by the
    project sponsors would allow RAX funding under the OMR portion of the
    appropriations to be used to upgrade existing system components such as
    this and allow construction funds to be used for completion of the
    distribution system.
        The remainder of the authorized ceiling and fiscal year 2013
    appropriations will be used for small additions to the distribution
    system and service lines and connections, all of which are constructed
    through the Tribe's force account program.
                     operation, maintenance, and replacement
        The sponsors will continue to work with Reclamation to ensure that
    their budgets are adequate to properly operate, maintain, and replace
    respective portions of the core and distribution systems. The sponsors
    will also continue to manage OMR expenses. The administration's budget
    for fiscal year 2013 is virtually the same as requested by the
    sponsors.

            FISCAL YEAR 2013 OPERATION, MAINTENANCE, AND REPLACEMENT
    ------------------------------------------------------------------------
                          Project area                            Request
    ------------------------------------------------------------------------
    Oglala Sioux Rural Water Supply System:
        Core................................................      $3,440,000
        Distribution........................................       3,400,000
    Lower Brule.............................................       1,560,000
    Rosebud RWS.............................................       2,377,000
    Reclamation.............................................       1,447,000
                                                             ---------------
          Total.............................................      12,224,000
    ------------------------------------------------------------------------

        The project has been treating and delivering more water each year
    from the OSRWSS Water Treatment Plant near Fort Pierre as construction
    has advanced in the Rosebud, WR/LJ, and Oglala service areas.
    Completion of significant core and distribution pipelines has resulted
    in more deliveries to more communities and rural users. The need for
    sufficient funds to properly operate and maintain the functioning
    system throughout the project has grown as the project has now reached
    95-percent completion. The OMR budget must be adequate to keep pace
    with the system that is placed in operation.
        With completion of construction imminent in fiscal year 2013,
    emphasis will shift to operation, maintenance, and replacement as the
    primary budgeting need. Adherence to a proper level of operation,
    maintenance, and replacement funding is manifest. Budgeting by the
    United States to ensure that aging features of the constructed project
    are protected is not only sensible but properly executes the
    responsibilities of the United States as trustee to the Indian people.
    While the budgeting by the administration was adequate this year,
    budgeting has not been adequate in several of the past years. The
    concern is that aging components of critical project facilities will
    not be properly repaired and replaced due to budget limitations.
        The Lower Brule Rural Water System (LBRWS) is essentially complete
    with all major components such as the water treatment plant, booster
    stations, and tanks/reservoirs in full operation. As a result, LBRWS's
    operation and maintenance portion of the budget has reached a baseline
    amount to which only slight adjustments along with inflation should be
    made each year. The portion of the LBRWS OM&R budget that is somewhat
    variable is the RAX maintenance items. LBRWS will continue to work with
    the Bureau of Reclamation and the other sponsors to prioritize their
    needs and ensure that their system is operating to the standards that
    have been established over the past several years. With that in mind,
    the LBRWS request for OM&R for fiscal year 2013 is $1,560,000.
        The RSRWS expanded the areas served from surface water
    significantly in 2011 and 2012. In 2012 the connections to provide
    surface water to the town of Mission were completed. Early in fiscal
    year 2013 the pipeline and pumping station delivering surface water to
    Sicangu Village will be completed. The new pumping stations increase
    operational costs for energy, maintenance, and personnel. In addition,
    energy costs increases have significantly impacted Rosebud for
    electrical costs and vehicle expenses. With the oldest parts of the
    system in service for 15 years replacement costs covered under RAX are
    also becoming more significant. RAX funds must be included in the Mni
    Wiconi Project appropriations because they are not funded through the
    Bureau's RAX program.
        OSRWSS will incur costs of replacement and sludge removal at the
    water treatment plant in fiscal year 2013. The Reclamation budget does
    not provide for routine replacements, which threatens the capital
    investment in the project. OSRWSS needs to replace 12 flocculation
    drives, 8 effluent valves, 2 pump variable frequency drive pumps,
    chemical feed pumps, and numerous other parts that Reclamation only
    includes in its RAX account for extraordinary, not routine maintenance.
    The replacement costs in our request are $958,000, which will ensure
    that obsolete parts are traded out. The balance of the $3.440 million
    request is for normal operation and maintenance. Further, OSRWSS staff
    will anticipate a salary adjustment to accommodate competitive wages
    for South Dakota.
        The on-reservation OSRWSS OMR expenses will be substantially higher
    with higher pumping rates, unanticipated costs with pump houses repair
    and higher water consumption as new systems are built and communities
    are connected. On-reservation staff will anticipate a salary adjustment
    to accommodate competitive wages for South Dakota as their jobs have
    become more technical, which requires a higher base wage. On-
    reservation has not received RAX money since fiscal year 2009 so there
    is a back log of items that fall in RAX maintenance.
        The Mni Wiconi Project tribal beneficiaries respectfully request
    appropriations for OMR in fiscal year 2013 in the amount of $12.224
    million, which is virtually the same as the President's budget.
                                     ______

