[Senate Hearing 112-213]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-213
 
                          MAJUMDAR NOMINATION

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



                                HEARING

                               before the

                              COMMITTEE ON

                      ENERGY AND NATURAL RESOURCES 


                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

   THE NOMINATION OF ARUNAVA MAJUMDAR TO BE UNDER SECRETARY OF ENERGY

                               __________

                            DECEMBER 8, 2011


                       Printed for the use of the
               Committee on Energy and Natural Resources




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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           MIKE LEE, Utah
BERNARD SANDERS, Vermont             RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan            DANIEL COATS, Indiana
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Franken, Hon. Al, U.S. Senator From Minnesota....................     3
Majumdar, Arunava, Nominee to be the Under Secretary of Energy...     4
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Rockwell, Victoria A., President, American Society of Mechanical 
  Engineers, New York, NY........................................    17

                                APPENDIX

Responses to additional questions................................    19


                          MAJUMDAR NOMINATION

                              ----------                              


                       THURSDAY, DECEMBER 8, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. Why don't we go ahead and get started. 
Senator Murkowski is on her way, but has been delayed, so she 
asked us to proceed without her until she can arrive.
    The committee meets this morning to consider the nomination 
of Dr. Arun Majumdar to be the Under Secretary of Energy.
    Dr. Majumdar is currently the Director of ARPA-E, the 
Advanced Research Projects Agency at the Department of Energy. 
The Senate confirmed his nomination for that position 2 years 
ago in October 2009. He also serves as Secretary Chu's senior 
advisor.
    The Office of the Under Secretary is one of the most senior 
at the Department. Its portfolio includes energy efficiency and 
renewable energy, fossil energy, nuclear energy, and 
electricity. It has been vacant since October 2010, when Dr. 
Kristina Johnson resigned.
    Since then, its functions have been performed on an acting 
basis, first by Cathy Zoi until she resigned earlier this year, 
and since March by Dr. Majumdar.
    Dr. Majumdar is a highly distinguished scientist and 
engineer. Before coming to Washington, he was the Associate 
Laboratory Director for Energy and Environment at Lawrence 
Berkeley National Laboratory, and was a Professor of Mechanical 
Engineering and Material Sciences and Engineering at the 
University of California at Berkeley.
    He holds over a dozen patents. He has authored close to 200 
scientific papers. He served as an advisor to both the National 
Science Foundation and the President's Council of Advisors on 
Science and Technology, as well as startup companies and 
venture capital firms in Silicon Valley. He holds a doctorate 
from the University of California at Berkeley, is a member of 
the National Academy of Engineering.
    We are very fortunate to have such a highly qualified and 
experienced nominee for this important position, and I strongly 
support his nomination. I am pleased to welcome Dr. Majumdar 
back before the committee this morning.
    Since Senator Murkowski is not able to give her statement 
right now, and I am told Senator Franken has another engagement 
and wanted to be recognized for a minute or 2 before he had to 
leave. So Senator Franken, why don't you go ahead.
    Senator Franken. Thank you, Mr. Chairman. I note that the 
ranking member has just arrived and would defer to her, 
considering that she is the ranking member.
    The Chairman. All right. We will----
    Senator Franken. Also, when you say I have another 
engagement, it sounds like I am doing a roast for, you know, 
Shecky Greene or something. I have another committee hearing.
    The Chairman. I did not know the nature of the engagement, 
but I wanted to leave it vague.
    Senator Franken. Let me be clear. It is a hearing.
    The Chairman. A hearing, I see.
    Senator Franken. Of a Senate Committee.
    The Chairman. I see. Senator Murkowski----
    Senator Franken. I would like to make a remark.
    The Chairman. All right, we----
    Senator Franken. I am sorry I interrupted you. Back to you.
    The Chairman. That is fine.
    Senator Murkowski, why don't you go ahead with any opening 
statements you would like to make, then Senator Franken had 
asked that he be allowed to speak for a minute or 2 before he 
has to go to another hearing. Then we will proceed with the 
rest of the hearing.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
that clarification. It was a little confusing first walking in 
here.
    Thank you for deferring, Senator Franken and good morning, 
Doctor. I appreciate you coming back to the committee. I thank 
you again for your willingness to accept an appointment at the 
Department of Energy.
    We have had an opportunity to spend a little time together. 
You came up to Alaska at my invitation, and that of a friend 
outside of Fairbanks, to look at low temperature geothermal. I 
think it is fair to say that we share a genuine interest in 
those exciting technologies, a little bit of the cutting edge, 
out of the box type thinking. I appreciate the enthusiasm and 
the passion that you bring to these issues.
    By all accounts, your background as a scientist and 
engineer makes you a good candidate and certainly a good fit 
there at DOE. While it is probably not easy, or probably not 
fun either, to be responsible for a big piece of a Federal 
Department, we have all benefited from your decision to help 
implement our Nation's energy policy.
    It was just over a couple of years ago, and you took over a 
tough task in standing up ARPA-E, a new agency with no history, 
but you were charged with developing some game changing energy 
technologies. Then back in February of this year, you agreed to 
take on even more responsibility as the Acting Under Secretary.
    So all of this has led to one of today's greatest 
scientific mysteries and that is: has Dr. Majumdar figured out 
how to survive with no sleep? Because I wonder. You have a lot 
going on and again, you do it with incredible energy, 
incredible passion. But I wonder where you find the hours in 
your day. I think you have done a considerable job in balancing 
the demands of 2 time-consuming jobs for some time.
    If you are confirmed as Under Secretary of Energy, as I 
hope you will be, you are going to continue to face a variety 
of tough challenges related to program direction, budgeting 
priorities, funding decisions. It is difficult to advance 
energy innovation and new technologies under the best of 
circumstances, and I think particularly so when Federal dollars 
are in short supply.
    But that is exactly what we are going to be asking you to 
do, and I am glad that you are willing to accept the challenge. 
I look forward to being able to ask you a few questions this 
morning. Again, thank you for your willingness to serve.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much. Senator Franken.

          STATEMENT OF HON. AL FRANKEN, U.S. SENATOR 
                         FROM MINNESOTA

    Senator Franken. Thank you, Mr. Chairman, for holding this 
important hearing in such a timely manner to consider the 
nomination of Dr. Arun Majumdar to be Under Secretary of 
Energy. I would like, also, to thank the Chairman for giving me 
a minute to congratulate Dr. Majumdar on his nomination before 
my next engagement.
    Dr. Majumdar is exactly the type of person this country 
needs leading our efforts to develop and deploy energy 
technologies to meet the challenges of climate change and 
national security.
    Thank you, Dr. Majumdar, for your pioneering role as the 
first Director of ARPA-E, the only U.S. agency devoted to 
funding transformational energy R and D. Dr. Majumdar not only 
led ARPA-E through its first 4 funding opportunity 
announcements, he also put forward a longer term vision for the 
agency. This longer term vision can especially be seen in his 
discussion with stakeholders about how to build a market for 
ARPA-E technologies, to avoid the dreaded ``valley of death'' 
between development and commercialization.
    I had the pleasure to host Dr. Majumdar in Minnesota in 
October when he travelled to join me for an energy summit that 
I had convened there. This provided a terrific forum for 
Minnesota's renewable energy leaders to discuss energy policy 
directly with the Department of Energy. Dr. Majumdar's comments 
were incredibly well received and I deeply appreciate, sir, 
your time and efforts.
    Thank you, Mr. Chairman, and congratulations once again to 
you, Dr. Majumdar.
    The Chairman. Thank you very much.
    Senator Franken. Thank you.
    The Chairman. Doctor, let me put us through our usual 
drill, which you have been through before, related to all 
nominees. The rules of our committee require that all nominees 
be sworn in connection with their testimony. So I would ask you 
to stand and raise your right hand, please.
    Do you solemnly swear that the testimony you are about to 
give to the Senate Committee on Energy and Natural Resources 
shall be the truth, the whole truth, and nothing but the truth?
    Mr. Majumdar. I do.
    The Chairman. Please be seated.
    Before you begin your statement, I will ask 3 questions 
that we address to each nominee who comes before this 
committee.
    First, will you be available to appear before this 
committee and other congressional committees to represent 
departmental positions and respond to issues of concern to the 
Congress?
    Mr. Majumdar. I do.
    The Chairman. The second question. Are you aware of any 
personal holdings, or investments, or interests that could 
constitute a conflict of interest, or create the appearance of 
such a conflict should you be confirmed and assume the office 
to which you have been nominated by the President?
    Mr. Majumdar. My investments, personal holdings, and other 
interests have been reviewed both by myself and the appropriate 
ethics counselors within the Federal Government. I have taken 
the appropriate action to avoid any conflicts of interest. 
There are no conflicts of interest or appearances thereof to my 
knowledge.
    The Chairman. Very good.
    Let me ask the third question then. Are you involved or do 
you have any assets that are held in a blind trust?
    Mr. Majumdar. No.
    The Chairman. At this point, our tradition is to allow the 
nominee, yourself, Dr. Majumdar, to introduce any guests or 
family members that might be here with you.
    Mr. Majumdar. Unfortunately, my family members could not 
come here, but I have my DOE family right behind me.
    The Chairman. All right. They are welcome.
    Now at this point, we will recognize you to make whatever 
statements you would like to make to the committee.

TESTIMONY OF ARUNAVA MAJUMDAR, NOMINEE TO BE UNDER SECRETARY OF 
                             ENERGY

    Mr. Majumdar. Thank you, Mr. Chairman.
    Chairman Bingaman, Ranking Member Murkowski, and 
distinguished members of this committee. It is my distinct 
honor and privilege to appear before you today as the nominee 
for Under Secretary of Energy.
    I would like to first thank my wife, Dr. Aruna Joshi, and 
my 2 daughters, Shalini and Anjali, who have been immensely 
tolerant over the last 2 years of my bicoastal lifestyle 
spanning California and Washington. Unfortunately, they could 
not be here today.
    I wish to also thank President Obama for his confidence in 
me, and Secretary Chu for being a thoughtful mentor, an 
outstanding boss, and someone I have the honor to call a 
friend.
    As I told this committee over 2 years ago, I spent most of 
my career as an educator and researcher in science and 
engineering at the University of California at Berkeley and 
Lawrence Berkeley National Labs.
    While at Berkeley Labs, I led strategic initiatives in the 
areas of energy efficiency, renewable energy, and energy 
storage. In 2005, I was elected to the National Academy of 
Engineering, the Nation's highest honor in engineering.
    The breadth and depth of my knowledge in science and 
engineering, and management of technological innovation, has 
served me well in taking on the challenge of being the first 
Director of ARPA-E, an honor and a privilege I will cherish for 
the rest of my life. In ARPA-E's short existence, we have stood 
up an organization with the philosophy of excellence in 
everything we do.
    I would like to briefly describe the 5 core values which I 
believe are instrumental in ARPA-E's success and which, if 
confirmed, I intend to bring to my role as the Under Secretary 
of Energy.
    Value No. 1: people. ARPA-E has been able to attract some 
of the best and brightest scientists and engineers as program 
directors. We have also assembled a superb administrative 
staff, support staff.
    Value No. 2: speed and efficiency. To be globally 
competitive, speed is of essence. We have developed a 
streamlined process where we can execute with a fierce sense of 
urgency and unprecedented speed and efficiency.
    Value No. 3: breakthrough technologies through competition. 
ARPA-E funds research to translate science into breakthrough 
energy technologies that are too risky for the private sector, 
but if successful could create the foundation for entirely new 
industries. ARPA-E programs have attracted some of the best 
scientists, engineers, and entrepreneurs to compete against 
each other and provide a portfolio of approaches that will 
ensure our national security, economic security, and 
environmental security.
    Value No. 4: stewardship and integrity. All projects are 
selected purely based on merit. We also engage in active 
program management and have had the discipline to discontinue 
projects when they simply did not work out.
    Finally, value No. 5: create value for a secure American 
future. It is important that ARPA-E creates value for society 
and makes an impact on our economy. For example over the last 2 
years, 11 of ARPA-E technologies received $40 million in 
funding, which allowed them, the teams, to conduct the research 
that has subsequently attracted more than $200 million from 
private sector investment in 2 years, 5 times leveraging the 
Federal dollars, and this number continues to grow.
    While such innovations in new energy technologies are 
critical and necessary, they are not sufficient. Cost and scale 
are equally important to address the significant challenges and 
opportunities we face in the 21st century.
    First the challenges. We import roughly 50 percent of the 
oil we use and pay about $1 billion a day. America invented the 
lithium-ion battery, and in 2009, we manufactured only 1 
percent of the world's batteries. We invented the solar cell, 
and this year we will manufacture only 7 percent of the world's 
photovoltaic modules.
    We have an aging grid infrastructure that needs to be 
modernized and secured. We have massive coal and natural gas 
resources that we must use in environmentally responsible and 
cost effective way.
    We invented nuclear energy as a clean source of 
electricity, and we must regain our technological lead and 
become globally competitive.
    Now the opportunities. The rising world population and 
economic growth presents the biggest economic opportunity of 
the 21st century with trillions of dollars of worldwide 
investment in the next few decades. Other nations are 
positioning themselves to take advantage of this opportunity 
and become energy leaders of the future.
    America faces a choice of what to do with the opportunity 
presented by the global energy race. We can compete in the 
global marketplace creating American jobs and selling American 
products, or we can buy technologies of tomorrow from abroad. I 
believe the road to a secure future is to invent locally, make 
locally, and sell globally and we need to do this with fierce 
urgency.
    This requires the Department of Energy to galvanize all its 
rich resources in science, engineering, and policy from across 
the whole enterprise spanning the Office of Science, APRA-E, 
and the applied energy offices, the national laboratories, and 
university and industrial research labs to catalyze and enable 
our small and large industries to become globally competitive 
and ensure a secure future for our children and grandchildren.
    If confirmed, I will work diligently within DOE and with 
Congress to make sure that the DOE will work as an integrated 
team where the whole is bigger than the sum of the parts to 
address the challenges and avail the opportunities of the 21st 
century.
    I thank you for the opportunity to testify before you 
today, and I look forward to answering the questions.
    [The prepared statement of Mr. Majumdar follows:]

