[Senate Hearing 112-643]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 112-643
 
                         DOE BUDGET FOR FY 2013 

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   TO

RECEIVE TESTIMONY ON THE DEPARTMENT OF ENERGY'S BUDGET FOR FISCAL YEAR 
                                  2013

                               __________

                           FEBRUARY 16, 2012


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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
Chu, Hon. Steven, Secretary, Department of Energy................     4
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2

                                APPENDIX

Responses to additional questions................................    57


                         DOE BUDGET FOR FY 2013

                              ----------                              


                      THURSDAY, FEBRUARY 16, 2012

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:31 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

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

    The Chairman. OK. Why don't we get started?
    Thank you all for coming. Today we have an oversight 
hearing to examine the President's proposed Department of 
Energy budget for fiscal year 2013. We welcome Secretary Chu to 
testify and present the Administration's budget to us today.
    The priorities laid out in the President's proposed budget 
reflect a strong commitment to clean energy and the increased 
security and economic benefits that made-in-America energy can 
achieve for us through American innovation and as well as 
manufacturing.
    In an overall budget request that seeks to provide 
substantial government wide deficit reduction, I'm pleased to 
see that we have a proposed 3.2 percent increase in the 
Department of Energy budget. This is an investment in the 
Nation's energy future that will boost our economic growth and 
global competitiveness, protect the environment and allow the 
U.S. to continue important nuclear non-proliferation work.
    Informed by the Quadrennial Technology Review, which we had 
a hearing on a couple months ago, the Department of Energy's 
budget request cuts funding in mature technology areas and 
provides increased resources for the most promising clean 
energy innovations. This is an important step toward a national 
energy policy that invests in critical energy priorities within 
a framework of a sustainable fiscal policy.
    The Department of Energy's budget before the committee 
today supports a range of cutting edge technologies that will 
enable us to lead in the global race for clean energy. 
Increased investment in high performance computing and basic 
science will increase understanding and spur new energy 
technology development. Continued investments in ARPA-E will 
support high risk transformational energy projects, helping 
them to mature and attract non-governmental funding. Support 
for solar, wind, geothermal and biomass energy will further 
develop our portfolio of available energy sources and enable a 
transition to cleaner technologies. Meanwhile, funding for 
research on carbon capture and sequestration, methane gas 
hydrates and minimization of the impact of shale gas 
development will allow us to utilize fossil fuel resources in a 
responsible way.
    This budget also provides funding to address critical grid 
modernization issues through a new Electricity Systems 
Innovation Hub and significant funding increases for advanced 
energy efficient manufacturing. This holds the promise of 
providing jobs for the future.
    It's important to recognize that the research and 
development programs that I mentioned here cannot fully meet 
the challenges of bringing new energy technologies to the 
commercial marketplace. The capital requirements to move 
promising technologies from the lab bench to pilot scale and 
finally to commercial scale are enormous.
    Our overseas competitors have figured this out. They're 
moving aggressively to gain an edge in clean energy 
technologies. Much of our effort to support domestic players in 
this race has occurred through the Loan Guarantee Program--a 
proposal that Senator Domenici and I jointly made as part of 
the 2005 Energy Policy Act. At its core the Loan Guarantee 
Program is intended to allow the government in the case of new 
technology development and deployment to take on risks that the 
private investor cannot. Mr. Herbert Allison has just published 
a useful report with some recommendations for managing the 
program going forward,and many of these are similar to 
approaches that Senator Murkowski and I have incorporated into 
the Clean Energy Deployment legislation the (CEDA) that we've 
reported from the committee. We'll be having a hearing on this 
report by Mr. Allison when we return after this next week's 
recess. I'll have a questions for the Secretary about the 
Allison report and the State of the loan guarantee program when 
we get to questions.
    Again, thank you, Mr. Secretary, for coming. We look 
forward to your testimony. Let me also just mention before 
calling on Senator Murkowski, I appreciate the technical 
assistance that your staff and the folks at the Energy 
Information Administration and other parts of DOE provided in 
helping us develop the proposal for a Clean Energy Standard 
that I hope we can introduce as legislation in a couple of 
weeks. The modeling and analysis that has been done in your 
Department has been very helpful in helping us develop that 
bill.
    So, let me call on Senator Murkowski for her opening 
statements.

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

    Senator Murkowski. Thank you, Mr. Chairman. Mr. Secretary, 
good morning, welcome to you. Thank you for being here before 
the committee to speak to the budget as it relates to the 
Department of Energy.
    I was disappointed with the Administration's overall 
request for fiscal year 2013. I think we all hoped, and I 
certainly expected, that the President would lead the way by 
presenting a good plan to reduce our debt, grow our economy. I 
think it was an opportunity to address the entitlement issue, 
reform the tax code, make swift progress in balancing the 
Federal budget or at least moving in that right direction.
    But instead we have a document that, I believe, largely 
ignores the greatest threat to our economy. That's the more 
than $15 trillion debt that led the United States' first ever 
credit downgrade last summer. Last year's budget request 
lamented the special interest loopholes that riddle our tax 
code, but this year proposes even more. It describes an economy 
built to last and yet, is filled with proposals that have 
virtually no chance of passage.
    Unfortunately I look at the energy budget and I think that 
this is clear within the energy policy as well. I can 
understand and certainly support many of the proposals that are 
within the DOE budget. I greatly appreciate the emphasis on 
science and research. I think that that is key. More money for 
geothermal research, I believe is a good thing and emphasis on 
drop in biofuels, clearly a worthy endeavor.
    But, I have some heartburn with the decision to reduce the 
funding for renewable water power. This is an issue that I hope 
we can discuss in the questions and answers after this. R and D 
efforts that could help unlock massive volumes of 
unconventional resources are, again, zeroed out.
    I'm also concerned by many of the big ticket expenses that 
are either directly or indirectly tied to this budget. We've 
got new and renewed tax credits as an extension of the 1603 
program. We've got a billion dollar vehicle deployment program, 
a $5 billion for advanced manufacturing, $6 billion for home 
star efficiency programs.
    I clearly understand why people would want to fund all of 
those. I certainly have shown my support in many of these 
areas. But given the state of the Federal budget, where we are, 
I would stress that now is a time to differentiate between 
those things that we might want to fund and those things that 
we need to fund.
    While DOE's discretionary budget grows by just over 3 
percent in this request, adding all of the programs and the 
subsidies that are included in the broader budget is going to 
nearly double our spending on energy. That concerns me.
    I'm willing to support more spending in this area, but only 
if the revenues are derived from new and not existing 
production. But that's another problem with the budget. It 
reignites a fight that the Administration has waged and 
overwhelmingly lost, I might say, for the past 3 years. Instead 
of taking steps to extract new domestic energy from our 
tremendous resource base, the Administration has decided to 
again, try to extract $40 billion from the consumers of oil and 
gas and coal regardless of the consequences that they could 
have for our energy supply, our economy and our security.
    The President, in his State of the Union, called for an all 
of the above approach to energy policy. I think that's 
certainly something that I have embraced and I think most of 
our colleagues here. But I'm just not seeing that played out 
within the budget. I causes me to wonder whether the budget 
planners were working together with the President when he 
enunciated those words in his speech.
    I'd like to see us get to that point. I, again, appreciate 
you, Secretary Chu. I think you do try to make a very concerted 
effort in a difficult area, during difficult times.
    Thank you for being here. Look forward to your responses to 
some of these very critical issues.
    Thank you, Mr. Chairman.
    The Chairman. Secretary Chu, why don't you take as much 
time as you would like to describe the budget and any other 
points you want to make?

 STATEMENT OF HON. STEVEN CHU, SECRETARY, DEPARTMENT OF ENERGY

    Secretary Chu. OK. Thank you, Chairman Bingaman and also 
thank you, Ranking Member Murkowski and members of the 
committee. Thank you for the opportunity to discuss the 
President's FY'13 budget request for the Department of Energy.
    I want to first begin by thanking Senator Bingaman for his 
years of leadership. It's been a privilege to work with you. I 
look forward to continuing our work together this year.
    To promote economic growth and strengthen national 
security, President Obama has called for an all of the above 
strategy that develops every source of American energy. The 
President wants to fuel our economy with domestic resources 
while increasing our ability to compete in the clean energy 
race.
    Although the United States has reclaimed the title of world 
leader in clean energy investments, we're at risk of falling 
behind again unless we support our domestic clean energy 
economy. Our country faces a stark choice. We can create jobs 
making and exporting the energy technologies of tomorrow or we 
can cede the leadership to other countries that are investing 
in these industries. As President Obama has said passing a 
clean energy standard is a vital step that Congress can take to 
broaden our clean energy market.
    Making the most of the America's energy resources is a 
pillar of the President's economic blueprint to build an 
economy that lasts. The Department FY'13 budget requesting 
$27.2 billion is guided by the President's vision, our 2011 
Strategic Plan and our inaugural Quadrennial Technology Review. 
It supports leadership in clean energy technologies, science 
and innovation and nuclear security and environmental cleanup.
    Trillions of dollars will be invested in clean energy in 
the coming decades. To seize this opportunity, the budget 
requests investing in the research, development, manufacturing 
and deployment of energy technologies. Decades ago the Energy 
Department's support helped develop the technologies that have 
allowed us to tap into America's abundant shale gas resources. 
Today our investments can help advance technologies that will 
unlock the promise of renewable energy and energy efficiency.
    The budget request invests approximately $4 billion in our 
energy programs. It advances progress in areas from solar, to 
offshore wind, to carbon capture utilization and storage to 
smart grid technologies. It helps reduce our dependence on 
imported oil by developing next generation biofuels, advanced 
batteries and fuel efficient vehicle technologies.
    The budget request invests $770 million in the Nuclear 
Energy program to help develop the next generation of nuclear 
power technologies including small modular reactors. It 
includes funding for continued Nuclear Waste R&D which aligns 
with the recommendations of the Blue Ribbon Commission on 
America's nuclear future.
    As we move to a sustainable energy future, America's fossil 
fuel energy resources will continue to play an important role 
in our energy mix. The budget requests include $12 million in 
grants. That $12 million is part of a $45 million priority 
Research and Development initiative by the Departments of 
Energy, Interior and EPA to understand and minimize the 
potential environmental, health and safety impacts of natural 
gas development through hydraulic fracturing.
    The budget also promotes energy efficiency to help 
Americans save money by saving energy. It sponsors R&D on 
industrial materials and processes to help American 
manufacturers cut costs and compete.
    To maximize our energy technology efforts, the Department 
is coordinating research and development across our basic and 
applied research programs as well as in ARPA-E in areas 
including batteries, biofuels and electric grid technologies.
    To encourage manufacturing and deployment of clean energy 
technologies, the President has called for extending proven tax 
incentives including the Production Tax Credit, the 1603 
program and the Advanced Energy Manufacturing Tax Credit.
    As industry, Congress and the American people make critical 
energy decisions, it's also important that we adequately fund 
the Energy Information Administration.
    Competing in the new energy economy will require our 
country to harness all our resources including American 
ingenuity to help the United States at the forefront of science 
and technology. The budget includes $5 billion for the Office 
of Science to support basic research that could lead to new 
discoveries and help solve energy challenges. These funds are 
for progress in material science, basic energy science, 
advanced computing and more.
    The budget request continues to support Energy Frontier 
Research Centers which aim to solve specific scientific 
problems to unlock new clean energy development. So far these 
research centers have published more than 1,000 peer reviewed 
papers and filed more than 90 patent applications or patent 
invention disclosures.
    It also supports the 5 existing Energy Innovation Hubs and 
proposes a new Hub in electricity systems. Through the Hubs 
we're bringing together our Nation's top scientists and 
engineers to achieve game changing energy goals.
    Additionally the budget request includes $350 million for 
ARPA-E to support research projects that could fundamentally 
transform the way we use and produce energy. ARPA-E invests in 
high risk, high reward research projects that, if successful, 
could create the foundation for entirely new industries.
    In addition to strengthening our economy the budget request 
strengthens our security by providing $11.5 billion for the 
National Nuclear Security Administration.
    As the United States begins the nuclear arms reduction 
required by the new START treaty, the science, technology and 
engineering capabilities within the nuclear security enterprise 
will become even more important into sustaining the U.S. 
nuclear deterrent. That's why the budget request includes $7.6 
billion for weapons activities.
    It also includes $1.1 billion for the Naval Nuclear 
program.
    Additionally it supports NNSA's work to prevent nuclear 
terrorism, one of President Obama's top priorities.
    It includes $2.5 billion to implement key nuclear security, 
non-proliferation and arms control activities.
    Finally, the budget request includes $5.7 billion to 
continue progress cleaning up the Nation's cold war nuclear 
sites.
    The budget request makes strategic investments to promote 
prosperity and security. At the same time we recognize the 
country's fiscal challenges and are cutting back where we can. 
We're committed to performing our work efficiently and 
effectively.
    Countries in Europe, Asia and throughout the Western 
Hemisphere recognize the energy opportunity and are moving 
aggressively to lead. This is a race we can win. But we must 
act with fierce urgency.
    So thank you. I'll be pleased to answer your questions.
    [The prepared statement of Secretary Chu follows:]

Prepared Statement of Hon. Steven Chu, Secretary, Department of Energy,
    Chairman Bingaman, Ranking Member Murkowski and Members of the 
Committee, thank you for the opportunity to appear before you today to 
discuss the President's Fiscal Year 2013 Budget request for the 
Department of Energy
    I want to begin by thanking Senator Bingaman for his many years of 
leadership. It has been a privilege to work with you, and I look 
forward to continuing our work together this year on the important 
energy issues facing our nation.
    To promote economic growth and strengthen national security, 
President Obama has called for ``an all-out, all-in, all-of-the-above 
strategy that develops every source of American energy--a strategy that 
is cleaner and cheaper and full of new jobs.'' The President wants to 
fuel our economy with domestic energy resources while increasing our 
ability to compete in the global clean energy race.
    Although the United States has reclaimed the title of world leader 
in clean energy investments, we are at risk of falling behind again 
unless we make a sustained federal commitment to supporting our 
domestic clean energy economy. To compete globally, America has to do 
more than invent technologies, we also have to produce and sell them. 
Our country faces a stark choice: we can create jobs making and 
exporting the energy technologies of tomorrow or we can cede leadership 
to other countries that are investing in these industries. As President 
Obama re-iterated in his State of the Union address, passing a Clean 
Energy Standard is a vital step that Congress can take to broaden our 
clean energy market and promote U.S. leadership.
    Making the most of America's energy resources is a pillar of the 
President's economic blueprint to build an economy that lasts. The 
Energy Department also supports other key elements of the President's 
agenda including leading in innovation, reducing our dependence on oil, 
cutting costs for families, businesses and manufacturers through energy 
efficiency and reducing nuclear dangers worldwide.
    Guided by the President's vision, the Department's 2011 Strategic 
Plan and our inaugural Quadrennial Technology Review, our FY13 budget 
request of $27.2 billion invests in the following priorities:

   Accelerating the transformation of America's energy system, 
        and securing U.S. leadership in clean energy technologies;
   Investing in science and innovation to promote our nation's 
        economic prosperity; and
   Keeping Americans safe by enhancing nuclear security through 
        defense, nonproliferation and environmental cleanup.

    These priorities will be enabled through a continuing commitment to 
fiscal responsibility and management excellence.
Leading in the Energy Technologies of the 21st century
    Last year, a record $260 billion was invested globally in clean 
energy, and trillions of dollars will be invested in the coming 
decades. To seize this market and job creation opportunity, the 
President's budget request invests in programs that advance research, 
development, manufacturing and deployment of the energy technologies of 
the future.
    Decades ago, support from the Energy Department helped to develop 
the technologies that have allowed us to tap into America's abundant 
shale gas resources. Today, our investments can help us advance 
technologies that will unlock the promise of renewable energy and 
energy efficiency.
    The budget request invests approximately $4 billion in our energy 
programs. It supports the Department's SunShot initiative to make solar 
energy cost-competitive with any other form of electrical energy, 
without subsidy, by the end of the decade. It advances technological 
progress in areas ranging from offshore wind to carbon capture, 
utilization and storage to smart grid and energy storage. And it helps 
reduce our dependence on oil by developing the next generation of 
biofuels and accelerating research in advanced batteries and fuel-
efficient vehicle technologies.
    Leadership in nuclear energy technologies is also essential to our 
ability to compete globally. The budget request invests $770 million in 
the nuclear energy program to help develop the next-generation of 
nuclear power technologies, including small modular reactors. It also 
includes funding for continued R&D on the storage, transportation and 
disposal of nuclear waste, which also aligns with the recommendations 
of the Blue Ribbon Commission on America's Nuclear Future.
    As we move to a sustainable energy future, America's fossil energy 
resources will continue to play an important role in our energy mix. 
President Obama is committed to developing our oil and gas resources in 
a safe and sustainable manner. Last year, our oil import dependence was 
at its lowest level in sixteen years, oil production reached its 
highest level in eight years and natural gas production set a new 
record. Building on this progress, the Energy Department's budget 
request includes $12 million as part of a $45-million priority research 
and development initiative by the Departments of Energy, the Interior, 
and the Environmental Protection Agency to understand and minimize the 
potential environmental, health, and safety impacts of natural gas 
development through hydraulic fracturing (fracking).
    The budget request also promotes energy efficiency to create jobs 
and to help Americans save money by saving energy. It supports home 
weatherization and calls for passage of the HOME STAR program to 
provide incentives to homeowners to make energy efficiency upgrades. It 
also invests in research and development to improve building efficiency 
and supports the President's ``Better Buildings'' Initiative to 
catalyze private sector investment in commercial building efficiency. 
Finally, the budget request sponsors R&D on industrial materials and 
processes to help U.S. manufacturers cut costs and improve their global 
competitiveness.
    To maximize our energy technology efforts, the Department is 
breaking down silos and coordinating research and development across 
our program offices. Modeled after our SunShot initiative, we're 
bringing together our basic and applied research programs and ARPA-E to 
harmonize their work in areas including batteries, biofuels and 
electric grid technologies. And to encourage manufacturing and 
deployment of clean energy technologies, the President has called for 
renewing and extending proven tax incentives including the Production 
Tax Credit, the 1603 cash payment in lieu of tax credit program and the 
Advanced Energy Manufacturing Tax Credit, known as 48C.
    As industry, Congress and the American people make critical energy 
decisions and require greater understanding of domestic and 
international energy markets, it's important that we adequately fund 
the Energy Information Administration, the nation's premier source of 
independent statistical information about energy production and use. 
That is why the budget request includes $116 million for EIA.
Unleashing U.S. Innovation to Create Jobs and Lead in the Global 
        Economy
    Competing in the new energy economy will require our country to 
harness all of our resources, including as the President said, the 
``one critical, renewable resource that the rest of the world can't 
match: American ingenuity.'' A key part of our country's success has 
been our leadership in science and technology, but we can't take that 
leadership for granted. According to the National Science Foundation's 
2010 Science and Engineering Indicators report, from 1996 to 2007, the 
average annual growth of R&D expenditures in the United States was 
about five to six percent compared to more than 20 percent in China.
    To help keep the United States at the forefront of science and 
technology, the budget request invests in cutting-edge research that 
could spur new jobs and industries. This includes $5 billion for the 
Office of Science to support basic research that could lead to new 
discoveries and help solve our energy challenges. These funds support 
progress in materials science, basic energy science, advanced computing 
and more. They also provide America's researchers and industries with 
state-of-the-art tools to help take their work to the next level.
    The budget request continues to support Energy Frontier Research 
Centers. The Energy Frontier Research Centers are working to solve 
specific scientific problems to unlock new clean energy development. So 
far, the EFRCs have published more than 1,000 peer-reviewed papers and 
filed more than 90 patent applications or patent/invention disclosures. 
Researchers are reporting multiple breakthroughs in areas ranging from 
advanced battery technology and solar energy to solid-state lighting 
and nuclear power.
    The budget request also supports the five existing Energy 
Innovation Hubs and proposes a new Hub in electricity systems. Through 
the Hubs, we are bringing together our nation's top scientists and 
engineers to achieve game-changing energy goals. The Hubs continue to 
make progress. For example, the Modeling and Simulation for Nuclear 
Reactors Hub has released the first versions of its software that, upon 
completion, will simulate a virtual model of an operating physical 
reactor. The Fuels from Sunlight Hub has filed multiple invention 
disclosures and published scientific papers. And the Energy Efficient 
Building Systems Hub is developing advanced building modeling tools and 
has built one of the country's first 3-D building design labs.
    Additionally, the budget request includes $350 million for the 
Advanced Research Projects Agency for Energy, known as ARPA-E, to 
support research projects that could fundamentally transform the way we 
use and produce energy. ARPA-E has invested in roughly 180 high-risk, 
high-reward research projects that, if successful, could create the 
foundation for entirely new industries. These companies and research 
teams are working toward a prototype of a battery that has double the 
energy density and one third the cost of batteries in 2010, bacteria 
that use carbon dioxide and electricity to make fuel for cars, grid 
scale electricity storage and other potentially game-changing 
breakthroughs. Eleven projects that received $40 million from ARPA-E 
over the last two years have done such promising work that they have 
now received more than $200 million in combined private sector funding.
    Taken together, our research initiatives will help rev up America's 
great innovation machine to accelerate energy breakthroughs.
Nuclear Safety and Security
    In addition to strengthening our economy, the budget request also 
strengthens our security by providing $11.5 billion for the 
Department's National Nuclear Security Administration. NNSA plays a key 
role in achieving President Obama's nuclear security objectives.
    As the United States begins the nuclear arms reduction required by 
the New START treaty, the science, technology and engineering 
capabilities within the nuclear security enterprise will become even 
more important to sustaining the U.S. nuclear deterrent. The budget 
request includes $7.6 billion for Weapons Activities, a five percent 
increase over the FY 2012 enacted levels. This increase provides a 
strong basis for transitioning to a smaller yet still safe, secure and 
effective nuclear stockpile. It also strengthens the science, 
technology and engineering base of our enterprise.
    The budget request also includes $1.1 billion for the Naval 
Reactors program to ensure the safe and reliable operation of reactors 
in nuclear-powered submarines and aircraft carriers and to fulfill the 
Navy's requirements for new nuclear propulsion plants that meet current 
and future national defense requirements.
    Additionally, the budget request supports NNSA's critical work to 
prevent nuclear terrorism--one of the most immediate and extreme 
threats to global security and of one President Obama's top priorities. 
It includes $2.5 billion to implement key nuclear security, 
nonproliferation and arms control activities. It supports efforts to 
detect, secure and dispose of dangerous nuclear and radiological 
material around the world. And it will help the Department to fulfill 
its role in accomplishing the President's goal of securing all 
vulnerable nuclear materials worldwide in four years.
    Finally, the budget request includes $5.7 billion for the Office of 
Environmental Management to continue progress cleaning up the nation's 
Cold War nuclear sites.
Fiscal Responsibility and Management Excellence
    The Department of Energy's FY13 budget request makes strategic 
investments to promote our country's future prosperity and security. At 
the same time, we recognize the country's fiscal challenges and our 
responsibility to invest in much-needed programs while cutting back 
where we can. That is why the President's budget request eliminates $4 
billion in inefficient and unnecessary fossil fuel subsidies.
    Given the urgency of the challenges we face, the Department is 
committed to performing our work efficiently and effectively. We are 
streamlining our organization to improve performance and save taxpayer 
money. For example, the Department achieved approximately $330 million 
in strategic procurement savings in FY11. We are taking several other 
steps such as reducing the size of our vehicle fleet, cutting back 
travel costs and consolidating websites.
    We are also breaking down barriers to make it easier for businesses 
to move technologies from our national labs to the marketplace, which 
can help the United States seize technological leadership and create 
jobs. For example, we've started a program which makes it easier, 
quicker and less costly for start-up companies to sign option 
agreements to license national lab technologies. And to make it easier 
to work with the labs, we've reduced the advanced payment requirement, 
and streamlined the Cooperative Research and Development Agreement 
contract and approval process.
    Throughout American history, the federal government has played a 
critical role in supporting industries that are important to our 
prosperity and security, from aviation and agriculture to 
biotechnologies and computer technologies. We should continue to do so 
today to lead in the new clean energy economy. Countries in Europe, 
Asia and throughout the Western Hemisphere recognize the energy 
opportunity and are moving aggressively to lead. This is a race we can 
win, but we must act with fierce urgency.
    Thank you, and now I am pleased to answer your questions.