                  Prepared Statement of The Nature Conservancy
        Dear Chairwoman Feinstein and Senator Alexander: My name is Taylor
    Hawes and I am the Director, Colorado River Program. I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    U.S. Bureau of Reclamation (Reclamation) within the budget line item
    entitled ``Endangered Species Recovery Implementation Program'' for the
    Upper Colorado Region, consistent with the President's recommended
    budget. Substantial non-Federal cost-sharing funding is occurring
    pursuant to Public Law 106-392, as amended. This appropriation will
    allow continued funding in fiscal year 2013 for the Upper Colorado
    River Endangered Fish Recovery Program and the San Juan River Recovery
    Implementation Program as authorized by Public Law 106-392. These two
    successful ongoing cooperative partnership programs involve the States
    of Colorado, New Mexico, Utah, and Wyoming; Indian tribes; Federal
    agencies; and water, power, and environmental interests.
        I thank you for the subcommittee's past support and request the
    subcommittee's assistance for fiscal year 2013 funding to ensure
    Reclamation's continuing financial participation in these vitally
    important programs.
                                     ______

     Prepared Statement of the Northern Colorado Water Conservancy District
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-share funding is occurring pursuant to Public Law 106-
    392 as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful, ongoing,
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

              Prepared Statement of the San Juan Water Commission
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

              Prepared Statement of the Southern Ute Indian Tribe
        Dear Chairwoman Feinstein and Senator Alexander: On behalf of the
    Southern Ute Indian Tribe, I am writing to request your support for an
    appropriation for fiscal year 2013 of $8,387,000 to the Bureau of
    Reclamation within the budget line item entitled ``Endangered Species
    Recovery Implementation Program'' for the Upper Colorado Region,
    consistent with the President's recommended budget. Substantial non-
    Federal cost-sharing funding is occurring pursuant to Public Law 106-
    392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful, ongoing,
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; the Southern Ute Indian Tribe; the Ute
    Mountain Ute Indian Tribe; the Navajo Nation; the Jicarilla Apache
    Nation; Federal agencies; and water, power, and environmental
    interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. The Tribe thanks you for the subcommittee's past support and
    requests the subcommittee's assistance for fiscal year 2013 funding to
    ensure the Bureau of Reclamation's continuing financial participation
    in these vitally important programs.
                                     ______

       Prepared Statement of The Southwestern Water Conservation District
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                    Prepared Statement of the State of Utah
        Dear Chairwoman Feinstein and Senator Alexander: On behalf of the
    State of Utah and Utah's Colorado River water users, I respectfully
    request your support for the appropriation to the Bureau of Reclamation
    for the Upper Colorado River Endangered Fish Recovery Program and the
    San Juan River Basin Recovery Implementation Program. These two
    programs are provided for in the budget line item entitled ``Endangered
    Species Recovery Implementation Program''.
        The Upper Colorado and San Juan recovery programs are highly
    successful collaborative conservation partnerships working to recover
    the four species of endemic Colorado River fish on the Federal
    endangered species list; while at the same time water use and
    development have been able to continue in our growing western
    communities. These programs are unique efforts involving the States of
    New Mexico, Colorado, Utah, and Wyoming; Indian tribes; Federal
    agencies; and water, power, and environmental interests. They are
    achieving Endangered Species Act (ESA) compliance for water projects
    and fully complying the interstate river compacts and the participating
    States' water law.
        Since 1998, the two programs, collectively, have provided ESA
    section 7 compliance (without litigation) for more than 2,100 Federal,
    tribal, State, and privately managed water projects depleting more than
    3.7 million acre-feet of water per year. Substantial non-Federal cost-
    sharing funding exceeding 50 percent is embodied in both programs.
        Each year in support of these two regionwide cooperative recovery
    programs, the State of Utah requests the subcommittee's assistance. It
    is absolutely essential that fiscal year 2013 funding be provided
    within the Bureau of Reclamation's budget appropriation to assure that
    agency's continued financial participation as directed by Public Law
    106-392, as amended.
        On behalf of the State of Utah, I thank you for the past support
    and assistance of your subcommittee; it has greatly facilitated the
    ongoing and continuing success of these multistate, multiagency
    programs vital to providing water for Utah.
                                     ______