 Prepared Statement of Arunava Majumdar, Nominee to Be Under Secretary 
                               of Energy
    Chairman Bingaman, Ranking Member Murkowski, and distinguished 
members of this committee, it is my distinct honor and privilege to 
appear before you today as the nominee for Under Secretary of Energy.
    I would like to first thank my wife, Dr. Aruna Joshi, and our two 
daughters, Shalini and Anjali, who have been immensely tolerant over 
the last two years of my bi-coastal lifestyle spanning California and 
Washington. Unfortunately, they cannot attend today's hearing. I wish 
to also thank President Obama for his confidence in me and Secretary 
Chu for being a thoughtful mentor, an outstanding boss, and someone I 
have the honor to call a friend.
    As I told this committee over two years ago, I spent most of my 
career as an educator and researcher in science and engineering at the 
University of California, Berkeley and Lawrence Berkeley National 
Laboratory. While at Berkeley Labs, I led strategic initiatives in the 
areas of energy efficiency, renewable energy, and energy storage. In 
2005, I was elected to the National Academy of Engineering, the 
nation's highest honor in engineering.
    The breadth and depth of my knowledge in science, engineering, and 
management of technological innovation has served me well in taking on 
the challenge of being the first Director of the Advanced Research 
Projects Agency--Energy (ARPA-E)--an honor and privilege that I will 
cherish for the rest of my life. In ARPA-E's short existence, we have 
stood up an organization with a philosophy of excellence in everything 
we do.
    I would like to briefly describe the five core values, which I 
believe have been instrumental in ARPA-E's success and which, if 
confirmed, I intend to bring to my role as the Undersecretary of 
Energy. Value #1: People. ARPA-E has been able to attract some of the 
best and the brightest scientists and engineers as program directors. 
We also have assembled a superb administrative support staff. Value #2: 
Speed and efficiency. To be globally competitive, speed is of the 
essence. We have developed a streamlined process where we can execute 
with a fierce sense of urgency and unprecedented speed and efficiency. 
Value #3: Breakthrough technologies through competition. ARPA-E funds 
research to translate science into breakthrough energy technologies 
that are too risky for the private sector, but if successful could 
create the foundation for entirely new industries. ARPA-E programs have 
attracted some of the best scientists, engineers and entrepreneurs to 
compete against each other and provide a portfolio of approaches that 
will ensure our national security, economic security and environmental 
security. Value #4 Stewardship and integrity. All projects are selected 
purely based on merit. We also engage in active program management, and 
have had the discipline to discontinue projects when they simply did 
not work out. Finally, Value #5: Create value for a secure American 
future. It is important that ARPA-E creates value for society and makes 
an impact on our economy. For example, over the last two years, 11 of 
ARPA-E technologies received $40 million in funding, which allowed the 
teams to conduct research, that has subsequently attracted more than 
$200 million of private sector investment--five times leveraging of 
federal dollars. And this number continues to grow.
    While such innovations in new energy technologies are critical and 
necessary, they are not sufficient. Cost and scale are equally 
important to address the significant challenges and opportunities we 
face in the 21st century. First, the challenges our country faces. We 
import roughly 50 percent of the oil we use and pay about $1 billion 
per day. America invented the lithium-ion battery, and in 2009 we 
manufactured only 1 percent of the world's batteries. We invented the 
solar cell and this year we will manufacture only 7 percent of the 
world's photovoltaic modules. We have an aging grid infrastructure that 
needs to be modernized and secured. We have massive coal and natural 
gas resources that we must use in an environmentally responsible and 
cost-effective way. We invented nuclear energy as a clean source of 
electricity, and we must regain our technological lead and become 
globally competitive.
    Now, the opportunities. The rising world population and economic 
growth presents the biggest economic opportunity of the 21st century 
with trillions of dollars of worldwide investment in the next few 
decades. Other nations are positioning themselves to take advantage of 
this opportunity and become energy leaders of the future. America faces 
a choice about what to do with the opportunity presented by the global 
energy race. We can compete in the global marketplace--creating 
American jobs and selling American products--or we can buy the 
technologies of tomorrow from abroad. I believe the road to a secure 
future is to: invent locally, make locally and sell globally. And we 
need to do this with fierce urgency.
    This requires the Department of Energy to galvanize all its rich 
resources in science, engineering, and policy from across the whole 
enterprise spanning the Office of Science, ARPA-E and the Applied 
Energy Offices, the national laboratories, and university and 
industrial research laboratories to catalyze and enable our small and 
large industries to become globally competitive and ensure a secure 
future for our children and grandchildren. If confirmed, I will work 
diligently within DOE and with Congress to make sure that the DOE will 
work as an integrated team where the whole is bigger than the sum of 
its parts, to address the challenges and avail the opportunities of the 
21st century.
    I thank you for the opportunity to testify before you today, and I 
look forward to answering your questions.