    The Chairman. Thank you very much, Mr. Secretary.
    Let me start with 5 minutes of questions. I'm sure all the 
members will have questions.
    I gather from the news that yesterday you were visiting the 
two new nuclear power plants that have been licensed in 
Georgia. My understanding is that the Loan Guarantee program 
was, to some extent, involved in the development of those 2 
plants. I guess I would be interested in getting your 
perspective.
    I know we've had lots of hearings in Congress on Solyndra 
and the lost taxpayer dollars there. Looking at the Loan 
Guarantee program overall, is it important for the country to 
maintain a Loan Guarantee program to assist with development 
and deployment of new technologies in the energy area? If so, 
how do you propose in this budget, how does the Administration 
propose that we move forward with that?
    Secretary Chu. First, Senator, let me say that if you look 
at the Loan Guarantee program, the 1703, the 1705, the ATVM 
parts of the Loan Program, overall it helped unleash about $40 
billion of investment in these industries, in projects like the 
2 new nuclear reactors that are being built in Vogtle. It 
invested, it helped Ford do a major retooling to build cars 
that it displayed at the Detroit auto show several months ago, 
really revolutionized wonderful cars that could be sold 
worldwide. There are many, many aspects of this Loan Program 
which have really helped bring back a lot of what we're famous 
for a century. It's helped stimulate deployment of many 
renewable energies. So the list goes on.
    Now the 1703 loan program is continuing. The ATVM program 
is continuing. We still think those are worthy projects.
    Going forward there--we do see a need as part of an overall 
plan to finance projects. Projects, for example, where you have 
a solid technology like onshore wind technology, is a very 
solid, known technology. A way of financing it so that one can 
deploy these with power purchase agreements, low risk. There 
are other--so that's one part.
    There are other parts, I think, that really could help 
drive it forward. Bloomberg New Energy Finance just completed 
its study about a month ago to summarize what happened in 2011 
and projections for 2012. They said if--and they looked at all 
forms of energy, new, gas, turbines, coal, wind, solar, all the 
way down the line. They said if you have 10 percent finance, 
borrowing charges, for all these forms of energy wind today and 
this is wind at a site. It's a 4 sight, not a 6th site.
    So a moderate site is within 10 or 15 percent of the cost 
of the lowest form of energy today which is new gas. We expect 
that to improve still further. So we also expect solar to be 
coming down. So this is all good news. But you need a financing 
mechanism even at 6, 8, 10 percent that would really tip the 
balance.
    The Chairman. Do you know? Let me ask on a somewhat 
different issue. We had a very good hearing where the 
Quadrennial Technology Review was presented to us. This was the 
first of these Quadrennial Technology Reviews.
    To what extent were the conclusions in that Quadrennial 
Technology Review used to influence what you've presented to us 
in this budget? Does this budget reflect the same priorities 
that the Quadrennial Technology Review identified?
    Secretary Chu. To a large extent, yes. I think with the 
Quadrennial Technology Review, the first one in the history of 
the Department of Energy, we wanted to step back. Said--say a 
slightly different question, what are the things we should be 
funding?
    But what are the things we should fund where the taxpayer 
dollars will do the most good? If we find that there are 
certain areas that the private sector is well invested in we 
have to say well, we really shouldn't be funding that. They've 
taken the ball. They're running with it. This is good.
    We did this with research in shale gas. The 1978-92 
industry didn't want to touch it. They didn't think it was 
feasible, horizontal drilling or fracturing rock. Then 
Schlumberger got into it. We got out of it. Industry picked it 
up.
    So that's the attitude we have in doing this that where 
could we put our dollars that would actually stimulate the 
research and the development to a point where the private 
sector starts to run with it and grow American industries. So 
that Quadrennial Energy Review, the Technology Review, was very 
useful in helping us find out by pulling back and looking 
across all of our funding arms, Energy, Office of Science and 
now ARPA-E. Are we putting the dollars where we think they can 
do the most good?
    So that is beginning to shape. We hope as it goes on 
further that it, just like the Quadrennial Reviews of the 
Pentagon and State, actually start to set in long term plans 
that can help our country. Energy investments are 60, 70 year 
investments. They can't be decided year to year to year. When 
you build, you build a new gas plant, a transmission line, you 
name it. These are long term investments.
    The Chairman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Secretary, the Chairman has asked you some questions about 
the Loan Guarantee Program. I appreciate the fact that we will 
be having a hearing when we return from the recess. I am one, 
who believes that there is a useful role to be played in the 
financing and the deployment of our advanced energy 
technologies and that the Loan Guarantee Program can be 
helpful. But we need to make sure that we get it right.
    So the question that I would ask you this morning, we can 
certainly work around your schedules, but will you make 
yourself available to come testify at the hearing when we are 
able to schedule one?
    Secretary Chu. There are several hearings. There's going to 
be one in the House, I guess one in the Senate. I think if this 
committee wishes me to appear I will appear.
    Senator Murkowski. I would think it would be helpful. I 
would certainly welcome you there.
    Let me ask you about hydro power. I mentioned that in my 
opening statement. This is one of those areas when we're 
talking about renewable resources. I certainly classify hydro 
power as a renewable resource and want to work to make sure 
that that is clear in our policies here.
    But funding for hydro power is down 66 percent. At the same 
time all the other renewable accounts are slated for an 
increase. Both you and the President have made statements 
supporting the growth of hydro power here in this country. But 
it really appears, to me, that we're leaving hydro power behind 
in this budget.
    Can you address that?
    Secretary Chu. I would divide hydropower into--first we 
have to make really tough decisions. The thinking behind 
hydropower is the following.
    First, we don't anticipate any new large dams being built. 
But there is potential for hydropower in the United States of 2 
forms.
    One is what I would call run of the river generation, which 
we think is environmentally compatible.
    Also, turbines on existing dams built for flood control 
where we don't have turbines where it's economically feasible. 
We think that's also a potential.
    But those are areas which are very mature technologies. So, 
again, based on the philosophy should we invest in, you know, 
like we've diverted wind research from onshore wind to offshore 
which is not as a mature technology. So that's one class.
    The other class of hydropower is essentially what I would 
call kinetic devices, hydropower that tries to extract energy 
from wave motion, tidal motion, things of that nature. We have 
this program that we invested in. We will continue investing in 
it. But we feel in these severe marine environments while we 
will continue in investing in it, we don't see in the near 
term, in the next 5 or 10 years, these things taking off. We 
hope they do.
    If it really looks like some of this hydropower attempts do 
look more promising we will respond. But that's the thinking we 
were going through.
    Senator Murkowski. I think the concern is that the funding 
is pretty anemic in not only the conventional but in the marine 
and hydro kinetic technologies as well. This is something, I 
know that Senator Wyden and I have had an opportunity to be in 
discussion about some of that.
    Let me ask you in my remaining time about a budget 
increase, a $2 million increase, in natural gas technologies R 
and D. It's my understanding that this effort would fund an 
initiative with EPA and USGS to look at the impacts of 
fracking. We had the Advisory Committee, the President's 
Advisory Committee, came, reported to us, had, you know, a 
pretty comprehensive, I felt, report. They presented 20 
specific recommendations for how any impacts can be mitigated.
    So I guess the question to you is what was the flaw in that 
Advisory Committee's report and recommendations that you felt 
were insignificant and now warrant a second investigation that 
we need to increase the funding. It's my understanding that the 
Advisory Board's recommendations are already finalized. Most of 
their proposed directives actually fall on the States, not 
necessarily on the Federal side.
    So why are we doing a second run on this? It raises some 
concern by some that there's an effort to try to find a smoking 
gun about some bad news about fracking out there and that's why 
we're going do a second investigation. So I'm curious as to why 
this funding increase in this area.
    Secretary Chu. Senator, it's actually the exact opposite. I 
think the committee you're referring to is the subcommittee of 
the Secretary of Energy Advisory Board?
    Senator Murkowski. Right. Right.
    Secretary Chu. Led by John Deutch.
    It's our view in the Department of Energy, first, I think 
that was an excellent report.
    Second, it's our view in the Department of Energy that if 
you look at the assets of the U.S. Government particularly 
thinking of USGS and the Department of Energy, and the intent 
is can we help drive the technology development forward to help 
with the environmentally responsible fracking so that the risks 
decrease. You can still continue to mitigate any potential 
risks to water tables, environmental impacts. So the tenor of 
that report and the attitude we have in the Department of 
Energy is exactly that. That in helping--with the technology 
there are rapid advances in seismic technologies that tell 
companies exactly what is happening in fracking.
    There's a lot of recommendations. We can have a 
coordinating role to help as information clearing houses so 
that industries can share best practices with each other. So 
the intent is--of that fund was not another study to look 
around. The intent is as we helped BP stop an oil leak in the 
Gulf of Mexico, we--the intent is actually to work with 
industry to help improve practices when and if possible so that 
we can actually extract this resource in an environmentally 
responsible way.
    Senator Murkowski. I'll follow up with you. My time is 
expired. My concern is is it does appear that we're directing 
an additional $2 million for yet a follow on study to one that 
you have agreed and I would agree was a pretty good study.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. Welcome Dr. Chu.
    I wanted to ask you first about natural gas pricing, 
particularly with respect to American business and American 
consumers. Now I've been a supporter of natural gas. It's a 
cleaner fossil fuel, of course and potentially a huge boon for 
American business, steel, plastic, chemicals and of course, our 
consumers.
    I do believe that there are substantial questions that have 
to be addressed before our country starts allowing significant 
natural gas exports. You made some statements a few days ago 
that are troubling me. I want to, kind of, walk you through it.
    As you know under the Natural Gas Act your Department has 
an obligation to evaluate whether natural gas exports are in 
the public interest. So you are, in effect, the regulator. The 
comments that you made the other day suggest to me that you've 
sort of made up your mind.
    You were quoted here as saying, I'll just quote you here. 
``Exporting natural gas means wealth comes into the United 
States.'' Now that's not what we've heard from our businesses 
like steel and chemical and plastics. They had representatives 
sitting where you did the other day.
    A very troubling study just came out from the Energy 
Information Administration, a part of your Department, 
indicating that natural gas exports could increase prices by 
more than 50 percent and cost American industry and our natural 
gas customers as much as $43 billion. Now I'm looking at the 
chart that estimates, for example, what we'd be dealing with in 
terms of the applications on offer now. It's about 13 billion 
cubic feet of gas exported per day. That's what we're talking 
about now.
    So the applications exceed the amount that EIA made that 
study based on. They looked at about 12 billion cubic feet per 
day. So I want to get your sense of how you're going to 
objectively look at this question.
    I'd like you to disabuse me of the theory that you've 
already made up your mind because when I looked at that quote 
coming from the recent meeting, I said, shoot, looks like Dr. 
Chu has already made up his mind. To me, for example, 13 
billion cubic feet of gas exported per day when 12 billion 
could raise prices 54 percent. That would be a huge shock to 
the American economy.
    So tell me how you're going to approach this issue. 
Particularly give us a sense of how you're going to approach it 
objectively and look at both sides.
    Secretary Chu. Sure. So I think the full quote, I'm going 
to paraphrase myself as I've said this a couple of times. The 
full quote is that certainly we don't want to see natural gas 
prices rise dramatically as we have seen in the price because 
that has an appalling effect. It creates great difficulties for 
businesses, for people who heat their homes with natural gas.
    So, and I said that a major focus on everybody's mind is if 
we start to export natural gas, liquefied natural gas, if not 
done right that could have that effect, I said. But there's 
another side because whatever we decide it has to be in the 
best public interest. There's a flip side to this that we also 
have to consider that it does create American jobs. If the 
prices are kept moderate then it does bring money into the 
United States. It helps our balance of trade. It creates jobs.
    Right now the natural gas prices, I don't know what they 
are today, but over the last week or so they were $2 dollars, 
$2.50 a million cubic feet, phenomenally low. It is usually, 
you know, EIA is saying something on the order of $4 to $6 in 
the coming decade or 2. We're hearing reports of gas extraction 
companies now pulling their rigs out, moving them, because the 
prices are too low.
    So what we need to do and we're not--so first, let me 
assure you, my mind isn't made up. If you read the full quote--
--
    Senator Wyden. I did, Mr. Secretary. There doesn't appear 
to be anything in the article----
    Secretary Chu. OK.
    Senator Wyden. With respect to what you said like the 
public interest test. It makes it out that exporting natural 
gas is an unmitigated plus. It says and I quote ``Supporting 
natural gas means wealth comes into the United States.'' That's 
your quote on the subject.
    Secretary Chu. OK. Then the article you're reading from 
certainly doesn't capture the full----
    Senator Wyden. Fair enough. Fair enough.
    Secretary Chu. OK. So, I think. So certainly our minds are 
not made up.
    Senator Wyden. Good.
    Secretary Chu. We're not going to be making up our minds 
because before we do anything to any--first let me first, very 
quickly say that there are two classes of countries. Countries 
we have free trade agreements with, and countries we don't. The 
countries we have free trade agreements with, we're obligated 
by law to say yes.
    But for the countries we don't have fair trade agreements 
with , we have to ask what's in the best interest of the United 
States. Before we do anything and I talked to people who are 
concerned about high gas prices. I also talked to the gas 
industry. I talked to many people and said we are not going to 
do anything until we make a determination on what the impacts 
would be.
    As we permit, we permitted one liquefied natural gas 
terminal. We determined that that would have a de minimis 
impact. Before we----
    Senator Wyden. Ten percent.
    Secretary Chu. We--my--we can get back to you on the 
details. But I was told by the EIA that that would have a very, 
very small impact on the price of natural gas in the United 
States.
    Senator Wyden. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman. Mr. 
Secretary, thank you for being here.
    We sat close to each other at the State of the Union. 
During that address I was happy to hear the President say 
quote, ``This country needs an all out, all of the above energy 
strategy that develops every available source of American 
energy.'' I'm encouraged to hear you echo those comments today 
in your testimony.
    Unfortunately the President's rhetoric rarely matches the 
reality. Monday, Congress learned the lesson once again, of 
course, with the President's fiscal year 2013 budget. 
Specifically to the tens of billions of dollars in new taxes 
and fees on American energy, oil and natural gas, you know, 
it's hard to understand how the President can impose tens of 
billions of dollars in new taxes on American energy and still 
pursue the quote, ``all out, all of the above strategy,'' that 
develops every available source of American energy.
    I know the American people realize that doesn't make sense. 
You know, we all support renewable energy. What I see though is 
that this President, this Administration ignoring the everyday 
concerns of American families.
    Today the average price of regular, unleaded gasoline is 
over $3.50 a gallon. USA Today, the morning after the Super 
Bowl, chaotic spring predicted for gas, average prices likely 
to hit over $4 a gallon. This morning's Wall Street Journal, 
front page, oil rise imperils budding recovery. It goes on to 
say that the average price of a gallon of regular gasoline has 
jumped 13 cents to $3.51 a gallon in the past month, so up 13 
cents in the last month.
    Some parts of the country have seen even bigger increases, 
prices approaching $4 a gallon in parts of California. Then the 
impact on the families. Higher prices at the pump force 
consumers to cut back spending on discretionary items like 
restaurant meals, haircuts, family vacations, hurting those 
industries. A prolonged increase can drive up inflation and 
drive down hiring.
    We're trying to get people back to work in this country. It 
just seems if we're going to try to get the economy going again 
we need affordable transportation fuel. We do know that the 
President, when he was running for office, said under his 
energy--under his policies specifically electricity costs, he 
said quote, ``would necessarily skyrocket.'' People have seen 
that. So that's why I'm hoping that the Congress has a chance 
to vote on and then reject the President's budget.
    So I come with a number of questions. One is in terms of 
how the policies of this Administration have played out. So I'd 
like to ask you about Solyndra.
    President Obama promised his Administration, as he said, 
would be the most transparent Administration in history. The 
American people still haven't received all the answers on how 
their taxpayer dollars were wasted on projects like Solyndra. 
So I know that tomorrow my colleagues in the House are going to 
consider whether to subpoena 5 Administration officials. It's 
my understanding that these House colleagues will cancel that 
meeting and that vote if the White House just makes these 
officials available to speak with the investigators.
    Have you asked the White House to make the officials 
available?
    Secretary Chu. No, I haven't. I wasn't asked to ask them.
    Senator Barrasso. Will you ask the White House to make 
these officials available because I'm asking you now.
    Secretary Chu. I think the White House can make that 
decision. They're very capable of that.
    Senator Barrasso. Yes. The American people still have lots 
of unanswered questions. So you're not asking the White House 
and have not asked the White House to make those officials 
available, just so I'm clear?
    Secretary Chu. I work for the White House. So, it will be 
their decision.
    Senator Barrasso. Now I want to move to Keystone XL 
pipeline. A number of us today met with Daniel Yergin, who as 
you know wrote The Prize and The Quest, a national expert on 
energy. He talked about I think, roughly 170,000 miles of 
pipeline moving liquid in the United States, petroleum 
products. Keystone is about 1 percent of that, about 1,700 
miles.
    It's my understanding the Keystone XL pipeline would ship 
up to 100,000 barrels per day of oil produced in North Dakota 
and in Montana. We heard earlier this morning about made in 
America energy. Is it fair to say that the Keystone XL pipeline 
would facilitate oil production in the United States?
    Secretary Chu. There's, first let me back up and say if you 
look at the oil pipelines in the United States the U.S. 
Government makes a decision on not only those parts of the 
pipelines. The State Department makes its decision that goes 
across borders. Within the United States there--a lot of 
companies have the latitude, the pipelines that are taking the 
oil from Wyoming, North Dakota down south to refineries are up 
and running.
    The biggest bottleneck in the United States apparently 
right now is from Cushing to the Gulf States. The market is 
responding. New pipelines are being built. Pipelines are being 
reversed so that oil from Wyoming and North Dakota, another 
pipeline from Chicago to Cushing back down to the Gulf States 
where the major refineries are.
    So those all are going forward. It's my understanding that 
the State Department has asked to look at other alternatives 
for environmental impacts on the part of the pipelines that 
cross the border.
    Senator Barrasso. It seems to me it is fair to say that the 
Keystone XL pipeline would facilitate oil production in the 
United States. Then my question to you is should the Keystone 
XL pipeline be part of an all out, all of the above strategy 
that develops every available source of American energy which 
is what the President has actually called for?
    Secretary Chu. There are pipelines being built and upgraded 
as I said, from Wyoming and from North Dakota. Again, I was 
trying to point out where some of the bottlenecks are and how 
the pipeline works. We're all for this. This is why the oil 
production in the United States is at an all time high compared 
to the last 8 years.
    We think, we're projecting, first that the oil production 
has gone up about a half a million barrels a day in the United 
States over the last several years. We think again because of 
the technology DOE invested in decades ago, that shale oil 
production may lead to another million barrels a day increase. 
You know, we're in the top 3 oil producers in the world. We 
could be either 1 or 2.
    This is good news for the United States. All that is within 
the continental United States. So those pipelines being built 
there are, you know, these investments are going forward.
    Senator Barrasso. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Senator Franken.
    Senator Franken. Thank you, Mr. Chairman.
    The ranking member referred to the first ever downgrade of 
our treasuries. I would remind the ranking member that the 
expressed reason given by S&P was the dysfunction of some in 
Congress who seemed willing to threaten to go into default.
    I think that we need to invest in energy. I think we need 
to invest in energy of the future. I think that all of the 
above doesn't mean all of all of the above.
    As the BP spill in the Gulf showed us that not exercising 
judgment, some judgment about environmental and safety impacts, 
can undermine the economic well being and the very goal of 
energy independence. I think what your budget shows to me is a 
sensible investment in innovation in energies of the future 
including energy efficiency which brings me to the 1703 Loan 
Guarantee Program.
    I see that you didn't really ask for additional 
appropriations for that just that program is for energy 
efficiency projects and innovation in energy efficiency.
    I see you just asked for $38 million to cover 
Administration costs. It seems the justification for this is 
that you have funds left over in this program that you haven't 
yet distributed. In fact it seems that there are funds left 
over in this program because there are approved projects that 
still haven't yet received loan guarantees that have been 
promised.
    One such project is from a company in Minnesota called SAGE 
Electrochromics. I know you're aware of that. SAGE has 
developed energy efficient windows that are cutting edge, 
better than anything in the world and uses photovoltaic cells 
to control the window. How dark it gets during the winter--
during the summer to block out UV light and to lower air 
conditioning costs and to let it all in and lower heating costs 
in the summer. It's really--I've been there and it's just an 
amazing technology.
    In the spring of 2010 the Department of Energy promised the 
company it would receive a $72 million loan guarantee under the 
1703 program to build a new manufacturing facility that would 
create 160 manufacturing jobs and 200 construction jobs in 
Southern Minnesota. It's now been 2 years since SAGE has been 
notified that it will receive a loan guarantee. The deal has 
not yet been closed.
    While the Department of Energy prolongs closing the deal, 
time and money are running out for SAGE. There are high tech 
manufacturing construction jobs at stake here. It's been going 
forward with the project assuming they get this loan guarantee, 
but they're running out of time and they may to sell themselves 
to a French company.
    My first question is the SAGE loan guarantee was going to 
be submitted to the Credit Committee on August 23rd, but it was 
stopped. Why is the Department of Energy continuing to delay 
closing and executing the SAGE loan guarantee?
    Secretary Chu. Senator, as you know first, yes, I'm very 
aware of that company. Actually the technology was developed by 
the laboratory I used to be the director of. So I know about 
it. It is very good technology.
    But Senator you will also know that I can't really speak of 
the particulars of a loan. This is confidential information. 
We'd be willing to work with SAGE and get them to talk to you 
on what they would be willing to divulge and--but it has to go 
through them. We can't really talk about the details of why.
    Senator Franken. OK. I have been through them. I've been 
going back and forth, as you know, with DOE and the White House 
on this.
    The Treasury Department view on the Loan Guarantee 
portfolio conducted by Herb Allison concluded recently that the 
program is on sound footing and that the 1703 and the 1705 
programs will cost the payers $2 billion less than initially 
expected. If that's the case why isn't the DOE moving full 
force ahead issuing new loan guarantees with and SAGE, I 
believe, is first in line for that under 1703.
    Secretary Chu. Yes. The bulk of the 1703 loans are 
applicants. We would expect to have been people like Vogtle, 
like the Vogtle project, nuclear power plants, also carbon 
capture, sequestration projects. There is some concern there 
because--and we're working with the companies. But we have low 
gas prices and so that affects business decisions.
    So we're working. You got it right. We actually didn't 
request more funds except for the management of the program 
because we do have funds available. Now in terms of carbon 
capture, and sequestration, what we are finding is that there 
are companies who are willing to invest because these require a 
lot of matching funds from companies.
    They're willing to invest in that part if there would be a 
utilization aspect to the carbon capture where the Department 
of Energy would pay for the measurement, the monitoring, the 
verification of where the carbon dioxide is going. We could 
help. All those things are necessary in a capture and 
sequestration project.
    We could help with the capture technologies that would be 
needed to capture carbon because by mid century, we're going to 
have to be capturing carbon from a lot of sources, all the 
large point sources. But the utilization part, in particular 
enhanced oil recovery, is enough of a stimulus for those 
companies to say, alright, we'd be gloom to look at those 
projects. So we're again working with companies to look at 
that.
    It still carries the agenda forward on what we believe is 
necessary, to develop the technologies of carbon capture, 
storage in geological sites that both would give the public 
comfort and help us determine, you know, understand the flow of 
carbon dioxide in geological strata.
    Senator Franken. OK. My time is up. But I'm not sure how I 
would really want to talk about DOE moving full force on 1703 
in regard to this one technology which is about energy 
efficiency for buildings which buildings consume almost 40 
percent of all our energy in the country. I think that it's 
absolutely essential that we pursue energy efficiency in our 
buildings and that this technology does just that.
    So thank you, Mr. Secretary.
    The Chairman. Senator Coats.
    Senator Coats. Thank you, Mr. Chairman.
    Mr. Chairman, I'd note that this will be the last budget 
hearing of the Energy Committee that you'll chair. You've spent 
a lot of years, investing a lot of time in this subject. I 
think we're all appreciative of your service. I know we'll have 
several hearings and this is not a good bye.
    The Chairman. You're going to have lots of chance to see me 
around here for many months, but thank you.
    Senator Coats. That's good. We'll take the opportunity to 
thank you for your years of service. I just wanted to mention 
that.
    Secretary, last year at a similar hearing I mentioned to 
you that it was unlikely that we were going to be able to reach 
the targets of the President's budget. As a matter--and 
suggested that you needed to go to a--was there a plan B in 
place or some thought of if we don't reach this how are we 
going to triage or how are we going to make decisions about 
where the money ought to be spent? It turned out that that was 
true. The vote against the President's budget was unanimous, 97 
to nothing for 2012 fiscal year.
    This new budget has been offered. It's unlikely that we'll 
even debate or vote. The Majority Leader has said he's not 
going to bring it for a vote. But if it does I think it will 
probably have the same fate.
    So my question to you is are you looking at a plan B for 
FY'13 fiscal year? If not, why not? If you are could you share 
that with us either today or in subsequent hearings or work 
with us to try to address the fact that the country just simply 
can't afford to do everything that we would like to do?
    Secretary Chu. As what happened last year, I think you, I 
hope that you felt that there was willingness to work with 
Congress. Ultimately it's Congress, appropriations that 
determine what we do and what we get and with the consent of 
the President. So I think that we will, you know, as the budget 
process unfolds, we certainly are willing to work with all the 
Members of Congress and the House and the Senate.
    Senator Coats. Thank you. I think we're going to need to do 
that. This plan is a billion more than last year, this budget. 
I just don't see the possibility given our current fiscal 
situation of being able to fund everything that you've 
requested. So I look forward to doing that.
    Let me just turn to the issue of loans and guarantees and 
subsidies and so forth and so on. I want to try to take it out 
of the political. Whether it's Republican Administration or a 
Democratic Administration there have been a number of 
embarrassing moments where winners and losers have been 
selected on the basis of not doing basic research which I think 
is a function of government, but in transferring that research 
to a specific industry, specific company.
    It's embarrassing to you. It's embarrassing to the 
President. It's embarrassing to Congress. It's embarrassing to 
the way in which money is allocated.
    Talk a little bit about how we can avoid--and the problem 
is that the political gets involved. Then there are headlines. 
There's allegations of crony capitalism and favoring one 
company over another for political reasons accompanied with 
well, maybe this is the future and we ought to invest this 
money.
    I know your Department has taken some second looks at some 
of the proposed loan guarantees. One of those was as a result 
of a letter Senator Toomey and I sent to you. I thank you for 
doing that second look, that due diligence which resulted in a 
different decision, saving potentially, the taxpayer well over 
a half a billion dollars. So I thank you for that.
    Can you talk a little bit about what I'm suggesting here? 
That is 2 things.
    One, the due diligence needed to take second looks at what 
programs are currently being evaluated.
    Second, the whole concept of, you know, should the 
government be involved in the, I think it was Larry Summers who 
said, you know, pardon the language here. You know, Government 
picking winners and losers is a crappy way to invest money. I 
think we've had some examples of that.
    So could you address the role of government being involved 
in basic research as opposed to selecting specific companies to 
develop a particular product when we continue to run into, as I 
said, whether it's Republican or Democratic Administration, 
continue to run into embarrassing situations on the taxpayer's 
dime.
    Secretary Chu. First Senator let me say that I'm very glad 
to hear you are very supportive of research and development. 
That is a proper role for the government because in many 
instances not all of the investments in research and 
development are captured by the company that makes that 
investment. Because of that not only this country, but 
countries all over the world feel that it is a government 
responsibility to help with the competitiveness of the 
businesses in their home countries to continue research and 
development.
    As you go more toward piloting and especially toward 
deployment that becomes increasingly a larger responsibility of 
the private sector to decide what they want to invest in. But 
having said that, there have been policies in the United States 
that go back a century or more that do help beginning 
industries start off. This has been part of the tradition.
    If you think about going back again, about 100 years and 
the beginning oil industry in the United States. There were 
incentives to help early investments and develop this. These 
are continuing, but certainly those incentives were there to 
spur new technologies.
    There were incentives in the airplane industry. There were 
lots of things in, you know, how to help the semiconductor 
issue. But in the last analysis I think the most effective 
programs are ones which can guide and stimulate private 
investment.
    You know, Senators Bingaman and Murkowski are, I think, 
supportive of sort of a CEDA-like program, a loan program, but 
in addition to that there are other things that we can do which 
can actually, again, just help guide those investment choices. 
Mostly what we want to do, in my opinion, what we'd like to do 
is guide the investment choices that could really stimulate 
high technology manufacturing in the United States. There's no 
reason why we cannot be competitive with any country in the 
world.
    Germany remains competitive in high technology 
manufacturing. I believe they have higher labor costs than we 
do. So we're at least as innovative and inventive as any 
country in the world. I would say more so.
    Senator Coats. My only response would be I think the market 
makes a better decisionmaking process than the government based 
on the record. If it's not the taxpayer's money at stake it's 
the stockholder's money that's at stake.
    Secretary Chu. Right.
    Senator Coats. With the winners and the losers and I just 
personally think that's the way it ought to be.
    Second the historical comparison made might not work now 
because we weren't drowning in debt when those loans were made. 
Today we're drowning in debt. We just can't keep going and 
having headlines that have half a billion or a billion dollars 
are lost again to the taxpayer.
    My time is more than expired, Mr. Chairman, thank you.
    The Chairman. Senator Stabenow.
    Senator Stabenow. Thank you, Mr. Chairman.
    First, welcome Secretary Chu. Let me just indicate first, 
that I appreciate the efforts in working with us on a clean 
energy manufacturing strategy. It's clearly leading the 
recovery for the country.
    Our efforts, the Chairman and I, championing the Advanced 
Manufacturing tax credit, 48C and the loan program that you 
mentioned, where Ford is actually now bringing jobs back from 
Mexico because of their efforts around advanced batteries and 
retooling. We're seeing jobs coming back from a number of 
countries because we're focused there. So I would encourage you 
to continue that and I would use the tools available.
    I want to talk specifically today though about a very, very 
important project, I believe, for the country and certainly for 
Michigan. That's the facility for rare isotope beams project 
that Michigan State won in a very rigorous competition, as you 
know, a number of years ago. They're at a critical point. We're 
coming into the fifth year of funding on this national project.
    It's a core piece of our research for the United States 
research infrastructure with broad benefits to science, 
homeland security, medicine, industry and not only will the 
project develop the next generation of Nuclear Physics work for 
us, as you know. But it will create thousands of jobs and 
really address our U.S. competitiveness and energy securities. 
So we have to move forward. If we don't, other Nations will. 
They will be the ones attracting the best and the brightest 
scientists and researchers, not the United States.
    So as you know I've talked to you numerous times about 
this, as have my colleagues in Michigan. You've heard from the 
scientific community. I'd like to hear from you today, what is 
the Department of Energy's level of commitment to this project?
    Secretary Chu. Senator, yes, you have certainly have talked 
with me many times and feel the same, I think, as the entire 
Michigan delegation feels. We agree with that FRIB is a worthy 
scientific project. What we're trying to do is to try to figure 
out within the constraints of the Nuclear Physics budget in the 
Office of Science how to best appropriate all the precious 
dollars.
    So the question is precisely that. Ultimately it's going to 
be the Nuclear Physics community that will be deciding what to 
do. Iit's not a targeted effort, it's the entire Nuclear 
Physics program.
    We think Nuclear Physics, and High Energy Physics are 
important parts of the Department of Energy portfolio. But the 
budget has said that we have constraints. We also need to use 
our budget in the Office of Science to help other mission 
oriented research that could lead to energy solutions and could 
lead to more a competitive America in the near term.
    So we recognize the value of the Michigan State project. We 
have asked for a budget that's at the same level as was 
appropriated last year. We will continue this, but in the end 
we need, you know, the Nuclear Physics community writ large to 
comment in all the projects, not only on projects, but the 
program in general.
    Senator Stabenow. Mr. Secretary, let me ask you though to 
clarify this because the President has indicated support for 
this in his budget. It's not at the level that will allow them 
to proceed as they have been planning.
    Secretary Chu. Right.
    Senator Stabenow. To be able to break ground this year 
which is critically important. Again this is going into fifth 
year of commitment in the United States on this particular 
project. They've been through numerous reviews and competitive 
reviews and in fact to come out with stellar recommendations in 
the past.
    So I'm very concerned that about what you're now calling 
another review process and whether this is just an effort to 
slow down or stop progress on this incredibly important 
project. So can you describe the review process and how does 
this fit with the fact that there is, in fact, a commitment in 
the President's budget to continue this?
    Secretary Chu. The fact that there is a commitment in the 
project means precisely what you just said. We're not prepared 
to abandon this project. The review project is not--the review 
will not be a review of just this. I want to make that clear.
    We have 3 large projects but we have a large Nuclear 
Physics program as well. Within the constraints of our budget 
we need the Nuclear Physics community to tell us what they 
value the most. This panel review is not going to affect what 
happens in FY'13.
    Senator Stabenow. So it's not affecting what happening in 
FY'13. So that means the project and the funding moves forward 
for this year?
    Secretary Chu. We have an amount in FY'12 and what we 
requested depends, of course, on what Congress says. But we've 
requested the same amount for FY'13 that was appropriated.
    Senator Stabenow. Alright.
    Secretary Chu. We got an amount----
    Senator Stabenow. Just--so for the record and as a member 
of the Budget Committee and moving forward with Appropriations 
Committee, it's my intent to make sure that we do everything 
possible to make sure they have the full commitment to be able 
to move forward with this project. I hope that the Department 
is going to keep its commitment going into the fifth year of a 
very important, not only science project, but economic 
development project that's going to create over a billion 
dollars in economic activity. It makes no sense to me why, as 
we go into the fifth year, that we're having this conversation 
when those conversations were conducted at the very beginning 
of all of this and priorities were set, decisions were made, 
dollars were spent.
    Now we go into the fifth year. It's in the budget. It seems 
to me we ought to be talking about what we need to have to 
break ground and to be able to move forward with this rather 
than another evaluation. I'm all for evaluations. But this 
project has been evaluated and evaluated and in fact has come 
out with stellar reviews at every step of the way.
    I would hope that the Department will keep its commitment.
    Thank you, Mr. Chairman.
    The Chairman. Senator Paul.
    Senator Paul. Secretary Chu, thank you for coming today.
    As you know we're in the midst of a great recession with 12 
million people out of work. I'm very concerned about 1,200 jobs 
in particular though that are in Paducah, Kentucky. They work 
for a nuclear enrichment plant there. It's been in operation 
for many years.
    Over 50 years we have accumulated 40,000 cylinders of 
uranium. Uranium waste, it's sitting on the ground. Something 
has to be done with it. These are 14 ton canisters of uranium.
    We'd just like to enrich them. If we were able to enrich 
them you could save these 1,200 jobs. These 1,200 jobs in all 
likelihood will be lost this year if the company goes under 
which it's predicted to go under within 6 to 12 months if we 
are not allowed to enrich this uranium.
    It's my understanding that it is under your discretion to 
decide to enrich this uranium. I'd like to ask you today here 
in public whether you'll help us with these 1,200 jobs and 
whether or not the Department of Energy will allow us to enrich 
this uranium.
    Secretary Chu. It's--Senator, I see it's not a matter of 
first, this company, USEC, which is running the Paducah plant. 
For them they say it's going to be a business decision that 
we're talking about some depleted uranium and whether they're 
going to use the enrichment facility to generate the uranium. 
What they are asking for is government assistance to say we 
have some depleted uranium. We can give it to them and have 
them enrich it.
    It's certainly true we're very concerned about those jobs. 
But we're also concerned of a number of other things. Because 
in order to provide the funds to allow this to go forward we 
would, for example, be using we would have to be essentially be 
putting some of our uranium that we have on the open market.
    We have to do this very carefully because we have a 
commitment that any use of our uranium, U.S. owned uranium, 
onto the open market might have an effect on the uranium 
markets that would affect the miners.
    Senator Paul. But if we allow this to happen it really 
doesn't cost the taxpayer anything because the payment for 
enriching it comes out of the proceeds of the sales of the 
uranium.
    Secretary Chu. It does, but you have to take that a little 
bit further because the market for uranium has changed after 
Fukushima as you all know. The Japanese have had their reactors 
down for a number of months. It's going to be, as they bring 
them up, it's going to be quite slow.
    The Germans have decided they're going to bring down the 
reactors more quickly than they had thought possibly.
    So the market for uranium and for reactors has changed over 
the last couple of years.
    Senator Paul. But if you're concerned about how much you 
sell could you not increase your stockpile. As you increase 
your stockpile then sell it over time?
    Secretary Chu. But the way we see it this is a very complex 
process. The way we see it we're going to be giving or we'll be 
using taxpayer money to pay for the use and services. That will 
keep the Paducah plant running.
    Let's just suppose there's a grow in the market of uranium. 
You've got to separate uranium. The value is not as high, and 
then in the end the taxpayer has to foot that bill.
    So the analysis, for example, the CBO's Office says this is 
not a money maker, in fact it could be a big liability for 
taxpayers.
    So we have to work through all those things.
    Senator Paul. But the GAO says that the uranium there has a 
value of $4 billion and that would be returned to the taxpayer 
if we were to enrich it. It's also--you've got a lot of 
problems here. I mean we've got 50 years of waste and we're 
providing you with an alternative that brings money back to the 
Treasury and helps you get rid of a waste problem.
    We have, I think, 700,000 tons of uranium that's just a 
waste product now sitting on the ground. I mean, many in the 