                   Prepared Statement of the State of Wyoming
        Dear Chairwoman Feinstein and Senator Alexander: I am requesting
    your support for fiscal year 2013 appropriations to the Bureau of
    Reclamation for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program.
    These two programs are provided for in the budget line-item entitled
    ``Endangered Species Recovery Implementation Program''. The Upper
    Colorado and San Juan recovery programs are highly successful
    collaborative conservation partnerships working to recover the four
    species of endemic Colorado River fish such that they can each be
    removed from the Federal endangered species list. At the same time,
    these programs have provided the means for water use and development to
    continue in our growing western States.
        These two programs are unique efforts involving the States of
    Colorado, New Mexico, Utah, and Wyoming; Indian tribes; Federal
    agencies; and water, power, and environmental interests. They continue
    to achieve Endangered Species Act (ESA) compliance for Federal and non-
    Federal water projects and are fully complying with interstate river
    compacts and the participating States' water law. Recognizing the need
    for fiscal responsibility, I must also point out that the participants
    would all be spending much more in ESA-related costs in the absence of
    these programs.
        Since 1988, these programs, collectively, have provided ESA section
    7 compliance (without litigation) for more than 2,300 Federal, tribal,
    State, and privately managed water projects that use more than 3.72
    million acre-feet of water per year. Substantial non-Federal cost-
    sharing, which exceeds 50 percent, is embodied in both programs.
        The State of Wyoming requests the subcommittee's assistance in
    support of these two regionwide cooperative recovery programs each
    year. It is essential that fiscal year 2013 funding be provided within
    the Bureau of Reclamation's budget appropriation to assure that the
    agency can continue to meet its financial participation requirements,
    which were set forth in Public Law 106-392, as amended.
        On behalf of the State of Wyoming, I thank you for your
    consideration on my request. I also thank you for the past support and
    assistance of your subcommittee, which have greatly facilitated the
    ongoing and continuing success of these multistate, multiagency
    programs that are vital to the recovery of the endangered fish and
    providing necessary water supplies for the growing Intermountain West.
                                     ______

        Prepared Statement of the Tri-County Water Conservancy District
        Dear Chairwoman Feinstein and Senator Alexander: The Tri-County
    Water Conservancy District Board requests your support for an
    appropriation for fiscal year 2013 of $8,387,000 to the Bureau of
    Reclamation within the budget line item entitled ``Endangered Species
    Recovery Implementation Program'' for the Upper Colorado Region,
    consistent with the President's recommended budget. Substantial non-
    Federal cost-sharing funding is occurring pursuant to Public Law 106-
    392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. We thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

       Prepared Statement of the Upper Gunnison River Water Conservancy
                                    District
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

                Prepared Statement of the Ute Mountain Ute Tribe
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

             Prepared Statement of the Utah Water Users Association
        Dear Chairwoman Feinstein and Senator Alexander: I request your
    support for an appropriation for fiscal year 2013 of $8,387,000 to the
    Bureau of Reclamation within the budget line item entitled ``Endangered
    Species Recovery Implementation Program'' for the Upper Colorado
    Region, consistent with the President's recommended budget. Substantial
    non-Federal cost-sharing funding is occurring pursuant to Public Law
    106-392, as amended. This appropriation will allow continued funding in
    fiscal year 2013 for the Upper Colorado River Endangered Fish Recovery
    Program and the San Juan River Basin Recovery Implementation Program as
    authorized by Public Law 106-392. These two successful ongoing
    cooperative partnership programs involve the States of Colorado, New
    Mexico, Utah, and Wyoming; Indian tribes; Federal agencies; and water,
    power, and environmental interests.
        The requested Federal appropriations are critically important to
    these efforts moving forward. The past support of your subcommittee has
    greatly facilitated the success of these multistate, multiagency
    programs. I thank you for the subcommittee's past support and request
    the subcommittee's assistance for fiscal year 2013 funding to ensure
    the Bureau of Reclamation's continuing financial participation in these
    vitally important programs.
                                     ______