    The Chairman. Thank you very much for your testimony.
    Dr. Majumdar, as you know, the loan guarantee program at 
the Department of Energy has been the subject of a lot of 
controversy and criticism particularly because of the loan to 
Solyndra. I wanted to just, in order to make a record of, and 
give you the opportunity to state your position on this, ask 
you a few questions.
    Time Magazine referred to your current agency, ARPA-E, as 
``The Department of Big Dreams.'' ARPA-E's job, as I understand 
it, is to promote transformational technological advances in 
energy technologies, but not to guarantee loans for commercial 
deployment of new energy technologies.
    As I understand it, the loan guarantee program is managed 
by a separate office that is not part of ARPA-E, is that 
accurate?
    Mr. Majumdar. Yes.
    The Chairman. Did you personally have any responsibility 
for guaranteeing or approving the Solyndra loan in your 
capacity as the Director of ARPA-E?
    Mr. Majumdar. No.
    The Chairman. It appears from the Department's 
organizational chart that the loan program office reports 
directly to the Secretary of Energy, and not through the Under 
Secretary.
    Did you have any responsibility for guaranteeing the 
Solyndra loan while serving as Acting Under Secretary?
    Mr. Majumdar. I had no role.
    The Chairman. The final question, will you have any 
responsibility for the loan guarantee program if confirmed as 
Under Secretary other than providing technical advice if 
requested?
    Mr. Majumdar. If requested, I will provide that. But 
otherwise, I have no responsibilities.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Just let me follow up with the Solyndra and the loan 
guarantee program very briefly here. I appreciate the Chairman 
asking those very direct questions to you and your succinct 
answers.
    A little over a month ago, Secretary Chu was quoted as 
saying that, ``We can design a program that is actually self-
paid and still stimulate the most innovative industries.'' So I 
took this to mean that the Department no longer supports the 
appropriation of funds to cover credit subsidy costs.
    I would like to know whether that is an accurate 
interpretation of Secretary Chu's remarks. Whether or not you 
can share your perspective, then, on the top 2 or perhaps t3 
changes that you believe are necessary to prevent a similar 
situation to what we have seen with Solyndra in the future.
    Mr. Majumdar. Senator Murkowski, as I just mentioned, I 
really had no involvement----
    Senator Murkowski. Right.
    Mr. Majumdar. In the loan guarantee program. I am not sure 
I am really qualified to say what is the top 2 or the bottom 2 
priorities that we should have.
    The only thing I would say is that the President has 
proposed funding or requested funding for the loan guarantee 
programs in the FY12 budget, and I support the President.
    Senator Murkowski. We have been working here in the 
committee to report out a cyber security bill. We moved the 
Grid Cyber Security Act that came through this committee on a 
bipartisan basis.
    I do not know whether you have had an opportunity to review 
that legislation insofar as being able to give us your 
thoughts, and whether or not you believe that Congress should 
proceed on a sector-specific basis like we have done with this 
legislation or, perhaps, via a Government-wide approach. This 
is something that the Majority Leader has named as a priority. 
We are trying to figure out how we advance that legislation, 
but your comments, if any, on cyber security legislation?
    Mr. Majumdar. I have not had the chance to look at the 
actual bill. Cyber security, obviously, as we all know, is a 
really important issue. It has, of course, many dimensions; the 
grid and the energy infrastructure being one of them. The 
Department of Energy has created a cyber security initiative 
and there is a roadmap as well. I have not had the chance to 
review that in detail, but I will be delighted to work with you 
on cyber security issues, because I think it is a really, 
really important issue.
    Senator Murkowski. We certainly would concur with that.
    Another issue that the Chairman and I have been working on 
are Small Modular Reactors, the nuclear reactors. Give me your 
thoughts, your perspective. Do you believe that the SMRs are a 
viable source of energy for our electricity grid and for 
applications off the grid?
    Mr. Majumdar. Senator, I absolutely do. I think this is--
there is a global competition going on in nuclear power, 
nuclear energy and this is a way to move forward. I think we 
should move forward very aggressively in this.
    Small Modular Reactors, as you know, is a way to be able to 
finance nuclear power plants in a way that is difficult to do 
if it is a really large plant. Modularizing it, in many ways, 
could potentially reduce the cost of nuclear or electricity 
from nuclear power, which has to compete with natural gas 
electricity which, today, is the cheapest. So I think it will 
enable to do that.
    But as I mentioned, there is a global competition going on, 
and I think we need to move really fast to be able to take the 
technological lead in the world. As you know, we have, the 
President has requested that from the FY11 and FY12 budget, and 
as soon as that budget is approved, we can have a new start. We 
will launch and put our efforts in getting the SMR issue 
resolved as quickly as possible.
    Senator Murkowski. I think we also recognize that when we 
are talking about what the prospects may hold for the SMRs, one 
of the stumbling blocks that we encounter is how we dispose of 
the used nuclear fuel and the radioactive waste. So that is 
something that, clearly, we need to address.
    Do you have any thoughts in terms of how we can better 
advance that discussion?
    Mr. Majumdar. I mean as we all know, this is a really 
serious issue because if we cannot handle the nuclear waste, we 
have a real problem in the Nation in the long term.
    The Secretary of Energy decided when he came in to put 
together the Blue Ribbon Commission, and the Blue Ribbon 
Commission has come up with a first draft of the report, and 
made several recommendations including legislative ones. The 
final report is going to come out in January of next year, just 
a month away, and I think it will be premature for me to say 
anything before the final report comes out, but we are studying 
the preliminary report very, very carefully.
    So I think before that report comes out, it will be very 
difficult for me to say anything, but I think this issue is a 
really important one which, as a Nation, we need to resolve 
very quickly.
    Senator Murkowski. Thank you, Doctor. Thank you, Mr. 
Chairman.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Doctor, without making this a bouquet tossing contest, let 
me also say I am very appreciative of the good work that you 
have been doing. Because you have been doing such good work, we 
have high expectations for you and you are going to get little 
tougher questions----
    Mr. Majumdar. Thank you, sir.
    Senator Wyden. Both today and in the days ahead.
    As I have indicated to you, with millions of Americans 
getting clobbered by skyrocketing energy prices, I want to see 
the administration put more of a focus on the question of 
energy affordability and energy sources being affordable for 
our people at a time when they are just getting hit so hard in 
the economy. Let's use natural gas exports as a question to 
kind of give your sense to us today how you are going to 
approach it.
    As you know, until recently, we have been talking about 
importing natural gas. Now we are looking at exports. We are 
excited about the promise of natural gas. I have been a strong 
supporter of natural gas. At the same time, there is a real 
question about what is ahead in terms of the prices. The prices 
in the Asian market are 3 and 4 times the price here and export 
terminals are going to siphon off natural gas produced here to 
the highest bigger.
    Now, when we had Chairman Bingaman's earlier hearing, we 
talked about the Department saying a 10 percent increase could 
be in the public interest. Since that standard, we have had a 
5-fold increase in the amount that was being considered for 
export, and now it is even higher than that. To date, DOE has 
either approved or is pending LNG export applications for 7 
terminals for almost 10 billion cubic feet of natural gas a 
day. That is like 15 percent of U.S. total demand.
    So my first question is: at what price is the Department 
going to conclude that the impact on our consumers and our 
businesses is not going to be in the public interest? Tell me 
how you are going to approach that question because your future 
colleague, when you are confirmed, frankly did not give me much 
of an answer. He said, we're doing lots of studies, and we've 
got contractors, and the like. But if you are, as I say, 
getting shellacked with these high energy prices, Americans 
want a better answer than that. So tell us how you would 
approach it.
    Mr. Majumdar. Senator, first of all, I share your concern 
about the affordability of energy whether it is electricity or 
gasoline or others. I can tell you what we did in ARPA-E. This 
is something that we take very seriously.
    We launched DOE-wide, the SunShot Initiative, as you know, 
to reduce the cost of electricity production from solar down to 
5 cents a kilowatt hour so they can survive without subsidies. 
The same thing for battery technology for electric vehicles to 
reduce the cost of electric cars, and go 300 miles, and be 
cheaper so they can compete without subsidies. That has been 
the way that we have approached energy technologies to make it 
even harder for the scientists and engineers to innovate.
    With respect to LNG, I think in the approval of the 
permits, we are, and what we have done in the past is take one 
at a time in a case by case basis, and we do market analysis 
for that to see whether that particular one will affect the 
natural gas prices, which depends on a combination of supply, 
demand, exports, et cetera.
    Frankly if I, you know, your question is how would I 
approach this? I would approach it as looking at whole market 
global analysis to see at what point does LNG, given the 
dynamics of the supply and demand and the export, at what point 
will the LNG export start changing the prices? If it changes 
too much, I do not think, and I share your concern, that this 
should not be, you know, we will look at it again. I would love 
to work with you, if confirmed, on this particular issue.
    Senator Wyden. You are giving a better answer than your 
future colleague did a few weeks ago, and we will be following 
up with you, because I think we need to know. Obviously, there 
are a host of issues that go into how you put your arms around 
it. We need to know that the Department is going to be more 
aggressive in defending Americans from these escalating prices. 
I consider that one of the areas where the administration needs 
to have a much more vigorous approach.
    Let me get one other question in, if I could, Mr. Chairman. 
It is on something we all care about on this committee and that 
is energy storage.
    This is one of the real breakthrough opportunities because 
the other side of the coin of promoting renewables. As you 
know, solar and wind, these are intermittent sources and there 
is a real opportunity to create good paying jobs, make energy 
more affordable.
    It has been hard to get the administration to put together 
a real roadmap from moving forward in energy storage. In other 
words there is a role, obviously a dramatic role, for the 
private sector, and we want to see how the Government can 
complement it.
    What can you do to help us promote that? You have already 
invested, made some good investments at ARPA-E. But what more 
can be done to get a real roadmap in place for an energy 
storage strategy for the country?
    Mr. Majumdar. Senator, that is a very fair question. Let me 
tell you what we are doing within the Department of Energy. You 
know, there are a lot of questions about what is going on at 
the Office of Science, what is going on in ARPA-E investment 
that you talked about, what is going on in EERE in the battery 
vehicle technology program?
    One of the first things that I did as an Acting Under 
Secretary is to look at it holistically because there is all 
battery basic science going on in this, in basic energy 
science, et cetera. Formed an integrated team, integrated 
technology team on batteries and electrification to make sure 
that, again, that 1 plus 1 plus 1 is greater than 3 so that the 
whole is bigger than the sum of the parts. We have formed this 
team.
    This team has come together, just like the SunShot, which 
is also a holistic team effort from the whole of DOE that we 
launched. The same thing is happening in electrification 
batteries to create a roadmap. In fact, we have had several 
workshops, one of them is what is called, just like you are 
proving with SunShot, a penny a mile. So if you are going to go 
to 40 miles on an electric vehicle, and pay only a penny a 
mile, that is about $125 a kilowatt hour on a battery, and 
today it is not far from that.
    The question is can we get a penny a mile by the end of 
this decade? If we can do that, U.S. will be competitive in 
battery technology and electrification. So that is the--now the 
question is if we are to get that, which is a bold goal, what 
is the roadmap? That is what we are coming at today.
    I would be happy, I would like to work with and to sort of 
engage in this discussion of what should be the national 
roadmap for battery technology?
    Senator Wyden. My time has expired. I just would like to 
work with you on making sure we can pin down an understandable 
plan for how the private sector can be involved with 
Government. Thank you, Mr. Chairman.
    The Chairman. Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Doctor, congratulations.
    I agree with Senator Wyden. We have great concerns about 
energy affordability, and just a number of weeks ago, we met in 
this room with Bill Gates and with others to talk about energy 
affordability. I have concerns when the President was then a 
Senator running for President. He said under his plan, 
electricity rates would necessarily skyrocket. To me, I do not 
think that bodes well for the country, and I have concerns 
about all of the regulations that we are facing as a Nation and 
the impact that they have on the cost and on energy 
affordability.
    In just over a week, the Environmental Protection Agency is 
going to issue its final Utility MACT rule. By the EPA's own 
estimates, the annual cost of compliance with the rule will be 
about $11 billion. That is the annual cost of compliance, $11 
billion. The EPA estimates the total savings from the mercury 
reductions in the Utility MACT rule will amount to just over $6 
million; that is opposed to $11 billion of the cost.
    Some of the Nation's largest power producers have said that 
they cannot comply with the rule in accordance with the EPA's 
deadlines. Of course, the Utility MACT rule is just one of a 
number of different forthcoming regulations on America's power 
sector; these regulations are looming over them. There is 
growing concern that perhaps the EPA's regulations will 
actually affect not just the affordability, but also the 
reliability of America's electric grid. So I wanted to get to 
that issue with you.
    Tuesday's Wall Street Journal published an editorial 
entitled, ``If the Lights Go Out.'' That editorial discusses 
the North American Electric Reliability Corporation's, NERC's, 
2011 reliability assessment, which was recently published. In 
that report they say, ``Environmental regulations are shown to 
be the No. 1 risk to reliability over the next 1 to 5 years.'' 
NERC has also said, ``the nation's power grid will be stressed 
in ways never before experienced.'' Somebody might ask, ``So 
where is the Department of Energy on this?''
    Unfortunately, I think the Department has been on the 
sidelines. The DOE only decided to address the issue of 
reliability recently. I think they have a 40-page study which 
was released earlier this month, and I understand that this 
study was only begun this past August. That is a year after a 
FERC Commissioner raised concerns about reliability.
    So as the senior advisor to the Secretary of Energy, the 
American people want to know, will the lights go out? I'd be 
interested in your thoughts on that study, where the Department 
of Energy has been, and our reliability in terms of energy and 
electricity?
    Mr. Majumdar. So Senator, first of all, I could not agree 
more about, with you, about the affordability of electricity. I 
think we all agree that that is, (A), reduce the cost of energy 
for our people. In fact, more so we have, that gives us a 
competitive edge in terms of bringing back manufacturing in the 
United States and creating jobs. I mean, that is something that 
we all, I think, share. That that is we are losing that, and we 
need to bring that back, and energy cost is a big issue in 
that.
    So all the things, as I mentioned, all the things that we 
have done, for example, in my real job, the one hundred percent 
job that I have is ARPA-E, is to look for technologies to 
reduce the cost of electricity and provide options for the 
Nation whether solar electricity or wind. We have invested in 
drilling technology to reduce the cost of geothermal, and this 
is a combination of laser and drill bits so that you reduce the 
cost of drill bits for that. The cost of nuclear energy, that 
is the Department of Energy is trying to do; that is the SMR 
part. All to reduce the cost of electricity down to about 5 
cents a kilowatt hour, and have them compete, and give options 
for the Nation.
    Now, the question about the EPA one that you are talking 
about, yes, we did a study. If you look at the conclusion, this 
is a very macroscopic study. The question is: would the grid be 
reliable or not? The grid has many problems whether you get a 
hurricane, or whether you have an ice storm in the Northeast 
has issues. That is a very major issue for our Nation that we 
need to address.
    With regards to the EPA, as I said, the study looked at 
whether we have the adequate resources to be able, on a 
macroscopic gross scale. The answer is yes, we possibly have 
those resources. What it has not done is to look for individual 
plans, and that is a business decision that the utilities would 
have to make.
    What we will do in DOE, if confirmed, is to put together, I 
will commit to you, to put together a team and we are actually 
putting that together right now, to help the utilities, and all 
the PUCs, and the stakeholders to make sure that the grid 
remains reliable. That is the role of the Department of Energy.
    Senator Barrasso. I appreciate your comments, and Bill 
Gates said exactly what you said in terms of being a 
competitive economy and having manufacturing opportunities. Low 
cost electricity is a big part of that.
    Following up on that in terms of energy affordability, 
coal: available, reliable, secure source of energy and clearly 
affordable energy. So I am wondering about EPA is unprecedented 
steps that seem to be aimed at eliminating coal fired electric 
generation in this country.
    What steps are you going to take to ensure that coal fired 
electric generation still has a bright future in this country 
for affordable energy?
    Mr. Majumdar. Senator, as you know, we have the world's 
largest reserves of coal, and we should be using it in an 
environmentally responsible and affordable way. I mean, that is 
just my philosophy of this.
    We have, in my work at ARPA-E, we have developed programs 
to reduce the cost of carbon capture down to below the price of 
carbon dioxide in the market, so that there is actually 
business opportunity in carbon market. Since we do not have a 
carbon price, it is decided by enhanced oil recovery.
    So if you could reduce the cost of carbon capture below the 
price, you could then sell it for enhanced oil recovery, so 
that we can use domestic sources of oil. We have roughly about 
80 billion barrels of oil stuck in the rocks onshore. That will 
address, also, national security and oil imports issue. So this 
is a carbon capture, utilization, and sequestration, which will 
affect, which will positively impact both the coal, electric 
energy from coal, as well as our oil imports.
    Senator Barrasso. Thank you, Mr. Chairman.
    The Chairman. Senator Sanders.
    Senator Sanders. Thank you, Mr. Chairman. Welcome, Dr. 
Majumdar.
    I happen to believe that from a global warming perspective, 
and energy independence perspective, and a job creating 
perspective there is huge potential in terms of transforming 
our energy system away from fossil fuel to sustainable energy 
and energy efficiency.
    Now the media has been talking a lot lately about 
sustainable energy and some of the problems that have occurred, 
but the truth is, as I suspect you know, the solar industry in 
recent years has been thriving. We have doubled the number of 
solar jobs in America since 2009. More than 100,000 Americans 
today are working in the solar industry. The solar industry 
grew at a rate of 69 percent annually in the last year, and it 
is one of the fastest growing industries in the United States, 
creating jobs all over this country. In fact, the cost of solar 
panels has fallen 30 percent over just the last 2 years.
    Wind is also exploding. Quite incredible. Texas alone has 
more than 10,000 megawatts of wind energy installed, equivalent 
in capacity to 10 nuclear power plants; 10 nuclear power plants 
in Texas alone. Iowa, 20 percent of their electricity is 
generated from wind.
    So my question to you is when you become Under Secretary, 
what are you going to be doing to significantly expand the role 
of sustainable energy in this country?
    Mr. Majumdar. Senator, first of all, I could not agree more 
with you about the role of solar and sustainable sources of 
electricity because (A), I think it is good for the 
environment. Second, it is a huge, trillions, multitrillion 
dollar world market.
    In terms of solar, as you know, we launched the SunShot 
Initiative which brings together, internally within the DOE, 
the resources in the Office of Science, and energy efficiency, 
and renewable energy, and ARPA-E. The power electronics effort 
from ARPA-E fits into that and that is why we created a program 
on Solar ADEPT. That is all to reduce the cost of solar so that 
we can be competitive.
    Senator Sanders. Doctor, would you not, in recent years, 
the cost of solar panels has plummeted. Do you believe with new 
technology and new research that we can continue the decline of 
price in solar to make it competitive with the more, the older 
and more mature technologies?
    Mr. Majumdar. Yes. The cost of solar, the cost of 
electricity, the price will be determined by the market. But 
the cost of production of electricity from solar is going down 
to the point that it is, in some parts of the country, it is 
already competitive. But if you look ahead in a few years from 
now, it will be competitive in large parts of the Nation.
    So, I think that is the question really would be then: is 
the integration of the solar onto the grid? That is one of the 
challenges that we have.
    Senator Sanders. Which takes me to my next question and 
that is an issue I know that you have been working on, we 
worked with you on, but the concept of the smart grid and 
sustainable energy. Could you say a few words on that?
    Mr. Majumdar. I think if you look at the grid today as a 
whole, if you just step back for a moment. Many of the assets, 
there were trillions of dollars of assets on our grid. The 
average age of a transformer on a grid is 42 years. It is 2 
years beyond its lifetime. We buy most of our transformers from 
overseas, and there is a backlog behind it. That transformer is 
not that different from what Nikola Tesla invented in the 
1890s. We have not really taken that quantum leap.
    That is why we created a program in ARPA-E called On Power 
Electronics, which uses silicon carbide-based transistors, and 
which operates at much higher frequency, reduces the size. 
Something which is today 10,000 pounds will be 100 pounds in 
the future. By the way, we are the biggest manufacturers of 
silicon carbide in the world. That is a competitive advantage, 
so leveraging that. I think that is the kind of quantum leap 
that we need to take, and that is what we are trying to do 
right now.
    Once you make that and you have put that in these smart 
devices, which are cheaper, lighter, and smarter into the grid, 
then you look at the whole system as a grid. On one end, you 
have the smart meters in the homes, et cetera. On the other 
hand, you have these fluctuating supply from wind and solar and 
base load. How do you take that whole system of transmission 
distribution and manage it in a way that is reliable, that is 
secure, et cetera?
    Which is why in ARAP-E, we created a program called GENI, 
which is the Green Electricity Network Integration to address 
that. In the Office of Electricity, we have several programs 
looking at the model. It is a very hard computational problem. 
I will not go into the technical details.
    Senator Sanders. Please.
    Mr. Majumdar. But that is the kind of thing that we need to 
take. Again, a quantum leap in our technologies, and 
integrating that, and having the right policies.
    Senator Sanders. I think that is very exciting. Say a very 
brief word, and my time limit is expired, on the potential of 
wind as you see it.
    Mr. Majumdar. I am sorry, the potential?
    Senator Sanders. On the potential of wind energy.
    Mr. Majumdar. I think in many parts of the country when the 
wind resources are clearly onshore, the cost of electricity 
from wind is almost at the same level as electricity from 
natural gas and sometimes cheaper.
    The question is the offshore wind, and offshore is still 
expensive. I think we need to put our resources to reduce the 
cost of electricity from offshore wind, which is a huge 
resource and make it reliable, because we cannot send ships out 
there to be able to repair it every few years or so. So it has 
to be extremely reliable and that, again, needs technology to 
be able to do that. That is the kind of thing that we are doing 
at the Department of Energy right now.
    Senator Sanders. Thank you very much. Thank you, Mr. 
Chairman.
    The Chairman. Thank you very much. Senator Murkowski, did 
you have additional questions?
    Senator Murkowski. Just very quickly in following up from 
my friend from Vermont who is always keyed-in and I appreciate 
his focus on the opportunities with solar, and wind, and some 
of our other renewable resources. The administration has 
clearly put a focus on that, and I think we have seen some 
gains there, which is important.
    But can you discuss, just very briefly, the role that you 
think that unconventional fossil fuels might play, such as 
methane hydrates, which we believe in Alaska have enormous 
potential, oil shale. Where do they fit into the picture?
    Mr. Majumdar. Oh, I think we should look at all options. 
There is not a silver bullet in this. In terms of 
unconventional, shale gas is often considered--shale gas and 
shale oil--are often considered unconventional. As you know, 
the President asked Secretary Chu to lead an effort, a 
multiagency effort, in trying to make sure that it is 
environmentally responsible. I think that in the first draft of 
the report came out, we are looking at that, and trying to get 
together across the agencies to be able to address that.
    But I think we need to address all our other natural 
resources that we have, whether it is methane hydrates. There 
is a project that we have in Alaska on that, and see what the 
capacity is, whether we can extract it in a cost effective way, 
and supply our Nation with affordable energy. I agree with you 
on that.
    Senator Murkowski. Thank you, Mr. Chairman. I look forward 
to working with you, Doctor.
    Mr. Majumdar. Thank you.
    The Chairman. Senator Coons had wanted to ask a question, 
but had to go to another hearing himself. So we will go ahead 
and conclude the hearing, and advise all members that they will 
have until 5 tomorrow to submit additional questions for the 
record.
    Thank you very much, Doctor, for your testimony, and we 
look forward to acting quickly on your nomination.
    Mr. Majumdar. Thank you very much indeed.
    The Chairman. That will conclude our hearing.
    [Whereupon, at 10:20 a.m., the hearing was adjourned.]