Administration say you all are a green Administration. You're 
for recycling. We're giving you a chance here to save jobs, not 
on some kind of loan program. Save jobs, existing jobs and 
recycle something and cut the amount of uranium waste in half.
    I mean, these are all problems we face if we do nothing. I 
believe you have the power to save these jobs. This is on you.
    I mean, basically these 1,200 jobs are yours to save if you 
choose to save them, but if you don't it's going to cost the 
taxpayer. It's $100 million a year to put things into cold 
storage there. It's also $100 million a year because someone 
has to guard that uranium. Then the surveillance costs all come 
out of the company now.
    So I think this is a win/win situation for the taxpayer. As 
you know I'm not a big fan of expending new taxpayer dollars. 
But the taxpayer dollars here come out of the sales of the 
uranium.
    If we were to temporarily raise the limit which I think 
you're allowed to do also under law. That's under your 
discretion, that we're talking about 1 percent of the world 
market. I don't think we're talking about affecting the price 
in a significant degree if we were allowed to do that.
    Secretary Chu. Just very quickly in closing:
    First, the GAO report came out several years ago before 
Fukushima. So there was a sea change, quite candidly, in 
prospects for the demand of uranium. Because of Fukushima, 
because of the German decision, because of the slower startup 
of the Japanese, who are still trying to figure out to what 
extent they're going to be starting all their reactors.
    So I would be a little surprised, very surprised, if their 
analysis of 3 years ago would be the same as it is now.
    Senator Paul. But there's a brand new one, June 13, 2011, 
nuclear material. DOE's depleted uranium tales could be a 
source of revenue for the government. That's one still talking 
$4 billion worth of----
    Secretary Chu. I'd be happy to spend some time. Be happy to 
meet with you as I indicated in a letter about that.
    Senator Paul. I just want it to be said for the record that 
these 1,200 jobs are 1,200 jobs that you could save with a 
stroke of the pen if you choose to do so. This isn't $500 
million or, you know, billions of dollars being sent, spent on 
something where we might get jobs and we have it. We have lost 
it.
    These are 1,200 existing jobs in a long standing nuclear 
trade. There are defense considerations for why we have to 
enrich uranium. Uranium is not a purely open market. We don't 
sell it to just anybody. There are strict controls on this 
market.
    So I think it is something where the government could do 
something that costs no money. I just hope you will help us 
there. I mean the 1,200 families in Paducah are sitting there 
and they're listening to you today. They know you have it in 
your power to save their jobs.
    I just hope you'll consider this. It doesn't cost the 
taxpayer anything ultimately because the proceeds will come out 
of the sales of the uranium.
    Secretary Chu. If the sales keep at a certain price. Again, 
Senator, I'd love to talk to you at length about this. We've 
thought deeply. But we also see a potential hundreds of 
millions of dollars liability in the future and that we have to 
work through that as well.
    The Chairman. Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman.
    Secretary Chu, good to see you here this morning. Thank you 
for visiting the Hanford site and the Vit plant specifically. 
Obviously you know that it is one of the most complex and 
largest contaminated sites in the world. Our concerns about 
making sure we continue to get clean up done in a timely 
fashion is of critical importance, not just to the State of 
Washington, but to the Nation.
    Are you confident that with this level of funding, we will 
have the Waste Treatment Plant open and operational in 2019?
    Secretary Chu. Senator, again, within the budget 
constraints we're essentially working hard to keep the 
Environmental Management budget essentially for that. It went 
down a fraction of a percent at 0.7 percent, but essentially 
flat. We are trying very hard to make some tough decisions 
there. There's the protection of the Columbia River, the waste 
plant, the tanks and WTP.
    So we first feel that we're going to meet all our legal 
obligations for FY'13 with this budget. But as you know, I 
spoke to you about this, that there was an ideal funding 
profile for the completion of the WTP plant, the vitrification 
plant would call for more aggressive spending this year, next 
year and the following years so that you just like in a 
commercial building when you build a building you don't mess 
around. If you've got it engineered you build it. You build it 
very quickly.
    That funding profile is not in the cards anymore because of 
our budgets. So because of that we know that there's a risk 
that could slip schedule. But on the flip side we are also have 
to prioritize and we have to make sure that the waste tank 
farms are cared for as well.
    So it's a tough decision. As you well know we take these 
responsibilities very seriously.
    Senator Cantwell. So 2019--that's your committment?
    Secretary Chu. We can't say right now. But we're working 
through some of the issues. We have a pilot program for 
testing, for example, the so called pulse jet mixing and things 
of that nature that perhaps 2 or 3 years ago we felt that--
we've determined with the defense of the Board and others it 
would be prudent to go through a more comprehensive testing.
    So we acknowledge that. So these are some of the issues on 
this very, very complex project. This is, in my mind, the most 
complex nuclear project the world has undertaken, literally, in 
the United States.
    Senator Cantwell. I couldn't agree more. Regarding the 
questions have been raised about the vit plant, Do you think we 
have the right oversight to address issues that have been 
brought up by whistle blowers?
    Because obviously once the plant goes operational we won't 
be able to fix any problems that arise, it will be too hot to 
fix.
    Secretary Chu. Yes. I think we've worked very hard, both 
the Deputy Secretary and I, have worked very hard to make sure 
that we have essentially our A team in place and the direct 
oversight of the contractors, Bechtel. Dale Knutson is a truly 
outstanding project manager, has had a long track record. We 
were able to talk him into doing this.
    We have a new head of the Office of River Protection. We 
have a lot--Scott Samuelson. We have a lot of respect for. Dave 
Huizenga, again, is superb manager person. So all the way up 
and down the chain we are putting in place what we believe is a 
very good team.
    Because of the importance of this project, a lot of these 
discussions go right into my office. I've spoken to the CEO of 
the head contractor, Bechtel, Riley Bechtel, probably now 4 
times in my office on making sure that he, too, has an A team 
as the contractor. From my discussions with the people on the 
ground they say that Bechtel has also been doing their job and 
trying to get the right people there.
    Senator Cantwell. Thank you for that level of detail in 
your answer, because I think that is what it takes. I've often 
said you should be made the Energy Secretary for life, or until 
Hanford is cleaned up, just so we don't continue to change 
horses in mid-stream.
    But can I get your viewpoints on whether we can dispose of 
military waste first. What we don't want is for Hanford to 
become a de facto disposal site for 90 percent of the waste. 
You know, the Blue Ribbon Commission was before the committee a 
few weeks ago. Senator Domenici basically put that 
consideration out on the table after my colleague, Senator 
Wyden, got him talking about it. I tried to follow up with 
Senator Domenici about whether the Waste Isolation Plant in New 
Mexico might be an ideal place for Hanford waste.
    So, do you agree with him on that?
    Secretary Chu. First, we're going to keep separate the 
civilian and the nuclear waste issues. I think they're, you 
know, that we, it would be prudent to treat it differently. We 
are considering, I'm not sure where in the status of it, but 
the WIP.
    First, it's for low level radioactive waste. So one would 
need to do some studies to make sure that that would be safe 
for the high level waste. So we'd need to do something along 
those lines.
    But I'm glad you pointed out WIP because this is a success 
story. It's been there operating for about a dozen years. There 
have been no incidents. The local people are--feel confident 
that we're running this in a very safe way. It's good for the 
local economy. It's good for the economy of the State of New 
Mexico.
    So, again, this is something where we can show that we can 
develop repositories for nuclear waste which has the acceptance 
of the local people.
    Senator Cantwell. I will follow up with you on the details 
of that for the record.
    Secretary Chu. Sure.
    Senator Cantwell. I'd appreciate it. I'd also like to 
follow up with you on the 1,000 acres we're trying to get 
transferred over from DOE to the community, know, as the 
cleanup progresses, for energy parks. I think it's a proposal 
that's moving its way through. But we would like to follow up 
with you on both of those. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Risch.
    Senator Risch. Thank you, Mr. Chairman.
    Secretary Chu, first of all, let me just say for the record 
that. I know this falls on deaf ears. But and this is simply 
philosophical disagreement. But your budget request of 3.2 
percent increase for the year, but yet decreases the nuclear 
energy component by 10 percent. I find that particularly 
discouraging as we look to the future.
    I know that that is not the Administration's position that 
nuclear is our future. I do. A lot of other people do. I 
suppose that's not going to change until the Administration 
changes at some point in time.
    So for the record just take my objection to the decrease 
while increasing other of the boutique type energy production 
systems that you have.
    I want to ask particularly about one part of that. I 
noticed that in the budget you increased or you decreased the 
fuel cycle research and development by 10.8 percent. Yet 
yesterday when you were in Georgia you announced that there was 
going to be a new $10 million advanced nuclear, innovative, 
cross cutting, research and development for advanced nuclear 
reactor and fuel cycle technologies.
    It seemed to be a little inconsistent. On one hand you're 
asking for a $10.8 million decrease and yet yesterday you said 
there was going to be new funding. What is this new funding? I 
didn't quite--that came out kind of gray.
    Secretary Chu. OK, so in the first, I have been very 
supportive of nuclear since I walked in office.
    Senator Risch. I understand that. I believe that. But I 
also understand you're carrying the Administration's water, so.
    Secretary Chu. So in terms of the fuel cycle. We believe 
that first, as the Blue Ribbon Commission pointed out that the 
technologies for fuel recycling today, we don't think are 
economically viable and non-proliferation resistant. There are 
other examples of--so this is UREX, PUREX, methods that the 
U.S. developed actually, and AREVA uses.
    But as we've seen from both, especially from the Japanese 
experience, that's well over budget. They believe it was a $6 
billion investment. It's north of $22 billion today, and still 
not operational. This is the Rokkasho plant.
    There are other technologies like pyro processing which we 
think have promise. They had good laboratory experiences. Then 
we went up and did the next step. It didn't quite work as well 
as we thought it would in order to be.
    It is more proliferation. It's not proliferation proof. But 
it's more proliferation resistant. Had that worked well we 
would have been encouraged.
    It's not to say that we're going to abandon that. In fact 
I'm personally getting very interested in why it's not working. 
So in my little spare time, I'm trying to figure out if I can 
help them. But never mind that.
    Senator Risch. You may resolve that in your garage.
    Secretary Chu. It's going to be up here. It's not going to 
be in a garage. I don't think the IRC would like it for me to 
be experimenting in my garage.
    But I would say that this doesn't like--it doesn't open up. 
It still doesn't mean we shouldn't be looking for other good 
ideas because we are very interested in. If nuclear is going to 
be part of this century's mix we would like to not use 1 
percent of the fuel, energy content of the fuel, to generate a 
certain amount of electricity. If we can use 20 percent, 20 
times more, so you have a similar waste product, but you've got 
20 times more electricity.
    So this is hanging out there. We would like very much to 
solve that.
    Senator Risch. We're all in agreement about it. We're all 
in agreement.
    Secretary Chu. So we do feel that it does make sense to 
invest in new technologies. We're going to have to come back a 
little bit and try to figure out why some of these earlier 
promising things at the lab scale doesn't go into the mini 
pilot scale.
    Senator Risch. Then the one question I have is why was the 
announcement made in Georgia since as you know the INL in Idaho 
has as one of its strong missions the actual work that you have 
described?
    Secretary Chu. I happened to be in Georgia and you know, 
I--yes, I can be in only 2 places at once.
    [Laughter.]
    Secretary Chu. So that would happen to be Georgia and Oak 
Ridge.
    Senator Risch. So I can take the message back to the Idaho 
people that this ten million dollars is coming?
    Secretary Chu. We announced competitive bids. Idaho is free 
to compete with that money.
    Senator Risch. Mr. Secretary, my time is up. But you and I 
had a discussion at your confirmation hearing about the 
contract for cleanup at the Idaho National Laboratory. You 
weren't familiar with that, but promised that you would get up 
to speed on that. I've got some questions about that from the 
budget which is really not very clear as to where we're headed 
with that.
    But if you'll take those questions for the record, I'd 
appreciate it.
    Secretary Chu. Sure, I will.
    Senator Risch. We'll--Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Udall.
    Senator Udall. Good morning, Mr. Secretary.
    I can speak for Senator Risch, I know he would volunteer 
his garage if you need it.
    I wanted to--I know he represents INL. I represent NREL. 
You know I'm very proud of their accomplishments. I want to 
continue to work with you to see that their good work 
continues.
    In your budget, in my estimation, you go a long way toward 
supporting that lab's critical programs, which are focused on 
developing innovative renewable energy technologies that 
clearly have translated into lasting, well paying jobs, a more 
comprehensive energy portfolio and the national security that 
comes with energy independence. So kudos to you. I know this is 
a tough fiscal environment, a tough budgeting process. But I 
want you to know I support what the President and you have put 
together.
    Now I mentioned how important NREL is. Financing is also 
really crucial to our energy future. Would you speak to the 
fact that we're at a really critical juncture here in regards 
to the PTC, the production tax credit?
    It's been very instrumental in the expansion of wind 
deployment around our country. Every State has a stake in this 
whether the States are producing wind in any significant 
amounts because of the supply chain this developed. This very 
important policy expires at the end of 2012. Would you speak to 
the ramifications if we don't extend the PTC in the timeframe 
that we have left?
    Secretary Chu. Sure.
    Yes, very quickly, I think things like production tax 
credits are a way to stimulate moving forward to get deployment 
in the marketplace. There--because Europe is in or I would say 
even perhaps even worse economic straits than we are. Because 
you see some countries like Spain decreasing a lot of their 
feed-in tariffs, a lot of their subsidies for renewables, 
there's a diminution of the market.
    But it's the local markets that actually help stimulate 
manufacturing in a particular country. So these--and this is 
why when Spain took away their subsidies and other countries 
are decreasing.
    China put in feed-in tariffs for their market in wind and 
solar. So they ratcheted it up because they recognized that 
they want to nurture their industries. They need a home market 
to make sure that they're going to be.
    They want to catch up in wind turbine technology. They are 
becoming a dominant force in solar technology. But they see 
both of those at risk.
    So as we saw in Europe's subsidies decrease. We say, OK, 
we're going to have--we want to develop our home market. The 
world is expecting this year that China will be the biggest 
deployer of renewable energy in the world.
    Let's go back to the United States. If we don't have a home 
market for these things, industries will not be motivated to 
develop manufacturing at home. They would not be--they would be 
less motivated to develop those technologies, such as the next 
generation of solar.
    For example, NREL was the developer that essentially 
inventor/developer of the Cadmium telluride cells. There's a 
number of solar companies making thin film Cad telluride 
technology. Those technologies are continuing to improve. One 
doesn't know whether silicon or Cad tel or some other 
technology will dominate. But they're certainly a player in 
that field and they're certainly in a competitive race.
    So I think to have a home market for a clean energy 
standard, a production tax credit. Those are mechanisms that 
can stimulate private sector investment that then stimulates 
manufacturing in the United States. This is why, yes, China 
wants to export. But they also realize that we have to create a 
home market as well. It's this mixture they need.
    Senator Udall. You're implying if we don't extend the PTC 
that home market mission that we've all agreed in a bipartisan 
way is crucial would----
    Secretary Chu. It goes to ways of how do you get a market 
draw. How do you help bring slightly lower cost financing to 
these projects? All those things.
    You talk to any supplier of wind, they would rather set up 
a supply chain in the country where these things are being 
installed. This is heavy stuff. So in the solar world it's more 
like a commodity that can be shipped worldwide. But it is going 
to be heavily be influenced.
    Now as wind technology, as I noted before, is getting very, 
very close to price parity with new gas. New gas, let me be 
careful, new gas at $4 to $6 a million cubic feet now which is 
considered, you know, if you average over the next 10 or 20 
years this is where EIA is projecting.
    Solar has dropped by more than 75 percent. The solar 
modules have dropped by more than 75 percent in the last 3 
years. Everybody anticipates another 50 percent drop, at least, 
in the next 5 to 8 years.
    So solar is going to be competitive with any new form of 
energy. So again, we need to spur this market because this 
could be. This is clean energy without subsidy that the world 
will want. As I said repeatedly we're either going to be buying 
or selling. I'd rather be selling.
    Senator Udall. Selling. We all would.
    I know my time is about to expire. But on the critical 
minerals Hub what are you doing at DOE to ensure that the DOE 
labs, university partners and industry are working together on 
the hubs? Can you give a brief answer and then expand your 
answer for the record?
    Secretary Chu. Very brief answer. Even the design of the 
Hubs or if we select a Hub. They have to come in with a design. 
What are they doing at the get-go to have industry and the 
National Labs and universities?
    I was just visiting a hub, a Consortium for nuclear 
reactors simulation. It was wonderful because they said at the 
very beginning, what are the problems that industry is 
interested in? Let's say a premature aging of the fuel rods.
    How do you extract more energy from those fuel rods?
    How do you make those dual reactors safer?
    Those are the things that industry actually sits with 
everyday. Can you simulate this? Can you simulate erosion 
processes of HC?
    So from its very design it was--we can use the powers of 
high performance computing, the intellectual powers of the 
people in universities, national labs, to help industries solve 
these problems. So the Hubs are specifically designed for that.
    The other thing I very quickly should mention is that we 
have also been easing the way to have technology transferred 
from National Laboratories, and universities, but National 
Laboratories, since we help control the technology transfer 
policies.
    We've just had a very exciting meeting. About 250 people 
attended. People from industry on the materials you would need 
for solving a lot of the energy challenges.
    This is not from tank materials. This is light weight 
steels and alloys and composites, everything because it's going 
to be dominated by new materials. Two hundred and fifty people 
came. A lot of companies, a lot of excitement, immediately the 
first week of payoff was, you know, venture capitalists are 
inviting people from the Labs to come.
    The other Labs are saying this really works. We're going to 
do this too. We have another one on advanced computation. How 
that can help in the industry. Just to tie, so the people in 
the National Labs know what the industry problems are and that 
they can be excited about helping them solve those problems.
    So this again is something that has been occurring over the 
last year----
    Senator Udall. I take from you that this is really 
important. You're really focused on it.
    Secretary Chu. Right.
    Senator Udall. You're going to work with all these 
stakeholders.
    Thank you, Mr. Secretary.
    Secretary Chu. Right. Thank you.
    The Chairman. Senator Manchin.
    Senator Manchin. Thank you very much.
    Secretary, and let me just say I know it's been mentioned 
before. The President, in his State of the Union Address, said 
that that country needs an all out, all of the above strategy 
and develop every available source of American energy. A 
strategy that we all agree is cleaner, cheaper, but full of all 
new jobs and also, hopefully, keeping the jobs we already have.
    I want to show you a chart that we put together. This 
information is taken from the EIA, your own Department, showing 
where we are as far as the first through 2010.
    Twenty-four percent of our energy coming from natural gas.
    Ten percent renewables.
    Forty-five percent coal.
    Twenty percent from nuclear and oil and other liquids. This 
is from your agency.
    Going out to 2035, 2 more decades this is where we are.
    Twenty-seven percent will be coming from natural gas.
    Renewables 16 percent.
    Coal still at 39 percent.
    The rest at 18 percent.
    With that being said the President's budget basically had 
2.7 billion that you all submitted for the energy efficiency. 
Renewable Energy at 47 percent increase from current levels.
    If you'll hold this one up, Tom, so you can see the 
comparison. Stand up.
    This is where your money is going. This is what you're 
going to get out of the investment. This is by your own.
    Then you have the Office of Nuclear Energy. Nuclear is 
right here. It's where you're going. This is where you are.
    You've cut, I mean, the greatest cut has been right here. 
You're still going to be dependent on it. We can do it much 
cleaner.
    I can't figure the rationale. What I would say is when you 
look at take all of the above that the President said and you 
look at the energy strategy when you're cutting funding to 
resources that will continue to provide the energy that we're 
dependent upon by your own estimation. It doesn't make sense, 
sir.
    It doesn't make any sense at all. That we can't do it 
better, cleaner and work together because you sure are putting 
this out to where we're going to be able to depend on it. We 
need it.
    So I don't know if you have a comment on this in relation. 
It seems like there's not a balance here at all.
    Secretary Chu. What we're doing, as you know, during the 
Recovery Act there was very large investments in clean coal 
partnerships and helping test, deploy some clean coal 
technologies. But unfortunately a lot of the companies who had 
supplied matching funds, at least 50 percent, have pulled out. 
But there's some hope and we're still pushing this as much as 
we can because we do believe that we have to develop 
technologies to use coal cleanly which means not only the 
normal pollutants, but also to capture the carbon dioxide.
    So we still remain committed to that. However, because of 
this changing landscape of companies not wanting to invest in 
large projects, sometimes hundreds of millions to billion 
dollar projects or multi-billion dollar projects, but we do see 
a path forward in having carbon capture utilization and 
sequestration.
    Senator Manchin. Sir, I hate to interrupt you on it because 
our times are so limited here. But you can keep those up. 
That's very important.
    With what--there's no coordination as I can see from the 
Environmental Protection Agency trying to work with you all to 
develop policies and be able to use the energy that we're 
depending upon. That's where the disconnect comes. What we're 
asking for is somebody has got to be talking to somebody 
coordinating it so we can continue from what you're depending 
upon to be able to use it and use it cleaner within the 
environmental standards that we're setting. There's no one 
working together.
    I will say this. Last year when you came before us you said 
the Department of Energy was eager to promote research on coal 
to liquids that blended biomass into the fuel and had carbon 
capture and sequestration technology. Then you said also coal 
to liquids with carbon capture and sequestration actually makes 
very clean fuels. Then once you start blending in biomass it 
becomes a real plus. It becomes carbon neutral in the tailpipe 
emissions.
    So for that reason the Department of Energy is very eager 
to promote that type of research. Last year, your budget had $5 
million in funding for that research. This year, zero.
    Have you changed your position? What is the 
Administration's position now? Why would you have such a 
reversal?
    Secretary Chu. I'm going to have to look at that and get 
back to you on that.
    Secretary Chu. I do think that any coal to liquids with 
carbon capture and as you blend in biofuels and that this is 
also true of coal firing bio-matter with a coal plant and if 
you capture the carbon dioxide after a certain percentage it 
does, it goes with the carbon capture. It actually goes 
negative. So you're actually net sucking carbon out of the air.
    Senator Manchin. Right. That's all. I think you testified 
last year.
    Secretary Chu. Right.
    Senator Manchin. We have people wanting to do this type. 
The road blocks are insurmountable because it looks like the 
Administration is saying one thing but they're pushing and 
promoting because of your, where you're making your 
investments. I think this shows completely where you're making 
your investments without taking into consideration what brought 
you to the dance and what you're expecting.
    If you look at natural gas and coal and what we have there 
you're talking about 66 percent of the energy for the next two 
decades with very little money going into it.
    Secretary Chu. As I said, the research for carbon capture 
and storage technologies we can fund, when it gets to be very 
expensive is it gets to be on the deployment side. This is a 
chart of electricity which is a major part of energy. But about 
38 percent of our energy is from oil. If you took that, as I 
tried to point out before, our budget doesn't reflect the 
percentage of energy we use. Therefore those dollars go into 
that percentage.
    The oil industry is a very mature industry. So we don't 
think, even though it's 38 percent of our total energy budget, 
we're not going to put 38 percent of our DOE budget into that.
    We do think that carbon capture, getting coal clean, is 
very important. But as I said----
    Senator Manchin. Oil recovery? Enhanced oil recovery? 
There's so many things we can use it for.
    Secretary Chu. I absolutely agree with you. That's----
    Senator Manchin. But sir, your budget doesn't reflect that. 
I'm sorry. We just, I know we have a difference. Thank you.
    The Chairman. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here. I, for one, would 
never say that you have deaf ears. I have found you to be very 
responsive. So I appreciate that.
    I want to pick up on the line of questioning that Senator 
Udall was pursuing relative to the production tax credits and 
the 1603 program, the Advanced Manufacturing program because I 
was pleased to see that the budget included continuing those 
programs and expanding them. We have some real success stories 
in New Hampshire under at least 2 of those programs.
    We have a company called Revolution Energy in my hometown 
of Dover where they've used the 1603 program to put solar 
installations in schools, save a significant amount of money.
    We have a wind farm in a community of Lempster in the 
Western part of the State. One that they're working on that 
have used the production tax credits. It's made a difference 
not just in the jobs that go into building those wind farms, 
but also in reviving the communities because of the economic 
activity that goes on around those projects.
    So I think they're very important and agree with your 
comments about the importance of continuing these investments 
in these markets. Have been concerned, as I know many of us in 
the Senate are, about the fact that these are going to expire 
at the end of this year. At this point the extension of the 
payroll tax cut and unemployment have not included a package of 
tax extenders that address these taxes.
    So can you talk a little bit about, adding to what you said 
to Senator Udall, about what happens to the market when we see 
this kind of interruption in support for these new energy 
technologies?
    Secretary Chu. I think as you talked and I'm sure, I know 
you have, as you talked to industries out there what industry 
wants more than anything else is they want to see stable 
government policies. They don't want to seem on again/off 
again. They want to see something because a lot of these 
investments, just to plan them and get them permitted and 
licensed, could go well beyond a 2-year cycle.
    So the production tax credit and the 1603 have, by most 
people's accounts, not everybody's, been very successful in 
stimulating investments in these new clean energies. With the 
end of the Recovery Act the Administration is very concerned 
about a roll off of these investments. You see this in the 
financial newspapers, Bloomberg, New Energy. You find all these 
things that there's going to be a real concern or is it just 
going to roll off and stop.
    Again, I go back and reiterate that it's very important 
that America develop a home market for the development of the 
industries of manufacturing in America. You know, one of the 
great things about the U.S. automobile industry is we had a 
very large home market and that actually stimulated a lot of 
the development into automobiles.
    Senator Shaheen. Is it fair to say that if that uncertainty 
exists because we let these tax credits expire that there's a 
good likelihood that we're going to see a number of jobs lost 
as part of that?
    Secretary Chu. Yes. I think there are early returns on that 
already because----
    Senator Shaheen. Right.
    Secretary Chu. Again, if you read the financial pages of 
various newspapers around the country and around the world, 
where there are continuing policies to allow investments, you 
see growth. Otherwise there is a pulling back.
    Senator Shaheen. I was also very pleased to hear the 
President in his State of the Union and to see that in action 
as well, the commitment to energy efficiency which is something 
that I believe is very important. Senator Portman and I have a 
bill S. 1000 that addresses energy efficiency in the industrial 
sector and government and buildings.
    But one of the best ways to encourage energy efficiency is 
by supporting the expansion of co-generation or combined heat 
and power. These are the technologies used are generally off 
the shelf. They exist right here in the United States. The jobs 
that are created are here in the U.S.
    So can you talk to what the position of the Department is 
on combined heat and power and how you address that in this 
upcoming budget?
    Secretary Chu. We are very bullish in combined heat and 
power. You know, in today's modern, let's say gas turbine 
generation, you can get 55, 60 percent efficiency in converting 
that energy into electricity. But it's at best 60 percent 
efficient. I guess some companies claim 61 or 2, but I'm not 
going to quibble. In combined heat and power you go up to 80 
percent.
    It can be now where we think that--and if there's any way 
to encourage people to do that that would be great. There's 
also new ideas and new innovations being deployed now that seem 
to work. Some people could--here's the issue. Sometimes you 
want the electricity you don't want the processed heat or maybe 
you want the heat you don't want the electricity.
    I was visiting a project we supported in Recovery Act funds 
in Houston, Texas. It powers this collection of medical centers 
that is about the 12th largest city in the United States, just 
the medical centers. Everything is big in Texas. Anyway, what 
they had is they had a very efficient gas generator, but single 
cycle. They had high temperature process heat that could be 
used for heating or air conditioning.
    Now the beauty of what they did is they took that process 
heat and they used it. You can actually use heat to cool. So 
they used it to chill water. They would store this cold water 
in this big tank right there.
    They found that it took about less than 10 percent of the 
energy, even in on a hot, Houston summer day to keep that tank 
cold. So they would run it so that that would balance. It's 
like a big battery, but it's a battery of heat that they would 
use to air condition their complex.
    OK. So and it was very cost effective. So they were 
operating this plant 80 percent efficiency, recovering all of 
that, very fuel efficient and again, drives down the cost to 
their customers, the medical centers, the hospitals. So that's 
an excellent example of how combined heat and power can be used 
in a way.
    I mean, buildings, new buildings now, many of them, 
especially if you have real time pricing of electricity. They 
use the electricity at night. Chill some water, even may turn 
into ice. Use the ice to cool the building during the daytime.
    So you're buying electricity where it's inexpensive. You 
decrease your electricity bill. The asset of generation are 
used, you know, you're getting a better return in your 
investment because you're using the asset in a more even way.
    So the good news is combined--so this all is about energy 
efficiency essentially. So combined heat and power in any city, 
any university, any hospital, that has an integration of steam 
and chilled water tunnels or a big complex could use combined 
heat and power. We'd love to see it go in that direction 
because now you're going to 80 percent efficiency.
    Senator Shaheen. Thank you.
    The Chairman. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    Dr. Chu, thank you for being before the committee again and 
for working with me and other members of the committee on some 
important projects.
    I like some things in the budget. One is energy efficiency 
as Senator Shaheen has just talked about. With buildings using 
about 40 percent of the energy in this country, I think what 
you're talking about there is consistent with the legislation 
which, as you may know, was introduced in the House, a 
companion bill yesterday. So we're hopeful that S. 1000 can 
make its way to the floor. I appreciate the support of the 
ranking member and the chair on that as well.
    I'm concerned about some other aspects of the budget, but 
let me focus on something else positive which is the small 
modular reactor licensing technical support program. You've 
funded that at 65 million bucks. These SMRs are really, I 
think, an exciting innovation. As you know, have safety 
advantages as well as economic advantages.
    I know that the Nuclear Regulatory Commission has just 
licensed a plant and another one coming with larger reactors. 
But it seems to me that this is a good investment. Something 
that will be very beneficial to energy mix going forward. So I 
thank you for that.
    With regard to carbon capture technologies, I don't know if 
you've had this question from other colleagues. I apologize if 
I'm repeating something here. But the CCS programs, I think 
still, are lacking direction in this budget. I don't think 
there's a pathway here as to how long and how much it's going 
to cost to be able to develop carbon capture technologies.
    I would like to see the budget laid out. But in the absence 
of that I would hope that the Department would do so. I did 
introduce an amendment last year that would require the 
Department to assess how successful the CCS programs have been 
and how much time and what the cost would be to get them to the 
commercial level. Senator Shaheen, again, was part of that and 
adding the assessment with some of the barriers are for large 
carbon capture and storage.
    So my question to you there would be, you know, what is the 
pathway and what can the Department give us in terms of 
information as to what your scientists believe is the way to 
move to a commercially viable demonstration projects?
    Secretary Chu. Sure.
    First, the carbon capture technologies that are being 
tested today and of the viable two categories this is, you 
know, after combustion you capture the carbon. There are MEA 
type technologies or chilled ammonia type technologies. Those 
are being pilot tested. In a sense they're by and large in the 
commercial sector.
    We feel that we would like to develop less expensive means 
because if you make, if you put in an estimate of how much it 
would increase the electricity bills, we think that this would 
not spur, not in the United States, but it would not spur China 
or India into using these technologies. So we would like to 
improve them. We think there are potential ways of improving 
them.
    One of the potential ways is to--but it's these very large, 
high, surface areas. So we're investing a lot of research to 
decrease the size of these capture stacks. Totally different 
ways of doing it, so instead of that being absorbed material 
you can use small particular matter at the nano scale. So we're 
investing a lot of research in that.
    We're investing in ways of--another way is to separate 
oxygen from nitrogen.
    Senator Portman. Dr. Chu, I guess what I would ask. This is 
a danger of having someone who actually knows something about 
science testifying.
    Secretary Chu. OK. I'll try to sub miss it.
    Senator Portman. I guess I would ask you, if you're 
willing, is I'll submit a question for the record. I know a lot 
of members of the committee would be interested in your 
response both on the specific, you know, technological 
improvements that you would recommend, but also just what the 
Department sees as the pathway forward here. I don't see it in 
the budget again. I think it would be very valuable to the 
committee.
    Secretary Chu. In short, the very brief time, I say the 
path forward is to take advantage of the industry's interest on 
the piloting side in the carbon capture utilization and 
sequestration.
    Senator Portman. Yes. We want it to be cost effective. It 
seems to me that there is an opportunity here. We're not taking 
advantage of it.
    With regard to uranium enrichment I appreciate the fact 
that in the budget you do talk about the need for us to have a 
domestic source. In fact, provide in the Defense Nuclear and 
Non-Proliferation Account, $150 million for domestic uranium 
enrichment development demonstration research. You and I talked 
about this a number of times before. It's interesting you 
include it under NNSA rather than the Nuclear Energy Account 
because I think it would also be appropriate under the Nuclear 
Energy Account.
    Is there a reason for that?
    Secretary Chu. No. That was assigned by people more like 
you than me.
    [Laughter.]
    Senator Portman. Uh oh----
    Secretary Chu. No, I think that--pardon?
    Senator Portman. I see what you're saying.
    Secretary Chu. No, I'm just saying that you had to park 
somewhere. It was certainly appropriate to put it in NNSA 
budget.
    Senator Portman. OK. We'd be very interested in working 
with you on that. I do think there's some appropriators who are 
particularly interested in knowing which account it's going to 
come out of.
    Secretary Chu. Right.
    Senator Portman. Where it's coming from. I think, you know, 
a conditional loan guarantee would be a far better solution. 
But given where we are and needing to have a domestic source of 
enriched uranium, I think it's important that we move forward. 
The more information, the better.
    With regard to enriched uranium, if you could just talk for 
a moment about why you think it's so important. Obviously we 
need it for our nuclear power plants. At one point we had a 
majority of the enriched uranium in the world being produced by 
the United States. I think we're down to about 25 percent of 
the world's supply of enriched uranium now.
    Maybe a place to start is, you know, where do we get it now 
in that we aren't producing nearly as much as we used to?
    Secretary Chu. There are 2 parts to this.
    One is the military side, the secured side. We have 
international treaties which we want to abide by, non-
proliferation treaties which says that the uranium used in 
nuclear security, for nuclear security purposes actually has to 
be indigenous to that country. It's a very wise treaty because 
you don't want one country to be using technology of another 
country to enrich uranium that they can turn into weapons.
    Senator Portman. Right.
    Secretary Chu. So we need our own indigenous source of 
uranium for our--to maintain our side. Also uranium that we 
need to produce tritium for that----
    Senator Portman. For the duration.
    Secretary Chu. Then there's a larger issue about the 
civilian nuclear side, much larger amounts of uranium. We think 
that if the United States, certainly the United States will be 
a player. The United States is well respected for its safety 
record, for its care in the way it handles its own civilian 
nuclear industry and for the technologies that it has 
developed, companies like GE and Westinghouse.
    It would also benefit if we had a home grown, new 
technology for enriching uranium for, again, so that we can 
offer for sale to other countries, other developing countries, 
you know, France is a player in this. Russia is a player in 
this. We think that if the United States is a supplier of this 
uranium that we could have a moderating effect again on non-
proliferation instruments.
    So it's for that reason as well.
    Senator Portman. In essence, discouraging emerging 
economies from developing their own enrichment capabilities.
    Secretary Chu. Right.
    Senator Portman. Saying that the fuel they need for a 
peaceful nuclear power facility can come from the United 
States. It will be a stable, affordable supply through a 
domestic origin.
    Secretary Chu. That's correct. In fact, if you put 
yourselves in the shoes of another country who might want to 
have nuclear technology, they would want to see several 
suppliers. So they would not be beholden to one or two. We also 
feel that the United States can lead by example, helping do 
what we can do in order to decrease the risks of proliferation.
    So it's the whole nuclear supply issue. We will be a player 
no matter what. But it would certainly benefit from that 
respect as well.
    Senator Portman. My time is up. Mr. Chairman, I'm sorry. 
Thanks, Mr. Chairman, for giving me a little time there. But I 
appreciate the follow up and we'll be following up.
    The Chairman. Senator Sanders.
    Senator Sanders. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary and thank you for all that you are doing.
    Let me begin by saying that I agree with Senator Shaheen 
and many others that it is absolutely imperative that we pass 
the Production Tax Credit in 1603. It is beyond comprehension 
to me that we are not moving forward aggressively. I thank the 
Administration for their support on that.
    I also want to thank you for your help in Vermont's smart 
grid. I think we will be probably the first State in America to 
have almost universal smart meters within a few years. We think 
if we're serious about energy efficiency and using electricity 
as efficiently as we can, this will be a major step forward. I 
hope Vermont can learn and that the Nation can learn from what 
Vermont will be doing. We want to share that with the rest of 
the country.
    Mr. Secretary, it seems to me that one of the sad moments 
in terms of what's happening in our country today is the degree 
to which, as a Nation, as a Congress, we are not dealing with 
the horrendous planetary crisis of global warming. It is--and I 
say this not to be terribly partisan here. But it is very sad 
that we have a major political party where many of its leading 
members actually reject what the, virtually, the entire world 
scientific community is saying.
    A, about the reality of global warming.
    B, that it is significantly caused by manmade activities.
    C, that if we are aggressive we can begin the process of 
leading the world in reversing greenhouse gas emissions.
    Without getting partisan it's just sad to me that we have 
so many people rejecting what is very clear scientific 
evidence, not only in this country, but from scientists all 
over the world.
    In terms of cutting greenhouse gas emissions I think that 
energy efficiency is a huge step forward. I don't think there's 
much disagreement on that. I think weatherization is a very 
important part of that.
    I come from a cold weather State. We are making some 
progress in retrofitting homes. When we do it well what we are 
seeing is often working families lowering--we've got people 
saying, you know, I've cut my fuel bill by 20 or 30 percent. 
I'm saving money as a consumer. We are emitting less greenhouse 