           Prepared Statement of the Wyoming State Engineer's Office
        Dear Chairwoman Feinstein and Ranking Member Alexander: This letter
    is sent in support of fiscal year 2013 funding for the Bureau of
    Reclamation's (BOR) Colorado River Basin Salinity Control Project--
    Title II Program. A total of $14,500,000 is requested for BOR's fiscal
    year 2011 activities to implement BOR's Basinwide authorized Colorado
    River Basin salinity control program. Failure to appropriate these
    funds will directly result in significant economic damages being
    accrued by United States and Mexican water users.
        The State of Wyoming also supports funding for Salinity Control
    Program general investigations as requested within BOR's Colorado River
    Water Quality Improvement Program (CRWQIP) budget line-item. It is
    important that BOR has properly-funded planning and administration
    staff in place, so that the program's progress can be monitored,
    necessary coordination among Federal and State agencies can be
    accomplished, and future projects and opportunities to control salinity
    can be properly planned. Maintaining the Colorado River water quality
    standards for salinity is essential to allow users in the seven
    Colorado River Basin States to continue to develop Compact-apportioned
    waters.
        In addition to the funding identified above for the implementation
    of BOR's program, the State of Wyoming urges the Congress to
    appropriate funds, as requested by the administration, to maintain and
    operate completed salinity control facilities, including the Paradox
    Valley Unit. At facilities located within the Paradox Valley of
    Colorado subsurface saline brines are collected below the Delores River
    and are injected into a deep aquifer through an injection well. The
    continued operation of this project, and the Grand Valley Unit, are
    funded primarily through the Facility Operations activity.
        The Colorado River provides municipal and industrial water for
    nearly 33 million people and irrigation water to approximately 4
    million acres of land in the United States. The River is also the water
    source for some 3 million people and 500,000 acres in Mexico. The high
    concentration of total dissolved solids (e.g., the water's salinity
    concentration) in the water limits users' abilities to make the
    greatest use of this water supply. This remains a major issue and
    continuing concern in both the United States and Mexico. The water's
    salinity concentration especially affects agricultural, municipal, and
    industrial water users. BOR presently estimates direct and computable
    salinity-related damages in the United States amount to more than $300
    million per year.
        The Environmental Protection Agency's (EPA) interpretation of the
    1972 amendments to the Clean Water Act required the seven Basin States
    to adopt water quality standards for salinity levels in the Colorado
    River. In light of the EPA's regulation to require water quality
    standards for salinity in the Basin, the Governors of Arizona,
    California, Colorado, Nevada, New Mexico, Utah, and Wyoming created the
    Colorado River Basin Salinity Control Forum as an interstate
    coordination mechanism in 1973. To address these international and
    regionally important salinity problems, the Congress enacted the
    Colorado River Basin Salinity Control Act of 1974. Title I addressed
    the United States obligations to Mexico to control the River's salinity
    to ensure the United States water deliveries to Mexico are within the
    specified salinity concentration range. Title II of the act authorized
    control measures upstream of Imperial Dam and directed the Secretary of
    the Interior to construct several salinity control projects, most of
    which are located in Colorado, Utah, and Wyoming.
        Title II of the act was again amended in 1995 and 2000 to direct
    BOR to conduct a basinwide salinity control program. This program
    awards grants to non-Federal entities, on a competitive-bid basis,
    which initiate and carry out salinity control projects. The basinwide
    program has demonstrated significantly improved cost-effectiveness, as
    computed on $1 per ton of salt basis, as compared to the prior BOR-
    initiated projects. The Forum was heavily involved in the development
    of the 1974 Act and its subsequent amendments, and continues to
    actively oversee the Federal agencies' salinity control program
    efforts.
        During the past 38 years, the seven-State Colorado River Basin
    Salinity Control Forum has actively assisted the Federal agencies,
    including BOR, in implementing this unique and important program. At
    its October 2012 meeting, the Forum recommended that BOR seek to have
    appropriated and should expend $14,500,000 through its Basinwide
    Program for Colorado River Basin salinity control in fiscal year 2013.
    We strongly believe the combined efforts of the salinity control
    efforts of BOR, Department of Agriculture, and the Bureau of Land
    Management constitute one of the most successful Federal/State
    cooperative non-point source pollution control programs in the United
    States.
        The State of Wyoming greatly appreciates the subcommittee's support
    of the Colorado River Salinity Control Program in past years. We
    strongly believe this important basinwide water quality improvement
    program merits continued funding and support by your subcommittee.
    Thank you in advance for inclusion of this letter in the formal hearing
    record concerning fiscal year 2013 appropriations.
    .................................................................