    [The following statement was received for the record.]
Hon. Harry Reid,
Majority Leader, U.S. Senate, 522 Hart Senate Office Building, 
        Washington, DC.
Hon. Jeff Bingaman,
Chairman, Energy and Natural Resources Committee, 703 Hart Senate 
        Office Building, Washington, DC.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate, 317 Russell Senate Office Building, 
        Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, 709 Hart Senate 
        Office Building, Washington, DC.
    Dear Senate Majority Leader Reid, Minority Leader McConnell, 
Chairman Bingaman, and Ranking Member Murkowski:
    On behalf of SME, I am writing to offer the endorsement of Arun 
Majumdar for the nomination of the Under Secretary of Energy at the 
U.S. Department of Energy. Our nation's ability to compete at a global 
level in the field of energy technology research will require visionary 
thinking of the level that Dr. Majumdar would bring to this position. 
During his time as the first-ever Director of the Advanced Research 
Projects Agency-Energy (ARPA-E) Dr. Majumdar has demonstrated the 
leadership traits, and skills, necessary for his nominated position.
    Founded in 1880, ASME is a more than 120,000 member not-for-profit 
professional society promoting the art, science, and practice of 
mechanical and multidisciplinary engineering and allied sciences. ASME 
also conducts one of the world's largest technical publishing 
operations, holds more than 30 technical conferenes and 200 
professional development courses each year, and has developed more than 
500 industrial and manufacturing standards, many of which are 
considered to be global technical standards. ASME has long believed 
that the nation's ability to develop and maintain a balanced energy mix 
is critical to the country's future economic growth.
    As you know, ARPA-E was authorized under the bipartisan ``America 
COMPETES Act'' (P.L. 110-69), but did not receive its first funding 
until the ``American Recovery and Reinvestment Act'' (P.L. 111-5). 
According to a recent report by The Breakthrough Institute, ARPA-E 
investments now total $521.7 million in awards for 180 different 
projects, which have attracted a cumulative $285 million in additional 
private capital investment.
    If confirmed, Dr. Majumdar will bring a lifetime of experience in 
leading edge energy science, and research, to the position. Dr. 
Majumdar has served on the advisory committee of the National Science 
Foundation's engineering directorate, was a member of the advisory 
council to the materials sciences and engineering division of the 
Department of Energy's Basic Energy Sciences program, and was an 
advisor or nanotechnology to the President's Council of Advisors on 
Science and Technology. Additionally, Dr. Majumdar was the founding 
chair of the ASME Nanotechnology Institute.
    Dr. Majumdar is a recipient of the Institute Silver Medal, NSY 
Young Investigator Award, ASME Melville Medal, the Best Paper award of 
the ASME Heat Transfer Division of ASME, Gustus Larson Memorial Award 
of the ASME, and Distinguished Alumni Award from IT-B. He is a fellow 
of ASME and AAAS, and is a member of the U.S. National Academy of 
Engineering.
    I urge you to support Dr. Majumdar's confirmation. Should you have 
any question, please do not hesitate to contact ASME Government 
Relations Director Kathryn Holmes at [email protected] or at 202/785-
3756.
            Sincerely,
                                      Victoria A. Rockwell,
                                                    ASME President.
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

   Responses of Arunava Majumdar to Questions From Senator Murkowski
    Question 1. General Research Priorities: Given your time at ARPA-E, 
what are the technologies that you believe offer the greatest future 
potential for economic renewable energy development over the next 
decade? What are you excited about right now? Beyond that, what are the 
most appropriate stages of development for DOE to be focused on--
research, deployment, or a combination of both?
    Answer. There are multiple technologies that offer great future 
potential for affordable renewable energy development. A few examples 
are given below:

          a) DOE's Sunshot initiative is focused on reducing the cost 
        of electricity from solar energy to 5 cents/kWh within this 
        decade, so that clean solar electricity can be sold with out 
        subsidies and be cost-competitive with other sources.
          b) Batteries that will enable electric vehicles have 
        comparable range and lifecycle cost as gasoline-based cars, so 
        that EVs could be sold without subsidies.
          c) New low-cost drilling technologies that will make 
        geothermal energy cost-effective and competitive with other 
        sources of electricity
          d) New approaches to use microbes for making cost-effective 
        and scalable renewable transportation fuels from domestically 
        produced electricity.
          e) Plants engineered to directly produce infrastructure 
        compatible biofuels at high yield and low cost.
          f) Electrical power management devices and systems for a 
        future reliable, resilient and secure electric grid that allows 
        for high renewable penetration.
          g) Grid-scale electricity storage at a cost that is 
        comparable to pumped hydro and/or compressed air
          h) New magnetic materials and motor/generator designs that 
        eliminate the need for rare earths
          i) Energy efficient lighting, HVAC and whole building energy 
        management that can reduce energy consumption by 50% with a 
        payback period of less than 5 years.

    The goal of DOE is to ensure a secure American energy future. This 
includes national security, economic security and environmental 
security. DOE has multiple roles to play in this regard. First, it 
should fund research in basic science as well as research to translate 
science into breakthrough technologies that are too risky for the 
private sector, but if successful, could lead to technologies that will 
make US globally competitive. Second, it must fund research for 
innovations in manufacturing technologies, ones that reduce cost and 
enable scaling within the US, and those that will make US globally 
competitive in manufacturing. Third, DOE can use its ability to create 
standards, such as appliance standards, that will lead to an energy 
efficient economy and create a market for innovative technologies.
    With regards to deployment, DOE's goal should be to catalyze and 
enable industry and business, so that deployment can occur via 
businesses that are sustainable in the long run. The DOE's funding 
should be highly leveraged by the private sector both for manufacturing 
and deployment of energy technologies.
    Question 2. Nuclear Waste--How to dispose of used nuclear fuel and 
highly radioactive waste remains a key stumbling block to the 
development of new nuclear reactors. What do you believe needs to 
happen to resolve this issue? Are used fuel recycling or fast neutron 
technologies viable options?
    Answer. Secretary Chu has determined that a proposed geologic 
repository at Yucca Mountain is not a workable solution for the 
disposition of used nuclear fuel and high-level radioactive waste. As 
Secretary Chu stated in his February 11, 2011 letter to Co-Chairs 
Hamilton and Scowcroft of the Blue Ribbon Commission on America's 
Nuclear Future (BRC),

          any workable policy to address the final disposition of used 
        fuel and nuclear waste must be based not only on sound 
        scientific analysis of the relevant geologies and containment 
        mechanisms, but also on achieving consensus, including the 
        communities directly affected.

    The Department is committed to meeting the Government's obligation 
to safely manage and dispose of our Nation's used nuclear fuel and 
high-level radioactive waste. The BRC was established by the Secretary 
to conduct a comprehensive review of policies for managing the back end 
of the nuclear fuel cycle and provide advice and make recommendations 
on issues including alternatives for the storage, processing, and 
disposal of civilian and defense used nuclear fuel and high-level 
radioactive waste. The BRC issued their draft report on July 29, 2011. 
The BRC's final report is expected by the end of January 2012. The 
Department will carefully review and evaluate the final findings and 
recommendations of the BRC The Department is evaluating integrated fuel 
cycle system options as part of its Fuel Cycle Research & Development 
Program. Some of these options include used fuel recycling and fast 
neutron reactor technologies.
    Question 3. EMPs--As we consider cyber security issues, what has 
DOE done to counter threats from electro-magnetic pulses, natural or 
man-made? Should EMP protections be included in cybersecurity 
legislation? Do we have enough information on how an EMP attack would 
work to protect our electrical grid, or mitigate the damage?
    Answer. There is a distinction between Electromagnetic Pulse (EMP) 
weapons and the naturally occurring phenomena known as Geomagnetic 
Disturbance (GMD) that is caused by solar storms. The Department of 
Energy (DOE) is aware of this naturally occurring phenomena and the 
potential risk to the Nation's electricity generation and supply. We 
also are aware of the threat posed by EMP weapons.
    DOE is working with agencies across the Federal Government as well 
as industry leaders in identifying protection and mitigation 
strategies. The Department has partnered with the Federal Energy 
Regulatory Commission, the Departments of Homeland Security and 
Defense, and Oak Ridge National Laboratory to develop these strategies 
specifically in response to GMD. DOE has also co-sponsored the High 
Impact/Low Frequency Event Workshop with the North American Electric 
Reliability Corporation (NERC) to further address these risks. The 
Department is also working closely with industry owners and operators, 
the National Aeronautics and Space Administration, the National Oceanic 
and Atmospheric Administration, the United States Geologic Service and 
our National Labs to enhance early warning capabilities and advanced 
modeling and simulation to more accurately project the time, location 
and effects in the event of a GMD incident.
    NERC is addressing the availability and adequacy of spare 
transformers and has created a Spare Equipment Database Task Force and 
a Task Force on Geomagnetic Disturbances. Several transformer 
manufacturers including ABB, Siemens, Prolec-GC, Mitsubishi and EFACEC 
are participating in these initiatives. Additionally, DOE has been 
working with the Department of Homeland Security, the Electric Power 
Research Institute and ABB on a Recovery Transformer Project. This 
project is testing units that are lighter and more easily transportable 
than existing transformers.
    EMP is only one aspect included in the High Impacts Low Frequency 
events that the electric sector is addressing. An EMP attack would 
affect other sectors beyond the electric sector. Comprehensive 
legislation on EMP, standard setting, research, and protection/
mitigation should be separate and comprehensive across all the affected 
sectors.
    Question 4. Cyber Security--This spring, the Committee reported out 
S. 1342, The Grid Cyber Security Act, on a bipartisan basis. The bill 
takes an electricity-sector approach to the issue of cyber security, 
tasking DOE to respond to imminent threats and FERC, through the ERO 
stakeholder process, to respond to emerging vulnerabilities. What are 
your thoughts on the legislation: do you believe Congress should 
proceed on a sector-specific basis like S. 1342 or via a governmentwide 
approach? If Congress decides to address cyber security government-
wide, presumably under the auspices of the Department of Homeland 
Security, what role do you see for the Energy Department? What role do 
you see for FERC and for the ERO stakeholder process? How does DOE 
interact with DHS on cyber-related matters now? Should Congress proceed 
on a sector-specific basis like S. 1342 or via a governmentwide 
approach?
    Answer. DOE supports the Administration's cybersecurity legislative 
proposal. Recognizing the interdependencies between different sectors 
and the unique cybersecurity challenges associated with the reliable 
delivery of electricity (e.g., high availability and low latency 
communications), we believe it is important to have a comprehensive, 
government-wide approach to cyber security.
    Question 4a. If Congress decides to address cyber security 
government-wide, presumably under the auspices of the Department of 
Homeland Security, what role do you see for the Energy Department?
    Answer. DOE supports a strategic comprehensive approach to enhance 
cybersecurity for the grid.In September 2011, DOE released the updated 
Roadmap to Achieve Energy Delivery Systems Cybersecurity to provide a 
collaborative strategy for improving cyber security, prioritizing cyber 
security needs, and focusing actions under way throughout Government 
and the private sector to secure control systems. The Roadmap vision is 
focused on resilient energy delivery systems that are designed, 
installed, operated, and maintained to survive a cyber incident while 
sustaining critical functions. The Roadmap strategies are also fully 
integrated into the Energy Sector-Specific Plan. DOE uses the Roadmap 
to focus its activities on the following key areas: public-private 
partnerships to accelerate Energy Sector cybersecurity efforts; 
research and development of advanced technology to create a secure and 
resilient energy infrastructure; cybersecurity standards to provide a 
baseline to protect against known vulnerabilities; facilitating timely 
sharing of relevant and actionable threat information; risk management; 
incident management and response; and development of a highly skilled 
and adaptive workforce.
    Due to the unique cyber security challenges of the electric grid, 
DOE has worked closely with its national laboratories, utility 
partners, and control system vendors to develop advanced technology 
solutions to secure the grid. The real-time cyber control of physical 
power systems and the highly interdependent nature of the electric grid 
with other critical infrastructure, creates a unique challenge that 
requires specialized technical knowledge that is present in DOE's 
Electricity Delivery and Energy Reliability cyber programs. With the 
development of Smart Grid, which is accelerating and expanding the use 
of digital devices that control the grid, DOE's role in developing and 
coordinating cyber security solutions has become more important.
    Under Homeland Security Presidential Directive 7 (HSPD-7), DHS is 
responsible for leading, integrating, and coordinating the overall 
national effort to enhance critical infrastructure and key resources 
(CIKR) protection, and is also a focal point for the security of 
cyberspace. HSPD-7 also designates DOE as the sector-specific agency 
(SSA) for energy responsible for collaborating with all federal 
agencies, state and local governments, and the private sector.
    Question 4b. What role do you see for FERC and for the ERO 
stakeholder process?
    Answer. Under the Energy Policy Act of 2005 (EPAct 2005), FERC 
promulgates and enforces reliability standards for the bulk electric 
system. FERC designated the North American Electric Reliability 
Corporation (NERC), as the Electric Reliability Organization (ERO) with 
the responsibility to develop technical standards associated with the 
reliable operation of the bulk power system.
    Question 4c. How does DOE interact with DHS on cyber-related 
matters now?
    Answer. DOE coordinates with DHS in accordance with HSPD-7. Given 
the interdependencies among sectors and reliance on the electric 
sector, DHS is a strategic partner for DOE. DOE interacts with DHS 
regularly on cybersecurity initiatives through both formal and informal 
means. Some examples include:

   The Roadmap to Achieve Energy Delivery Systems 
        Cybersecurity.
    DOE, in coordination with DHS and other Federal agencies, 
        has conducted several cyber threat information sharing 
        workshops to analyze classified information, determine the 
        impact to the sector, and develop mitigations that were 
        specifically designed to work in the sector.
   DOE, in coordination with the National Institute of 
        Standards and Technology (NIST), DHS and NERC, is leading a 
        collaborative effort with representatives from across the 
        public and private sectors to develop a cyber security risk 
        management guideline. The objective of this effort is to 
        provide a consistent, repeatable, and adaptable process for the 
        electric sector, and enable organizations to proactively manage 
        risk.