gas emissions. You know what? We're creating jobs because 
people are working on those homes.
    If there's any win/win/win situation that I see in this 
country, being aggressive about weatherization is it. Yet 
within a pretty good budget you guys have cut weatherization. 
Why?
    Secretary Chu. Actually if you look at our request I 
believe it is up from what was given to us for FY'12.
    Senator Sanders. Here's the story. The budget before us 
actually invests only half as much in weatherization for 2013 
as we did in 2008. That was the last year of the Bush 
Administration.
    In 2012 Congress approved huge cuts to weatherization 
dropping funding to $68 million in 2012, down from $227 million 
in 2008. Now you're right. You went up from last year. But 
we're significantly below where we were in 2008.
    Would you agree with me that investing in weatherization is 
a win/win/win situation?
    Secretary Chu. I agree. So we have asked for an increase. 
It's not quite double. But a big increase from what we were 
authorized.
    But and I think we're also trying to promote programs that 
with not only the Federal dollars, but also programs because I 
really think if done right weatherization can actually save 
money. The money one needs to borrow whether you're a business 
or a homeowner, if paid back in moderate interest loans can 
actually decrease your bills.
    Senator Sanders. Right. We certainly agree. I hope that you 
will work with us.
    Because I don't know that there's any much partisan 
disagreement on that one. It's just common sense, if I lower 
your fuel bill by 30 percent, why not? Right?
    Secretary Chu. Right.
    Senator Sanders. If we create jobs as part of that process 
that's a winner.
    Let me ask you this question. I am working on a concept 
again, which should not be partisan. It's called on bill 
financing because one of the problems we have in terms of 
weatherization.
    If Ron Wyden here wants to reduce his fuel bill in his home 
and knows that retrofitting will do that, but he doesn't have 
the upfront money. If we can get him the $15,000 he needs to 
cut his fuel bill by 30 percent and pay it back by the reduced 
amount of money he's spending on fuel we're just lending him 
money. He's paying it back.
    What ideas do you have about how we can get middle class, 
working families that upfront money so they can weatherize, 
lower their fuel bill and save money in the long run?
    Secretary Chu. A number of things.
    First, usually one is most motivated and has the capacity 
when they are buying a house. We have in the toolbox, I think 
it's HUD has, energy mortgages, which are not widely 
appreciated, not widely known. One way to stimulate that is to 
encourage lenders.
    Lenders, they ask for a person's income.
    They want to know they can pay the mortgage, of course.
    They ask for the property taxes because that's the cost of 
owning the house.
    They ask for a lot of things.
    They ask for a structural engineer.
    Senator Sanders. Right.
    Secretary Chu. Because they don't want their asset, the 
bank's asset, to fall down.
    It would not be too much to say, why not get a structural 
and energy audit from the engineer. To make a wiser homeowner 
that can know----
    Senator Sanders. I agree. But it is not only people who are 
just purchasing a home.
    Secretary Chu. Right.
    Senator Sanders. You have, people have older homes instead. 
Will you work with us on this concept of on bill financing?
    Secretary Chu. Yes.
    Senator Sanders. Coming up with loans that will be repaid 
as a result of lowered billing?
    Secretary Chu. Right.
    Senator Sanders. I think it's just a win/win situation. 
Will you work with us on that?
    Secretary Chu. Absolutely. Just very briefly I think 
utility companies can play a role in this as well.
    Senator Sanders. Yes, they can.
    Secretary Chu. OK.
    Senator Sanders. Yup.
    Secretary Chu. Because they have access to moderately low 
cost capital.
    Senator Sanders. Yup, that's correct.
    OK, thank you.
    The Chairman. Senator Hoeven has arrived but he has asked 
for a few minutes to review his notes. I know that some of us 
have additional questions. I had one additional question, Mr. 
Secretary, that I wanted to ask. Then I will see if others do 
as well. Then Senator Hoeven can ask his questions when he's 
ready.
    I wanted to ask about the Department's plans at Los Alamos 
National Lab now that the chemistry and metallurgy nuclear 
facility has been put on hold. For many years now we've been 
told that the replacement nuclear facility was necessary. Now 
we are told there may be alternatives that the Department wants 
to pursue.
    Could you describe what changes in operations and staffing 
you anticipate at Los Alamos now that the CMRR has been 
delayed?
    Secretary Chu. Much of the staffing I don't think is 
directly. So what we plan to do is go ahead and complete 
substantially the design of that building. So what we have been 
putting in previously was mostly engineering design. We're 
going to get to perhaps 90 percent of the engineering design 
part of it. That's very prudent for a number of reasons because 
before you start construction it's best you have most of it 
designed.
    But you're correct we are now putting that on hold a while. 
Because of the budget constraints of the NNSA we have to look 
at all the other projects. We could not simply, we felt we 
could not simply start CMRR and UPF, the Uranium Processing 
Facility at Oak Ridge. We felt there was more compelling 
reasons to begin that.
    We're looking at ultimately the plans we can consolidate. 
The footprint is there. There could be other parts of this.
    We're looking at, as we look toward new start and beyond 
new start, whether, you know. Working with the Defense 
Department as to what our requirements to fulfill our duties to 
the Defense Department for the nuclear future will be. So as 
that gets worked out that will be folded into it.
    So we'll essentially begin to complete this engineering 
design and then try to figure out how we can reposition. Again, 
because of the--and what is different as you well know, is that 
we have severe budget constraints and we do have a deficit.
    The Chairman. But you are not real clear as to what 
additional actions the Administration would expect to take to 
meet its needs, the needs it was expecting to meet, through the 
construction of this CMRR?
    Secretary Chu. There are--yes. We're looking at some of the 
things the CMRR building would have done. We are looking 
perhaps to offload some of that to other sites. For example, I 
forget even what the name of it is called. It used to be called 
the Nevada Test Ground. They have a new name for that also some 
issues in with.
    So we are looking very closely at how we can best fulfill 
our obligations and the needs for our nuclear security. We 
believe that and so our overall plutonium strategy but there 
will be some CMRR in Los Alamos, we feel. But again, we don't 
know whether there are other options.
    The Chairman. Let me ask Senator Hoeven. Are you ready for 
your questions before I ask others if they have a second round 
of questions?
    Senator Hoeven. I am, Mr. Chairman. Thank you very much.
    The Chairman. Why don't you go ahead?
    Senator Hoeven. I appreciate it.
    Mr. Secretary, good to see you again. Thank you for being 
here.
    I'd like to ask you a little bit about gasoline prices. I'm 
sure you're well aware that the average price for gasoline in 
the country right now is over $3.50 cents according to both 
Triple A and the Lundberg Survey. That's up 90 percent since 
the current Administration took office.
    So my question relates to why aren't we advancing projects 
like the Keystone XL pipeline to provide more supply and help 
bring gasoline prices down. You were asked to review that 
project or the Department of Energy was asked to review that 
project by the State Department. Your expert, Dr. Carmine, I'm 
going probably miss on the last name.
    You might have to help me, Difiglio? Is that? Dr. Carmine 
Difiglio, does that sound about right?
    Secretary Chu. Sounds about right.
    Senator Hoeven. Alright.
    Anyway he was asked to review the Keystone XL pipeline 
project and comment on it as to whether it would help reduce 
gas prices in the United States. I'll quote from his report. 
``Gasoline prices in all markets served by PAD1, the East Coast 
and three, the Gulf Coast refiners would decrease gasoline 
prices in all markets served by PAD1 in the East Coast and 
three, the Gulf Coast would decrease, including the Midwest.'' 
That was by your expert, Dr. Difiglio, Department of Energy, 
June 22, 2011.
    So my question to you is here we have rising gas prices 
putting a strain on our consumers, on businesses, on the 
economy. Yet the Administration turns down a project that would 
help us reduce gasoline prices. Why is that?
    Secretary Chu. First, let me say I'm not aware of this 
report. So I can get back to you on that. But it is my 
understanding that as I tried to explain, that the gasoline 
prices in the United States are affected by refining capacities 
and by access of those refiners. The biggest bottleneck was the 
bottleneck from Cushing, Oklahoma to Houston. That--and there 
was a very large price differential of crude in Houston and 
Cushing verses crude in Houston.
    So that bottleneck is being taken care of by the pipeline, 
the people who invest in pipelines. As that is being taken care 
of as we speak there are numerous pipeline plans for enlarging 
that pipeline. One pipeline is being reversed so that refined 
products from Houston and Louisiana can be then ported to the 
Midwest.
    Another pipeline from Chicago to Cushing and also in the 
Plains is being built as far as I know. So much of the 
pipelines in the United States that would bring oil from 
Wyoming, North Dakota and to get the oil to the refineries that 
have the capacity to refine this oil and back up are being done 
in the private sector. So we think that this is on a path that 
is creating jobs, that is going to be helping.
    In the end, the gasoline prices, we are very concerned 
about. The Administration has taken, I mean, this pipeline 
activity occurs because once you see a big price differential, 
the industry steps in and says, hey, we can fix that. In 
addition to that, we are doing a lot. For example, twice we've 
changed the mileage standards of automobiles. This directly 
affects the American public.
    By 2025 the estimate is the fleet average will be saving on 
average Americans over the lifetime ownership of that car by 
$8,000 in gasoline bills.
    Senator Hoeven. Mr. Secretary, so you're saying that while 
you've been part of this Administration gasoline prices have 
gone up 90 percent. We're looking at $4 gasoline by Memorial 
Day, maybe $5 gasoline this summer. You're saying you're 
willing to build all kinds of pipelines, but you're unwilling 
to build a pipeline that will bring 830,000 barrels a day into 
this country from our closest friend and trading partner, 
Canada, and will help alleviate a bottleneck in my State of 
North Dakota where we now produce more than 500,000 barrels a 
day.
    But our oil is now discounted $27 a barrel, light, sweet, 
bach and crude off West Texas Intermediate. $27 a barrel we're 
discounted because we don't have the pipeline capacity to bring 
it down to the refineries. We will put more than 100,000 
barrels a day in that pipeline.
    Instead we have to run trucks over the road. We have 
traffic fatalities. We have wear and tear on our roads. You 
just got done saying you're willing to build all these 
pipelines. Why not the Keystone?
    Secretary Chu. The pipelines from Wyoming and North Dakota 
can be built. The Administration actually has no--there's not a 
decision the Administration needs make on that. This is all on 
American territory.
    The only part of the pipeline the Administration, the State 
Department, was asked to weigh in on was the part that went 
from Canada to the United States. So specifically, and the 
pipelines I was talking about are actually helping bring the 
oil from your State down to those refineries. Those things are 
things we're----
    Senator Hoeven. That's not the case. I just explained to 
you the pipeline that would help us bring the oil from my State 
down to the refineries.
    Secretary Chu. My understanding is if you look at the 
pipelines that exist today and you look at the major 
``bottlenecks'' of the pipelines those pipelines and we're 
talking now specifically about the part of the pipeline that 
goes from Canada into the United States. My people tell me that 
for the next decade or so with the anticipated increase in 
production of Canadian oil that that will not the bottleneck.
    We have a bottleneck now that is in the Cushing to Houston. 
There's another bottleneck from Chicago. There's also pipelines 
that go from your State to Chicago. That pipeline goes from 
Chicago to Cushing.
    So those things are being built. So those are taken care of 
as we speak.
    Senator Hoeven. I see I am over my time, Mr. Chairman. I 
will defer for a second round if that's the wishes of the 
Chair.
    The Chairman. Alright. Why don't we go ahead with a second 
round?
    Senator Murkowski, did you have questions?
    Senator Murkowski. I do, Mr. Chairman. Thank you. Thank you 
for your patience, Secretary.
    Several weeks ago we had a presentation. EIA presented kind 
of the global picture. I had an opportunity to ask Mr. 
Gruenspecht his opinion on where Alaska natural gas fit into 
the bigger picture as we talked about domestic natural gas.
    Senator Wyden has on many occasions before this committee 
asked questions about the export of domestic product here. You, 
as the Secretary, have the authority to sign off on whether or 
not export is in the national interest. The question I had 
asked Mr. Gruenspecht was whether or not, in his opinion, 
Alaska was viewed separately from the rest of the lower 48 
market. Different type of gas, different processes and clearly 
a different market, Alaska is much closer to the Asian market 
than we are, most of the lower 48.
    It was good to get Mr. Gruenspecht's opinion on it. But 
you're the guy that ultimately signs off on export licenses. 
How do you view Alaska's natural gas and whether or not this is 
something that would be viewed differently than the domestic, 
the lower 48, natural gas domestic production?
    Secretary Chu. Given the charge of the Act and the 
decisions we would have to make on allowing the export of 
natural gas it would, again, have to be folded into what would 
be in the best interest of the United States.
    Senator Murkowski. Certainly.
    Secretary Chu. So and you correctly pointed out that Alaska 
is in a different location. But we would have to fold all that 
in. I actually don't know what Howard said.
    But it's very clear that before we license anybody as we 
deal with these applications we just have to be very conscious 
of the fact that we don't want to have a significant impact on 
the gas prices. Again, considering the benefit of the United 
States in its totality and so, I really, I can't comment on 
what is going to be the economics in Alaska.
    I guess having said that we are, you know, Alaska does have 
natural gas.
    Senator Murkowski. Lots of it.
    Secretary Chu. Yes.
    Senator Murkowski. Lots of it. You know, we're still trying 
to figure out how we access that. That's our challenge in the 
State right now.
    But one of the things that we are looking at is the 
prospect of rather than sending it through Canada through an 
extraordinary transportation system to move it through it 
through the State, liquefy it and move toward export. It's not 
a decision that has been made yet. We've got a long way to go.
    But it is an issue where for us in the State, it is a very 
different market. It is a very different gas. I look forward to 
the opportunity to speak with you more about that.
    Secretary Chu. Sure.
    Senator Murkowski. Just sequeing here. We've also had the 
chance to talk about Arctic methane hydrates and the great 
potential that we have. I understand that methane hydrates are 
going to continue to be a part of the natural gas technologies 
R and D budget which is good.
    We're not the only country, of course, that is working on 
this. We've got a good partnership going with Japan. I guess 
the question to you on this is right now there is a--or they're 
scheduled to conduct a major test up in the Arctic, in Alaska, 
in partnership with Japan on hydrate flows and pressures.
    I know DOE had hoped to follow up on this test. So I'm 
wondering if you can tell me what the level of commitment is 
from DOE to continue this public/private, the progress that has 
been made to advance the research in an area that I think we 
recognize holds great potential. It may be further out in the 
distance than some of the technologies that are in front of us. 
But exciting, if we can get there.
    So can you give me any updates?
    Secretary Chu. Sure.
    Senator Murkowski. Specifically the commitment the DOE has 
to this.
    Secretary Chu. Sure. Sure.
    We're going ahead with this test. It's not in conjunction 
with ConocoPhillips. Japan is very interested because they have 
methane hydrate reserves off their coast.
    As you noted, it can if one can figure out to extract it 
without plugging gas lines and all those other things, it would 
be, it could be, as significant or even far more significant 
than the technology that was developed for shale gas. So we are 
looking forward to the test. But the test is one part of a 
program going forward before, quite candidly, before industry 
actually would want to begin to invest in it on their own.
    So again, it's this balance. Right now industry is not, you 
know, they view methane hydrates more as something that plugs 
up their lines rather than a potential source. Just like with 
shale gas as if it looks like it can be developed and industry 
gets invested in it as part of our all of the above strategy, 
then they can take it over.
    Right now the program being done in Alaska is actually 
being directed by DOE's scientists. So it is a research 
project. But it's just one part of that research project. After 
this stage we see it continuing.
    Senator Murkowski. I think that's important. Because we 
recognize that apparently there's $12 million now that's 
proposed in this budget for all methane hydrate research next 
year. It's my understanding that this test is going to be more 
expensive. So the commitment then from DOE to continue that is 
going to be important.
    Again, we'll follow up on this conversation.
    Thank you, Mr. Chairman.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Secretary Chu, you've been a patient soul. You have sat in 
that seat for two and a half hours. As you can tell up on this 
side of the dais, there are pretty diverse views with respect 
to energy. Folks who care about wind and solar and folks that 
care about coal and nuclear and so there is a wide variety of 
opinion.
    I wanted to ask you about an area that I think would be 
unifying and something I think you, in particular, could 
champion. That is energy storage. When you look at energy 
storage, this is something that makes wind and solar, for 
example, more economic. But it also is hugely beneficial to 
base load technologies like coal and nuclear because it can 
help them meet their peak electric demand. It also helps the 
transmission system operate more efficiently.
    So you've got something that is cross-cutting in terms of 
technology, literally benefits every corner of the country. In 
other words, I can't find a corner of the country that wouldn't 
benefit from it. Yet, we haven't been able to get in place a 
clear strategy to tap the potential of energy storage.
    A couple of years ago Dr. Koonin, your Science Advisor, a 
very distinguished individual, I asked him about energy 
storage. He said, well, we're going to wait and see what 
happens. Basically we've gone through a variety of debates.
    I'm concerned, for example, then in the Office of 
Electricity in this budget it looks like energy storage is cut. 
But I want to set that aside. Ask you what would it take to get 
you and the Department to lay out for us a significant strategy 
to tap the potential of energy storage?
    I mean, it has the real potential for production and 
distribution. It's not consumption. It's almost the other side 
of the coin of energy efficiency. It could be something that 
would be backed by Democrats and Republicans.
    It would be cross-cutting in terms of technology. Yet, so 
little has been done to lay out an opportunity for a real 
strategy here. Could we persuade you to do that?
    Secretary Chu. You don't have to persuade me. We are doing 
that. We--this is one of the reasons why one of our Hubs is an 
energy storage Hub, but not only for automobiles, but for 
utility. We made it very specific.
    It's not only batteries. It's compressed air. It's thermal 
storage.
    I just talked about how you can use nighttime energy to 
hold processed heat. Sometimes when the wind is blowing there's 
nowhere to take that electricity. You can put that into lots of 
kinds of storage either, you know, hydro storage is something 
I've been pushing very hard to BPA to start doing. Pump from 
one dam to another dam so there's minimal, essentially no 
environmental impact, but it's a form of storage.
    We have a target. We know that energy stored at the 
megawatt and megawatt/hour scale would have incredible 
applications in the electricity distribution system. It would 
make our electricity distribution system much more efficient 
because all the little ripples that, you know, you have a few 
major generating stations. It goes to distribute out here. You 
purposely overfill today to--and if you had little batteries 
of, you know, kind of that size scale popped here and there it 
would have a profound difference.
    Right now the energy storage is about 300, $350 a kilowatt/
hour. At $100, $150 a kilowatt/hour it goes viral. So energy 
storage for renewables, energy storage for making a more 
efficient distribution system, energy storage is for a sounder, 
more robust grid are all part of that.
    So we have a Hub for that. We are trying to coordinate. 
We're not only looking at battery. We're looking at compressed 
air. We're looking at thermal storage.
    Senator Wyden. Dr. Chu, if you could send me the document 
that reflects this strategy. That's what I'm really asking for. 
Because I've followed this, all I can see in terms of 
documents----
    Secretary Chu. OK.
    Senator Wyden. is the proposed cut in storage at the Office 
of Electricity. I wasn't interested in debating that. What I 
wanted to see was something that would lay out a strategy.
    As I've said, I've gone back several years with Dr. Koonin 
and others and we haven't seen such a thing. If you can get 
that to me, we'll discuss it back and forth. But what I really 
want to see here that I think would be unifying in this 
committee is an actual strategy so that everybody would 
understand what the potential is and where we want to go. Thank 
you, Mr. Chairman.
    Secretary Chu. Just 10 seconds. Yes, the Office of 
Electricity--OE was cut because what we decided was it was much 
more appropriate to increase in ARPA-E dramatically, and the 
Office of Science and in EERE. So we were trying to consolidate 
where we could think it could do the most good in terms of the 
level of program management.
    So overall if we gathered up all the pieces in energy 
storage it's actually going up.
    The Chairman. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman. To the question 
as to whether energy storage is part of efficiency, yes, it is 
and part of using our system more efficiently.
    Earlier we talked about your commitment to a new enrichment 
technology that gives the United States the ability to get back 
on the cutting edge in terms of our technology. Create great 
advanced manufacturing jobs. But also be able to supply our 
energy needs and from a national security point of view to deal 
with our need for tritium for the nuclear arsenal which comes 
from enriched uranium.
    That tritium comes from domestic sources of enriched 
uranium, is that correct?
    Secretary Chu. Correct.
    Senator Portman.Is that the policy of this Administration 
that we should have a U.S. source of lowly enriched uranium for 
tritium production at TVA?
    Secretary Chu. It's not in the policy. By treaty we're 
obligated to have U.S. sources to create our tritium.
    Senator Portman. So this is a requirement that we have a 
domestic source. With regard to other activities at Piketon, 
which you know, it's a huge campus. By the way would once again 
extend an invitation to you to come out. I think you'd really 
enjoy seeing what's going on there and see the incredible work 
that's been done over the years at that plant.
    But there is also a cleanup of the existing technology 
which is the gaseous diffusion technology still being used at 
Paducah, but now at Piketon through an effort that 
Administrations through the years have supported 
decontamination and decommissioning is going on. They're 
actually 1,950 workers involved with that. I notice in the 
budget and very concerned about it that there's a 33 percent 
cut there from $190 million to $127 million.
    Will this reduction in funding allow the Department to 
maintain the commitment that the Department has made to 
accelerate a cleanup? It was made, I think, back in 2009?
    Secretary Chu. We are looking very hard at this. Yes, there 
is a decrease in budget. We are looking again at all our 
options whether we can do some bartering, things of that 
nature. But again, we have to be very careful about whether 
that bartering will affect the markets.
    So we're trying to figure out with the tools we have how we 
can move that forward.
    Senator Portman. In the past, as you know, you have both 
barter and sold some of your own stockpile of uranium to 
provide the additional funding and maintain that accelerated 
cleanup schedule. It seems to me that that would be the right 
way forward. When you say you need to analyze it more, what do 
you need to do?
    Secretary Chu. Right now we've already analyzed that if we 
introduce into the market something 10-percent or below, that 
we feel safe that won't have a material impact on the markets. 
We have not gone--we don't know what will happen beyond that. 
So----
    Senator Portman. It sounds like you have done the analysis. 
You did it in 2011 and it went through the third quarter of 
calendar year 2013. That and you found, as you say, no adverse 
impact for the level you were talking about putting on the 
market.
    Secretary Chu. Yes, the 10-percent market. Yes.
    Senator Portman. So I would hope that having done that 
analysis that we could move forward to give the folks at the 
plant some certainty and also to just to maintain the cleanup 
schedule on an accelerated basis.
    As I talked about, I worked a lot when I was in the House 
of Representatives on the cleanup at Fernald. In the end we 
accomplished something great working with the Department of 
Energy on an accelerated cleanup. It was initially opposed by 
some people including folks who had jobs at the plant to 
maintain the status quo. But in the end it saved the taxpayers 
somewhere between $3 and $4 billion by accelerated cleanup.
    So I know there is a temptation in these budgets to try to 
find savings. But I think this is a place where it would be 
penny wise and pound foolish. In other words, I think for the 
taxpayer, it's definitely going to cost the taxpayer more over 
time if we get away from the accelerated cleanup.
    So I strongly encourage you, Mr. Secretary, to look at that 
analysis again and provide the funding through the barter or 
sales to keep your commitment because I think it's the right 
commitment. I think it's good for taxpayers.
    Secretary Chu. Yes.
    Senator Portman. Good for the site and good for the high 
tech jobs that are there.
    Secretary Chu. Yes, Senator, we did do the analysis for 
barter and sales at the 10-percent level or below. Right now we 
see us bumping up hard against that. If you want to ask us to 
do an analysis higher than 10-percent we would be receptive, 
but I think Senator Barrasso is not here. But he might 
represent an alternate point of view because----
    Senator Portman. That's why I'm asking when he's not here.
    [Laughter.]
    Secretary Chu. OK.
    Senator Portman. No, I think, seriously the analysis done 
last year was, as I understand it, conclusive as to not having 
a market impact.
    Secretary Chu. At the 10 percent level, but again because 
of all our obligations we're bumping up against that so we 
would have to do another analysis to go higher.
    Senator Portman. Are you committed to the accelerated 
cleanup?
    Secretary Chu. We're committed to whatever the means we 
have and the constraints we have to do the best we can. If you 
want to ask us to do another analysis, we'd be delighted to.
    Senator Portman. We certainly would appreciate that 
analysis if that's what it takes to be able to keep the 
commitment because I do think it's the right thing to do for 
the taxpayer. It's also the right thing to do certainly to keep 
onsite a lot of highly skilled people who are otherwise going 
to be found without a job or moving on and more difficult to 
bring them back to continue the good work they're doing.
    The other issue, of course, is we are very interested in 
being able to take some of the materials out of the 
decontamination and cleanup effort and be able to recycle those 
materials. We appreciate your continued cooperation with that 
effort. I know there's a concern with some of the other 
agencies looking at the safety of that. But we think that that 
is an enormous benefit again to the taxpayer and also through 
the processing provides good economic opportunities for our 
region.
    Thank you, Mr. Chairman.
    The Chairman. Senator Franken.
    Senator Franken. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary for your patience.
    I want to follow up on what Senator Sanders was talking 
about in terms of, I call it retrofitting. I've started a 
retrofitting initiative in my State called Back to Work 
Minnesota. I really believe that this is a low hanging fruit.
    That we--what I'm trying to do is find innovative financing 
mechanisms to get that upfront money to retrofit commercial 
buildings, MUSH, you know, Municipals, Universities, schools 
and hospitals, etcetera, and residential buildings. Knowing 
that it pays for itself and it puts people back to work. It 
puts people in the building trades to work who are in 
depression or a recession right now.
    They need the work. It helps our manufacturers in Minnesota 
and would do this all around the country. So it's sort of part 
of the President's Better Building Initiatives as well.
    I'd like to just bring up a few little areas in this. You 
talked about utility companies can provide the financing for 
this. In Minnesota we have a mandate for utility companies that 
they have to increase the efficiency of their users by 1.5 
percent a year.
    This is a mandate that actually encourages the utilities to 
find retrofits that are energy efficient projects that they can 
help finance. I was wondering if you think there could be, if 
we legislated that as a national part of maybe the Clean Energy 
Standard, if that would be helpful?
    Secretary Chu. I'm not sure. I think--I don't know whether 
that has a chance of passing, quite frankly. But let me just 
say----
    Senator Franken. Let's say it did.
    Secretary Chu. That would be helpful.
    [Laughter.]
    Secretary Chu. Here's another thing that would be helpful. 
It happens now in New York and Massachusetts and California, 
maybe a couple other States, per the regulatory agencies who 
set the rates. Let's say that if a utility company gets an 
equal return on investment if they help a customer, a business, 
a home owner and they loan them money to retrofit, that that is 
seen as an investment of the utility company which they're 
entitled to a return on their investment.
    Utility companies, a highly rated utility company, has 
access to fairly inexpensive capital.
    Senator Franken. Yes. That's why this is done.
    Secretary Chu. They became a bank for the business, for the 
homeowner. So a moderate interest rate and you're entitled to 
recover for your investment in energy efficiency. So instead of 
building another power plant.
    Senator Franken. Oh, exactly. I mean, that's the whole--
that's why Minnesota put this in.
    Secretary Chu. Right.
    Senator Franken. Let me talk to you--I have limited time, 
PACE, Property Assess Clean Energy Financing. This is basically 
done for commercial buildings. We say, a State or a county can 
lend money to a commercial building to do a retrofit sometime 
and ESCO gets involved in this.
    But some part of the financing can be this PACE which puts 
a property tax on that even if the building gets sold that 
property tax continues. It's a great model. Again what I'm 
trying to do is just find financing models for this.
    On residential PACE putting a property tax on doing 
retrofit, to finance a retrofit, the FHFA will not give 
mortgages to a residential--to a home with PACE because PACE 
would get paid back before the mortgage. Do you think that's a 
wise policy by FHFA? Is there anything you could do like give 
them--I've written them a letter. Would you join my letter or?
    Secretary Chu. I've been talking to Shawn now a lot about 
this. He and I are trying to be as supportive as possible. I 
think the issue was that even the lenders don't want to even be 
pari passu.
    Let's say you loan $200,000 to buy a home. The homeowner 
wants another $10,000 for home energy improvements. To have 
equal footing in the payback the lenders are fighting back. 
They say, no, we don't want you to do that.
    You have to be high. That has to be--the PACE is viewed as 
essentially a mortgage and has to be behind the initial 
mortgage. Even to get it even would be of great help.
    So we're trying to work this thing through. But the lenders 
really feel that nothing should stand in the way of them and 
the first mortgage.
    Senator Franken. Very often the lender would be the city or 
the county. This isn't when someone is buying the house. But it 
may be when they've been in the house for a while. It's just 
about making that home more efficient.
    Again, putting people to work, putting people to work who 
are in the building trades. People who are in the manufacturing 
and making that home more energy efficient and bringing down 
the cost of energy in that community.
    Secretary Chu. I'd love to talk to you. The time is up.
    Senator Franken. Yes.
    Secretary Chu. If the Chair would indulge me a minute there 
are a couple of other ideas we think are worth thinking about.
    On the commercial sector there are real estate investment 
trusts.
    Senator Franken. REITs.
    Secretary Chu. REITs. We feel that all we need is perhaps 
just clarification from the Treasury that says that this real 
estate investment trust of a commercial building wants to 
invest in a new HVAC system or in more energy efficient 
windows. Let's just say an HVAC system.
    Senator Franken. OK.
    Secretary Chu. Would you allow that to be written off, 
depreciated, as a capital expenditure cost? As differentiated 
from the depreciation rate for the building: Just the 
clarification of that, I think, would spur a lot of investment 
because these REITs, quite often, own office buildings and they 
pay the energy bill because, you know, occupants come and go 
and they don't want to separate the meter all the time. Then it 
goes into the rent.
    So a very simple clarification could spur a lot of 
investment because it will make sense to them. It won't cost 
the government any money. But that would be good.
    There are a couple of other things. I think if sometimes 
retrofits actually there's a community, a block, that wants to 
do. You know, a couple of homeowners get together and say, you 
know, one homeowner has a good experience. Says, you know, I'm 
saving a lot of money.
    But now you can capitalize on that and have the block 
party. Talk about it and make it a Groupon like thing, so if 
you get 5 people, 8 people to say we will do this. But you 
demand a discount rate, a 30 percent discount on the energy 
audit and the installation and everything else because to the 
contractor it's great. They send a truck out. They go bang, 
bang, bang, bang, down.
    So that can greatly reduce the price of retrofitting. Drive 
it up and actually get some social awareness in this as well. 
But it's all about saving money by saving energy. The finance 
part of that, you know, if you lower the price by 20, 30, 40 
percent, the finance decreases.
    Go back to utility companies. Companies that have access to 
low cost financing and moderate interest rates, it's a no-
brainer. You don't--not out of pocket expenses. You're saving 
more. In paying back the debt you're saving. The money to pay 
back the debt is less than the money for your energy bill and 
it's immediate jobs.
    Senator Franken. Exactly.
    Secretary Chu. This is immediate jobs that could be for 
decades. Right? It's going to have 140 million homes.
    Senator Franken. Yes. Right.
    Secretary Chu. Probably 80 million could use an energy 
uplift, facelift, or whatever you want to call it. So there are 
many things that we are mulling about and trying to get 
programs. We have a number of programs to--those are some of 
the ideas we're talking about also to stimulate State and local 
governments to think of better ideas.
    Again, a lot of this can be driven by the private sector.
    Senator Franken. Absolutely. Absolutely.
    Secretary Chu. Because energy efficiency does save money.
    Senator Franken. Absolutely. It doesn't need government 
money. It just needs----
    Secretary Chu. Remodel.
    Senator Franken. Can my office work with your office 
because right now I have written down REITs and house parties.
    Secretary Chu. Yes. Block parties.
    Senator Franken. Block parties. That's what I meant. Block 
parties, I'm glad you corrected me. Thank you.
    Thank you, Mr. Chairman.
    [Laughter.]
    The Chairman. Thank you.
    Senator Hoeven, you have the final questions. Assuming 
nobody else wanders in here which I very much hope isn't the 
case.
    Senator Franken. I want a third round on block parties.
    [Laughter.]
    The Chairman. I think we'll schedule that for the week 
after Christmas.
    Go ahead, Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman.
    Again, Mr. Secretary, thank you for being here. You've been 
out to our State, I think, several times. We appreciate it. 
We'd like to have you back.
    But I really am looking for help on this vitally important 
issue of energy infrastructure. In our last question and answer 
period here we went through pipelines. You said, well we're 
trying to build all these pipelines. You talked----
    If I could finish. You talk about all these pipelines we're 
trying to build around the United States. So my question to you 
is if we're--and you'll acknowledge that there's thousands of 
pipelines under the entire country. So why are we unwilling to 
build a pipeline that will bring crude in from Canada and will 
help us move our crude in the country?
    Why is that?
    Secretary Chu. First we're not unwilling. The President's 
position and the State Department's position, not the DOE's 
position, you know, we're not in the decision-making loop. 
We're asked to give technical advice on certain things, but 
that they wanted an evaluation of the environmental impact.
    The pipelines that are being built in the country are 
investments of the private sector. I see a lot of healthy 
movement in the pipeline construction within the United States 
in large part because of the ability to get oil from shale-like 
rock. This is the big boom in your State. You've got to get 
that oil to the refineries. This is also wealth creation and 
it's decreased oil dependency, all good things.
    The private sector is the one that is investing in these 
pipelines. That's what has brought about the only time the 
government steps in. There's FERC issues. But in terms of the 
one you're worried, concerned about is the one that goes across 
the border.
    Senator Hoeven. Right.
    Secretary Chu. Then again that's a State Department issue.
    Senator Hoeven. If I may, Mr. Secretary, you brought up 2 
great points.
    Your technical advice, again, Department of Energy, this 
Administration's Department of Energy, the report I cited says 
that the Keystone XL pipeline will lower gas prices, not may 
will lower gas prices, East Coast, Gulf Coast even in the 
Midwest. In addition in that report also says that it concludes 
that the PAD3 refiners, the Gulf Coast refineries will likely 
consume additional Canadian oil sands well in excess of what 
would be provided by Keystone XL pipeline. Again, your experts.
    The reason I cite this is because some have said well we'll 
bring it in from Canada and then export it somewhere else. But 
your own experts have said that it will be used here and we're 
going to need more, not less. So it won't be export.
    So again on your technical advice you've said, the 
Department of Energy that it will reduce prices and it will be 
used here, not exported. Your experts. So I appreciate your 
technical advice. I think it's very good. I complement you for 
it and I thank you for it.
    Second, private sector investment. This is a $7 billion 
private sector investment, the Keystone XL pipeline, not one 
penny of government spending. So again I go back and say given 
that it would bring us more crude which we otherwise have to 
get from the Middle East or Venezuela. You know what's going on 
in the Middle East.
    It helps us with the bottlenecks. We have a $27 a barrel 
crude in my State. Unbelievable traffic up there which because 
of truck traffic and so forth, oil trucks that we'd like to use 
a pipeline for.
    So not only do we have discounts for our producers. Not 
only do we have infrastructure problems. We have the consumer 
and businesses paying $3.50, I think it's $3.52 a day. The 
highest it's ever been this time of the year in our country 
which hurts our economy.
    Why would we conceivably allow this? I don't understand it? 
When you said we're willing to build pipelines. I don't 
understand.
    Secretary Chu. Senator, I don't know the particulars. I 
mean, usually when you have trucks. Trucks are short term, 
interim solution to a region if you expect sustained oil 
production. They're very expensive, as you well know as well as 
being very disruptive.
    Senator Hoeven. I agree.
    Secretary Chu. So----
    Senator Hoeven. Which is why we need the pipelines.
    Secretary Chu. So again, if we're talking about the trucks 
in North Dakota and Wyoming, the private sector, I don't know 
the particulars about this. But I think once you see a lot of 
truck traffic that's almost the last resort. You know, it goes 
pipeline then it goes rail and the last is truck.
    Senator Hoeven. Mr. Secretary, I'm looking for help here. 
Frankly, your experts have been helpful and they've been right 
on the money, literally. They have. They reported this thing 
straight up and I appreciate it.
    Maybe we conclude with, as you know in our State, when we 
talk about all of the above of energy development, we don't 
just talk about it. We do it.
    If you go to our State, you'll see wind.
    You'll see biofuels.
    You'll see ethanol.
    You'll see biodiesel.
    You'll see shale gas.
    You'll see oil, the Bakken.
    You'll see hydro.
    Biomass.
    All of these. In other words, we're really doing it. But 
the reality is to get to that all of the above that means we 
have to try to develop all of them, not pick winners and 
losers. So I'm looking for help in this endeavor.
    Let's touch for just a minute on Insitu. Mr. Chairman, I 
may go over my time just a minute. I hope you'll indulge me.
    With the development of the Canadian oil sands oil, 80 
percent of the new development is Insitu. Where instead of 
excavating as is the traditional practice. You actually drill 
like you drill for conventional oil. You put steam down the 
hole and so forth.
    So your greenhouse gas emission is the same as for 
conventional drilling, right?
    So talk to me in terms of when, with Canada, United States 
and some help from Mexico we produce about 70 percent of our 
crude. We add Keystone we immediately go to 75 percent plus and 
we have the opportunity for much more. We then don't have to 
rely on the Middle East and Venezuela.
    Eighty percent of the new development is Insitu which is 
the same footprint as conventional. Why wouldn't we be trying 
to do all of that that we can? From an energy standpoint the 
concept of North American energy independence isn't this a plan 
that gives us the opportunity to truly get to all of the above?
    Why aren't we doing it? How can you help us get this done?
    Secretary Chu. Again, first, I agree that Insitu is 
environmentally much preferred than the open pit mining that 
started with the oil sands.
    Senator Hoeven. Right.
    Secretary Chu. Because it leaves a lot of the really gunky 
stuff that we don't want down in the ground.
    Senator Hoeven. But 80 percent of the new development is 
Insitu.
    Secretary Chu. I understand that. It's still a little bit 
more carbon intensive because you're using fossil fuel to heat 
up the steam. But having said that, it is much preferred than 
open pit mining.
    Again, it's not a question of why don't we. This is where 
industry is going because as they develop those sands they're 
finding out that they're going to have to go deeper. It doesn't 
make sense economically, the open pit mining.
    There's also the environmental cleanup issues that they 
have to face when you have that open pit mining. So the Insitu 
recovery is much more desirable.
    Senator Hoeven. You address that problem too with Insitu, 
correct?
    Secretary Chu. Again, because you're using natural gas to 
heat up the steam that is going to cause more carbon. But the 
refining issues are much easier, all sorts of issues are 
easier.
    Senator Hoeven. Thank you, Mr. Chairman. I appreciate it. I 
appreciate you being here.
    The Chairman. Secretary Chu, you've been----
    Senator Hoeven. Mr. Secretary, excuse me.
    Secretary Chu. Yes.
    The Chairman. Yes, you've been very generous with your 
time. We appreciate you being here. So that will conclude our 
hearing.
    [Whereupon, at 12:27 p.m. the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