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Alexander, Senator Lamar, U.S. Senator From Tennessee:
        Questions Submitted by............................56, 115, 201, 219
        Statements of............................................3, 65, 125
    American:
        Council for an Energy-Efficient Economy, Prepared Statement
          of the.....................................................   241
        Geosciences Institute, Prepared Statement of the.............   243
        Public Power Association, Prepared Statement of the..........   244
        Society for Microbiology, Prepared Statement of the..........   246
        Society of:
            Agronomy, Prepared Statement of the......................   249
            Civil Engineers, Prepared Statement of the...............   221
            Plant Biologists, Prepared Statement of..................   250
    APS Technology, Inc., Prepared Statement of......................   255
    ASME, Prepared Statement of......................................   252
    Assiniboine and Sioux Tribes of the Fort Peck Reservation and Dry
      Prairie Rural Water, Prepared Statement of the.................   313
    Aurora Water, Prepared Statement of..............................   315

    Board of:
        Levee Commissioners for the Yazoo-Mississippi Delta, Prepared
          Statement of the...........................................   223
        Mississippi Levee Commissioners, Prepared Statement of the...   224
        Water Works of Pueblo, Colorado, Prepared Statement of.......   316

    Carnegie Mellon University, Prepared Statement of................   257
    Castle, Hon. Anne, Assistant Secretary for Water and Science,
      Bureau of Reclamation, Department of the Interior..............   142
        Prepared Statement of........................................   143
    Central Utah Water Conservancy District, Prepared Statement of...   316
    Chu, Hon. Steven, Secretary, Office of the Secretary, Department
      of Energy......................................................     1
        Prepared Statement of........................................     7
        Summary Statement of.........................................     5
    City of Farmington, Prepared Statement of........................   316
    Coal Utilization Research Council, Prepared Statement of the.....   258
    Coalition of Northeastern Governors, Prepared Statement of the...   261
    Cochran, Senator Thad, U.S. Senator From Mississippi, Questions
      Submitted by..................................................60, 207
    Collins, Senator Susan, U.S. Senator From Maine:
        Questions Submitted by......................................61, 208
        Statement of.................................................   127
    Colorado River:
        Basin Salinity Control Forum, Prepared Statement of..........   316
        Board of California, Prepared Statement of the...............   318
        Energy Distributors Association, Prepared Statements of the..   320
    Colorado Springs Utilities, Prepared Statement of................   321
    Colorado Water Congress, Prepared Statement of the...............   321
    Connor, Hon. Michael L., Commissioner, Bureau of Reclamation,
      Department of the Interior.....................................   150
        Prepared Statement of........................................   151
        Questions Submitted to.......................................   209
    Crop Science Society of America, Prepared Statement of the.......   249
    Cummins Inc., Prepared Statement of..............................   263

    D'Agostino, Thomas P., Administrator, National Nuclear Security
      Administration, Department of Energy...........................    63
        Prepared Statement of........................................    70
        Questions Submitted to.......................................   110
        Summary Statement of.........................................    67
    Darcy, Hon. Jo-Ellen, Assistant Secretary of the Army (Civil
      Works), Corps of Engineers--Civil, Department of the Army,
      Department of Defense--Civil...................................   123
        Prepared Statement of........................................   129
        Questions Submitted to.......................................   181
        Summary Statement of.........................................   128
    Denver Water, Prepared Statement of..............................   321
    Diesel Technology Forum, Prepared Statement of the...............   265
    Durbin, Senator Richard J., U.S. Senator From Illinois, Questions
      Submitted by...................................................    54

    Edison Electric Institute, Prepared Statement of the.............   268
    Electric Drive Transportation Association, Prepared Statement of
      the............................................................   270

    Federation of American Societies for Experimental Biology,
      Prepared Statement of the......................................   271
    Feinstein, Senator Dianne, U.S. Senator From California:
        Opening Statements of........................................ 1, 63
        Questions Submitted by...........................110, 123, 181, 209
    Fermi National Accelerator Laboratory, Prepared Statement of the.   272
    Fifth Louisiana Levee District, Prepared Statement of the........   227

    Gas Turbine Association, Prepared Statement of the...............   275
    GE Energy, Prepared Statement of.................................   276
    Grand Valley Water Users' Association, Prepared Statement of.....   322

    Irrigation and Electrical Districts Association of Arizona,
      Prepared Statement of..........................................   322
    Izaak Walton League of America, Prepared Statement of the........   227