Critical Minerals
    Question 5. I often say that minerals are the building blocks of 
our society--especially for clean energy and other advanced 
technologies--and yet, our dependence on foreign suppliers continues to 
grow more and more severe.
    Question 5a. Would you agree that the United States needs an 
effective, holistic policy to promote the responsible production of 
critical minerals and a strong supply chain?
    Question 5b. If we refuse to produce minerals here at home, what do 
you think that will mean for manufacturers' ability to obtain the raw 
materials that go into their products?
    Question 5c. As Under Secretary, I expect you'll be involved in the 
Department's updated critical minerals strategy. Will the update 
include the Department of the Interior? Will you look at permitting and 
other issues that need to be addressed if we're going to be successful 
in this area?
    Answer. Yes, policies focused on the development of a robust 
domestic critical material supply chain will be an important component 
for strengthening American industries. To accomplish this DOE is 
focusing on three pillars to address the challenges associated with 
critical materials in the clean energy economy. These three pillars 
form the basis of an effective, holistic policy. First, substitutes 
must be developed. Research and entrepreneurial activity leading to 
material and technology substitutes improves flexibility to meet the 
material demands of the clean energy economy. Second, recycling, reuse 
and more efficient use can significantly lower global demand for newly 
extracted materials. Research into recycling processes coupled with 
well-designed policies will help make recycling economically viable 
over time. Finally, diversified global supply chains are essential. To 
manage supply risk, multiple sources of material are required. This 
means encouraging other nations to expedite alternative supplies and 
exploring other potential sources of material in addition to 
facilitating environmentally sound extraction and processing here in 
the United States. With all three of these approaches, we must consider 
all stages of the supply chain: from environmentally-sound material 
extraction to purification and processing, the manufacture of chemicals 
and components, and ultimately end uses.
    Production within the United States is important for at least two 
reasons. First, the United States' considerable reserves of some 
critical materials could add significantly to total global production 
and to greater diversity in the global supply of these materials. 
Second, U.S. technology and best practices developed during mine 
operations can help promote safe and responsible mining in other 
countries, further contributing to supply diversity and the sustainable 
development of resources.
    In the past six months, DOE and interagency colleagues have had 
several conversations with the Department of Interior concerning 
critical materials, in updating our Critical Materials Strategy and 
otherwise. Among the topics addressed have been general and specific 
permitting issues. DOE intends to continue these conversations.
    Question 6. I know you have visited Alaska's lone working 
geothermal project at Chena Hot Springs, and I thank you for taking the 
time to visit my home state two summers ago. My question is what do you 
feel that DOE should be doing to further geothermal development 
nationwide? The program has been concentrating on enhanced geothermal 
system research and on geothermal heat pump technology. But what other, 
if any, areas are you interested in focusing Department assistance on, 
especially given the likelihood of declining funding for all renewable 
energy and energy efficiency projects in future years?
    Answer. It is critical that the Nation continue to develop its 
geothermal resources. The program should be developing replicable 
exploration tools that today's industry can use to reduce uncertainty 
and risk regarding the quality of this base load renewable resource 
prior to committing to costly exploration and drilling. This would be 
analogous to what the oil and gas industry has done to reduce resource 
uncertainty. The U.S. Geological Survey estimates that there are still 
30 GW of undiscovered hydrothermal resources; ten times today's 
installed capacity, plus significant additional potential which could 
come from success in developing enhanced geothermal systems. With 
successful DOE-sponsored development and demonstration of advanced 
exploration technologies (e.g., seismic, magnetic, optical, etc.) that 
more accurately characterize the resource, we help tackle another 
critical barrier to geothermal power growth--affordable financing. With 
reduced risk and cost, the private sector will be more willing to 
provide financing at affordable rates, leading to an expansion of the 
geothermal industry.
    Question 7. As you prepare now your FY 14 budget, since the FY 13 
budget submission should be all but finished, I would encourage you to 
consider funding to provide additional grants under Section 625 of the 
Energy Independence and Security Act of 2007. That provision set up a 
matching grant program for high-cost geothermal projects nationwide. I 
happen to think geothermal has significant upside for supplying 
baseload power, if the high initial capital costs can be reduced. What 
is your view on the technology's future efficacy, and where it will fit 
in your personal priorities for DOE funding when building a budget for 
renewable energy for submission to the President and Congress?
    Answer. Geothermal Energy plays a vital role in our Nation's energy 
mix, and it has the potential for further growth. The Geothermal 
Technologies Program funding is focused on those technologies which 
have the greatest potential to help realize this opportunity. In the 
likelihood of declining budgets, we believe that investment in research 
and development will provide the maximum rate of return on taxpayer 
investment as compared to more expensive, location-specific 
demonstration and deployment. The EISA 625 grants are for design, 
engineering and commercial applications which can be done by the 
private sector. It's also imperative that we help develop solutions for 
Americans who are paying excessive costs for energy, especially those 
who are relying on high-priced diesel to produce electricity. This 
situation is further compounded by additional fuel transportation costs 
for those living in remote areas such as Alaskan villages. In 
consideration of these factors in high-cost areas, the DOE Geothermal 
Technologies Program (GTP) has included EISA Section 625 as a special 
program policy factor in its funding opportunity solicitations. While 
we have not awarded EISA 625 grants per se, there have been five 
projects selected in high-cost areas of the State of Alaska (one is 
currently being negotiated). These projects include:



------------------------------------------------------------------------
             Awardee                       Title            DOE Funding
------------------------------------------------------------------------
 Hattenburg, Dilley, and          Identifying Fractures    $ 313,858
 Linnell, LLC                      with Geochemical
                                   Techniques
------------------------------------------------------------------------
 Hattenburg, Dilley, and          Methodologies for       $ 331,174
 Linnell, LLC                      Reservoir
                                   Characterization
                                   Using Fluid Inclusion
                                   Gas Chemistry
------------------------------------------------------------------------
University of Alaska              Pilgrim Hot             $4,274,792
                                   Springs(Innovative
                                   Exploration
                                   Technologies)
------------------------------------------------------------------------
 Naknek Electric  Association     Implementation of a     $12,376,568
                                   Demonstration EGS
                                   Project at Naknek,
                                   Alaska
------------------------------------------------------------------------
The Trabits Group                 Development of an       $2,154,238
                                   Improved Cement for
                                   Geothermal Wells
------------------------------------------------------------------------

