[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

                               __________

         Printed for the use of the Committee on Appropriations





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                      COMMITTEE ON APPROPRIATIONS

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

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

              Subcommittee on Energy and Water Development

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

                                

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