    Jicarilla Apache Nation, Prepared Statement of the...............   323

    Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions
      Submitted by..................................................42, 192
    Lautenberg, Senator Frank R., U.S. Senator From New Jersey,
      Questions Submitted by........................................43, 197
    Little River Drainage District, Prepared Statement of the........   230
    Lower Brule Rural Water System, Prepared Statement of the........   324

    Mississippi Valley Flood Control Association, Prepared Statement
      of the.........................................................   231
    Murkowski, Senator Lisa, U.S. Senator From Alaska, Questions
      Submitted by...................................................    61
    Murray, Senator Patty, U.S. Senator From Washington, Questions
      Submitted by........................................36, 113, 191, 219

    National:
        Association for State Community Services Programs, Prepared
          Statement of the...........................................   282
        Association of State Energy Officials, Prepared Statement of
          the........................................................   279
        Carbon Capture Center, Prepared Statement of the.............   284
        Community Action Foundation, Prepared Statement of the.......   287
        Consumer Law Center, Prepared Statement of the...............   289
        Hydropower Association, Prepared Statement of the............   292
        Insulation Association and International Association of Heat
          and Frost Insulators and Allied Workers, Prepared Statement
          of.........................................................   295
        Research Center for Coal and Energy, Prepared Statement of
          the........................................................   296
    Nature Conservancy, Prepared Statements of the.................234, 328
    Northern Colorado Water Conservancy District, Prepared Statement
      of the.........................................................   328
    Nuclear Energy Institute, Prepared Statement of the..............   298
    Nuclear Engineering Department Heads Organization, Prepared
      Statement of the...............................................   301

    Oglala Sioux Rural Water Supply System, Prepared Statement of the   324

    Red River Valley Association, Prepared Statement of the..........   237
    Rosebud Rural Water System, Prepared Statement of the............   324

    Sacramento Municipal Utility District, Prepared Statement of the.   303
    San Juan Water Commission, Prepared Statement of the.............   328
    Society for Industrial and Applied Mathematicsm, Prepared
      Statement of the...............................................   304
    Soil Science Society of America, Prepared Statement of the.......   249
    Southern Ute Indian Tribe, Prepared Statement of the.............   329
    Southwestern Water Conservation District, Prepared Statement of
      the............................................................   329
    State of:
        Utah, Prepared Statement of the..............................   329
        Wyoming, Prepared Statement of the...........................   330
    State Teachers' Retirement System, State of California, Prepared
      Statement of the...............................................   306

    Temple, Major General Merdith W.B., Acting Commanding General,
      Chief of Engineers, Corps of Engineers--Civil, Department of
      the Army, Department of Defense--Civil.........................   136
        Prepared Statement of........................................   137
        Questions Submitted to.......................................   181
    Tester, Senator Jon, U.S. Senator From Montana, Questions
      Submitted by..................................................44, 199
    Tri-County Water Conservancy District, Prepared Statement of the.   330

    University Corporation for Atmospheric Research, Prepared
      Statement
      of the.........................................................   307
    Upper Gunnison River Water Conservancy District, Prepared
      Statement of the...............................................   331
    URS Corporation, Prepared Statement of the.......................   310
    Utah Water Users Association, Prepared Statement of the..........   331
    Ute Mountain Ute Tribe, Prepared Statement of the................   331

    West River/Lyman Jones Rural Water System, Prepared Statement of
      the............................................................   324
    Worcester Polytechnic Institute, Prepared Statement of the.......   312
    Wyoming State Engineer's Office, Prepared Statement of the.......   332

                                 SUBJECT INDEX

                                  ----------

                          DEPARTMENT OF DEFENSE--CIVIL

                             Department of the Army

                           Corps of Engineers--Civil

                                                                       Page

    Additional Committee Questions...................................   181
    American Recovery and Reinvestment Act...........................   135
    Aquatic Ecosystem Restoration....................................   133
    Construction Program.............................................   138
    Direct Program...................................................   138
    Efficiency and Effectiveness of Corps Operations.................   140
    Fiscal Year 2013:
        Discretionary Funding Level..................................   130
        New Investments in...........................................   132
        Program Budget, Summary of...................................   138
    Flood Risk Management............................................   133
    Infrastructure Modernization.....................................   132
    Investigations Program...........................................   138
    National Defense.................................................   140
    Navigation.......................................................   132
    New Investments in Fiscal Year 2013..............................   132
    Operation and Maintenance Program................................   139
    Planning:
        Improvements.................................................   135
        Program Modernization........................................   140
    Program:
        Construction.................................................   138
        Direct.......................................................   138
        Investigations...............................................   138
        Operation and Maintenance....................................   139
        Regulatory...................................................   135
        Reimbursable.................................................   139
    Regulatory Program...............................................   135
    Reimbursable Program.............................................   139
    Research and Development.........................................   140
    Summary of Fiscal Year 2013 Program Budget.......................   138
    Value of the Civil Works Program to the Nation's Economy and
      Defense........................................................   140
    Veterans Curation Project........................................   135