    Responses of Hon. Steven Chu to Questions From Senator Bingaman
                                  r&d
Quadrennial Technology Review
    Question 1. The DOE completed the first Quadrennial Technology 
Review in September 2011.

          a. Can you explain how the QTR has influenced the FY2013 DOE 
        budget? Please provide specific examples of programs that 
        received increased or decreased funding based on the 
        recommendations or findings of the QTR.
          b. Please comment on the usefulness of the QTR in informing 
        tough budget decisions or providing justification for various 
        projects.

    Answer (a). The Department's first QTR provided a framework and 
principles for planning and budgeting for technology development 
efforts across the Department's Energy and Science programs. For 
example, in FY2013, EERE has requested a budget that is consistent with 
the recommendations of the QTR, rebalancing priorities from mature 
technologies, such as onshore wind, distributed fuel cells, and 
conventional hydropower to support the development of newer, advanced 
technologies, such as off-shore wind and computational modeling of 
complex environments (coupling of wind and sea states and complex 
terrain). Additionally, EERE has shifted its investments in the mature, 
market-ready geothermal heat pump technologies away from technology 
development in the geothermal program to systems integration in the 
Buildings Program. The Biomass program is focusing further program 
shifts to drop-in hydrocarbons.
    Answer (b). The DOE-QTR has proven to be a valuable process, 
leading to a robust framework for the Department's energy programs, as 
well as principles by which to establish multiyear program plans. These 
principles are useful in helping the Department judge the priorities of 
various technology efforts, and guide the budget process in determining 
priorities.
High Performance Computing
    Question 2a. I am a strong supporter of the DOE's exascale 
initiative to further develop high performance computing. In 2011 I 
championed a letter, signed by 24 senators from both sides of the isle, 
asking the Administration to support the exascale initiative. I see in 
the Office of Science (SC) budget that Advanced Scientific Computing 
Research is funded at $455 million, an increase of 3.3%. Exascale has 
also been funded through the National Nuclear Security Administration 
(NNSA) in recent years' budgets. There is no specific line in either 
budget for the exascale initiative.
    In FY 2013, what fraction of this funding is available for the 
exascale program? Please provide the budgeted amount for the exascale 
initiative both from the SC budget and from the NNSA budget.
    Answer. Thank you for your continued support of the Department's 
exascale efforts.
    In the FY 2013 NNSA budget request, $48.6 million is for activities 
that contribute to high performance computing advancements directly 
supporting NNSA's stockpile stewardship mission but that NNSA considers 
relevant to the Department's efforts toward exascale.
    In the FY 2013 SC budget for Advanced Scientific Computing 
Research, $68.5 million, will be spent on exascale activities including 
Research and Evaluation Prototypes partnerships with industry for 
advancing critical technologies for Exascale, Computer Science research 
in software environments, Applied Mathematics research in uncertainty 
quantification, and co-design efforts in Computational Partnerships. If 
FY 2013, funding for hardware research will focus on R&D in 
breakthrough technologies that will enable novel hardware designs for 
Exascale computing with priority given to early-stage technology 
development.
    Question 2b. The Chinese and Japanese are investing heavily in high 
performance computing and the race to exascale capability. Is the DOE 
still on track to achieve exascale by the end of the decade and does 
the budgetary commitment for exascale put us in a competitive position?
    Answer. The DOE exascale initiative is about enabling certain 
science and engineering capabilities that we believe will advance the 
DOE missions and U.S. competitiveness in important areas. This goal has 
a number of critical milestones that must be achieved along the way. 
For example, to deliver more advanced computing capabilities, we must 
significantly reduce the power requirements of computing hardware. 
Achieving our goals for power reduction will have a significant 
positive impact throughout the IT sector of our economy and will be 
particularly important for scientific computing as tomorrow's 
departmental machines have today's supercomputers' capabilities. 
Equally important are our investments in applications, software and 
tools that will open high performance computing to even more research 
communities. With or without a machine that executes a billion billion 
operations per second, the investments the Department is proposing in 
the FY 2013 budget request advance the competitive position of the 
United States. We believe that the partnership between the NNSA and the 
Office of Science, with a balance between near-term and long-term 
efforts, is the right approach.
                         small modular reactors
    Question 3a. For Fiscal Year 2013, the Department continues it 
program to work with industry to help license small modular reactors. 
How long does the Department believe it will take to successfully 
license these designs before the NRC?
    Answer. The Department will soon be releasing a funding opportunity 
announcement (FOA) for cost-shared industry partnerships with SMR 
vendor and licensee teams for technical support for two SMR designs. 
The current domestic SMR vendors are expected to submit DC applications 
in the 2013-2014 timeframe, implying that certification can be 
completed in 4-5 years. Utility operating licenses will be submitted 
and completed concurrently in this timeframe. However, the actual 
licensing schedule will be highly dependent on the quality of the 
application, the extent of safety issues that surface during the 
review, and the resources that the NRC is able to commit to these 
reviews.
    Question 3b. What progress toward SMR's has been made to date?
    Answer. The Department received its FY12 budget for the SMR 
Licensing Technical Support program in December 2011. A draft SMR FOA 
was issued for comment in January 2012 to ensure industry understanding 
of and involvement in the procurement process. Under the current 
schedule, the Department expects to issue the final FOA at the end of 
March 2012, conduct a merit review and selection process during summer 
2012, and announce award selections by September 2012. The Department 
is committed to reducing the time required to fund these awards, if 
possible. Once underway, we expect the financial assistance provided by 
this program to provide noticeable acceleration in the licensing 
processes for the selected projects.
    DOE is also providing funding for Advanced SMR R&D that is intended 
to improve the commercialization potential of SMR designs with longer 
licensing horizons. DOE is taking a deliberate approach to identifying 
a R&D portfolio that will address SMR-specific issues in areas like 
instrumentation and control, thermal hydraulics under natural 
circulation conditions, probabilistic risk assessment for the unique 
operating characteristics of SMRs, and other areas where there are 
pronounced technology gaps.
                            innovation hubs
    Question 4. The Department is proposing the addition of a new 
innovation hub in electricity systems. Please explain what this hub 
will add to the Department.
    Answer. The Hub will serve as a focal point for many grid 
activities at the Department. It will establish a platform to test and 
evaluate innovative grid technologies and concepts on real electricity 
systems. The types of topics addressed through the Electricity Systems 
Hub are different from those that have been addressed through the 
Department's other Hubs, in that conditions and system needs vary 
throughout the country and must be incorporated into national 
solutions. In light of this particular challenge, two or three regional 
hubs rather than one single larger hub may be pursued to address the 
complex regional and local issues associated with grid modernization. 
By understanding the unique demands of each region, we can identify the 
needs common to all, and develop solutions that apply nationwide but 
accommodate local differences.
    Key stakeholders can convene at the Hub to observe, discuss, and 
understand the market, regulatory, and institutional implication of 
these advancements. It will be a leader in transforming our Nation's 
power system and serve as a center of excellence for sharing 
information and best practices.
                          technology transfer
    Question 5a. We hear a lot about the technology ``valley of death'' 
and I understand that the DOE has a new program, Agreements for 
Commercializing Technology or ACT, to try to bridge this gap. Can you 
describe how this initiative differs from other DOE methods of 
Technology Transfer?
    Answer. The Agreement for Commercializing Technology (ACT) was 
proposed based on responses and recommendations received from industry 
to a 2009 Request for Information (RFI). The RFI provided stakeholders, 
including the private sector and other government entities, an 
opportunity to comment on the Departments best practices for technology 
transfer. DOE is piloting a new contractual mechanism to address many 
of the concerns and recommendations raised by the respondents.
    While the general parameters of this proposal would allow greater 
latitude to M&O contractors for entering into Work for Others (WFO) 
with outside entities, we are continuing to develop the specifics of 
this proposal in a manner that will protect taxpayer interests.
    Question 5b. Can you talk a little bit about overall DOE efforts to 
move products from the Department to the market?
    Answer. DOE works with the private sector to facilitate industry in 
its efforts to move technology to market. DOE's objective in the area 
of technology transfer and commercialization is to facilitate the 
transfer of laboratory research to the marketplace as quickly and 
efficiently as possible. To this end, we are working to reduce the 
actual and perceived barriers to licensing.
    DOE is aggressively examining licensing practices to attract and 
facilitate work with both large and small companies. DOE plans to 
introduce SBIR-Technology Transfer, which would be a subset of the 
larger SBIR program. This model was spearheaded by NIST and aims to 
mature technologies developed at the laboratories. A laboratory will 
identify a technology along with the corresponding patent portfolio, 
which will be proposed for funding through an SBIR call. Small 
companies will be invited to submit their commercialization plans for 
technologies selected.
                         uranium re-enrichment
    Question 6. Mr. Secretary, what are the DOE's current plans with 
respect to re-enrichment of depleted uranium from the existing 
stockpile?
    Answer. The Department has been working diligently to determine the 
best options and potential agreements with private industry partners 
with respect to our depleted uranium inventory with highest uranium 
assay. DOE is committed to working with the Congress as we evaluate 
alternatives that are beneficial to both the Department's missions and 
our fiduciary responsibility to the taxpayers.
                           new mexico issues
Chemistry and Metallurgy Replacement Nuclear Facility at Los Alamos 
        Laboratory
    Question 7a. Secretary Chu, during the hearing you talked a bit 
about the Department's plans to put the Chemistry and Metallurgy 
nuclear facility on hold. Can you describe what changes in operations 
and staffing you anticipate at Los Alamos now that he CMRR has been 
delayed?
    Answer. The decision to defer construction of the CMRR Nuclear 
Facility (NF) for at least five years and to meet DoD long-term pit 
production needs requires NNSA to adjust its plutonium strategy by 
using existing infrastructure to provide for the capabilities 
originally planned for the CMRR-NF. Over the next several weeks, NNSA 
will be working with key officials at Los Alamos to identify plans to 
close out design activities for the CMRR-NF and modify our plutonium 
strategy to meet the needs of the nation's deterrent. While details of 
our plutonium strategy continue to develop, initial efforts focus on 
optimizing analytical chemistry activities in the Radiological 
Laboratory/Utility/Office Building (RLUOB) and using the Plutonium 
Facility (PF)-4 for some materials characterization workload. Impacts 
to staffing are pending Los Alamos Laboratory assessments on the 
technical and scientific expertise required to maintain its scientific 
and national security mission in support of the stockpile and required 
to support the safe and secure execution of the additional capabilities 
planned and needed for the RLUOB and the PF-4.
    Question 7b. Will additional funding for Los Alamos be needed to 
maintain adequate support to the complex?
    Answer. After evaluating the laboratory's proposal on how to 
address the CMRR-NF deferred capabilities using existing 
infrastructure, the NNSA will have a better understanding of future 
funding requirements. In the interim, NNSA requested an additional $35M 
for FY2013 for Los Alamos to accelerate actions necessary to process, 
pack, and ship excess material out of the PF-4 vault. The Administrator 
and the head of NNSA's Office of Defense Programs have made it clear 
that NNSA intends to work closely with Congress to ensure appropriated 
resources can be applied to near term alternatives to deliver required 
plutonium support functions at Los Alamos.
                         advanced manufacturing
    Question 8a. What are the goals of the new Advanced Manufacturing 
Office (previously the Industrial Technologies Program)? Some 
manufacturers are concerned that DOE will not be able to continue to 
provide near term assistance for small to medium sized manufacturers--
please address this concern.
    Answer. The Advanced Manufacturing Office (AMO) is focused on 
creating a fertile innovation environment for advanced manufacturing, 
enabling vigorous domestic development of new energy-efficient 
manufacturing processes and materials technologies to reduce the energy 
intensity and life-cycle energy consumption of manufactured products, 
and promoting a collaborative infrastructure around targeted technical 
areas that will facilitate the development and scale-up of energy 
efficient manufacturing technologies. AMO also supports U.S. 
manufacturers through technology deployment efforts targeted to help 
those manufacturers overcome specific barriers to adoption of energy 
efficient technologies and best energy management practices as a path 
to strengthen their global competitiveness.
    As part of its deployment activities, AMO will continue to provide 
immediate assistance to small and medium-sized enterprise (SME) 
manufacturers through its ongoing support for the Industrial Assessment 
Centers, which provide students with critical skills and training to 
conduct energy assessments in a broad range of facilities, while 
producing real cost savings for small to mid-size manufacturers. AMO 
will also help SMEs by preparing and updating a variety of other energy 
efficiency software tools, training, and guidance materials that SME 
customers can effectively apply to find energy savings.
    Question 8b. What are the goals of the new Advanced Manufacturing 
Office (previously the Industrial Technologies Program)? Is DOE 
committed to continuing the Industrial Assessments Centers and Clean 
Energy Application Centers?
    Answer. The Advanced Manufacturing Office is committed to 
continuing the Industrial Assessment Centers (IACs) as part of its work 
to help manufacturers overcome specific barriers to adoption of energy 
efficient technologies and strengthen their global competitiveness. In 
September, 2011, as part of a competitive funding process, AMO selected 
a new group of 24 IACs located across the country to carry on and 
enhance the work of the program.
    DOE will also continue to support the Clean Energy Application 
Centers (CEACs) that provide outreach and technology deployment 
expertise to industry stakeholders as a strategy to accelerate the 
adoption of clean energy technologies including, principally, CHP under 
the funds requested for Industrial Technical Assistance ($31 Million).
    Question 9. The recent Innovative Manufacturing Initiative funding 
opportunity through the Advanced Manufacturing Program received 1400 
letters of intent of which 78% were small companies of less than 500 
employees. As I understand it, the initiative requires a cost share 
from industry partners. The successful call showed that industry 
partners were willing to shoulder $4.3 billion in leveraged funding to 
develop innovative manufacturing processes and materials, which 
indicates there is an appetite for increased partnerships between 
government and small businesses to revitalize manufacturing in the 
United States. How much of the Advanced Manufacturing Program requested 
budget is allocated to the Innovative Manufacturing Initiative in 2013 
and are there any similar leveraged partnership programs within DOE 
that you would like to highlight?
    Answer. The Advanced Manufacturing Office (AMO) plans to allocate 
$25 million from its FY 2011 funds to support projects selected through 
the Innovative Manufacturing Initiative (IMI) funding opportunity 
during 2012. Funding provided through the IMI solicitation is to extend 
over three years to help develop transformational manufacturing 
technologies and innovative materials that can reduce time, cost, and 
energy requirements associated with manufacturing. AMO's plan is to 
spend $50 million in support of IMI projects in FY 2013. All 
solicitations put out by AMO are designed to require significant cost 
share depending upon the technology readiness level of the project. AMO 
views the cost share as an important requirement to encourage leveraged 
partnerships.
    Question 10. The return on investment in Combined Heat and Power 
Technology has been impressive. For example, a DOE investment of 
approximately $12 million at Caterpillar resulted in an estimated 
$3.0--$4.0 Billion in sales and 44% improvement in energy efficiency. 
Of the $290 million requested for the Advanced Manufacturing Program, 
how much of that is allocated to developing CHP technology and does 
this represent an increase or decrease from 2012 enacted levels?
    Answer. The Advanced Manufacturing Office (AMO) is committed to 
supporting Combined Heat and Power projects in its portfolio so long as 
these projects continue to meet their technical milestones and overall 
AMO objectives. Existing CHP R&D projects and new CHP R&D activities 
will be supported through the funds requested for Next Generation 
Manufacturing Processes $198 million. Funding levels for AMO's CHP 
projects included in the 2013 budget request will be similar to 2012 
levels, as long as the projects demonstrate satisfactory progress and 
continue to support AMO's core objectives. The Clean Energy Application 
Centers (CEACs) provide technical assistance, education and outreach, 
and market development support to industry stakeholders as a strategy 
to accelerate the adoption of clean energy technologies including, 
principally, CHP. The CEACs will be supported under the funds requested 
for Industrial Technical Assistance ($31 Million). The CEACs will also 
be supported at a level similar to FY12.
    Question 11. The President's budget has an increase in the Fossil 
Energy research and development over the last fiscal year--with much of 
the focus on carbon capture and sequestration technologies, as well as 
the safe and environmental exploration and production of unconventional 
shale gas plays, such as the Marcellus. Please describe a bit more how 
the Department is spending the funding in this area and how it will 
leverage the work that the other agencies are conducting on the same 
areas of research and regulatory development--including the EPA and the 
Department of the Interior.
    Answer. DOE's FY 2013 Natural Gas budget request for shale gas will 
focus on high priority research recommendations received from the 
Subcommittee of the Secretary of Energy Advisory Board (SEAB). On April 
13, 2012 DOE, the Environmental Protection Agency, and the Department 
of the Interior's U.S. Geological Survey signed a Memorandum of 
Agreement formalizing this Multi-Agency Collaboration on Unconventional 
Oil and Gas Research. Through this collaboration, a robust Federal R&D 
plan is being developed, taking into account the recommendations of the 
Secretary of Energy Advisory Board (SEAB) Natural Gas Subcommittee. 
DOE's role in this initiative will focus on priorities identified by 
the interagency collaboration in a research plan to be formed over the 
next nine months within its area of core research competencies, 
including wellbore integrity, flow and control; green technologies; and 
systems engineering, imaging and materials.
    Question 12. There are several rescissions cited in the FE budget 
overview--from the FE R&D program--most notably in the area of ultra-
deepwater and unconventional natural gas. In the detailed budget--there 
is a budgetary request of $17 million for FY 2013 for the natural gas 
program, while the ultra-deepwater unconventional natural gas program 
appears to be cancelled altogether. I ask this because the Secretary of 
Energy's Advisory Board Subcommittee on Shale Gas proposed making 
greater investments into studies, as well as R&D for safe, responsible 
shale gas extraction. The $17 million that is requested appears to pay 
for natural gas technologies (at $12million), as well as $5 million for 
a methane hydrates field test, which is a cut of 50% from the previous 
fiscal year. That seems like an extremely modest investment for trying 
to address the range of environmental and human health and safety 
issues that shale gas production has generated and the challenges 
associated with methane hydrate extraction. Can you explain why the 
whole $50 million ultradeepwater/unconventional natural gas program 
funding wasn't used to more properly address the issues around shale 
gas development, as well as other unconventional oil/gas production 
(such as shale oil like the Bakken formation in North Dakota)? That 
seems like it could fit will within the constraints of the existing 
program authorizations for the ultradeepwater/unconventional program.
    Answer. EPACT Sec. 999 is too inflexible a mechanism to adequately 
address environmental and safety concerns in the dynamic and rapidly 
evolving hydraulic fracturing space. The 2013 Budget request focuses 
the natural gas program on a collaborative R&D effort with the 
Environmental Protection Agency and the Department of the Interior to 
understand an minimize the potential environmental, health, and safety 
impacts of natural gas development through hydraulic fracturing 
consistent with high priority recommendations of the Secretary of 
Energy Advisory Board.
                           energy efficiency
    Question 13. FEMP is bringing back the Federal Energy Efficiency 
Fund at $5 million in funding. What is the expected leverage of private 
sector and/or other agency funds for this $5 million investment? (It is 
my understanding that in the 90s the Navy was able to leverage over 4 
times their investment by using ESPCs.)
    Answer. Similar to the DOD's Energy Conservation and Investment 
Program (ECIP), through the Federal Energy Efficiency Fund (FEEF), FEMP 
would provide direct funding and leveraged cost-sharing for Federal 
civilian agencies for the most worthy capital projects and other 
initiatives with the greatest return on investment in order to increase 
the energy efficiency, water conservation and renewable energy 
investments at agency facilities. We expect that the leveraging of 
other civilian agency funds to DOE funds would be about one to one, and 
FEMP would include this expectation as well as consideration of other 
private sector leveraging, in our criteria for competitively awarding 
projects. In the two years that this program had spending authority (FY 
1994 and FY 1995), grants of $7.9 million were provided to 37 projects 
which leveraged $3.6 million in Federal-agency funding and $0.9 million 
in non-Federal funding.
    Question 14. There are a growing number of DOE and other programs 
that ask manufacturers or private owners of commercial buildings to 
commit to voluntary energy-saving targets or actions: at DOE alone 
these include Save Energy Now, Superior Energy Performance and 
``Global'' Superior Energy Performance, and most recently Better 
Buildings/Better Plants. Prior to these, EPA has had the Energy Star 
for Buildings and Energy Star for Industry programs. And outside the 
government, the US Green Building Program's LEED rating for Existing 
Buildings has a significant energy component. Does this create 
confusion in the market place, with multiple programs all vying for 
attention and commitment from the same private companies? What will DOE 
do, working with EPA and others, to reduce the apparent duplication and 
confusion?
    Answer. DOE recognizes the importance of reducing duplication and 
confusion in the marketplace and seeks to work with programs like LEED 
and Energy Star as partners, not competitors. That is why DOE has an 
MOU with EPA (available at: http://www.energystar.gov/
index.cfm?c=partners.mou) recently updated in 2009, to clearly lay out 
plans (updated annually) for how we will work together, and to 
articulate these plans to our mutual partners. However, we also 
recognize that there is always room for improvement. This year, we 
intend to undertake a comprehensive evaluation of our energy efficiency 
partnership programs to determine where it makes sense to streamline 
and consolidate activities to make sure that the programs we support 
are efficient, robust, and making valuable contributions that 
complement--rather than duplicate--efforts underway elsewhere.
    For the other DOE programs mentioned, they are each related to each 
other in a complementary manner. For instance, SEP (and GSEP, which is 
the international companion program) is a technical program that 
supports and aligns with Better Buildings, Better Plants Program, which 
is the overarching program (and has replaced Save Energy Now).
    Our role is to provide a technically sound, unbiased and 
transparent program that allows consumers a common comparison of 
results.
    Question 15. With the initiation of the various Research Hubs, 
DOE's EERE program seems to be much more focused on R&D than on 
deployment issues. Can you please tell me whether and how much of a 
role DOE plans to play in deployment of Energy Efficiency technologies?
    Answer. EERE supports innovation that will allow U.S. manufacturers 
and U.S. workers to lead the race and secure the benefits of clean, 
energy efficient domestic energy systems as a foundation for a 
prosperous American future. EERE directs and manages a portfolio of 
activities, including research hubs, to foster and support 
technological solutions across the research and development (R&D) 
continuum, bridge gaps by increasing product performance and knowledge, 
and attract commercial resources necessary for commercialization at a 
convincing scale. EERE's portfolio includes strategic investments in 
research areas where risks and other factors stymie immediate private 
research investment or would otherwise not occur for many years, and 
areas where programs are developed to overcome market barriers to help 
important new technologies reach a point where private investment will 
be able to turn them into profitable business opportunities.
    The primary mission of the Building Technologies Program (BTP) is 
to reduce building energy consumption in the U.S. through the 
development of advanced, innovative technologies; we will not be able 
to actually deliver those energy savings to U.S. consumers unless these 
products are used in the market, at scale. Therefore, the Program also 
supports market-priming measures to ensure that these technologies 
overcome the barriers to widespread adoption, such as first cost, the 
various building trades' understanding and then acceptance of new 
technology, and insufficient availability of credible and objective 
consumer information. BTP has a significant number of deployment 
related activities, including:

   BetterBuildings Challenge--The BetterBuildings Challenge 
        will document successful models of increased investment in 
        commercial building energy efficiency that improve efficiency 
        by at least 20 percent by 2020.
   High-performance Product Specifications and Markets--DOE 
        will work with commercial building stakeholders to identify and 
        develop high-performance product specifications, and then use 
        the Better Buildings Alliance, composed of companies and 
        stakeholders, to stimulate and drive demand for advanced 
        technologies identified as having large opportunities for 
        energy savings.
   Efficiency Benchmarks, Tools, and Databases--The creation of 
        reliable efficiency benchmarks, tools and databases to 
        facilitate energy efficiency financing, technology deployment, 
        and sustainable business models, and to define efficiency's 
        value-add to consumers (BetterBuildings Residential and 
        Commercial, Energy Star);
   Energy Efficient Buildings Hub--The creation of the Energy 
        Efficient Buildings Hub in Pennsylvania to demonstrate the 
        integration of advanced, energy efficient technologies, systems 
        and techniques into buildings, and to facilitate their scale 
        deployment into the market; and
   Common Test Procedures--Developing common test procedures 
        (i.e., supporting both Energy Star and Federal Standards) and 
        new standards for new energy consuming equipment and new 
        buildings with continually updated equipment and model building 
        codes based on cost effective, higher performing technology 
        that has been successfully commercialized.