    The Office of Energy Efficiency and Renewable Energy has assigned 
an expert, Dr. Brian Hirsch, from the National Renewable Energy 
Laboratory, to assist the Denali Commission, Alaska Energy Authority 
and other State agencies and organizations in developing resources such 
as biomass, wind, hydro, and marine, as well as geothermal. We plan to 
continue this project and policy support as Alaska embarks on achieving 
15% energy efficiency improvement by 2020 and 50% renewable energy 
generation by 2025. Achieving these goals will help make electricity 
more affordable and decrease the price volatility associated with the 
diesel market. Based on recent discussions with the Alaska Governor and 
Lieutenant Governor, the state of Alaska and DOE are considering a more 
formal relationship through a Memorandum of Understanding and DOE will 
continue Dr. Hirsch's efforts and possibly expand support.
    Question 8. Coming from Alaska, I am a big supporter of wave, 
current, and tidal power. I think over the long-term, marine 
hydrokinetics offer considerable upside for low-cost renewable energy 
so I support the Department providing a majority of the water power 
budget to marine hydrokinetics. At the same time, I think there are a 
whole host of ways that we can still get more lower-cost renewable 
energy from conventional hydropower projects with additional government 
assistance--not just incremental hydropower. What is your view as to 
how the Department should be spending its water power budget, and what 
are your priorities for the future?
    Answer. The Department believes that continued funding of research 
and technology development projects for both conventional hydropower 
and emerging marine and hydrokinetic (MHK) energy technologies is 
needed to meet the nation's immediate and long-term energy needs. The 
President's request includes $38.5M for marine and hydrokinetic and 
conventional hydropower technologies. The President's request is 
essentially split between these two technology areas. The Senate 
appropriations mark eliminates conventional hydropower activities.
Conventional Hydropower Opportunities
    The Department agrees that there are significant opportunities to 
increase electricity generation by optimizing existing hydropower 
facilities, adding power to non-powered dams, and developing new 
(small) hydropower. The nation's current hydropower fleet is aging, and 
many facilities have not been upgraded in decades to take advantage of 
modern technologies. The Department works to remove market barriers by 
developing technology for efficiency upgrades to encourage investment, 
and to remove environmental barriers by demonstrating technologies such 
as the fish-friendly Alden turbine. Also, the Department's assessment 
of non-powered dams found that there is potential to add more than 12 
GW of hydropower capacity by powering existing nonpowered dams.
    In addition to supporting research to make use of opportunities at 
existing dams, the Department supports activities to harness new energy 
resources such as small hydropower and pumped storage hydropower. To 
this end, in FY2011, the Department selected 11 multi-year projects to 
develop innovative small hydropower technologies and two projects to 
deploy state-of-the-art pumped storage hydropower technologies, which 
can help in integrating high penetrations of variable renewable energy 
into the electric grid. The Department is also undertaking an 
assessment of opportunities to develop new hydropower facilities across 
the United States.
Marine Hydrokinetic Opportunities
    The Department's current MHK priorities include ongoing R&D 
activities targeted at developing cost benchmarks and technology 
pathways to cost-competitiveness for MHK technologies. There are also 
activities addressing key environmental, siting, and market barriers 
and a comprehensive set of resource assessments and detailed techno-
economic assessments for emerging MHK technologies.
    The Department has recently concluded studies finding that the 
technically recoverable resource potential is approximately 1,170 TWh/
yr for wave energy and 180 TWh/yr for tidal energy. This resource 
potential represents about one-third of U.S. electricity demand. 
Assessments of ocean thermal, ocean current, and river hydrokinetic 
energy will be completed in 2012. The completion of these studies, in 
addition to the results of demonstration projects and continued 
research over the next decade will put industry in a position to offer 
more cost competitive and reliable electrical generation options with 
this nascent technology.
    Question 9. While wind power is a wonderful source of supplemental 
electrical energy in rural Alaska, nationwide I have the sense that 
wind is an increasingly mature technology. What do you see as the 
future for research into wind turbine technology and for integration of 
wind into the electrical grid? In your view, should wind funding be 
increased, decreased, or stay the same as a percentage of the 
Department's renewable energy budget?
Technology Maturity of Land and Off-shore Wind
    Answer. The DOE Wind program has been successful in enabling the 
cost competitiveness of land-based systems which has gone from 0.1% in 
2000 to over 2% by 2011 (42GW installed). With the success of the 
land-based deployments, the Department is now prioritizing and shifting 
a significant portion of the RD&D portfolio to off-shore systems. In 
FY12, the President's budget reflects an increase to develop immature 
off-shore systems to take advantage of high resource potential and 
proximity to high population centers (4,000 GW potential), and to 
enable land-based wind to be cost competitive with fossil sources on an 
unsubsidized basis (noting that PTC expires at the end of 2012). In 
addition, more work needs to be done to increase domestic manufacturing 
of wind energy technologies and components throughout the supply chain. 
Currently, four of the top ten (and seven of the top 15) leading global 
suppliers of wind turbines in 2010 are from China, while only one U.S. 
company, GE, is in the top 15.
    Regarding offshore wind, there are currently 3 GW of offshore wind 
technology installed worldwide, but none are installed in the U.S. For 
the offshore wind industry to be viable in the U.S., a number of 
technology hurdles need to be overcome. Current technology solutions 
exist for shallow water in the 3-5MW range but to be cost effective 
offshore technology must be scaled to the 8-10MW range and be able to 
be deployed in deeper water. Developing the nation's offshore wind 
energy resources could deliver substantial amounts of clean electricity 
to U.S. consumers, especially in transmission-constrained coastal areas 
with high energy costs, while creating thousands of jobs and 
stimulating billions of dollars in new economic activity.
Future Research Investment
    Further research is needed to harness the considerable market 
potential for offshore wind energy in the United States, as described 
in the National Offshore Wind Strategy released by the Departments of 
Energy and the Interior in 2011. As the U.S. industry develops, 
projects will presumably tap into the high wind resource potential 
available in deep water locations. To address this need and support 
this new industry, the Department is focusing on developing cost-
effective technologies for deep water floating offshore systems in 
addition to exploring demonstration areas where technologies can be 
showcased and evaluated. The increase in machine size for offshore 
applications will require innovation in drivetrain topographies that 
are lighter and more reliable; blade geometries that are larger (up to 
100m), but lighter and capture more energy; and ''smart'' control and 
health monitoring systems that not only optimize energy capture but 
characterize and predict system behavior when system failures are 
realized. The Department's recent funding opportunity awards in 
offshore wind technology, innovative drivetrains, and market barriers, 
totaling $50 million, are key to ensuring the success of this emerging 
industry. Some of the specific technology research areas that DOE is 
supporting to advance the offshore wind industry include marinization 
of the structure and power electronics; moorings and foundations for 
deepwater systems; and control systems that provide stability and high 
efficiency for floating wind energy systems. DOE-supported R&D will 
allow domestic wind technology developers and manufacturers to enter 
the global market by leapfrogging further development of conventional 
offshore turbine technologies and produce next generation designs 
tailored to the unique conditions off the coasts of the United States.
    While it is widely understood that achieving high levels of wind 
energy penetration into the grid (upwards of 20%) is technically 
feasible, issues related to project cost effectiveness, electricity 
grid infrastructure and operations, and siting and environmental 
concerns must be addressed, and they require government involvement. 
These issues are increasingly more complicated in an off-shore 
environment, where both the experience is limited, and technical and 
market barrier challenges are more complex. Investments to reduce the 
cost of wind power through technology development and improved 
reliability are needed to bring wind power closer to unsubsidized 
market competitiveness. Investments to reduce market barriers to wind 
deployment are needed to allow wind plants to be sited in higher 
quality (higher wind speed) resource areas, further lowering the cost 
of wind and increasing market competitiveness. As the market 
penetration of land-based wind energy has increased and the first U.S. 
offshore wind plants are being planned, concerns associated with siting 
projects--such as potential impacts on wildlife, civilian and military 
radar systems, communities, and competing land and ocean uses such as 
fishing and shipping--have also grown. The wind industry estimates that 
planned projects representing tens of gigawatts of potential capacity 
have been delayed or otherwise significantly impacted by these issues.
Wind Integration
    DOE efforts to integrate wind energy into the electric grid are 
coordinated between the Office of Electricity Delivery and Energy 
Reliability and the Office of Energy Efficiency and Renewable Energy. 
Regarding the integration of wind into the electrical grid, substantial 
efforts are needed to improve the capabilities of wind turbines and 
begin providing services that more closely resemble conventional 
generation technologies.
    These capabilities include a variety of active power controls that 
allow the possibility for wind turbines to provide regulation service, 
frequency response, improved voltage control, and a variety of other 
ancillary services. Mitigation of wind variability through demand 
response and energy storage also deserves serious investigation. 
Analysis of existing storage systems and additional demonstrations 
coupled to wind generation are required to generate reliable data. 
Furthermore, more analysis studies are needed to better understand the 
impacts of high penetrations of wind through additional wind 
integration studies similar to the Western Wind and Solar Integration 
Study and the Eastern Wind Integration and Transmission Study. These 
types of studies help planners and system operators better understand 
how wind energy's variability and uncertainty affect the power grid and 
provide insights into issues such as what impact thermal unit cycling 
has on wear and tear to those generators. Also, considerable research 
is needed to help support the development of decision support tools to 
aid system operators make more informed operational decisions. Finally, 
substantial investigation is needed into power system dynamic behavior 
under a variety of wind deployment scenarios. In rural areas or in 
areas that have small electrical grids, wind energy can be stored or 
integrated with other renewables (e.g., biomass, hydrogen, etc.) to 
provide more continuous power.
    DOE believes that the allocation of $126.9 million in the 
President's FY2012 Congressional Budget Request for EERE's Wind program 
is sufficient to address the wind energy R&D needs outlined above.
    Question 10. Through the 2007 energy bill, Congress set up a 
matching grant program to help fund the capital costs renewable energy 
projects in high-cost areas like Alaska. While some have incorrectly 
considered the program to be Alaska-specific, I believe it allows the 
department to make grants to actually build wind, solar, geothermal, 
marine hydrokinetic and some hydro projects nationwide--with funding 
for lake tap hydro projects clearly being limited to just Alaska. What 
is your view about the merits of DOE providing financing assistance to 
actually build renewable energy projects? Will you seek to dedicate 
some portion of the Department's future budget to implement grant 
funding for such projects as Under Secretary?
    Answer. Section 803, titled ''Renewable Energy Deployment,'' of the 
Energy Independence and Security Act (EISA) allows 50:50 cost share of 
renewable energy construction grants. To date, the Department has not 
requested funding for Section 803. In the likelihood of declining 
renewable energy technology development budgets at DOE, we believe 
that, in general, investment in research and development will provide 
the maximum rate of return on taxpayer investment as compared to more 
expensive, location-specific demonstration and deployment projects. The 
total R&D budget for renewable energy is approximately $600M annually. 
Even if this amount were matched by private cost share, it would be 
dwarfed in comparison to what is invested in building renewable energy 
projects with other policy incentives. However, the Department will 
look to sponsor special demonstration projects where applying this 
authority to validate new technology performance and economics in high 
cost areas could spur follow-on private investment and be replicated at 
scale.
    Some of the other Federal government incentives and financing 
opportunities for commercializing new technologies and for constructing 
renewable energy plants include the DOE and USDA loan guarantee 
programs, Modified Accelerated Cost Recovery System depreciation 
schedule, production and investment tax credits and the Treasury grants 
in lieu of tax credit program. For example, under the American Recovery 
and Reinvestment Act, the Section 1603 Treasury grant program has 
incentivized over 24,000 projects yielding over 14 GW of renewable 
energy and $33 billion in total renewable energy investment by the 
government and private sectors. As the Treasury grant program and tax 
credits expire, the DOE looks forward to working with Congress and 
other government agencies to determine the best policy mechanisms and 
existing authorities to offset capital costs and to incentivize private 
investment in building new renewable energy projects.
    Question 11. Both the Government Accountability Office and the 
Department of Energy's Inspector General have raised serious concerns 
regarding the management and effectiveness of the Weatherization 
Assistance Program. While clearly energy efficiency is a critical tool 
to reduce energy bills, what will you do to improve the program? Do you 
believe it has fundamental problems that can be solved?
    Answer. More than $5 billion has been administered through Recovery 
Act funding of the Weatherization Assistance Program (WAP). The use of 
these funds to weatherize low income homes has been the subject of 28 
audits covering grantees representing $3.9 billion or 78% of the 
Recovery Act portfolio by either or both of the Office of Inspector 
General (OIG) and the Government Accountability Office (GAO). 17 of 
these audits have been complete and 11 are currently in process.
    Most of the completed audit reports (14 of the 17) contained either 
no recommendations or standard recommendations to improve ''Controls'' 
and monitoring. Of the remaining three reports, substantive 
deficiencies included evidence of substandard performance in 
workmanship, initial home assessments, contractor billing, financial 
management, and compliance with laws and regulations, including Davis-
Bacon and Historic Preservation issues. The latter issues were new to 
all grantees, since the Recovery Act added them to the requirements. In 
many cases these issues were identified prior to the OIG or GAO audits 
by DOE monitoring and were being addressed.
    Since the inception of the Recovery Act, DOE has taken its 
management responsibility very seriously, designing and implementing a 
robust monitoring system that could identify problems and take 
corrective actions without relying on outside audits. This allowed DOE 
to both systematically identify and respond to the new issues presented 
by the large increase in funding for WAP. All of the WAP grantees have 
been visited on a routine basis, with Monitoring Site Visits by DOE 
program staff totaling 121 as of December, 2011. Any issues identified 
are addressed until corrected.
    DOE will continue to act responsibly and appropriately when 
monitoring Recovery Act spending. Routine findings are regularly 
reviewed and used to identify areas of improvement among grantees. 
Often, the WAP issues additional guidance to clarify or strengthen 
policies. As in the past, DOE will remain vigilant in our awareness of 
potential fraud or abuse of services.
    Question 12. ``Duplicative Authorizations-- Over the years, 
Congress has authorized numerous programs at the Department of Energy 
that can be considered overlapping or duplicative. Has DOE considered 
any kind of consolidation of programs that may be duplicative? Is that 
something you would be willing to work with our committee on, if you're 
confirmed as Under Secretary of Energy?''
    Answer. DOE is working to ensure that its program areas are well 
coordinated and have minimal overlap or duplication, in order to make 
federal R&D funding have the highest possible impact. Recently, 
building on the success of the SunShot program, DOE established a set 
of cross-cutting technology teams to further this effort. These teams 
are formed along techno-business lines (such as vehicle 
electrification) and consist of the senior program managers from ARPA-
E, the Office of Science, and the applied technology programs that 
oversee research that is relevant to each technology area. Working 
closely with the Office of the CFO, these teams analyze the R&D 
portfolio DOE-wide, to look for overlap, duplication, or gaps that may 
not have been apparent when viewed on a program-byprogram basis. The 
work of these teams is ongoing, and if confirmed, I would be happy to 
work with the Committee on this important topic.
    Question 13. There is confusion about DOE's current role in the 
Energy Star Program. Can you please describe that role, and the 
associated budget requirements?
    Answer. DOE is the technical lead for the ENERGY STAR program 
through its development of product test procedures and support of the 
verification testing program. DOE remains committed to work with EPA 
and stakeholders on creating and updating ENERGY STAR test procedures 
that are reflective of innovations in the market place and address 
manufacturers concerns with test procedures. As an example, DOE and EPA 
are working closely with the Association of Home Appliance 
Manufacturers (AHAM) and major refrigerator manufacturers in the 
development of test procedures to support Smart Grid capability in 
ENERGY STAR refrigerators. In FY2011, DOE's budget for ENERGY STAR was 
$7 million to develop test procedures for ENERGY STAR and verify the 
performance of ENERGY STAR labeled products through third-party 
laboratory testing. The President's FY2012 budget request for ENERGY 
STAR was $10 million to support those same to goals above and to work 
with EPA and participating manufacturers, retailers, and energy 
efficiency program sponsors on certification and product testing.
    Question 14. Please describe how the DOE uses the procurement and 
acquisition system to push energy conservation, and sustainability 
within the DOE, and throughout the Federal Government.
    Answer. As required by Executive Order 13514, DOE is ensuring that 
95 percent of its contract actions include sustainable acquisition 
clauses. DOE also purchases and establishes policies regarding 
sustainable electronic equipment and energy efficient power management 
practices, including EPEAT, ENERGY STAR and FEMP designated products.
    In addition to these requirements DOE is making enhancements in its 
Strategic Integrated Procurement Enterprise System contract writing 
tool to ensure that contracting personnel can easily select the 
appropriate green provisions and clauses for procurements to ensure the 
Department's prospective contractors and successful competitors are 
fully aware of DOE's commitment to sustainable acquisition.
    Section 525 of the Energy Independence and Security Act of 2007 
requires each Federal agency to procure ENERGY STAR qualified or 
Federal Energy Management Program (FEMP) designated products in all 
product categories covered by the Energy Star program or the FEMP 
program, unless the efficient product is not cost-effective over the 
life of the product or if no qualified product is reasonably available 
to the agency. FEMP supports Federal agencies in identifying energy-and 
water-efficient products that meet this and other Federal acquisition 
requirements, conserve energy, save taxpayer dollars, and reduce 
environmental impacts. This is achieved through technical assistance, 
guidance, and efficiency requirements for energy-efficient, water-
efficient, and low standby power products.
    FEMP product efficiency requirements set minimum efficiency levels 
for product categories that have the potential to generate significant 
Federal energy savings. FEMP dedicates staff and resources to inform 
Federal buyers, procurement officials, energy managers, and facility 
engineers of the reasons and requirements to buy energy-efficient 
products. Several online and other resources are available to 
facilitate product selection. Technical documents, fact sheets, and 
web-based tools include covered product category efficiency 
requirements, cost calculators, and the standby power data center. In 
addition to online resources, FEMP staff works directly with Federal 
agencies on a variety of issues, such as guide specifications, Federal 
supply catalogs, outreach and training, and the Product Procurement 
Working Group.
    Question 15. Procurement Guidance: Please describe any guidance 
that the DOE provides program managers and contracting officers on the 
purchasing of sustainable or green construction services. Are there any 
requirements prescribed that require the contracting officers to use 
third party sustainability or green certification services in new 
construction or through retrofits of existing buildings funded by the 
DOE?
    Answer. DOE provides guidance to program managers and contracting 
officers in the area of sustainable acquisition, including sustainable 
construction services, through several channels. Regulatory guidance is 
provided through the Department of Energy Acquisition Regulation 
(DEAR), part 923. The DOE Acquisition Guide (chapter 23) provides 
comprehensive information concerning Executive Order 13514 and its 
predecessors, responsibilities of various offices in DOE for meeting 
the goals of the EO, and useful resources for both program managers and 
contracting officers. The Department also maintains a Sustainable 
Acquisition Working Group of over 200 members which shares information 
and best practices in sustainable purchasing through quarterly 
teleconferences for contractors and federal employees.
    DEAR clause 952.223-78 Sustainable Acquisition Program (Alternate 1 
for Construction Contracts and Subcontracts) requires a third party 
sustainable/green certification to the Leadership in Energy and 
Environmental Design (LEED) Gold level under the LEED rating system 
most suited to the building type.
    Question 16. Are federal agencies required to consult the Federal 
Energy Management Program (FEMP) regarding efficiency opportunities 
within new construction and the retrofit of existing buildings? For 
example, if the DOD or GSA procures services to build a new facility or 
retrofit an existing facility, are they required to consult with FEMP 
on ways to incorporate energy efficiencies into the design and 
construction of the building? If not, what role does FEMP play in 
ensuring that these buildings are incorporating energy savings into 
their designs?
    Answer. Federal agencies are required to conform to efficiency 
standards for new construction and major renovation as published by 
FEMP through Federal Rule makings. Additional information on this 
rulemaking is available at www.femp.energy.gov/pdfs/75_fr_29933.pdf
    Agencies are also required to complete assessments of their 
existing facilities to identify potential energy conservation measures 
and report those findings to FEMP annually, per 432 of the Energy 
Independence and Security Act 2007 (EISA 2007). This section required 
FEMP to develop and manage an online tracking system, the EISA Section 
432 Compliance Tracking System (CTS), to track agency performance of 
energy and water evaluations, project implementation and follow-up 
measures, and annual building benchmarking requirements. Because this 
system is just now being implemented, we do not yet have data on agency 
compliance.
    In addition, Federal agencies are required by 548(a) of the 
National Energy Conservation Policy Act (NECPA (42 U.S.C. 8258(a))) to 
report annually to FEMP their energy management activities as detailed 
in the Energy Policy Act of 2005 and EISA 2007. Information and data 
collected from the agencies is then used to develop DOE's Annual Report 
to Congress on Federal Government Energy Management.
    In addition to reporting requirements, FEMP provides the services, 
tools, and expertise to Federal agencies to help them achieve their 
Federal energy management goals. This is delivered through project 
financing, technical assistance, and communications and training.
    Question 17. Please describe how FEMP analyzes energy management 
authorities and develops rules and guidance to help Federal agencies 
comply with applicable requirements.
 Analyzing Energy Management Authorities:

    Answer. The rulemaking process begins when DOE is directed by 
Statute or by Executive Order to develop a rule or regulation or is 
directed to develop guidance or interpretation of a rule or regulation. 
When a law is enacted or an executive order issued relevant to FEMP's 
scope of activity (e.g., dealing with Federal energy and water 
management, fossil fuel consumption, or greenhouse gas emissions), 
FEMP, working with other relevant DOE offices, as well as other 
cognizant federal agencies (such as GSA, DOD and EPA), determine FEMP's 
responsibilities.
Developing rules and guidance to help agencies:

    Consistent with the Federal Register Act, the Administrative 
Procedure Act, and other applicable legislation, DOE experts develop a 
draft Proposed Rule consistent with the requirements and intent of the 
governing authority. The draft Proposed Rule is then subject to an 
interagency review process. Following that process, the draft is issued 
as a Notice of Proposed Rulemaking (NOPR) in the Federal Register. The 
NOPR provides a specified period of time usually 60 days--for all 
interested parties to comment on the proposed rule. A public hearing is 
typically held as well. Rulemaking documents, public comments and other 
supporting materials are placed in a rulemaking docket which is made 
available for public inspection at www.regulations.gov. After due 
consideration of the public comments, modification of the proposed 
rule, DOE publishes the final rule. The rule then becomes part of the 
Code of Federal Regulations, and remains so until it is revised.
    Upon completion of a final rule, DOE also develops guidance for 
Federal agencies that are subject to the rules. This guidance expands 
on the legal language used in the rules and addresses specific concerns 
and issues agencies may have, as well as providing agencies direction 
as to how to show compliance with the new rule. As needed, FEMP works 
with DOE program offices, other federal agencies, national 
laboratories, and industry experts to prepare the form and technical 
aspects of guidance for complying with rules and regulations. Such 
guidance typically covers both technical (e.g., energy, water, and/or 
fossil fuel use) and cost-effectiveness based on life cycle costs and 
published forecasts by energy Information Administration and National 
Institute of Standards and Technology (NIST). NIST is responsible for 
developing and maintaining a building life cycle cost model used by 
federal agencies.
    FEMP maintains a website containing information on the rulemaking 
process at www.femp.energy.gov/regulations/notices--rules.html. FEMP 
also maintains a website containing guidance for Federal rules at 
www.femp.energy.gov/regulations/guidance.html.
    Question 18. Is DOE the lead federal agency in ensuring that the 
goals of Executive Order 13514 (Federal Leadership in Environmental, 
Energy, and Economic Performance) of October 5, 2009 that relate to 
energy are being met? Please describe how the DOE will ensure that all 
federal agencies are reducing their energy intensity throughout their 
building stock. If the DOE is not the lead within the Executive Order 
as it relate to energy initiatives, who will be the lead federal agency 
in ensuring that reductions in energy intensity throughout the federal 
government are being met?
    Answer. Each Federal agency is responsible for meeting the goals of 
Executive Order 13514. However, the Federal Energy Management Program 
within the DOE is responsible for tracking agency progress towards 
meeting these goals and provides the services, tools, and expertise to 
help them do so. This is delivered through project financing, technical 
assistance, and communications and training.
    Question 19. Please describe the role the DOE will play within the 
Administration to ensure that the President's direction to federal 
agencies to cut energy costs in agency facilities as part of a broader 
effort to reduce spending and shrink the Federal Government's real 
estate footprint will be met.
    Answer. FEMP continues to play a central role in guiding agencies 
to use funding more effectively in meeting Federal and agency-specific 
energy management objectives. FEMP services are designed to help 
agencies meet their energy management requirements, however, projects 
with energy savings may have associated cost savings. FEMP provides the 
services, tools, and expertise to Federal agencies to help them achieve 
their Federal energy management goals. This is delivered through 
project financing services, technical assistance, and communications 
and training.
    DOE Report on Reliability: On December 1, 2011, the Department of 
Energy released a report entitled ``Resource Adequacy Implications of 
Forthcoming EPA Air Quality Regulations.'' The report represents an 
assessment by DOE of the adequacy of U.S. electric generation resources 
under air pollution regulations being finalized by the U.S. 
Environmental Protection Agency.
    Question 20a. When did the Department begin work on this report? 
When was that work completed? How long was the report under review 
before it was issued? Who outside of the Department was asked or 
allowed to provide input or review the final product?
    Answer. As part of its core mission to understand and analyze 
factors affecting the US energy system, the Department has monitored 
external analysis of EPA regulations on an ongoing basis and has 
consulted with EPA and other government offices on these topics when 
appropriate. The Department began drafting the formal written report in 
October 2011, drawing upon preliminary internal analysis that was 
initiated over the summer. The report was not completed until shortly 
before its release on December 1st. It did not undergo peer-review, 
although DOE consulted EPA to clarify technical details about the rules 
and asked a small number of experienced external energy experts to 
provide comments on a draft.
    Question 20b. Why did the DOE Office of Policy and International 
Affairs undertake the work for this report? What role did DOE's Office 
of Electricity Delivery and Energy Reliability have in preparing this 
report? Did DOE consult with either the Federal Energy Regulatory 
Commission or the North American Electric Reliability Corporation in 
connection with preparation of the report, or before the report was 
released? Please list all persons or entities that DOE vetted this 
report with.
    Answer. DOE's Office of Policy and International Affairs (PI) led 
the effort to produce this report, with substantive input and 
consultation with other DOE offices, including the Office of 
Electricity Delivery and Reliability. PI led this effort because it 
falls within PI's core mission to understand and analyze policies 
affecting the US energy system and cuts across multiple DOE technology 
areas. DOE did not consult with FERC or NERC about this report. It did 
not undergo peer-review, although a small number of experienced energy 
experts were asked to provide comments on a draft.
    Question 20c. Why did DOE examine only two of EPA's air 
regulations? Why didn't the Department provide an integrated analysis 
of the multiple environmental regulations?
    Answer. The report focused on the two EPA rules--CSAPR and MACT--
that are largely anticipated to have the greatest near-term impact on 
the energy system. The Department did not consider two other proposed 
rules--316(b) and the Coal Combustion Residuals Rule--because the 
requirements of these rules are more uncertain. Since these rules could 
not be modeled explicitly, the analysis instead reflected the 
uncertainty itself by making conservative assumptions about payback 
periods associated with pollution control technologies.
    Question 20d. Do you agree that regarding reliability concerns, 
local issues are of paramount concern given that many of the retiring 
units provide location and site-specific services such as black start 
are done at the local level? If so, why does the DOE report 
specifically decline to analyze the more important local and location-
specific reliability concerns?
    Answer. The report acknowledges that specific units may provide 
important ancillary services and that the localized reliability 
implications of retiring such units will need to be evaluated as those 
units are considered for retirement or extended outages. The report did 
not analyze these aspects of reliability because such an analysis would 
require knowledge about specific retirement or retrofit decisions at a 
unit-level that have not yet been made by the owners of those plants. 
Such analyses should be conducted and reviewed at the appropriate time 
by regional planning authorities, electric reliability organizations, 
and additional stakeholders with the best detailed knowledge of the 
relevant systems. The Department is committed to providing technical 
assistance to all relevant stakeholders as the rules are implemented.
    Question 21. Transmission--In the 2005 Energy Policy Act (EPAct), 
Congress attempted to address the difficult issue of transmission 
siting by adding Section 216 to the Federal Power Act which provided 
new Federal authority in this area. Pursuant to EPAct, DOE was tasked 
with conducting a study of electric transmission congestion and 
constraints every three years and, based on the study, designating 
National Interest Electric Transmission Corridors (NIETC or 
Transmission Corridors) where existing congestion resulted in 
reliability concerns or rate increases. FERC was granted limited 
backstop siting/eminent domain authority for transmission lines within 
those DOE-designated Transmission Corridors. DOE finalized its first 
study in 2006 and in 2007 designated two Transmission Corridors--one in 
the Mid-Atlantic region and the other in the Southwest. The 2009 
Stimulus bill amended the 2005 EPAct language to expand the basis of 
NIETC designations by including an analysis of significant potential 
sources of renewable energy that are constrained by a lack of adequate 
transmission capacity. With this new directive, the Energy Department 
completed its second congestion study in September 2009 but basically 
re-affirmed the previous two Transmission Corridor designations.
    Just this past September, in light of decisions on this EPAct 
provision in the Fourth and Ninth Circuits, the Department sought to 
transfer its study/designation authority to FERC so that only one 
federal agency would be in charge. However, rather than notify ENR, the 
Committee of jurisdiction, DOE simply posted the proposal on its 
website and asked for stakeholder comments. After significant backlash, 
including from this Committee's Chairman who noted that any changes to 
the carefully crafted 2005 compromise should be made by Congress and 
not the Administration, the Department withdrew its proposal.

    Question 21a. Do you believe the Department should undertake to 
rework pieces of energy laws like the 2005 Energy Policy Act or the 
2007 Energy Independence and Security Act without at least consulting 
with the Committees of jurisdiction?
    Question 21b. I understand that instead of proceeding with its 
proposal to transfer its transmission authority to FERC, the Department 
is now undertaking a Memorandum of Understanding with the Commission. 
What is the status of that MOU and how will it differ from DOE's 
initial authority transfer proposal?
    Question 21c. Do you agree that the 2005 statute reflects a clear 
division of authority between the two agencies and that FERC should not 
have the ability to trigger its own backstop jurisdiction?
    Answer(a). The Department understands that it does not have the 
authority to ``rework'' statutes like the 2005 EPA or the 2007 EISA. 
After receiving the delegation proposal from industry, a number of 
Federal agencies involved with electric generation and transmission 
projects decided to post the proposal--without endorsement--for 
comment. After receiving and carefully considering comments from a wide 
range of parties, the Department concluded that the proposed delegation 
would not be an appropriate action.