                              DEPARTMENT OF ENERGY

    Additional Committee Questions...................................    36
    Advanced Computing...............................................    31
    Argonne and Supercomputing.......................................    55
    Biofuels.........................................................    14
    Blue Ribbon Commission Recommendations...........................    34
    Bonneville Power Administration..................................    37
        Federal Energy Regulatory Commission.........................    16
        Pumped Storage Hydro.........................................    23
    Federal Energy Regulatory Commission.............................    16
    Coordination With Other Agencies.................................    52
    Distributed Wind.................................................    50
    Efficient Automobiles............................................    32
    Energy Efficiency and Renewable Energy Increase--Wind Technology.    13
    Federal Energy Regulatory Commission--Bonneville Power
      Administration.................................................    16
    Fermilab and High Energy Physics.................................    54
    Fiscal Responsibility and Management Excellence..................     9
    Fuel Cell and Hydrogen Program...................................    39
    Fuel Cells.......................................................    22
        Follow Up....................................................    44
    Fusion--International Thermonuclear Experimental Reactor.........    10
    FutureGen 2.0....................................................    55
    Geothermal:
        Energy Budget................................................    48
        Heat Pumps...................................................    49
    Health, Safety, and Security.....................................    36
    High Energy Physics, Fermilab and................................    54
    Hub Questions....................................................    56
    Hydraulic:
        Fracking.....................................................    19
        Fracturing...................................................    45
    Hydro Budget.....................................................    49
    Leading in the Energy Technologies of the 21st Century...........     7
    Mesoscale........................................................    10
    Nuclear:
        Energy and Small Modular Reactors Questions..................    57
        Projects and Waste Clean Up..................................    12
        Reactor Loans................................................    24
        Safety.......................................................    28
            Security, and............................................     9
        Waste:
            Questions................................................    57
            Storage and Disposal.....................................    30
    Office of:
        Electricity Delivery and Energy Reliability..................    40
        Inspector General Report on the Department of Energy Lab
          Contracting Costs..........................................    46
        Science Questions............................................    58
    Offshore Wind....................................................    33
    Oil Prices.......................................................    17
    Oil/Gas..........................................................25, 28
    Pump Storage Hydro and Power Marketing Administration
      Coordination...................................................    52
    Renewable Energy Standard........................................    53
    Research and Development Efforts.................................    27
    Strategic Petroleum Reserve......................................    42
    Streamlining and Reducing Costs Questions........................    59
    Tech Transfer....................................................    22
    Unleashing U.S. Innovation to Create Jobs and Lead in the Global
      Economy........................................................     8
    Waste:
        Isolation Pilot Plant........................................    11
        Power Program................................................    41
        Treatment Plant..............................................    15
    Weatherization...................................................    26
        Programs.....................................................    20
    Yucca Mountain...................................................    24

                    National Nuclear Security Administration

    Achieving the President's Nuclear Security Objectives, Shaping
      the Future.....................................................    70
    Additional Committee Questions...................................   110
    Administrative Costs.............................................   120
    American Centrifuge Plant........................................   108
    Construction Projects............................................   112
    Continuously Improving...........................................    73
    Doing Our Part...................................................    73
    Environmental Management--Technology Development and Deployment..   115
    Fissile Materials Disposition....................................   117
    Life Extension Programs.........................................98, 117
    Los Alamos National Laboratory Plutonium Facility................    99
    Major Shift in Second Line of Defense Program..................113, 118
    National Ignition Facility......................................89, 110
    National Laboratory Costs........................................    97
    National Nuclear Security Administration Workforce Planning......   115
    Nuclear:
        Export Controls..............................................   119
        Security Objectives, Shaping the Future, Achieving the
          President's................................................    70
        Smuggling....................................................   104
        Weapons Modernization........................................   105
    Oak Ridge Uranium Project........................................    93
    Pit Production...................................................   115
        Plutonium....................................................    97
    Plutonium Pit Production.........................................    97
    Radiological Cleanup.............................................   108
    United States Enrichment Corporation...........................102, 107
    Workforce Planning...............................................   120
        National Nuclear Security Administration.....................   115