    Within EERE, the U.S. Department of Energy's Advanced Manufacturing 
Office (AMO) works specifically to support existing U.S. manufacturers 
through technology deployment efforts targeted to help manufacturers 
overcome specific barriers to adoption of energy efficient technologies 
and best practices as a path to strengthen their global 
competitiveness. AMO pursues this goal through a combination of 
education, recognition, and deployment expertise tailored to the 
particular challenges faced by manufacturers and the energy management 
industry. Included among these activities are:

   Industrial Assessment Centers (IACs)--A network of 
        university-based, DOE-supported programs that conduct energy 
        audits for small and medium size manufacturers while 
        simultaneously training engineering students to help them 
        become the next generation of energy management professionals.
   Superior Energy Performance--A market-based, American 
        National Standards Institute (ANSI)-accredited energy 
        management certification program that provides manufacturers 
        and industrial facilities with a roadmap for achieving 
        continual improvement in energy efficiency while maintaining 
        competitiveness. The program provides a transparent, globally 
        accepted system for verifying energy performance improvements 
        and management practices, and also serves as an implementation 
        of the International Organization for Standardization (ISO) 
        50001 energy management system standard.
   Clean Energy Regional Application Centers--These centers 
        provide outreach and technology assistance to industry 
        stakeholders as a strategy to accelerate the adoption of clean 
        energy technologies--principally combined heat and power 
        (CHP)--helping manufacturers save energy and money.
   The Better Buildings, Better Plants Challenge and Program--
        This is a national partnership program that aims to drive a 25% 
        reduction in industrial energy intensity over 10 years in order 
        to improve energy efficiency and enhance the overall 
        competitiveness of the U.S. manufacturing sector. These public/
        private partnerships will also help to create energy efficiency 
        oriented American jobs as companies execute energy saving 
        programs, implement technologies, and share best practices as 
        part of their corporate commitment to the program.

    Question 16. DOE and OMB have recently begun missing legal 
deadlines for appliance and equipment efficiency standard rulemakings. 
Can you tell us what the problems are and what you are doing to catch 
up so that all rulemakings can get back on track?
    Answer. The passage of EISA 2007 substantially increased the 
workload of the Appliance Standards Program, adding new statutory 
obligations to the initial multi-year rulemaking schedule in the 
January 31, 2006, report to Congress. Since EISA 2007 established an 
aggressive schedule for completing these additional rulemakings, DOE is 
working on many more contemporaneous rulemaking proceedings than had 
been contemplated at the time of the initial report to Congress.
    Since publication of the initial report, DOE has issued efficiency 
standard final rules for 21 of the 22 original backlogged products and 
completed a determination for the remaining product. Consequently, all 
the actions required by the consolidated consent decree in State of New 
York, et al. v. Bodman and NRDC, Inc., et al. v Bodman have been 
completed. Yet the coincident requirements of the backlog and EISA 2007 
strained the standards review and approval process. While DOE met all 
of its obligations with respect to the consent decree, DOE has missed 
several deadlines codified in EISA 2007. These rulemakings are 
priorities for completion, and DOE remains committed to complying with 
all applicable deadlines. As a result, DOE has further streamlined 
standards and test procedure reviews and approvals, and is building 
additional program capacity. DOE is also working closely with the 
Office of Management and Budget (OMB) to review key rulemaking 
documents, such as notices of proposed rulemaking (NOPRs) and final 
rules. The department will continue to monitor and seek to improve the 
rulemaking review and approval process so as to meet all rulemaking 
requirements.
    Question 17. This budget includes some significant increases for 
energy efficiency programs, How does energy efficiency programmatic 
spending compare to other spending with regard to the economic 
benefits?
    Answer. Energy efficiency programs help American families, 
businesses, and government save money, reduce harmful emissions, as 
well as reduce energy consumption and our nation's reliance on oil.
    For example, the FY2013 request makes a large investment into 
Advanced Manufacturing, which will support development of innovative 
energy-efficiency manufacturing processes that will reduce costs of 
manufacturing by using less energy while improving quality and 
accelerating product development. Additionally, with buildings 
representing 40 percent of the nation's energy consumption--costing 
over $400 billion per year--DOE will make greater investments in 
partnership with the buildings industry to make buildings more 
efficient and affordable. DOE believes the energy costs from buildings 
could be reduced by 20-50 percent or more through a variety of energy 
efficiency approaches.
    Question 18. To what extent would the programs under the Office of 
Energy Efficiency and Renewable Energy (EERE) be impacted if tax and 
mandatory spending were not reformed, and the Fiscal Year 2013 
sequestration were sustained?
    Answer. We urge Congress to enact balanced deficit reduction 
legislation that avoids sequestration as proposed in the President's 
Budget.
    Question 19. How do energy efficiency initiatives/investments fit 
in the broader context of the ongoing debate to lower the deficit, 
strengthen the economy and create jobs?
    Answer. Investments in energy efficiency activities and initiatives 
provide some of the greatest economic benefits per dollar spent. EERE's 
efforts contribute to these economic benefits by:

   Providing American businesses and households with low-cost 
        energy services by furthering low cost renewable supplies and 
        energy efficient products and systems;
   Developing approaches and supporting industries that can 
        accelerate economic growth and job creation while improving the 
        environment by both reducing greenhouse gas emissions and 
        improving air and water quality;
   Insulating the U.S. economy from the price and supply 
        uncertainties associated with petroleum, and ensuring diversity 
        and choice in the way energy services are produced.

    EERE achieves this by developing and accelerating the adoption of a 
new generation of energy efficiency technologies--buildings, factories, 
and vehicles that are clean, safe, efficient, and productive. EERE 
supports innovation that will allow U.S. manufacturers and U.S. workers 
to lead the race and secure the benefits of clean, domestic energy 
systems as a foundation for a prosperous American future.
    Question 20. Over the last year, you have changed the name of the 
Industrial Technologies Program to the Advanced Manufacturing Office. 
How does the new program square with the current deployment needs of 
today's U.S. manufacturers to become more energy efficient in order to 
remain competitive and keep operating in the United States? What is the 
funding level for Combined Heat and Power?
    Answer. A continuing part of the mission of the U.S. Department of 
Energy's Advanced Manufacturing Office (AMO) is to support existing 
U.S. manufacturers through technology deployment and technical 
assistance efforts targeted to help manufacturers overcome specific 
barriers to adoption of energy efficient technologies and best 
practices as a path to strengthen their global competitiveness. AMO 
pursues this goal through a combination of education, recognition, and 
deployment expertise tailored to the particular challenges faced by 
manufacturers and the energy management industry. Included among those 
activities are:

   Industrial Assessment Centers (IACs)--A network of 
        university-based, DOE-supported programs that conduct energy 
        audits for small and medium size manufacturers while 
        simultaneously training engineering students to help them 
        become the next generation of energy management professionals.
   Superior Energy Performance--A market-based, American 
        National Standards Institute (ANSI)-accredited energy 
        management certification program that provides manufacturers 
        and industrial facilities with a roadmap for achieving 
        continual improvement in energy efficiency while maintaining 
        competitiveness. The program provides a transparent, globally 
        accepted system for verifying energy performance improvements 
        and management practices, and also serves as an implementation 
        of the International Organization for Standardization (ISO) 
        50001 energy management system standard.
   Clean Energy Regional Application Centers--These centers 
        provide technical assistance, education and outreach, and 
        market development support to industry stakeholders as a 
        strategy to accelerate the adoption of clean energy 
        technologies--principally combined heat and power (CHP)--
        helping manufacturers save energy and money.
   The Better Buildings, Better Plants Challenge and Program--
        This is a national partnership program that aims to drive a 25% 
        reduction in industrial energy intensity over 10 years in order 
        to improve energy efficiency and enhance the overall 
        competitiveness of the U.S. manufacturing sector. These public/
        private partnerships will also help to create energy efficiency 
        oriented American jobs as companies execute energy saving 
        programs, implement technologies, and share best practices as 
        part of their corporate commitment to the program.

    With specific regard to Combined Heat and Power (CHP), AMO is 
committed to supporting deployment efforts as well as research and 
development projects in its portfolio so long as these projects: 1) 
continue to meet their technical milestones, and 2) support AMO 
objectives. Existing CHP R&D projects and new CHP R&D activities will 
be supported through the funds requested for Next Generation 
Manufacturing Processes ($198 Million). The Clean Energy Application 
Centers (CEACs) will be supported under the funds requested for 
Industrial Technical Assistance ($31 Million).
    Question 21. The budget reorganization at the Office of Energy 
Efficiency and Renewable Energy means that that there is no longer 
specific budget information for most programs. Could you provide us 
with the FY 2012 and proposed FY 2013 budgets for building energy 
codes, equipment standards and analysis, Energy Star (DOE portion), and 
superior energy performance?
    Answer. Below are the funding levels in FY12 and FY13 for selected 
Building Technologies programs: 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 22. DOE has helped recent model building energy codes 
achieve extraordinary success, with 30% savings for both homes and 
commercial buildings. What are your plans for building on that success? 
Will you consider making adoption of the new codes a criterion or 
scoring factor for state and local grants, as you did with the Better 
Buildings community program?
    Answer. With each new edition of the IECC, DOE is required to 
publish a determination whether the new edition will improve energy 
efficiency in residential buildings. DOE published the preliminary 
determination in the October 19, 2011 Federal Register, that the 2012 
IECC would achieve greater energy efficiency in low-rise residential 
buildings than the 2009 edition. The final determination is currently 
being developed. Once a final determination is issued, each state will 
have two years to certify that it has compared the provisions of its 
residential building code to the 2012 IECC and has determined whether 
to revise its code to meet the 2012 IECC.
    DOE published the ASHRAE 90.1-2010 Final Determination in the 
October 19, 2011 Federal Register that ASHRAE 90.1-2010 would achieve 
greater energy efficiency in commercial buildings than ASHRAE 90.1-
2007. States have two years after publication of DOE's Final 
Determination to certify that the state commercial building code meets 
the provisions of ASHRAE 90.1 2010. Those certification letters are 
provided to the Office of Weatherization and Intergovernmental Programs 
that implements the Department's State Energy Program.
    DOE participates in advancing codes on the national stage, however 
adoption, implementation, compliance and enforcement at the state and 
local level are key to ensuring the full energy savings potential of 
those codes and standards are realized. The DOE Buildings Technology 
Program (BTP) facilitates code adoption by providing a robust technical 
support infrastructure to help states in taking the next step. To make 
adoption easier for states BTP provides numerous tools and support, 
ranging from technical analyses of proposed state code amendments to 
code-compliance software. To ensure transparency in DOE's development 
and deployment process, and to uphold the economic feasibility of the 
codes, DOE developed a Residential Cost Database and solicited input to 
improve its methodology for assessing the cost-effectiveness of 
residential building energy codes. DOE's Residential Cost-Effectiveness 
Methodology, which explains how DOE evaluates the energy and economic 
impacts of codes, was made publicly available via the 
www.energycodes.gov website, in April 2012. The Residential Cost 
Database was made available in May 2012.
    Question 23. The President recently committed to $2 B in 
performance based contracting at federal agencies using private sector 
funds. We are encouraged by this announcement but note that the budget, 
if you take out the new funding for the FEEF, is actually reduced from 
last year. Will FEMP have the resources to comply with the Executive 
Memo and the many other statutory and executive mandates?
    Answer. FEMP does not anticipate a need for additional resources to 
support agencies in attaining this goal. FEMP is currently exploring 
methods of improving its delivery processes to be able to adequately 
respond to the Agencies, including both a request for information to 
improve and lower financing and a review to streamline the ESPC 
contracting process.
    Question 24. How can FEMP gain leverage over the other agencies of 
the Federal government to comply with their energy related mandates? Or 
does there need to be someone at the White House that further leverages 
agency actions?
    Answer. FEMP is the lead program in terms of collecting and 
reporting on federal progress toward the goals, and is the lead program 
in providing guidance, technical support, training, tools such as 
ESPCs, as they relate to energy policy implementation. FEMP has not 
been given further oversight responsibilities relative to other 
agencies.
    However, FEMP does provide support to OMB in assessing agency 
progress toward achieving energy-related goals, coordinating the 
Interagency Energy Task Force and its sub-working groups including the 
Interagency Sustainability Working Group (ISWG). The ISWG was 
established in August 2001 and includes over 200 members representing 
20 major and a number of independent Federal agencies. Through these 
working groups, FEMP recommends policy and reporting guidelines and 
develops technical guidance, web-based reporting and other tools to 
support the implementation of agency energy and sustainability 
requirements for Federally-owned, operated, and leased buildings. FEMP 
also provides support to OMB and the Agencies in compiling data and 
complying with the federal Greenhouse Gas emission reduction targets 
and OMB Sustainability/Energy Scorecard assessments as directed by 
Executive Order 13514.
    Each year, FEMP reports findings to OMB and the Council on 
Environmental Quality (CEQ) of calculated scope 1, 2, and 3 GHG 
emissions from agency-aggregated energy and operations data. FEMP 
collects required data elements for measuring agency progress towards 
meeting facility energy intensity reduction goals (42 U.S.C. 8253(a)), 
renewable electricity use requirements (42 U.S.C. 15852), water 
intensity reduction (E.0. 13514), facility metering requirements (42 
U.S.C. 8253(e)) and compliance with Federal energy efficiency standards 
for new construction (10 CFR Parts 433, 434, and 435, 72 FR 72565). The 
results of this data are compiled and used by OMB to track agencies' 
progress in the OMB Agency Sustainability/Energy Scorecard.
    FEMP also provides services, tools, and expertise to Federal 
agencies to help them achieve these goals. FEMP's range of services 
includes project financing, technical assistance, award programs, 
communications and training.
                  hydrogen and fuel cell technologies
    Question 25. The Department has made great progress in hydrogen 
fuel cell research, however, this technology is far from mature. Given 
the continued strong funding of fuel cell research in Japan and 
Germany, I am concerned about the proposed 20% reduction in hydrogen 
research for FY 2013. Can you please explain the reasoning behind the 
proposed budget reductions in this area?
    Answer. The budget request for hydrogen and fuel cells has been 
reduced as part of rebalancing the Department's portfolio of advanced 
technologies. However, hydrogen and fuel cells research and development 
remains an integral part of that portfolio. The budget request for 
fiscal year 2013 allows the Department to focus on hydrogen and fuel 
cell activities that will yield technology advancements in key areas--
including ongoing reductions in the production cost and improvement in 
the durability of fuel cells, reductions in the cost of renewably 
produced hydrogen, and improvements in systems for storing hydrogen. 
Funding has been reduced for aspects of the program with less impact on 
R&D progress, such as technology validation, codes and standards, and 
market transformation. Rebalancing the portfolio will allow the 
Department to focus on nearer term transportation technologies while 
maintaining a strong effort in hydrogen and fuel cells R&D. The FY 2013 
budget request should allow the United States to maintain its 
leadership position in the emerging hydrogen and fuel cell market.
                               hydropower
    Question 26. The proposed 66% reduction in funds for the Water 
Power Program in EERE appears to be a departure from the President's 
goal of generating 80% of the country's electricity from clean energy 
sources by 2035 of which conventional hydropower and marine 
hydrokinetic power together are projected to contribute 15% of that 
objective. While the budget justification suggests that this is due in 
part to the successful completion of several conventional hydropower 
projects, the marine hydrokinetic power program will also suffer 
shortfalls if this budget is enacted. Would you please describe more 
fully the Department's justification for cutting this specific program 
within EERE?
    Answer. In FY 2012, the Department will continue and complete a 
number of important water power technology research and development 
projects. The $20 million requested in FY 2013 would allow the 
Department's Water Power Program to continue its ongoing efforts to 
advance water power technologies and accelerate their market adoption. 
This funding level would allow DOE to support a number of water power 
technologies that can be developed for both conventional hydropower and 
the emerging marine and hydrokinetic (MHK) energy generation.
    For hydropower specifically, DOE selected 16 new innovative 
hydropower technology development projects for funding in FY 2011, and 
that work will continue into FY 2012 and FY 2013. Additionally, DOE 
expects to continue its efforts to analytically quantify the benefits 
that conventional and pumped-storage hydropower provide to the electric 
grid, which can also support the integration of variable renewable 
resources like wind and solar.
    For MHK technologies, in FY 2013 activities are expected to focus 
on developing a suite of technologies that harness the energy from 
wave, tidal, and current resources. Specifically, MHK research is 
expected to focus on maintenance and development of advanced open water 
test infrastructure for MHK devices and research into the costs and 
performance of innovative, early-stage MHK systems and components.
    Finally, resource and technology assessments will be conducted in 
FY 2012 and FY 2013 to accurately characterize all opportunities for 
water power development. DOE intends to use data from ongoing techno-
economic MHK assessments to establish baseline costs, which DOE will 
use along with resource assessments to evaluate the need for further 
innovative water power R&D.
    Responses of Hon. Steven Chu to Questions From Senator Murkowski
                             fossil energy
    Question 1. I disagree with the Administration's proposal to cut 
funding for fossil fuel work again by $105 million. Alaska's North 
Slope has an estimated 25 billion barrels of heavy oil, largely in the 
Kuparuk field, but far more research is needed for the technology to 
extract that oil out of the ground, even at current prices. According 
to DOE's own reports, the U.S. and Canada have enough heavy oil to meet 
our country's total needs and prevent dependence on non-North American 
sources for 150 years--if the energy can be made more economic to 
produce. This is research that could help America, not any particular 
oil company. Why then, is the Administration seeking to reduce this 
longer-term research that could pay substantial benefits in the future, 
especially for smaller companies and independents that don't have the 
research budgets of the larger oil companies?
    Answer. America's abundant unconventional oil and natural gas 
resources are critical components of our Nation's energy portfolio. 
Their development enhances our energy security and fuels our Nation's 
economy. Given limited research funding, the Department's current focus 
is primarily on safe and environmentally sustainable development of 
unconventional natural gas resources.
                            methane hydrates
    Question 2. What technological advances are still needed to 
facilitate large-scale development of methane hydrates, particularly in 
the Arctic?
    Answer. The present challenge is to determine whether methane 
hydrate deposits can yield methane gas at the rates necessary to make 
Arctic or deep-water production commercially viable. The next critical 
step in methane hydrate development in the U.S. Arctic region will be 
the facilitation of a long-term production test. To be most effective, 
the test should include comprehensive scientific data acquisition 
during drilling, extended duration flow testing designed to advance 
scientific understanding by isolating reservoir response to specific 
production/stimulation inputs, and extensive monitoring of both 
reservoir response and potential environmental impacts. The results of 
this test will support the further development of comprehensive 
geologic and engineering models. 43
                          alaska transmission
    Question 3. Alaska probably has the greatest potential of any state 
to produce renewable energy. According to two recent DOE analyses, my 
home state has 2,400 known and potential megawatts of geothermal; 90% 
of the nation's tidal potential--representing 47,437 megawatts of known 
power; 50% of its potential wave energy--representing 1,360 Terrawats 
hours; 9 megawatts of in-river hydrokinetic energy; and nearly 400 
hydroelectric sites (300 alone in Southeast Alaska), easily able to 
produce more than 1,100 megawats. The problem is that there is no way 
to get all of that power to markets in need of clean, renewable energy 
in the continental U.S. Can the administration assist with possible 
ways to facilitate and finance the installation of high-voltage 
transmission to better move this tremendous renewable power to market? 
It seems to me that we are spending a lot of money on new technology, 
even though we can develop substantial renewable power with known or n 
early proven technology if we simply can find a way to economically get 
it to market.
    Answer. The Administration is committed to increasing the use of 
our country's vast renewable resources, including but not limited to 
geothermal, tidal, and hydroelectric energy. We are using all of the 
tools available to tap into these resources. To that end, last year, 
the Administration created the Rapid Response Team for Transmission 
whose charge is to expedite the evaluation of high-voltage transmission 
applications. This team is currently working on seven pilot projects 
that, if approved, will facilitate the development of more than 3,000 
miles of transmission lines and create more than 11,000 direct jobs.
    However, the challenges of moving the renewable sources from Alaska 
to market are significant. The costs of building transmission to 
connect this mainland infrastructure to the renewable-rich State of 
Alaska would be very high.
    Additionally, there are a number of technical challenges of moving 
large amounts of renewable-fueled electricity long distances. 
Transporting energy from the renewable rich state of Alaska to 
electricity customers in the continental United States would likely 
require long direct current (``DC'') lines. These projects are very 
costly; however, DOE is conducting research and development on ways to 
reduce the costs. As costs decline the economics of delivering energy 
from Alaska to the continental United States will likely improve.
    Finally, a major challenge is the lack of cost-effective large-
scale storage of electricity. DOE is also conducting significant 
research and development on grid-scale storage. Unlocking the storage 
puzzle will greatly improve our ability to integrate more renewables 
into the electric grid.
                              water power
    Question 4. If the Department does not continue to invest in new, 
innovative hydro technologies, modernizing operations, and expanding 
hydro's contributions to the nation's electricity supply--currently 8 
percent, the largest of all the renewables--how do you propose to meet 
your own goal to significantly increase renewable energy production? 
Your budget materials include water power resources under that vision, 
but your funding levels for the program appear to undermine it. Will it 
be all through intermittent wind and solar generation?
    Answer. Hydropower is currently our nation's largest source of 
clean, renewable electricity generation, contributing over 60% of our 
nation's renewable electricity output annually.
    DOE is committed to expanding hydropower technologies to both 
increase the efficiency of current hydropower generation and develop 
new ways to produce electricity from wave, tidal, and other marine 
hydrokinetic sources. DOE recently selected 16 new innovative 
hydropower technology development projects for funding in FY11, and 
that work will continue into FY 2012 and FY 2013. Additionally, DOE 
intends to continue its efforts to analytically quantify the benefits 
that conventional and pumped-storage hydropower provide to the electric 
grid, which can also support the integration of variable renewable 
resources like wind and solar.
    Question 5. DOE testified before this Committee last year that the 
Department's estimates indicate that there could be an additional 300 
gigawatts of hydropower through efficiency and capacity upgrades at 
existing facilities, powering non-powered dams, new small hydro 
development and pumped storage hydropower. Why then, given this 
tremendous potential of conventional hydropower resources, does the 
Administration proposed to not only slash funding for this renewable 
water power resource, but commit the remaining anemic funding to only 
marine and hydrokinetic technologies?
    Answer. In FY 2012, the Department will continue and complete a 
number of important water power technology research and development 
projects. The $20 million requested in FY 2013 allows the Department's 
Water Power Program to continue its ongoing projects to advance water 
power technologies and accelerate their market adoption. At this 
funding level, DOE would be able to support a number of water power 
technologies that can be developed for both conventional hydropower and 
emerging marine and hydrokinetic (MHK) energy generation.
    For hydropower specifically, DOE selected 16 new innovative 
hydropower technology development projects for funding in FY 2011, and 
that work will continue into FY 2012 and FY 2013. Additionally, DOE 
expects to continue its efforts to analytically quantify the benefits 
that conventional and pumped-storage hydropower provide to the electric 
grid, which can also support the integration of variable renewable 
resources like wind and solar. Finally, DOE anticipates conducting 
resource assessments in FY 2012 and FY 2013 to further refine the 300-
GW gross hydropower potential and accurately characterize all 
opportunities for new hydropower development across the country. In 
addition, DOE intends to use data from ongoing techno-economic MHK 
assessments to establish baseline MHK costs, which DOE will use along 
with resource assessments to evaluate the need for further innovative 
water power R&D.
                                nuclear
    Question 6a. Within the Office of Nuclear Energy budget request, 
your budget ends funding for the Integrated University Program, a 
program that I have heard very good reviews about. Could you explain 
why you want to end that program?
    Answer. The Department sets aside 20% of its nuclear energy R&D 
funding for work at universities, which is an effective way to get 
students interested in nuclear energy R&D and introduce them to the 
work done at DOE and the national laboratory environment. In addition, 
the Department is confident that expansion of the nuclear industry will 
create incentives necessary for students to enter nuclear-related 
education and training programs. The Department is currently evaluating 
more efficient ways to draw students into its technology missions if 
needed, including nuclear energy.
    Question 6b. Are there more efficient ways to advance student 
involvement in nuclear programs?
    Answer. Yes, the Department believes that there are more efficient 
methods to advance student involvement in nuclear programs than those 
employed by the Integrated University Program. Through a DOE-wide 
coordination effort the Department will be evaluating how it can better 
coordinate and leverage its existing science, technology engineering 
and mathematics (STEM) programs, as well as take better advantage of 
the capabilities at the DOE laboratories and their collaborative 
relationships with colleges and universities, to more effectively 
address the Department's critical scientific and technical workforce 
needs.
    Question 7. Within the Office of Nuclear Energy budget request, you 
propose reducing the Reactor Concepts Research, Development and 
Demonstration Program by over $40 million. What parts of the program 
would be reduced and for what reason?
    Answer. Within Reactor Concepts, the Department chose to focus its 
resources on research and technology development activities that have a 
higher potential for near-term impact. The allocation of available 
resources is consistent with our goals in the reactor areas, extending 
the life of the current reactor fleet and improving the affordability 
of new reactors.
    While each of the four subprograms within this budget element were 
reduced, the Light Water Reactor Sustainability program was least 
impacted. This program addresses near-term activities supporting the 
safe, long-term operation of the current fleet of 104 nuclear power 
plants. These plants provide the vast majority of our carbon-free 
electricity production and are a vital clean energy asset.
    The other programs within Reactor Concepts Research, Development 
and Demonstration include technologies that have a longer timeframe for 
commercialization and will depend to a large degree on future fuel 
cycle, uranium resources and waste management considerations. We will 
pursue every opportunity to leverage our efforts with universities, 
industry and the international community.
                                 arpa-e
    Question 8. You are requesting an additional $75 million for ARPA-
E's budget, bringing it to $350 million. You are also refocusing ARPA-
1.2.'s mission to place a priority on Transportation Systems. With the 
small fraction of projects that are likely to be successful. given the 
high-risk high-reward nature of the ARPA-E program, is it wise to so 
narrowly focus ARPA-E's mission on one topic? If we are looking for 
game changing technology innovations across the energy spectrum, why 
should we limit ourselves to one area?
    Answer. ARPA-E believes that combining its investments in high-
impact solutions that cut across multiple energy-related challenges 
with its nimble management structure provides it with the flexibility 
to react to changing market and technological conditions. ARPA-E's 
investment approach is also consistent with the Quadrennial Technology 
Review (QTR), which stated in part:

          ``Informed by the QTR process, DOE will give greater emphasis 
        to the transport sector, where innovation can impact all three 
        energy challenges [i.e. Energy Security, Environmental 
        challenges, and Competitiveness challenge.''\1\
---------------------------------------------------------------------------
    \1\ U.S. DOE Quadrennial Technology Review Volume 1 (2011). page 
124. available at: http://energv.gov/sites/prodffiles/QTR report.ndf, 
Note, parenthetical information taken from page 123.