    Answer(b). After further discussion with FERC, the Department has 
concluded that an MOU on this subject is not needed.
    Answer(c). While members of congress have differing views on the 
congressional intent underlying the 2005 statute, the Department 
recognizes that the language of the Energy Policy Act of 2005 defines 
certain roles for the Department and other roles for the Federal Energy 
Regulatory Commission resulting in a division of authority.
    Question 22. Loan Programs Office: Who is currently in charge of 
the day-to-day operations of the Department's Loan Programs Office?
    Answer. David Frantz, a career DOE employee and Director of 
Origination, is currently serving as Acting Executive Director of DOE's 
Loan Program Office, reporting to Deputy Secretary of Energy Daniel 
Poneman. Mr. Frantz has more than 25 years of experience in project 
finance and prior to joining DOE, worked at the Overseas Private 
Investment Corporation, where he managed a team responsible for closing 
financial transactions to assist U.S. businesses investing overseas and 
promoting economic development in new and emerging markets.
    Question 23. ATVM Loans--The Department has entered into a 
conditional commitment, through the Advanced Technology Vehicles 
Manufacturing (ATVM) Program, for a $730 million loan to the domestic 
subsidiary of a Russian company for a project to produce advanced high-
strength steel. This loan commitment is controversial for several 
reasons, and raises a number of questions about DOE's interpretation 
and implementation of the ATVM statute. To the extent that you are 
unable to answer the following questions on your own, please work with 
other officials at the Department to do so and return complete answers.
    Question 23a. When was advanced high-strength steel first produced 
in the United States?
    Answer. This is not within the scope of the Department's loan 
program review, as it does not impact the ability of the applicant to 
meet the objectives of the ATVM program or their ability to repay their 
loan.
    Question 23b. When was advanced high-strength steel (AHSS) first 
used in a light-duty automobile in the United States?
    Answer. This is not within the scope of the Department's loan 
program review, as it does not impact the ability of the applicant to 
meet the objectives of the ATVM program or their ability to repay their 
loan.
    Question 23c. Is the Department aware of any companies within the 
domestic steel industry who have produced--or plan to produce--advanced 
high-strength steel without receiving a loan from the ATVM program? 
Please list those companies, along with the dates each began or will 
begin to produce advanced high-strength steel.
    Answer. Demand for uncoated AHSS capabilities in higher grades will 
grow significantly over the next 10 years, due to fuel efficiency and 
crash safety standards. At this time, ArcelorMittal has the only 
dedicated continuous annealing line (CAL) to produce uncoated and 
martenistic steels in the US. Severstal's expansion at its Dearborn, MI 
facility will represent the second CAL production projected to come on 
line in the US, in 2012. Based on market analysis, US demand from AHSS 
will continue to grow and there is currently insufficient US 
manufacturing capacity to meet this demand. While other lines have been 
announced, it is unclear as to their timing and production status. The 
Department's loan program welcomes applications from any of these 
companies.
    Question 23d. In determining eligibility for loans under the ATVM 
program, does the Department make any distinction between a vehicle 
``material'' and a vehicle ``component''? Why or why not?
    Answer. Each ATVMIP application undergoes a thorough review of its 
statutory eligibility. As a part of this process, DOE has determined 
that AHSS is reasonably understood to meet the statutory definition of 
``qualified component'' as set forth in Section 136(a)(4) of the Energy 
Independence and Security Act of 2007 (EISA). ``Qualifying components'' 
are ``components that the Secretary determines to be (A) designed for 
advanced technology vehicles (ATVs) and (B) installed for the purpose 
of meeting the performance requirements of ATVs.'' AHSS meets the 
requirements of a component for which the Secretary has the statutory 
discretion to determine qualification. In this regard, AHSS is designed 
for automotive applications, currently the only major use for these 
high grades of steel. AHSS is also installed for the purpose of 
improving fuel economy in ATVs. Prior to reaching a determination on 
eligibility, DOE confirmed that automotive original equipment 
manufacturers (OEMs) would use AHSS in qualified ATVs.
    Question 23e. Did the Department issue any rulemaking--and seek 
public comment on that rulemaking--before determining that advanced 
high-strength steel is a ``component''? Upon determination that 
advanced high-strength steel (or any other material or component) 
qualifies for ATVM awards, does DOE have any responsibility to 
advertise that expanded eligibility to the general public, including 
other companies in the industry and other materials suppliers?
    Answer. DOE did not issue a rulemaking prior to determining that 
AHSS is a component. DOE's determination was made as a matter of 
statutory interpretation after all due consideration.
    Question 23f. Please explain if there are any limits to the 
material/component projects that the Department believes are eligible 
for ATVM loans. Given that rare earth elements are used in many 
advanced vehicles, would a project to modify or establish a rare earths 
processing or beneficiation facility be eligible to receive an ATVM 
loan based on the Department's current statutory interpretation?
    Answer. As highlighted above, the Department's Loan office places 
great importance on the statutory eligibility of each applicant and 
carries out a thorough review to determine its eligibility. This review 
takes place on a case-by-case basis. At this time, ATVM has not carried 
out a thorough review to determine the eligibility of rare earth 
elements under the ATVM program.
    Question 23g. Please explain how low-cost federal financing for one 
company within the domestic steel industry will not afford it an unfair 
advantage compared to competitors that do not receive the same low-cost 
federal financing.
    Answer. As set forth in Section 136(a)(4) of the Energy 
Independence and Security Act of 2007 (EISA), ATVMIP authorizes funding 
awards and a direct loan program for OEMs and component suppliers that 
re-equip, expand, or establish manufacturing facilities in the U.S. to 
produce qualifying vehicles and components. The loan program welcomes 
applications from any companies that meet the objectives of the 
statute.
    Question 23h. Please provide all market analysis for advanced high-
strength steel that the Department completed prior to its recent 
conditional commitment.
    Answer. Market analysis is a critical part of evaluating a 
company's prospect of loan repayment. Before issuing loans, DOE closely 
analyzes and considers the competitive landscape and the impact of new, 
potential competitors on the existing market.
    DOE's market research is extensive and performed by highly 
regarded, independent engineering and consulting firms in the 
automotive and industrial manufacturing sectors. The due diligence 
performed on Severstal Dearborn, as with all other ATVMIP evaluations, 
included both a top-down and bottom-up market analysis of historical, 
current and anticipated future market conditions for both commodity and 
advanced high strength steels (with special focus on martensitic ultra 
high strength and uncoated steels). Moreover, the project's 
construction, production and operations costs were carefully reviewed. 
The analysis considered the rate of AHSS use abroad, specifically by 
foreign vehicle manufacturers selling imported vehicles in the U.S., as 
well as the importation of high tensile strength steels and the costs 
to OEMs and vehicle consumers. These considerations were determined to 
be critical inputs in evaluating Severstal Dearborn's suitability for 
the program and its ability to repay a loan.
    Question 23i. Please provide all analysis that the Department 
completed with regard to potential impacts this loan could have on 
other firms in the steel industry, before it concluded that the recent 
$730 million conditional loan commitment was warranted.
    Answer. As highlighted above, DOE carried out extensive top-down 
and bottom-up market analysis of historical, current and anticipated 
future market conditions for both commodity and advanced high strength 
steels. It was determined from this market analysis that US demand from 
AHSS will continue to grow and that there is currently insufficient US 
manufacturing capacity to meet this demand. To date, there is only one 
other domestic supplier of martensitic uncoated steels capable of 
providing high product volumes in the near term, but it is expected 
that the supplier will be unable to meet full market demand. In order 
to meet domestic demand and ensure dollars and jobs remain within the 
US, there is a need for additional US manufacturing of AHSS.
    Question 23j. Please provide the current construction status of all 
facilities that were to be reequipped, expanded, or established under 
the project that was awarded a $730 million conditional loan 
commitment. To the extent that facilities in the project have already 
started construction or been completed, please explain why the 
Department determined that the loan was still necessary and 
appropriate.
    Answer. Severstal decided to modernize and expand its manufacturing 
facilities for the production of AHSS shortly before a major 
contraction within the steel industry and the broader financial market. 
Beginning in late 2007, Severstal Dearborn embarked on a capital 
improvement program, substantially similar in planning to the first 
phase of the project considered by the ATVMIP for the production of 
coated steels using a hot dip coating process. Due to the recession and 
the contracting credit market, Severstal was forced to stop work in 
early 2008 and the project was placed on indefinite hold. The extent of 
the work completed at that time was minimal, consisting of the 
incomplete framing of a building intended to serve as the improved 
facility. Due to financial constraints, no additional progress was made 
on the project until the company submitted its ATVMIP application. The 
expenses associated with this part of the project were incurred prior 
to the company's submission of its ATVMIP application and therefore 
cannot be reimbursed under the ATVM rulemaking.
    In September 2009, Severstal's application to the ATVMIP was 
determined by program staff to be substantially complete. Under the 
ATVM regulation, eligible project costs incurred and paid between the 
date of an application's substantial completeness and loan close 
qualify for reimbursement should the loan be made. Since the project 
has not yet closed, Severstal has incurred any expenditures to-date at 
its own risk. For ten months (September 2009-June 2010), the Applicant 
conducted no project work. In June 2010, Severstal requested permission 
from the Loan Programs Office NEPA group to begin working on ``interim 
actions'' related to facility construction under Phase I of the 
project. Permission being granted, Severstal embarked on the 
development of its pickling line and hot dip coating facility, funding 
at its own risk in hopes of securing a DOE loan, through a combination 
of equity contributions from Severstal's parent, subordinated debt, and 
two existing, limited scope, credit facilities from major banks. At no 
time was Severstal assured of success in its pursuit of a loan. During 
this phase of the ATVMIP process, DOE conducted financial, market, 
legal and credit due diligence, and the Office of Management and Budget 
approved the credit subsidy rate. On July 8, 2011, the DOE approved 
moving forward with a conditional commitment to Severstal. As noted 
above, finalization of the loan is still pending.
    At the time of the conditional commitment, approximately one year 
after commencement of interim actions, the Phase I facility was 
approximately 80% complete, which greatly reduced the credit and 
execution risk associated with the project, helping protect taxpayer 
interests by improving the DOE's collateral position and supporting the 
borrower's prospects for loan repayment. The Phase I facility is still 
in testing and qualification and has not yet begun volume production. 
Phase II, the construction of a continuous annealing line facility for 
uncoated AHSS, has not yet broken ground. The company has represented 
to the ATVMIP that this phase is dependent on both the completion of 
Phase I and securing a DOE loan, as the company itself does not 
currently have the resources to complete the project without government 
assistance. Assuming a loan is approved, Phase II construction would 
begin in the late first quarter of calendar year 2012.
    Responses of Arunava Majumdar to Questions From Senator Barrasso
    Question 1. Do you believe the United States should have a robust 
uranium mining industry? If so, why?
    Answer. Yes, I believe that U.S. power reactors must have access to 
an adequate supply of uranium to enhance our national security and 
support the Administration's view that nuclear energy should continue 
to make a major contribution toward meeting our energy requirements and 
addressing the challenge of global warming.
    Question 2. If confirmed, will you communicate the importance of 
the domestic uranium mining industry to other agencies within the 
Federal government, including the Department of the Interior and the 
Environmental Protection Agency? If so, how?
    Answer. The Department is supportive of the advancement of nuclear 
energy, including support for domestic uranium mining, and will 
communicate that position within the Federal government. On an equal 
footing, I support the efforts of the Department of Interior and the 
Environmental Protection Agency to support their missions and protect 
the public interest.
    Question 3. If confirmed, you will oversee the Office of Nuclear 
Energy. The Office of Nuclear Energy has responsibilities, together 
with the Office of Environmental Management and the National Nuclear 
Security Administration, for managing and disposing of the Department's 
excess uranium inventory. If confirmed, what steps will you take to 
ensure that the Department adheres to its 2008 Excess Uranium Inventory 
Management Plan?
    Answer. If confirmed, I will ensure the Department remains 
committed to following the principles and policies contained in the 
2008 Excess Uranium Inventory Management Plan, whereby the Department 
will manage its excess uranium inventories in a manner that: (1) 
complies with all applicable legal requirements; (2) maintains 
sufficient uranium inventories at all times to meet the current and 
reasonably foreseeable needs of DOE missions; and (3) supports the 
maintenance of a strong domestic nuclear industry.
    Question 4. If confirmed, what steps will you take to ensure that 
the Department does not dispose of more uranium into the market than 
that identified in its 2008 Excess Uranium Inventory Management Plan-
specifically, 3.8 million pounds in calendar year 2012 and 5 million 
pounds annually in calendar years 2013 through 2017?
    Answer. DOE has established priorities for the transfer of uranium 
through 2013 consistent with the principles and policies set forth in 
the 2008 Excess Uranium Inventory Management Plan. On March 2, 2011, 
Secretary Chu announced that he had determined, based on a market 
impact analysis, that the planned transfers to fund accelerated cleanup 
activities at the Portsmouth Site in Piketon, Ohio, will not have an 
adverse material impact on the domestic uranium mining, conversion, or 
enrichment industries. The total proposed Departmental transfers 
through calendar 2013, including previously planned transfers by 
National Nuclear Security Administration, total approximately 2,000 
metric tons of uranium per year, or about 10 percent of U.S. reactor 
demand, consistent with the guideline or objective the Department set 
out in the 2008 Plan. I do not anticipate any changes going forward 
with respect to the principles and policies contained in the 
Department's 2008 Plan.
    Question 5. In September of 2011, the Government Accountability 
Office found that the Department violated Federal law (31 U.S.C. 
3302(b)) in a series of transactions with USEC between December 2009 
through June 2011. Do you believe the Department violated Federal law 
with respect to these transactions? If not, why not?
    Answer. I am not an attorney, but the Department's response to the 
GAO report, including its legal analysis, is contained in Appendix IV 
to the report. I refer you to that response, available at http://
www.gao.gov/new.items/d11846.pdf , for the Department's position on 
this matter.
    Question 6. If confirmed, what steps will you take to ensure that 
the Department adheres to the miscellaneous receipts statute (31 U.S.C. 
3302(b))?
    Answer. As stated in its response to the GAO Report, the Department 
does not believe it violated the miscellaneous receipts statute in the 
transactions analyzed by GAO. Nevertheless, the Department will take 
GAO's concerns into account in future transactions.
    Question 7. The Department has indicated that it is revising its 
2008 Excess Uranium Inventory Management Plan. If confirmed, what steps 
will you take to ensure that the revised plan will promote a strong and 
stable domestic uranium mining industry?
    Answer. As I have indicated in response to a previous question, if 
confirmed, I will fully support the Department's principles and 
policies contained 2008 Excess Uranium Inventory Management Plan are 
reflected in the revision to the Plan. The Plan will incorporate these 
principles and policies and set forth the Department's intended 
transfers, which will be conducted in a manner that: (1) complies with 
all applicable legal requirements; (2) maintains sufficient uranium 
inventories at all times to meet the current and reasonably foreseeable 
needs of DOE missions; and (3) supports the maintenance of a strong 
domestic nuclear industry. It is especially important to note that for 
certain kinds of transfers or sales of uranium, the Department is 
subject to requirements under 3112(d) of the USEC Privatization Act, 
including a determination by the Secretary that the proposed 
transaction will not have an adverse material impact on the domestic 
uranium mining, conversion, or enrichment industries.
    Question 8. If confirmed, what steps will you take to ensure that 
the revised plan's annual limits on the Department's excess uranium 
inventory dispositions will be no more than 5 million pounds or 10 
percent of annual domestic fuel requirements?
    Answer. If confirmed, I will support the Department's general 
guideline, set forth in both the 2008 Plan and the 2008 Secretary of 
Energy's Policy Statement on Management of the Department of Energy's 
Excess Uranium Inventory, to keep the quantity of uranium introduced 
into the domestic market within 10 percent of average annual domestic 
demand. The Department believes, as do I, that the introduction into 
the domestic market of DOE inventories in amounts that do not exceed 10 
percent of the annual U.S. fuel requirements should not have any 
adverse material impact on the domestic industry. The 10 percent 
guideline was in fact one of industry's recommendations regarding the 
Department's management of its uranium. As acknowledged in the Plan, 
however, the Department anticipates that in any given year it may 
introduce less than that amount into the domestic market and that in 
some years it may introduce more for certain special purposes. 
Regardless of whether a particular transfer or sale is above or below 
the 10 percent guideline, if it is a transaction that is covered by 
section 3112(d) of the USEC Privatization Act, the Secretary must 
determine that that a proposed transfer or sale will not have an 
adverse material impact on the domestic uranium mining, conversion, or 
enrichment industries in order for that transaction to occur.
    Responses of Arunava Majumdar to Questions From Senator Portman
    Dr. Majumdar, as you know, one of the administration's priorities 
in the energy research portfolio has been the hubs of innovation. 
Secretary Chu originally sought funding for eight hubs; to date 
Congress has funded three to examine Fuels from Sunlight, Modeling and 
Simulation, and Energy Efficient Building. Further funding has been 
proposed for creation of the Battery and Energy Storage and Critical 
Materials Hubs.
    Question 1. How would you assess the progress of these Hubs? 
Looking forward, I would like to ask for your further thoughts on the 
proposed Hub for Smart Grid research.
    Answer. The Hubs continue to make strong progress in their 
respective technical areas. By bringing together researchers from a 
diverse, complementary set of fields under the leadership of strong 
scientist-managers, the Hubs have succeeded in creating a ``critical 
mass'' of research attention on these high-value problems. The Smart 
Grid Hub will replicate key features of this successful model in the 
area of grid technologies. However, recognizing the significant 
regional diversity of the electricity system, DOE is considering the 
concept of supporting multiple Smart Grid ``Hublets'', rather than 
using a ``single roof'' approach. Under this model, these several 
``Hublets'' would secure partnership and cost-sharing with industry, 
local governments and other stakeholders in their region, in order to 
explore regional-level technology and institutional solutions while 
maintaining coordination for the national interest.
    Question 2. How do you see the proposed Hub for Smart Grid research 
interfacing with existing federal funding supporting Smart Grid 
technologies?
    Answer. While the Smart Grid Hub will leverage the activities of 
existing programs, its general focus would likely be on the unique 
technology, market, and policy issues at the interface between 
electricity transmission and distribution. The trend toward increased 
deployment of distributed generation, electric vehicles, and customer 
participation in wholesale electricity markets has blurred the 
traditional boundary between transmission and distribution, introducing 
new complexity to the grid system. A systems-level, grid-centric 
approach pursued by the Hub would help realize the full potential of 
these clean technologies as well as emerging grid technologies.
    Question 3. Do you see a Smart Grid Hub geared more toward 
fundamental research or applied research and commercialization?
    Answer. The Smart Grid Hub will likely focus on applied research 
and commercialization, while also exploring the market and 
institutional issues that are critical for successful deployment of 
innovative grid technologies and solutions. Education and training for 
the next generation of grid designers, engineers, and operators is also 
likely to be a cornerstone of the Hub's efforts.


                               


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