                           DEPARTMENT OF THE INTERIOR

                             Bureau of Reclamation

    2011 Accomplishments.............................................   144
    Additional Committee Questions...................................   209
    America's Great Outdoors.........................................   145
    Anadromous Fish Screens..........................................   215
    Army Corps of Engineers--Levee Vegetation........................   191
    Bay-Delta Conservation Plan....................................213, 214
    Beneficial Use of Dredged Materials..............................   195
    CALFED...........................................................   211
    California Bay-Delta Restoration.................................   155
    California Drought...............................................   212
    Campaign to Cut Waste............................................   156
    Central Utah Project.............................................   149
        Completion Act.............................................154, 218
    Central Valley Project...........................................   177
        Restoration Fund.............................................   155
        State Water Project, and.....................................   210
    Chickamauga Lock.................................................   160
    Contributed Funds................................................   187
    Delta and Delta Counties.........................................   214
    Des Moines River.................................................   175
    Feasibility Studies..............................................   174
    Fiscal Responsibility............................................   145
    Fiscal Year 2013:
        Budget for Water and Related Resources, Highlights of the....   152
        Priority Goal for Water Conservation.........................   156
    Flood Control:
        Coastal Emergencies, and.....................................   204
        Studies, Ongoing.............................................   163
    Growing the Economy Outdoors.....................................   145
    Harbor Maintenance:
        Taxes to the States Where Generated, Proposal To Return......   185
        Trust Fund............................................158, 184, 206
    Highlights of the Fiscal Year 2013 Budget for Water and Related
      Resources......................................................   152
    Hydropower.....................................................147, 219
    Impact of Panama Canal Expansion on United States Shipping Ports.   164
    Indian:
        Land and Water Settlements...................................   148
        Water Rights Settlements...................................155, 217
    Inland Waterways.................................................   193
        Trust Fund............................................159, 185, 202
    Innovation Through Science.......................................   147
    Intake Dam Rehabilitation........................................   200
    Interagency Performance Evaluation Task Force....................   188
    Investing in Our Youth...........................................   146
    Klamath Settlement...............................................   211
    Levee:
        Task Force...................................................   200
        Vegetation, Army Corps of Engineers..........................   191
    Louisiana Coastal Area Projects..................................   167
    Missouri River...................................................   176
        Authorized Purposes Study....................................   199
        Flood Infrastructure Recovery................................   199
    Modified Charleston Method for Mitigation........................   168
    Natomas Levee Improvement Program................................   157
    New Energy Frontier..............................................   147
    New York-New Jersey Harbor Deepening.............................   163
    Odessa Subarea Special Study.....................................   219
    Olmsted Lock.....................................................   175
        Dam, and.....................................................   201
    Ongoing Flood Control Studies....................................   163
    Passaic River Basin..............................................   163
    Performance-Based Budget and Development of Work Plans...........   189
    Permanent Appropriations.........................................   156
    Policy and Administration........................................   155
    Principles and Guidelines........................................   205
    Project Prioritization...........................................   172
    Proposal To Return Harbor Maintenance Taxes to the States Where
      Generated......................................................   185
    Regulatory Program...............................................   205
    Research and Development.........................................   155
    San Joaquin:
        Restoration Fund.............................................   212
        River Restoration Fund.......................................   155
    Section 104 Credits..............................................   188
    Sierra Nevadas...................................................   210
    South Dakota Projects............................................   211
    St. Mary Rehabilitation..........................................   200
    State Water Project, Central Valley Project and..................   210
    Title XVI:
        Water Reclamation and Reuse..................................   214
        WaterSMART...................................................   216
    Vernal Pool Regulations..........................................   161
    Waste, Campaign to Cut...........................................   156
    Water:
        Banking......................................................   209
        Challenges...................................................   146
        Conservation, Fiscal Year 2013 Priority Goal for.............   156
        Related Resources, and.......................................   152
            Highlights of the Fiscal Year 2013 Budget for............   152
        Resources Modernization......................................   190
    Wetlands Mitigation..............................................   196
    White House Navigation Task Force................................   190
    Work Plans.......................................................   186
        Performance-Based Budget and Development of..................   189
    Yellowstone River Corridor Study.................................   199