    ARPA-E's Recovery Act, FY 2011. and FY 2012 investments are split 
approximately evenly between the Stationary and Transportation sectors. 
With the FY 2013 request. ARPA-E seeks to invest about 57% of its funds 
appropriated for projects in Transportation Systems, 40% in Stationary 
Power Systems, and the remainder on its Small Business Innovation 
Research (SBIR)/Small Business Technology Transfer (STTR) program. 
Specifically, in FY 2013 ARPA-E's Transportation investments would 
include advanced manufacturing and vehicles research. ARPA-E would 
continue to invest in both alternative domestic sources of sustainable 
fuels and electrification of vehicles. ARPA-E believes there are 
critical ``white spaces'' within the field of transportation systems.
                           uranium enrichment
    Your budget proposes to reinstate the collection of revenues under 
the Uranium Enrichment Decontamination and Decommissioning Fund, 
specifically $200 million per year from utilities while the federal 
government would pay in $463 million.
    Question 9. Has the government fulfilled its financial obligations 
toward the Fund as directed by the Energy Policy Act of 1992?
    Answer. Yes, the Government fulfilled its financial obligation for 
deposits into the Fund with the FY 2011 appropriation.
    Question 10. How much of a shortfall is expected in the Fund?
    Answer. The shortfall reported in the 6th Triennial report to 
Congress in December 2010 was $11.8 billion.
    Question 11. If Congress were to reauthorize revenue collection, 
for how much longer should utilities expect to pay into the Fund?
    Answer. Should Congress reauthorize revenue collection from the 
Domestic Nuclear Utilities, the amount of revenue and the time 
utilities could expect to pay into the fund would be subject to 
Congressional determinations of appropriate cost share with the 
Government, considering the schedules and costs for the Office of 
Environmental Management cleanup program.
    Question 12. Why should the private sector pay additional money for 
what is essentially defense waste?
    Answer. The utilities agreed to participate in the establishment of 
the Uranium Enrichment Decontamination and Decommissioning Fund for the 
first 15 year period of the fund, based upon fuel they purchased when 
they were legally required to do so from Government enrichment 
facilities. The reauthorization of the utility contributions is 
necessary because the balance in the Fund is currently inadequate to 
fully fund remediation of the three gaseous diffusion plants.
                      strategic petroleum reserve
    Question 13. The proposed budget calls for a $291 million 
rescission of funds from the SPR petroleum account. This is in addition 
to the $500 million rescission that was authorized in last year's 
Omnibus Appropriations Act. Mr. Secretary, is it consistent with the 
law to use our SPR as an ATM?
    Answer. The FY 2013 Budget proposes to use the SPR Petroleum 
Account receipts to repurchase about 27 million of the 31 million 
barrels sold in the SPR Drawdown by 2017, which will provide the Nation 
with sufficient import protection. The remaining funds of $291 million 
are not required and can be cancelled.
    Question 14. The budget also proposes that the remaining balance of 
the SPR account be used to repurchase 27 million barrels of oil, sold 
last June. Given that Louisiana Light Sweet crude is trading at around 
$121/barrel, the remaining $2.4 billion should only be sufficient to 
repurchase less than 20 million barrels at today's prices. Mr. 
Secretary, absent the royaltyin-kind program which this budget would 
repeal, how does the DOE propose to repurchase the remaining oil that 
was sold last summer? Or does the DOE believe that oil prices are on 
the decline?
    Answer. The SPR stores 696 million barrels of crude oil, which 
provides adequate U.S. import protection at this time.
    The FY 2013 budget assumes the repurchase of about 27 million 
barrels of crude oil sold in 2011 over the 5-year period from 2013 to 
2017. The objective is to re-enter the oil market during a time when 
world oil supplies and market prices are stable and to secure the best 
price for the American taxpayers.
    In 2009, the DOE was able to purchase 11 million barrels at an 
average price of $52.17 to replace barrels that were sold following 
Hurricane Katrina in 2005 for about $65 per barrel.
                    natural gas/hydraulic fracturing
    Question 15. DOE's Fossil Energy Office is requesting a $2 million 
increase (to $17 million total) in Natural Gas Technologies research 
and development. This effort would fund a DOE initiative with EPA and 
USGS ``to understand and minimize'' the impacts associated with 
fracking. I understand this to be a follow on to your Advisory 
Committee's report, and we had Dan Yergin and several other board 
members in to talk about the 90 day report before the final report was 
finished. In addition to analyzing all of the potential environmental 
impacts associated with shale gas development, the report presented 20 
specific recommendations for how these impacts can be successfully 
mitigated. Can you please explain what specifically about the Advisory 
Committee's report and recommendations were insufficient and warrant a 
second investigation?
    Answer. The Secretary of Energy Advisory Board (SEAB) in fact 
recommended expanded federal research on specific safety and 
environmental questions. The next step is to more precisely define the 
specific research questions suggested by the wide set of topics 
articulated in the SEAB recommendations.
    On April 13, 2012 DOE, the Environmental Protection Agency, and the 
Department of the Interior's U.S. Geological Survey signed a Memorandum 
of Agreement formalizing this Multi-Agency Collaboration on 
Unconventional Oil and Gas Research. Through this collaboration, a 
robust Federal R&D plan is being developed, taking into account the 
recommendations of the SEAB. DOE's role in this initiative will focus 
on priorities identified by the interagency collaboration in a research 
plan to be formed over the next nine months within its area of core 
research competencies, including wellbore integrity, flow and control; 
green technologies; and systems engineering, imaging and materials.
    Question 15a. Why is there a need to fund this initiative when the 
advisory board's recommendations are already finalized and most of 
their proposed directives fall on the states?
    Answer. SEAB recommended that specific research be undertaken by 
the federal government and this budget request would actually implement 
that recommendation. On April 13, 2012 DOE, the Environmental 
Protection Agency, and the Department of the Interior's U.S. Geological 
Survey signed a Memorandum of Agreement formalizing this Multi-Agency 
Collaboration on Unconventional Oil and Gas Research.
    Through this collaboration, a robust Federal R&D plan is being 
developed, taking into account the recommendations of the SEAB. DOE's 
role in this initiative will focus on priorities identified by the 
interagency collaboration in a research plan to be formed over the next 
nine months within its area of core research competencies, including 
wellbore integrity, flow and control; green technologies; and systems 
engineering, imaging and materials. The three agencies, DOE, EPA, and 
USGS, each possess discrete and specialized capabilities in particular 
scientific disciplines and technical areas.
    Question 15b. Is this new initiative an attempt to uncover a 
``smoking gun'' that has yet to surface and effectuate new layers of 
federal rules over hydraulic fracturing?
    Answer. The DOE, EPA, and USGS effort will identify research 
priorities and collaborate to sponsor research that improves our 
understanding of the impacts of developing our Nation's unconventional 
natural gas resources and ensure that these resources are developed in 
a safe and environmentally sustainable manner. Through enhanced 
cooperation, the agencies will maximize the quality and relevance of 
this research, enhance synergies between the agencies' areas of 
expertise, and eliminate redundancy.
                                nuclear
    Question 16. Your budget requests $10 million from the Nuclear 
Waste Fund for the Office of Nuclear Energy. The Nuclear Waste Policy 
Act lays out specific purposes for what funds in the Waste fund may be 
spent on. Could you describe how the Office of Nuclear Energy intends 
to use expenditures from the Nuclear Waste Fund?
    Answer. Consistent with the Blue Ribbon Commission recommendation 
to promote the better integration of storage into the waste management 
system, including standardization of dry cask storage, DOE will develop 
standardized container specifications with industry and award contracts 
to vendors to design standardized containers. This is also consistent 
with direction in the FY 2012 appropriations for development and 
licensing of standardized transportation, aging, and disposition 
canisters and casks.
    In the area of transportation, DOE will finalize transportation 
procedures for technical assistance to States and tribes consistent 
with section 180 (c) of the Nuclear Waste Policy Act, will initiate 
pilot training programs for emergency responders along those routes 
from decommissioned sites, and will expand interaction with 
Transportation Stakeholders.
    Question 17. Could you please provide more detail on how you intend 
to utilize the requested $60 million to advance the recommendations of 
the Blue Ribbon Commission?
    Answer. The Blue Ribbon Commission acknowledged the importance of 
the ongoing work related to used fuel disposition, and recommended the 
continuation of the activities. The funding within the Used Nuclear 
Fuel Disposition subprogram in FY 2012 aligns with the Commission's 
near-term research and development-related priorities. The Department's 
FY 2013 Congressional budget request builds on these efforts initiated 
in FY 2012. Specifically, the Department intends to continue systems 
studies related to consolidated storage and related transportation; 
continue research and development on the extended storage of spent 
fuel; expand interactions with transportation stakeholders; continue 
studies of non-site specific geologic disposal options; and complete a 
research and development plan for deep borehole disposal.
                  unconventional fossil fuels research
    Question 18. This budget again zeroes out the unconventional fossil 
program, I take it as part of the Administration's efforts to end so-
called ``subsidies'' to fossil fuels. But the budget maintains major 
CCS funding as well as some natural gas R&D funding. Meanwhile, the 
President has touted DOE's support for research in shale gas as a major 
success story. What's so wrong with including unconventional fossil 
fuels in a budget, especially when ``unconventional'' methods of 
extracting and using them has turned out to mean cleaner ways of 
extracting and using them?
    Answer. The FY 2013 Fossil Energy research and development budget 
request, which is about 23 percent more than previous year's does, in 
fact, focus on unconventional fossil energy resources in light of high 
priority research recommendations received from the Subcommittee of the 
Secretary of Energy Advisory Board (SEAB). These research efforts will 
help to improve our understanding of the impacts of developing our 
nation's unconventional natural gas resources and assist in developing 
new technologies that will enhance safe and environmentally sustainable 
development of these resources.
                              atvm program
    Question 19. Just five loans have been issued since funding was 
appropriated to this program in 2008, including just one loan in the 
past year. DOE initially claimed the program was oversubscribed, but 
now it's virtually dormant. Last year at this time, DOE stated that it 
anticipated ``offering a number of additional conditional commitments 
under the program in the near future.'' What happened to that? Are 
there no viable projects, or are other factors preventing DOE from 
making yes-or-no decisions in a timely manner?
    Answer. The ATVM Loan Program has closed five loans totaling over 
$8.3 billion. While the ATVM Loan Program was oversubscribed, certain 
events occurred over the past year that reduced the applicant pool, 
including the withdrawal and rejection of several applications. Reasons 
for rejecting the applications include, but are not limited to, 
substantial market risk, financial distress and credit risk, and 
technical development risk.
    The program will continue to work with remaining applicants, with 
an aim to communicating application status in a timely manner. In 
addition, the program is simultaneously reaching out to additional 
potential applicants via trade organizations and digital media. The 
ATVM Loan Program continues to be an attractive source of funding for 
automotive manufacturers of vehicles and components, receiving new 
applications and indications of interest regularly. We are striving to 
allocate a significant portion of ATVM's remaining credit subsidy by 
the end of the fiscal year.
                           vehicle subsidies
    Question 20. In other parts of the budget, the administration 
proposes to modify and expand the electric vehicle tax credit. The 
200,000 vehicle per manufacturer limit is removed, the per-vehicle 
limit is raised to $10,000, and more technologies would be eligible 
based on a formula. That seems incredibly lavish. First-time homebuyers 
received an $8,000 credit--and now, for a single vehicle, the 
administration is proposing an even higher subsidy. Can you defend 
that? How does a $10,000 per vehicle subsidy make sense at a time of 
trillion dollar deficits, and repeated statements from administration 
officials that the costs of batteries should come down dramatically 
over the next several years? How can you square this proposal with the 
President's statement from last year that the tax code is already too 
riddled with ``special interest loopholes''?
    Answer. The electric vehicle tax credit is not within DOE's 
jurisdiction.
                               fuel cells
    Question 21. According to the budget request, you want to 
significantly reduce funding for fuel cell technologies because of 
``substantial progress in research innovations.'' Can you explain that 
logic, especially in the context of your request for significantly more 
funding for electric vehicles, which are now being commercially sold?
    Answer. Significant progress has been made in fuel cell 
technologies, including reducing the modeled cost of fuel cells by more 
than 80% since 2002.The FY 2013 budget request will allow the 
Department to concentrate on high impact hydrogen and fuel cell R&D 
activities that will continue to yield technology advancements in key 
areas--including ongoing reductions in the cost and improvement in the 
durability of fuel cells, reductions in the cost of renewably produced 
hydrogen, and improvements in systems for storing hydrogen. Rebalancing 
the Department's advanced technologies portfolio will allow a focus on 
nearer term transportation technologies while maintaining a strong 
effort in hydrogen and fuel cells.
                          cellulosic biofuels
    Question 22. In early 2010, your Department set a goal to drive the 
costs of cellulosic ethanol down to $1.76 per gallon in 2012. Can you 
provide us with an update on any progress made? How close--or how far--
is unsubsidized cellulosic biofuel from commercial competitiveness?
    Answer. The DOE Biomass Program is on track to meet its major 
milestone of achieving cellulosic ethanol cost of $1.76/gallon of 
ethanol by the end of FY 2012. This cost milestone is expected to be 
validated at the pilot scale at the National Renewable Energy 
Laboratory during the summer of 2012. The noted cost does not reflect 
the cellulosic ethanol costs from first-of-a-kind pioneer plants but 
rather the cost attainable after several plants that have been built 
with the lessons learned and the technology developed by DOE and its 
partners. Achieving this milestone would mean that the Biomass program 
would de-emphasize cellulosic ethanol research and that DOE would focus 
on research for ``drop-in'' biofuels, which are more infrastructure 
compatible (e.g, bio-derived gasoline, diesel, and jet fuel). Biobased 
hydrocarbon fuels can be used in applications like heavy trucks and 
planes where electrification may not be suitable.
    The DOE Biomass program has already started construction at four, 
commercial scale ``drop-in'' biofuel pioneer and plans to have them 
operational in FY 2013 (Abengoa, Mascoma, Ineos, and Poet). These first 
plants will likely require the currently available cellulosic tax 
credit of $1.00 per gallon to be initially cost competitive. Once we 
have operating experience with these plants, we can better project when 
they can compete on an unsubsidized basis.
                         natural gas tax hikes
    Question 23. I think it would be a mistake to raise taxes on our 
nation's energy producers by $40 billion over the next ten years, as 
this budget proposes. But setting aside my general concerns--the impact 
it would have on supply and prices paid by consumers--I want to ask a 
more specific question. Why has the Department continued to target 
natural gas for a tax hike? With natural gas prices at historical lows, 
we have seen reports that some producers are already considering 
shutting in their wells because they simply cannot make any money off 
of them. Did the administration give any consideration to the impacts 
that its proposed tax increases could have on natural gas production 
and prices in the longer term?
    Answer. The Administration believes these tax code adjustments are 
appropriate given overall industry revenues and profits and would not 
have an adverse impact on domestic oil and gas production. These tax 
changes are small enough they should not have any real impact on 
domestic natural gas prices.
    The tax credits that the Administration proposes to repeal for oil 
and natural gas distort commercial markets. This market distortion is 
detrimental to long-term energy security and is also inconsistent with 
the Administration's policy of supporting a clean energy economy, 
reducing our reliance on oil, and cutting carbon pollution. Moreover, 
any tax credit must ultimately be financed with taxes that result in 
underinvestment in other, potentially more productive, areas of the 
economy. Furthermore, as the demand for natural gas increases, 
competitively-priced supplies of natural gas will be available to meet 
that demand.
                             battery costs
    Question 24. The Department has projected that battery costs for 
electric vehicles will come down dramatically over the next several 
years. Can you provide the committee with a current breakdown showing 
how much components, R&D, metals, other materials, labor, and any other 
costs currently contribute to advanced battery prices? Can you explain 
where you see substantial cost reductions coming from, especially in 
the context of each of those categories?
    Answer. A September 2011 ANL modeled the costs of lithium-ion 
batteries for electric drive vehicles, and indicated the following: raw 
materials, 50%; purchased parts, 16%; depreciation, 9%; direct labor, 
4%; variable overhead, 4%; general sales and administration, 4%; R&D, 
4%; profit, 4%; and warranty, 5%.
    Substantial future cost reductions are expected to be derived from 
the use of higher-performance, lower-cost raw materials in batteries 
currently in development (e.g., less nickel and cobalt, more 
manganese), improvements in battery design (higher cell capacity 
resulting in fewer number of cells required), better materials 
processing and cell assembly manufacturing, learning-curve cost 
reductions, and the economies of scale in mass production.
                      vehicle technologies program
    Question 25. In looking at this year's budget request, the 
Department appears to continue its trend of heavily favoring electric 
vehicles. What percentage of the $420 million request for the Vehicle 
Technologies program would go to electric vehicles? What percent would 
go to other promising technologies, like natural gas vehicles or 
ultracapacitors?
    Answer. Through a comprehensive and coordinated effort among its 
Office of Science, the Advanced Research Projects Agency-Energy (ARPA-
E), and Office of Energy Efficiency and Renewable Energy, the 
Department supports a broad range of advanced vehicle technologies in 
various stages of development. The FY2013 request for Vehicle 
Technologies Program (VTP) activities includes $203 million for 
batteries and electric drive components (48% of the VTP total). Of this 
amount, approximately $4.5 million would focus on ultracapacitor 
development. The VTP FY2013 request includes an additional $35 million 
for electric-drive vehicle systems modeling, analysis, and testing 
activities. It is important to note that the aforementioned funding 
supports development of technologies for the full range of electric-
drive vehicles--including plug-in electric hybrids, extended range 
electric vehicles, and micro hybrids, as well as battery electric 
vehicles--and cuts across light-duty and heavy-duty vehicle classes.
    VTP supports a portfolio of technologies and approaches to 
petroleum reduction in addition to electric drive, including advanced 
combustion, materials technology, and fuels technology research and 
development, as well as demonstration and deployment of a wide variety 
of alternative fuels and advanced, fuel-efficient technologies.
                      community deployment program
    Question 26. The President's budget proposes a $1 billion community 
deployment program for advanced vehicles. Which agency would administer 
that program? What is maximum amount of funding that could be made 
available to each community? If funding is appropriated to it, how will 
you ensure that public dollars do not crowd out investments now being 
made by private companies?
    Answer. The Department of Energy would administer the program. As 
noted in the White House Fact Sheet issued March 7, 2012, the program 
embraces a strategy proposed by Senators Jeff Merkley (D-OR) and Lamar 
Alexander (R-TN) in the Promoting Electric Vehicles legislation, but 
takes a fuel neutral approach and includes the development of up to 
five liquefied natural gas corridors for long-haul trucks. The 
Department is working to finalize program details, but envisions that 
between 10-15 communities would receive funds through an open and 
competitive process, and a minimum 50% cost share of the total project 
value would be required.
    Funds would encourage, and not crowd out, private investment. 
Selection criteria would be based on the strength of the local 
community partnership and its ability to meet program objectives, the 
demonstrated commitment of partners, the ability to significantly 
leverage Federal funds, the strength of the business case, and the 
plans--as well as the team's ability--to ensure project sustainability 
upon expenditure of Federal funds.
                             biofuel grants
    Question 27. In the Biomass and Biorefinery Systems account, the 
Department notes that it wants to provide ``an additional installment 
for the full-fledged construction of demonstration and commercial scale 
integrated biorefinery projects that were competitively awarded in 2007 
and 2008 and that will be operational in 2014.'' Can you provide 
further details about that proposal? How many projects would this 
affect, how much funding would.be required, and why is additional 
funding needed at this time?
    Answer. The Biomass Program ran two competitive biorefinery 
solicitations, one each in 2007 and 2008. These two solicitations 
resulted in 11 awards: 4 commercial scale cellulosic ethanol 
biorefineries in 2007 and 7 demonstration scale cellulosic ethanol 
biorefineries in 2008. The benefits created by these programs will help 
to promote a new cellulosic biofuels industry that has the potential to 
replace crude oil consumption, enabling economic activity in rural 
America, enhancing our energy security, and dramatically decreasing the 
emissions of GHG from the transportation sector.
    These biorefinery projects were all funded incrementally and the 
awards are contingent on the availability of appropriated funds and 
ability for recipients to meet cost-share requirements and stage-gate 
criteria for proceeding to subsequent phases. The four awards from the 
2007 solicitation for commercial scale cellulosic ethanol biorefineries 
have been fully obligated and do not require additional funding. Of the 
seven awards from the 2008 solicitation, four require a total of $123M 
to fulfill the total award amount. The FY 13 requested funds would be 
used to achieve the total amount for three of the four demonstration 
scale biorefineries.
                          biofuel procurement
    Question 28. DOE has requested authority to transfer funds to the 
Department of Defense for biofuel procurement. How much funding do you 
anticipate would be transferred? At a time of unprecedented debt--and 
in a budget request that projects a trillion dollar deficit--do you 
believe it is appropriate for the government to sign contracts that 
require it to pay more than $25 per gallon of biofuel?
    Answer. The Biomass Program seeks to lower the cost of advanced 
biofuels by focusing on RD&D across the biofuels value-chain that 
supports the development of innovative technologies and lowers the 
financial, technical, and market risks of deploying integrated 
biorefineries.
    The Biomass Program is requesting $40M to be transferred to the 
Department of Defense to support jointly funded biorefineries for the 
demonstration of the production of military grade diesel and jet fuels 
at commercial scale with the military being the first customer for 
these fuels.
    This initiative would not be used to subsidize the military's 
purchase of fuel. Rather, the Navy, USDA and DOE, would mutually 
support the missions of each agency in accelerating the capability to 
produce domestic, bio-based hydrocarbons such as gasoline, diesel and 
jet fuel. If these fuels meet military specifications, then this would 
open up other markets for these products and gain the confidence of 
private sector investors necessary for scaling the industry.
                             arpa-e funding
    Question 29. In the budget request, ``natural gas fueled 
transportation systems'' are listed within the ARPA-E account as a 
``potential future program.'' Why are those systems considered 
appropriate for ARPA-E, instead of the Vehicle Technologies program 
within EERE?
    Answer. ARPA-E's invests in early-stage technologies that have the 
potential to be transformational, including new vehicle technologies. 
The Methane Opportunities for Vehicular Energy (MOVE) program is 
focused on breakthrough research to develop technology that can 
significantly reduce the cost of natural gas storage systems in 
vehicles as well as compression systems for home refilling. The 
projects suppOrted are working on fundamentally different technology 
than what is being funded within the Vehicle Technologies Program. 
Today's natural gas vehicle technologies require tanks that can 
withstand high pressures, are cumbersome, are either too large or too 
expensive to be suitable for passenger vehicles, and cannot hold 
sufficient fuel to provide comparable range to today's gasoline powered 
vehicles. MOVE will fund research into innovative, low-cost Compressed 
Natural Gas (CNG) storage technologies and methods to lower pressure in 
vehicles while maintaining the same amount of gas storage.
    ARPA-E takes very seriously its statutory requirement to ensure its 
activities are coordinated with, and do not duplicate the efforts of, 
programs and laboratories within the Department and other relevant 
research agencies. In this case, ARPA-E and EERE's Vehicle Technologies 
Program (VTP) have close formal and informal working relationships.
                      total clean energy spending
    Question 30. Collectively--across all federal programs and all 
federal agencies--how much does the President's Fiscal Year 2013 budget 
propose to spend on clean energy?
    Answer. The FY 2013 President's Budget requests $6.7 billion for 
clean energy research, development, demonstration, and deployment 
government-wide. Please see Section 22 (Special Topics, Research and 
Development, page 366) of the FY 2013 President's Budget Analytical 
Perspectives volume.
                          1603 grants program
    Question 31. What is the total estimated cost of all projects that 
were--or could still be, based on various deadlines within the 
progrfam--funded by the Sec tion 1603 grants program?
    Answer. This question is not within DOE's jurisdiction.
                             arra spending
    Question 32. According to the Department of Energy's website, 
roughly $13 billion in stimulus funding has not yet been spent. What 
has prevented those funds from being spent? When do you anticipate the 
Department will be able to report 100 percent spendout?
    Answer. The Department of Energy has been deeply committed to 
ensuring that recipients are spending their Recovery Act funds in an 
efficient and responsible manner. As of November 25, 2012, the 
Department of Energy's approximately 5,000 Recovery Act recipients have 
outlaid $27.4 billion (80% of total stimulus funds obligated by the 
Department), to support over 15,000 clean energy projects across the 
country. These Recovery Act investments are putting Americans back to 
work, making our homes and businesses more energy efficient, increasing 
the use of clean and renewable electricity, cutting our dependence on 
oil, and modernizing the electric grid.
    Based on current spending, the Department of Energy expects that by 
the end of fiscal year 2013, over 90 percent of DOE granted stimulus 
funds will be spent by recipients. One hundred percent of Recovery Act 
funds will be spent by end of FY15 in accordance with law.
    As was known from the inception of the Recovery Act, DOE's Office 
of Fossil Energy (FE) carbon capture, utilization, and storage (CCUS) 
and clean coal power initiatives will account for nearly half of the 
funds that will be spent in FY14 and FY15. The majority of FE's 
Recovery Act projects are large, capital intensive projects that 
involve long-lead times for siting, permitting, design and 
construction. While DOE's experience in prior negotiations allowed DOE 
to streamline the process for award negotiations and receive well-
defined project management plans from recipients, these multi-million 
and billion dollar clean coal projects require an average of 2 years 
for completion of siting, permitting and design phases of the project 
before well-executed construction and retrofits can begin.
    The remaining portion of Recovery Act funds to be spent after FY13 
is primarily from:

   The Advanced Battery Manufacturing Program (68% of total 
        ARRA funds spent as of November 25, 2012; 83% of total Recovery 
        Act funds spent by end of FY13): DOE competitively-awarded 
        funds for 30 projects to build domestic capacity for 
        manufacturing advanced batteries and electric drive 
        components--not only creating jobs but also helping to ensure 
        the U.S. remains a leader in a fiercely competitive global 
        automotive market. Industry is providing slightly more than 50 
        percent cost-share. Prior to the Recovery Act, domestic battery 
        manufacturing was negligible; as of December 31, 2011, our 
        Recovery Act projects created a total battery manufacturing 
        capacity of 145,000 batteries/year.
   Smart Grid (79% of total ARRA funds spent as ofNovember 25, 
        2012; 92% spent by FY13): More than $4 billion in Recovery Act 
        smart grid investments are helping to modernize our grid, 
        critical to meeting today's increasingly complex electricity 
        needs. These Recovery Act investments for smart grid projects 
        went to 49 states and two territories to help build a more 
        stable, secure electrical grid. The funds projected to be spent 
        after FY13 are associated primarily with smart grid 
        demonstration projects designed according to the original 5 
        year timeline set by the Recovery Act statute. These projects 
        require additional time to complete due mainly to the scale of 
        technologies and installations, often involving multiple states 
        or regions; and longer field validation and data collection 
        required for these first-of-a-kind technologies.

    Question 33. The Department's IG and others have suggested that it 
may ultimately be appropriate to return at least some ARRA funding 
(e.g., from the Energy Efficiency and Conservation Block Grant program) 
to the Treasury. Do you agree? Please explain.
    Answer. As part of the Recovery Act, the Department of Energy's 
5,000 recipients have spent $23.1 billion (67% of total stimulus funds 
obligated by the Department), and averaged 91% of the monthly payment 
plan that it developed and submitted to OMB nearly two years ago. The 
Department of Energy has been deeply committed to ensuring that 
recipients are spending their Recovery Act funds in an efficient and 
responsible manner, and continues to diligently monitor its Recovery 
Act programs and projects to completion.
    In those rare cases where projects have been unable to move forward 
for a variety of individual reasons the Department has established a 
system to efficiently terminate projects and return these funds to the 
US Treasury. While the DOE is proactive in its monitoring of funding 
recipients, and setting clear milestones to help recipients execute 
their projects, some recipients are ultimately unable to meet the 
agreed upon plan and have requested the contract be terminated. The 
Department's system also closely monitoring projects for any waste, 
fraud and abuse and retains the authority to terminate such contracts 
if in violation, or if a project fails to meet technical or performance 
milestones.
    The Energy Efficiency and Conservation Block Grant (EECBG) Program 
made available $2.7 billion in formula grants and $454 million in 
competitive grants to US states, territories, local governments, and 
Indian tribesto improve energy efficiency and reduce energy use and 
fossil fuel emissions in communities. To improve oversight of EEBCG 
funds, DOE required cities and counties to develop energy-efficiency 
plans for the first time to receive funding. Many of these local 
governments had not previously participated in funding programs of this 
nature. As may be expected with participation in a new program, some 
EECBG grantees were slower to start moving forward than others.
    To date, this program paid out over $2 billion (over 70% of total 
EECBG funds) and expects to be fully spent by the end of FY13.
    The EECBG program has been among the largest job creators under the 
Recovery Act. The success of this program at the local level holds the 
potential to create a vibrant longterm market in energy efficiency 
throughout the country. It is helping local communities, homeowners and 
businesses to save money and energy and reduce our reliance on imported 
oil.
                          unobligated balances
    Question 34. Please provide a full and detailed list of all 
unobligated balances for every program and account at the Department of 
Energy.
    Answer. The Department's unobligated balances as of April 30, 2012 
are as follows:

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                             weatherization
    Question 35. I know that looking at weatherization funding is 
complex given that the funding levels are still being affected by the 
large amount of money given to states, nearly $5 billion, in the 
economic stimulus bill in spring 2009. Still, given the benefits of 
weatherization as far as the amount of energy it saves, and given the 
Department's priorities to fund commercial energy efficiency programs, 
I am a bit confused by the budget that calls for weatherization funding 
of $195 million--still $36 million below 2011 and $135 million below 
the Department's former goal of trying to make about $325 million 
available for weatherization a year. My home State of Alaska, for 
example, is proposed to get $200,000 less than in FY 11, even though 
there are still tens of thousands of homes that would save more than 
$550 a year per household in energy costs from such energy efficiency 
efforts. Why did weatherization not rate a higher priority in the 
Administration's thinking?
    Answer. The Weatherization Assistance Program (WAP) remains a 
priority for the Department of Energy. The $195 million funding request 
made by the Department in 2013 is a combination of three programs: 
Weatherization Assistance Program--$139 million; State Energy Program--
$49 million; and Tribal Energy program--$7 million, which will help to 
reduce energy costs for families across the country.
    Question 36. Please describe how your Department allocated FY2012 
funding under the weatherization program to each state. If a State did 
not receive a FY2012 please describe the reasons for withholding 
funding.
    Answer. The 2012 Consolidated Appropriations Act provided $65 
million for allocation to Weatherization Assistance Program (WAP) 
grantees--a funding level that is less than one-third of the amount 
provided in the 2011 Appropriations for the Program. Congress also 
provided the Secretary of Energy with the authority to use an alternate 
methodology other than the formula established in regulation to 
distribute the available funding--taking into consideration unspent 
balances from the American Recovery and Reinvestment Act of 2009 (ARRA) 
and other DOE resources available to grantees in 2012. The Secretary 
exercised this authority and allocated program year (PY) 2012 funds to 
ensure two major outcomes: 1) grantees that spent their ARRA funds on 
time have adequate DOE funds to maintain their operations at pre ARRA 
levels; and 2) all grantees have adequate funds to operate throughout 
PY 2012, given the fund balances that are already allocated but remain 
unspent. The allocations were based on the following criteria:

   Use of an appropriation amount of $210 million as the base 
        ``PY12 Target Allocation'' for establishing funding for each 
        grantee. This is the amount that would have been awarded to 
        grantees through the funding formula as established in the 
        regulations based on a $210 million Appropriation by Congress 
        in 2010.
   Whether a significant portion of the ``PY12 Target 
        Allocation'' was available in ARRA balances for at least half 
        of the PY 2012. PY 2012 ``Target Allocations'' were adjusted 
        downward for grantees with significant ARRA balances.
   Whether more than the adjusted ``PY12 Target Allocation'' is 
        expected to be available at the start of the grantee's PY 2012. 
        Grantees with a prior year balance totaling more than the 
        adjusted ``PY12 Target Allocation'' did not receive FY 2012 
        funding.
   Allocation of PY 2012 funds was provided to those grantees 
        requiring additional DOE funds to reach their adjusted ``PY12 
        Target Allocation''. This allocation was equal to 76.38 percent 
        of the adjusted ``Target Allocation''.the proportional share of 
        the $65 million Appropriation relative to the sum of the 
        adjusted target allocations.

    The only reason why a grantee would not have received funds in 2012 
is that sufficient unspent ARRA and/or DOE Appropriated funds from 
previous years still remained available for use in 2012.
    Question 37. Please briefly describe the reports that have been 
issued by the Office of the Inspector General at the Department of 
Energy that have found instances of waste, fraud and abuse under ARRA 
for the weatherization program. In addition, please describe actions 
that DOE will be taking with regard to each of the IG's recommendations 
stemming from these reports.
    Answer. More than $5 billion of funding from American Recovery and 
Reinvestment Act of 2009 (ARRA) has been administered through 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. These audits were conducted by the DOE Office of Inspector 
General (OIG) and the Government Accountability Office (GAO). Of the 28 
audits, 17 are complete and 11 are ongoing.
    The majority of the completed audit reports (14 of 17) contained no 
significant findings. Of the remaining three reports, findings 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.
    As part of DOE's regular monitoring and oversight responsibilities, 
the Department systematically identifies and responds to new or on-
going compliance issues created as a result of the large increase in 
WAP activities under ARRA funding. All of the WAP grantees take part in 
regular phone call updates and have been visited on a routine basis, 
with a total of 121 Monitoring Site Visits conducted by program staff 
through December 2011. Any issues identified are tracked and addressed 
until corrected.
    DOE monitoring efforts identified these issues prior to the OIG 
audits and actions have already been taken to address them. It is worth 
noting that some of these requirements, such as those related to the 
Davis-Bacon Act, were previously not applicable to the WAP but have now 
been integrated into the Program.
                              energy star
    Question 38. Please identify DOE's role in this program, and the 
amount of funds expected to be allocated to the Energy Star Program. In 
addition, please describe your coordination efforts with the EPA as it 
relates to Energy Star implementation.
    Answer. DOE is the lead for the development of product test 
procedures and technical support of the verification testing program 
for the ENERGY STAR program. DOE remains committed to working with EPA 
and stakeholders in terms of creating and updating ENERGY STAR test 
procedures that are reflective of innovations in the market place and 
that address manufacturers concerns with test procedures. As an 
example, DOE and EPA are working closely with industry associations and 
major refrigerator manufacturers in the development of test procedures 
to support Smart Grid capability in ENERGY STAR refrigerators. In FY 
2012, DOE's budget for ENERGY STAR was a total of $7 million. With 
those funds, DOE developed test procedures for the ENERGY STAR program 
that manufacturers must use when qualifying their products for the 
ENERGY STAR program and conducted a variety of activities geared toward 
verifying the performance of ENERGY STAR labeled products through 
third-party laboratory testing. This information and data are provided 
to EPA on an ongoing basis, as they are responsible for managing the 
ENERGY STAR brand.
                     advanced manufacturing program
    Question 39. Last year your Department changed the name of the 
Industrial Technologies Program to the Advanced Manufacturing program. 
Within the FY 2013 budget you have requested a 150.9% increase above 
the appropriated FY 2012 levels. Please describe the changes that you 
anticipate with the new program, along with how you intend to allocate 
funding for each of the different components of the Advanced 
Manufacturing Program
    Answer. The work of the Advanced Manufacturing Office (AMO) is 
focused around several major program activities: 1) The Innovative 
Manufacturing Initiative (IMI), 2) Manufacturing Demonstration 
Facilities (MDF), and 3) the Energy Innovation Hub for Critical 
Materials. Each of these is described further below.

          1. The Innovative Manufacturing Initiative (IMI) will support 
        competitively selected, industry-led cost-shared technology 
        projects within broadly identified priority technology domains. 
        Industry response to the IMI solicitation was widespread and 
        diverse. AMO received 1,408 total Letters of Intent. Due to 
        this strong industry response, awards will be highly 
        competitive, but the eagerness of so many companies--78% of 
        whom were small enterprises--to put significant sums of their 
        own money toward these cost-shared projects speaks to the high 
        level of demand for this type of public-private partnership.
          The $51.2 million in support for projects selected through 
        the IMI solicitation during FY2012 is split approximately 
        equally between FY11 and FY12 funding.
          2. The Manufacturing Demonstration Facilities (MDFs) are 
        intended to create collaborative, shared infrastructure around 
        targeted technical areas that will facilitate the development 
        and utilization of energy efficient, rapid, flexible 
        manufacturing technologies and to promote broad and rapid 
        dissemination of manufacturing technologies. Two MDFs will be 
        established around foundational keystone technologies that 
        strongly affect techno-economic systems such as low-cost carbon 
        fiber, out-of-the-autoclave composites, wide band gap semi-
        conductor materials, and other industry-identified priority 
        areas.
          The MDF's will serve a number of valuable functions. They 
        will provide manufacturers and product developers access to 
        physical and virtual tools from design to evaluation for 
        rapidly prototyping new technologies and optimizing critical 
        manufacturing processes. They will also guide and train users 
        and maintain infrastructure with a staff of designers, 
        manufacturing experts and product evaluators. In addition, the 
        MDFs will act as a center for education and training, hosting 
        interns and representatives from industry, academia and 
        government.
          3. The DOE Energy Innovation Hubs aim to foster innovation 
        through a unique approach, where scientists and engineers from 
        many disciplines work together to overcome the scientific 
        barriers to cutting-edge energy technologies in specific topic 
        areas. In this environment, the researchers can accomplish 
        greater feats more quickly than they would separately. DOE's 
        goal for the Hub is to create a coherent, full spectrum 
        research team focused on conducting basic and applied research, 
        development, and demonstration (RD&D) to reduce criticality for 
        existing materials and prevent criticality of new materials 
        that are essential to modern and emerging energy technologies. 
        DOE has released a Funding Opportunity Announcement for the 
        Critical Materials Hub and selection is expected by the end of 
        2012. In the 2013 budget request, AMO request $20M for this 
        Hub. It is expected that AMO will request $25M annually for the 
        Hub in FY 2014--2016.
          Specific funding allocations for the various activities 
        conducted through AMO will depend upon the availability of 
        funds.

                     building technologies program
    Question 40. The Building Technologies Initiative request is 
increased substantially, by 41.4% over the FY 2012 budget. Please 
describe how much you intend to allocate for each of the components 
within this Program. In addition, please describe how you intend to 
ensure that the Program's progress is coordinated with the other EERE 
programs, including: the Solar Technologies Program, the Weatherization 
and Intergovernmental Program, and the Federal Energy Management 
Program.
    Answer. The allocation for each of the components within the 
Building Technologies Program is shown below: 

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    The Building Technologies Program (BTP) is continually working on 
enhanced collaboration with other EERE organizations, including cross 
program ``details'' of staff, and jointly developed programs and 
results. Examples include:

   BTP is currently participating on a number of EERE 
        crosscutting teams to coordinate activities including a team on 
        advanced manufacturing for lighting, technology deployment and 
        workforce.
   Building Integrated Photovoltaic (BIPV) in conjunction with 
        the Solar Energy Program to explore the impact of roof-top PV 
        systems on thermal management in buildings and develop 
        solutions to mitigate additional cooling loads that might 
        result from a BIPV system;
   Technology screening verification and technology 
        demonstrations for the Federal and private sector with the 
        Federal Energy Management Program;
   Development of energy audit tools, workforce standards and 
        certification, residential retrofit strategies with the 
        Weatherization and Intergovernmental Program; and
   Superior Energy Performance (SEP) and Global Superior Energy 
        Performance (GSEP) Program with the Advanced Manufacturing 
        Office. These are voluntary certification programs that provide 
        commercial buildings and industrial facilities with a pathway 
        for achieving continual improvement in energy efficiency and 
        for documenting their achievements.

    Question 41. Please describe how you intend to reduce building-
related energy costs by reducing energy use by 50% by 2030. What are 
the projected incremental costs to the Department to fund these 
initiatives that could lead to a 50% reduction in building related 
energy use by 2030?
    Answer. BTP will pursue several key activities to reduce energy use 
by fifty percent.

   The Equipment Standards and Analysis program will increase 
        the scope and effectiveness of its energy conservation 
        standards by accelerating the test procedures and standards 
        rulemakings, allowing for the increased use of DOE's existing 
        authorities to establish standards for additional products that 
        have large energy savings potential. The program will also 
        actively monitor and enforce all DOE energy conservation and 
        water conservation standards through product testing and it 
        will continue to initiate investigations into any detected 
        noncompliance. DOE will also continue working with the 
        Environmental Protection Agency to update and/or create test 
        procedures for the ENERGY STAR program to use for those 
        products that have the potential to save the most energy.
   The Emerging Technologies program will be focused on 
        conducting additional new FOAs in the areas of HVAC; building 
        envelope and windows; sensors and controls; and solid state 
        lighting manufacturing. Additional research will include 
        projects to improve building systems operations with innovative 
        sensors for temperature, humidity, air flow, motion/occupancy, 
        and light level.
   The Commercial Buildings Integration program will conduct 
        demonstrations of commercial building retrofits critical to 
        achieving BTP's goal of reducing building related energy use by 
        50 percent cost effectively, as well as increasing deployment 
        of technical specifications and demonstration of cost effective 
        retrofits. Commercial Buildings Integration will also work 
        jointly on a competitive solicitation with Emerging 
        Technologies with a focus on building envelope and windows, and 
        one on sensors and controls with the intent to better align the 
        technologies with market opportunities to improve ongoing 
        building energy use.
   The Residential Buildings Integration program will greatly 
        expand their research, including integrating new technologies 
        into existing homes. It will continue to identify and develop 
        the most cost effective measures and enable/demonstrate the 
        cost effectiveness and reliability of systems required to meet 
        the International Energy Conservation Code (IECC) 2012 code 
        revision. In addition, the Building America Program will expand 
        their research into achieving 50 percent energy efficiency 
        savings in residential buildings over IECC 2009. These goals 
        are targeted for completion for all climate zones by 2017.
   The Building Code program will build upon prior year 
        activities to achieve the 50 percent upgrade of the IECC and 
        ASHRAE 90.1 and provide significant technical assistance to 
        States for code adoption and compliance.

    DOE will continuously seek to identify opportunities and prioritize 
activities to meet the proposed 50 percent goal, and seek input from 
stakeholders throughout this process.
                          homestar initiative
    Question 42. The budget continues to recommend the introduction and 
the enactment of the HOME STAR Efficiency Program. However, as of yet 
the President has not sent the Congress bill language.
    What is your estimation on how much this program would cost? Will 
the Administration be sending Congress a legislative proposal on this 
initiative?
    Answer. As proposed in 2010, HOMESTAR would establish a $6 billion 
rebate program, which would provide rebates to consumers to encourage 
immediate investment in energy-efficient appliances, building 
mechanical systems and insulation, and whole-home energy efficiency 
retrofits.
                federal energy management program (femp)
    Question 43. Since 2006 you estimate that FEMP has saved Federal 
facilities over $5 billion in energy costs. Can you provide us a list 
of the projects. and their associated savings. that you used to arrive 
at the 55 billion in savings?
    Answer. Between FY 2006 and FY 2012. 126 DOE ESPC delivery orders 
and task orders have been awarded with more than $1.7 billion having 
been invested in Federal energy efficiency and renewable energy 
improvements. These improvements have resulted in more than 210 
trillion Btu life-cycle energy savings and more than 55.1 billion of 
cumulative energy cost savings. 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 44. Please describe how you intend to fully utilize your 
existing authorities to obtain additional energy savings at Federal 
facilities (EPSCs, USECs, PPAs, etc). In addition, please describe the 
specific authority, and projected cost of each project that you are 
likely to pursue to meet energy savings.
    Answer. The Federal agencies have set targets for utilizing these 
private investment tools to support the December 2, 2011 Presidential 
Memorandum, which calls on the Federal government to enter into $2 
billion worth of energy efficiency performance-based contracts by 
December 2013. DOE has contracts, training, and technical resources in 
place to assist with this full utilization.
    The specific authorities vary by contract type but include the 
following:

   ESPCs are authorized by 42 USC 8287 et seq. for all agencies 
        to enter into these contracts.
   UESCs are authorized by 42 U.S.C. 8256, for all civilian 
        agencies, to enter into these contracts. DoD has specific 
        authority to enter into UESCs.
   PPAs are codified by 40 U.S.C. 501, for all civilian 
        agencies, to enter into these types of agreements. PPA's are 
        codified by 10 U.S.C. 2922 for DOD.

    FEMP developed a 12-month timeline to guide agencies step-by-step, 
and month-bymonth towards achieving their targets and commitments using 
FEMPs multi-award ESPC. On average ESPC projects are about $15 million; 
however, the costs of these projects are likely to vary among agencies. 
Since these contracts are paid from savings, there is not an increased 
cost to government. FEMP is working with CEQ and OMB to track agencies 
progress in achieving the $2 billion target on a monthly basis.
    Question 45. If a Federal agency pursues an energy savings 
initiative, are they required to consult with FEMP?
    Answer. Federal agencies are not required to consult FEMP prior to 
pursuing energy savings initiatives, but highly encouraged to do so as 
FEMP has resources to assist with their energy savings initiatives, 
including services, tools, and expertise to help them achieve their 
Federal energy management goals and ESPC targets.
    There are several statutory requirements for federal agencies to 
report on energy conservation measures and performance that is 
coordinated by FEMP. For instance, agencies are required to complete 
energy evaluations of their existing facilities, identify potential 
energy conservation measures and report those findings to FEMP 
annually, per Sec. 432 of the Energy Independence and Security Act (42 
USC Sec. 8253(f)). Section 8253, Energy Management Requirements, 
requires 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.
    In addition, Federal agencies are required by Sec. 548(a) of the 
National Energy Conservation Policy Act (NECPA (42 U.S.C. 8258(a))) to 
report annually to FEMP certain energy management activities. 
Information and data collected from the agencies is then used to 
develop DOE's Annual Report to Congress on Federal Government Energy 
Management as well as the OMB Scorecards used to inform Congress and 
the public of federal energy management efforts.
    Question 46. Please describe how you intend to reinvigorate the 
Federal Energy Efficiency kind. What types of projects do you envision 
being funded under this initiative?
    Answer. Similar to DOD's Energy Conservation Investment Program, 
through the Federal Energy Efficiency Fund, in FY13 FEMP intends to 
provide direct funding and leveraged cost-sharing for Federal civilian 
agencies for capital projects and other initiatives to increase the 
energy efficiency, water conservation and renewable energy investments 
at agency facilities. Grants from the Fund would be awarded after a 
competitive assessment of the technical and economic effectiveness of 
each agency proposal. The types of projects that would be funded under 
this initiative include a broad range of energy efficiency, renewable 
and water technologies such as lighting upgrades, solar energy, 
geothermal heat pumps, metering, commissioning, and wind power.
    Criteria for a project award under the Federal Energy Efficiency 
Fund include the amount of energy and cost savings anticipated to the 
Federal Government, amount of funding requested by the agency, and the 
extent that a proposal leverages financing from other non-Federal 
sources.
    Question 47. FEMP is directed to assist agencies in meeting the 
goals set forth in the Presidential Memorandum on Performance 
Contracting (December 2, 2011). In the memo, Federal agencies are 
tasked to enter into a minimum of $2 billion in performance-based 
contracts in Federal building energy efficiency within 24 months. 
Please describe how you intend to meet this goal.
    Answer. FEMP has a number of established tools and systems 
currently in place to assist Federal agencies which are ultimately 
responsible for executing projects in support of this goal. Those tools 
include an Indefinite Delivery, Indefinite Quantity multiple award 
(IDIQ)contract with 16 energy service companies (ESCOs) (with a $5 
billion contract ceiling for each ESCO) that are fully qualified to do 
this work; a comprehensive set of contractual templates and documents, 
along with a streamlined process that allows agencies to move through a 
project efficiently in about 12 months; three Federal Financing 
Specialists assigned to different regions of the country who can assist 
and educate Federal agencies and build interest in performance based 
contracts; a team of Project Facilitators and National Laboratory 
experts who serve as the technical resource and assist Federal agencies 
as they move through project phases. Additional FEMP support includes 
on-line training, website resources, classroom training and other 
outreach activities to raise awareness across the Federal government.
    FEMP also launched some new initiatives to assist agencies meet 
this goal. They include promoting ``deep'' energy retrofit projects (a 
whole-building analysis and construction process that uses integrated 
design to achieve much larger energy savings than conventional energy 
retrofits), a new small site initiative (ESPC ENABLE) for the purpose 
of bringing in small sites that are currently not being served by the 
DOE IDIQ ESPCs; partnering with Army on their Net Zero initiative that 
is expected to result in large, comprehensive projects. DOE 
headquarters is playing a lead role by piloting a data center ESPC with 
a goal of replicating similar initiatives throughout the Federal 
government. FEMP is also working with CEQ and OMB on agency 
sustainability planning and provided a project management tool to 
assist agencies with planning, tracking and monitoring implementation 
efforts.
                              electricity
    Question 48. With its budget request, the Administration proposes 
$20 million to establish a new Electricity Systems Hub that will focus 
on the ``seam'' between the transmission and distribution systems. 
Please elaborate on this proposal. Will FERC or NERC be invited to 
participate? What about electricity stakeholders? In last year's budget 
proposal, the Administration sought to create a Smart Grid Hub which I 
don't believe was ever established. Does DOE intend to include smart 
grid activities, including cyber security, within this new Electricity 
Systems Hub?
    Answer. The Electricity Systems Hub will develop principles and 
functionalities around the substation of the future, redefining the 
critical seam between transmission and distribution. Innovation at this 
interface is necessary to enable the effective use of clean generation, 
electrification, and smart grid technologies. The Hub will convene 
diverse stakeholders including FERC, NERC, utilities, industry, system 
operators, regulators, commissioners, consumer advocates, national 
labs, and academia to solve the technical and institutional challenges 
at this interface. Hub activities will build upon existing smart grid 
projects, innovate, and embed a culture of cyber-physical security.
    Question 49. The FY 2013 budget request proposes $143 million for 
the Office of Electricity Delivery and Energy Reliability, a 3% 
increase over the FY 2012 enacted level. DOE's budget materials note 
that ``[t]hese efforts build upon the Recovery Act investments that 
will have successfully deployed more than 26 million smart meters and 
1,000 phasor measurement units in FY 2013, laying the foundation for a 
modernized electricity grid.'' However, a January 2012 DOE Inspector 
General Report on the Department's management of the Smart Grid 
Investment Grant Program found that many of the grant recipients failed 
to include adequate cyber security measures. What steps is the 
Department taking to address these inadequacies?
    Answer. DOE takes very seriously the responsibility of managing and 
overseeing the Smart Grid Investment Grant (SGIG) Program to protect 
taxpayer funds and ensure that projects are moving forward effectively 
to modernize our Nation's electricity grid. The security of our 
electrical grid is of the utmost importance, which is why the 
Department developed a comprehensive cybersecurity approach for all of 
SGIG projects. DOE required all recipients to develop cybersecurity 
plans that provided information about how they would identify 
cybersecurity risk, how those risks would be mitigated, and how the 
processes in place would ensure that a sufficient cybersecurity posture 
be maintained. Those cybersecurity plans were subject to a rigorous 
review by DOE cybersecurity experts, including iterations between DOE's 
cybersecurity and the recipient's cybersecurity experts prior to final 
approval. DOE approved cybersecurity plans for all 99 SGIG projects. 
DOE did not approve any SGIG cybersecurity plan that failed to meet DOE 
requirements.
    The IG's opinion about what should have been included in the 
required cybersecurity plans differs from what DOE believes is 
necessary. The cybersecurity plans described a process that, when 
implemented correctly, would establish and maintain an adequate 
cybersecurity profile and, at the same time, retain flexibility so that 
specific cybersecurity protections could be addressed as the project 
requirements became better defined from the design phase to the 
deployment phase.
    DOE will continue to ensure that the cybersecurity plans of the 
SGIG recipients are complete and are being implemented properly. The 
Department has conducted a progress review of the recipients' 
cybersecurity implementations as an integral part of numerous site 
visits conducted over the past year. The interim assessments performed 
by cybersecurity experts during site visits help ensure that the 
recipients are implementing the cybersecurity actions and approaches 
outlined in their plans. DOE is in the process of reviewing information 
gathered from the on-site project reviews and, based on this review, 
will determine whether recipients are required to update their plans.
    DOE will continue conducting on-site visits, sharing best 
practices, offering information-sharing sessions via workshops and 
webinars, and evaluating recipients' progress against their required 
cybersecurity plans.
Responses of the Federal Energy Regulatory Commission to Questions From 
                           Senator Murkowski
    The DOE FY 2013 Congressional Budget Request Budget Highlights, (p. 
84) proposes with respect to FERC:

          ``1,480 FTEs . . . will support FERC in its reliability and 
        critical infrastructure protection standards development and 
        compliance processes; infrastructure siting and inspection 
        responsibilities; enforcement efforts; and policy reforms 
        related to competitive energy markets and regulatory policies, 
        including removal of barriers to renewable resources and 
        advanced technologies.''

    Question 50. Please provide the FTE breakdown for each of the 
referenced activities as follows, cross-referenced by Commission 
office:

   ``reliability and critical infrastructure protection 
        standards development and compliance processes;''
   ``infrastructure siting and inspection responsibilities;''
   ``enforcement efforts;''
   ``policy reforms related to competitive energy markets and 
        regulatory policies, including removal of barriers to renewable 
        resources and advanced technologies.''

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    Question 51. Also, do the activities highlighted represent all of 
the Commission's activities? And if not, how many FTEs are dedicated to 
other activities? Please specify.
    Answer. The activities highlighted above represent all of the 
Commission's activities.
     Responses of Hon. Steven Chu to Questions From Senator Johnson
    Question 1. I appreciate the Department's intent to continue to 
support activities for minimal, sustaining operations at the Homestake 
mine in South Dakota. As you know, over the past year, operations have 
been moving forward through a combination of state, private, and 
federal resources. The project team has been updating the shafts to 
ensure they are safe and continuing to pump water from the mine and is 
supporting several early science experiments. Unfortunately, though, it 
is my understanding that the Department's request would reduce funds 
for ``minimal, sustaining operations'' by approximately a third below 
the FY 2012 level. This would very likely result in several operational 
changes, including layoffs of dozens of employees in the small town of 
Lead, SD. Additionally, this reduction would not instill confidence in 
our longstanding state, international, and private partners that have 
dedicated significant funding to this project. How does the Department 
plan to sustain this critical facility, continue to attract 
international interest, and keep dedicated private and state partners 
together given the current budget request?
    Answer. The Department is exploring the impacts of the FY 2013 
budget for ``minimal, sustaining operations'' at Homestake with the 
staff responsible for these operations to ensure continued operations 
at the mine to support the current science program. Sustaining these 
operations will require continuing communication with and involvement 
of private and state partners. Other scientific activities that could 
utilize sites like the Homestake mine are in planning or pre-planning 
stages. Once the plans for these experiments are determined, it will be 
possible to engage in discussions with possible partners about
    Question 2. I am pleased that the Administration seeks a 2.4 
percent increase for the Office of Science. Additionally, I am pleased 
that the Administration is placing a heavy emphasis on the development 
of renewable energy. At the same time, I am also concerned about the 
proposed reductions to the Offices of High Energy Physics and Nuclear 
Physics. These offices have provided funding for operations of the 
Homestake Mine in South Dakota and the design of the Long-Baseline 
Neutrino Experiment, which has been recommended by the National 
Academies and numerous interagency committees. These scientific fields 
have become global in nature, but currently the U.S. role is 
participatory. As such, what are the Administration's plans to ensure 
the U.S. regains its leadership role in particle physics and to take 
advantage of unique assets like the Sanford Underground Research 
Facility in Lead, SD?
    Answer. DOE is committed to maintaining U.S. leadership on the 
Intensity Frontier of particle physics. A suite of neutrino experiments 
is either already underway or under construction as part of the 
Department's intensity frontier program. A major workshop was held in 
December 2011 to help develop plans for this program. The program will 
involve the production of intense particle beams using the Fermilab 
accelerator complex and a series of experiments to explore neutrino 
interactions, rare decays, and other precision measurements of 
forefront interest to the international particle physics community. The 
unique facilities at Fermilab enable the U.S. to hold this leadership 
role on the Intensity Frontier. In addition, deep underground sites 
like the one at Homestake could house facilities for U.S. based dark 
matter direct detection and double beta decay experiments. Currently, 
Homestake hosts demonstration experiments in these areas.
    Responses of Hon. Steven Chu to Questions From Senator Barrasso
    Question 1. The Department's 2008 Excess Uranium Inventory 
Management Plan states that the Department will not dispose of more 
than 3.8 million pounds of natural uranium equivalent during calendar 
year 2012. Will the Department abide by its own Management Plan to 
ensure that no more than 3.8 million pounds of excess uranium 
inventories enter the commercial market? If not, why not and how much 
uranium will enter the market?
    Answer. On May 15, 2012, the Secretary of Energy issued a 
determination that specifically considered the following potential 
transfers:

          1. Up to 9,082 metric tons uranium (MTU) of DUF6 to Energy 
        Northwest (ENW) in CYs 2012 and 2013, which would be 
        immediately followed by enrichment to LEU equivalent to 482 
        MTU, with ENW utilizing a portion of the LEU for fueling the 
        nuclear power reactor it operates. The remaining LEU would be 
        sold as LEU or, in its component parts, as NU and separative 
        work units (SWU) to the Tennessee Valley Authority (TVA) as 
        part of a commercial transaction to support future power 
        generation and tritium production from 2013 through 2030, 
        thereby serving national security purposes.
          2. Up to 2,400 MTU per year of NU to DOE contractors as 
        compensation for cleanup services at the GDP sites at Paducah, 
        Kentucky, or Portsmouth, Ohio, in quarterly transfers of up to 
        600 MTU for the period 2012 through 2021.
          3. Up to 400 MTU NU equivalent per year contained in LEU 
        transferred to NNSA contractors for down-blending HEU to LEU 
        for the period 2012 through 2020.
          The Department's uranium transfers in 2012 are proceeding 
        consistent with the May 2012 Determination.

    Question 2. On January 13, 2012, the Department announced that it 
will assume $44 million in liability for depleted uranium from USEC. I 
am concerned about the impact that this decision will have on the 
commercial market for uranium and on jobs within the uranium mining 
industry. Will the transfer of liability result in any excess uranium 
inventories entering the commercial market beyond the amount specified 
in your answer to question one? If so, how much additional uranium will 
enter the market?
    Answer. The Department signed a contract to procure approximately 
$44 million of separative work units (SWU) of enrichment services from 
USEC, and will compensate USEC for the SWU by accepting title to and 
disposal responsibility for a portion of USEC's depleted uranium tails 
that present liabilities valued at approximately $44 million. The 
Department has taken title to, and eventual disposal responsibility 
for, the depleted uranium tails, and has provided natural uranium as 
feedstock to USEC in return for receiving low enriched uranium (LEU) in 
a quantity that is equal to the natural uranium feed provided and then 
enriched with the value of SWU the government is procuring. The LEU 
resulting from this procurement is now owned by DOE and held in its 
inventory. The LEU can be used to support tritium production. This 
transaction with USEC did not result in uranium entering the market.
    Question 3. Will the Department take any other actions involving or 
related to USEC which will result in any excess uranium inventories 
entering the commercial market beyond the amount specified in your 
answer to question one? If so, what are those actions and how much 
additional uranium will enter the market?
    Answer. At the time of this hearing, the Department does not 
anticipate taking any actions involving or related to USEC which will 
result in any excess uranium inventories entering the commercial market 
beyond the amount specified in the answer to question 1.
    Question 4. It is my understanding that the Department is currently 
revising its 2008 Excess Uranium Inventory Management Plan. What steps 
are you taking to ensure that the revised plan will promote a strong 
and stable uranium mining industry within the United States?
    Answer. The principles underlying the 2008 Excess Uranium Inventory 
Management Plan (Plan) are that the Department manages its inventory of 
excess uranium in a manner that is consistent with current law, 
maintains an adequate inventory for DOE mission needs, ensures 
transactions with non-Government entities are transparent and 
competitive, and supports the maintenance of a strong domestic 
industry. The Department remains committed to the maintenance of a 
strong domestic uranium industry, and the revised Plan will reflect 
adherence to policies and legal requirements that protect the interests 
of the domestic uranium industry in an effective and reasonable manner 
while providing the Department with the necessary flexibility to meet 
its programmatic needs and responsibilities.
    Question 5. Can you tell me whether 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. The May 2012 Determination described in answer to question 
1 effectively sets the Department's agenda for uranium transfers for 
the time span of the Excess Uranium Inventory Management Plan currently 
undergoing revision while keeping in mind the principles set out in the 
answer to question 4.
    Question 6. The Department's FY 2013 budget request states that the 
Department ``will begin implementing a disposition plan developed in FY 
2012'' for the Rocky Mountain Oilfield Testing Center and NPR-3. Has 
the Department completed its disposition plan for the property? If not, 
when will the Department complete the disposition plan?
    Answer. The plan analyzing the options for disposing of Naval 
Petroleum Reserve No. 3 and the Rocky Mountain Oilfield Testing Center 
(RMOTC) is currently being prepared. It is expected that the 
disposition plan will be completed by the end of the year.
    Question 7. It is my understanding that in 2009 the Department 
selected a number of projects to proceed to detailed due diligence and 
negotiation of terms and conditions necessary for a section 1703 loan 
guarantee. When do you anticipate that the Department will complete the 
review process for these projects?
    Answer. The Department seeks additional guidance and clarification 
on the ``selected . . . number of projects'' from 2009 that is cited 
and in order to answer the question responsively.
    Question 8. It is my understanding that the Department of Energy, 
the Department of Treasury, and the Office of Management and Budget all 
participate in the review process of projects considered for section 
1703 loan guarantees. Do any other agencies or offices within the 
Administration participate in the review process? If so, which agencies 
or offices?
    Answer. Treasury and OMB are the only agencies or offices that have 
a statutory role in the review process for Section 1703 loan 
guarantees.
    The statutory basis for Treasury's consultative role is found in 
Section 1702 (a) of Title XVII of the EPAct of 2005, which authorizes 
the Secretary of Energy ``to make guarantees . . . for projects on such 
terms and conditions as the Secretary determines, after consultation 
with the Secretary of the Treasury.'' (Sec. 1702(a)).
    OMB's authority is derived from Section 503 of the Federal Credit 
Reform Act (FCRA), which provides: ``For the Executive Branch, the 
Director [of OMB] shall be responsible for coordinating the estimates 
required by this title.'' [''.nder this authority, the director of OMB 
delegates the authority to agencies to make estimates, while OMB 
reviews and must approve credit subsidy costs for all programs.''. The 
Final Rule governing Section 1703 provides that OMB must review and 
approve DOE's calculation of the credit subsidy cost prior to issuance 
of a loan guarantee.
    Question 9. Will you provide the Committee with a list of the 
projects currently under review for a section 1703 loan guarantee? 
Please also explain the current status of each project and the 
remaining steps that need to be taken to complete the review process 
for each project.
    Answer. Disclosure of the status of loan guarantee applications may 
involve proprietary information that could adversely affect a company's 
financial position. Accordingly, we shall seek to accommodate the 
request for details about specific transactions through other means.
      Responses of Hon. Steven Chu to Questions From Senator Wyden
                        water power budget cuts
    Question 1. For the third year in a row, DOE's budget cuts funding 
for water power technologies, like wave energy. The Europeans are 
committing hundreds of millions of dollars to wave energy technology, 
yet water power technologies were cut 66% to $20 million. The U.S. does 
not even have a test bed for full-scale wave energy devices, as the 
Europeans do, because you keep cutting the budget. Water power 
technologies have broad, bi-partisan support here in the Congress (as 
shown when this Committee adopted both of Sen. Murkowski's marine 
energy and hydroelectric bills last year) and at home. Cities want to 
install small hydro projects in their water systems. Irrigation 
districts want to install them in their irrigation canals. Why has the 
Department cut water power funding?
    Answer. In FY 2012, the DOE Water Power program will continue and 
complete a number of important water power technology research and 
development projects. The FY13 request of $20 million will allow the 
Department's Water Power Program to continue its ongoing projects to 
advance water power technologies and accelerate their market adoption. 
At this funding level, DOE would be able to support a number of water 
power technologies for both conventional hydropower and emerging marine 
and hydrokinetic (MHK) energy technologies.
    For hydropower specifically, DOE selected 16 new innovative 
hydropower technology development projects for funding in FY 2011, and 
that work will continue into FY 2012 and FY 2013. Additionally, DOE 
expects to continue its efforts to analytically quantify the benefits 
that conventional and pumped-storage hydropower provide to the electric 
grid, which can also support the integration of variable renewable 
resources like wind and solar. For MHK technologies, in FY 2013 
activities are slated to focus on developing a suite of technologies 
that harness the energy from wave, tidal, and current resources. 
Specifically, MI-1K research is expected to focus on maintenance and 
development of advanced open water test infrastructure for MHK devices 
and research into the costs and performance of innovative, early-stage 
MHK systems and components. Finally, DOE anticipates conducting 
resource and technology assessments in FY 2012 and FY 2013 to 
accurately characterize all opportunities for water power development. 
DOE intends to use data from ongoing techno-economic MHK assessments to 
establish baseline costs, which DOE will use along with resource 
assessments to evaluate the need for further innovative water power 
R&D.
                  hydrogen and fuel cells budget cuts
    Question 2. Hydrogen and fuel cell technology funding was cut more 
than 22% to $80 million. Here again is a technology with enormous 
potential and global competitors. A recent Pike Research white paper 
estimated the global market for fuel cells at $785 million for 2012. 
When this Committee was considering my alternative fuel vehicle bill 
last year, both of the major auto manufacturers groups recommended the 
bill place more emphasis on hydrogen, but DOE is recommending exactly 
the opposite. Why is the Department cutting hydrogen and fuel cell 
research?
    Answer. The budget request for hydrogen and fuel cells has been 
reduced as part of rebalancing the Department's portfolio of advanced 
technologies. However, hydrogen and fuel cells remain an integral part 
of that portfolio and significant progress is being made. The budget 
request for fiscal year 2013 allows the Department to focus on hydrogen 
and fuel cell activities that will continue to yield technology 
advancements in key areas--including ongoing reductions in the cost and 
improvement in the durability of fuel cells, reductions in the cost of 
renewably produced hydrogen, and improvements in systems for storing 
hydrogen. Funding has been reduced for aspects of the program with less 
impact on R&D progress, such as technology validation, codes and 
standards, and market transformation. Rebalancing the portfolio will 
allow the Department to focus on nearer term transportation 
technologies while maintaining a strong effort in hydrogen and fuel 
cells.
    Question 3. DOE also cut funding for grid-connected energy storage 
by 25% to 15 million in the Office of Electricity Delivery and 
Reliability. Energy storage technologies have application to a number 
of DOE programs and program offices--from energy efficiency, to 
integration of intermittent renewables, to electric grid management. At 
the hearing. Sen. Wyden requested that Secretary Chu provide the 
Department's technology roadmap or strategic plan for Department-wide 
research and development of energy storage technologies. Please provide 
this material.
    Answer. DOE is pursuing a department-wide coordinated R&D strategy 
for energy storage. This strategy is articulated the following key 
documents:

   The Grid Storage Report to Congress (July 2010) describes 
        the roles of each DOE Office, technical goals, and R&D 
        portfolio overviews.
   The Energy Storage Program Planning Document (February 
        2011)\2\ describes grid-scale energy storage technology 
        challenges and needs, as well as near-and long-term DOE 
        objectives in relevant R&D and demonstrations.
---------------------------------------------------------------------------
    \2\ See http://energy.gov/oe/technology-development/energy-storage

---------------------------------------------------------------------------
   The Vehicle Technologies Program Multi-Year Program Plan 
        (201 1-2015)\3\ describes DOE goals for vehicle energy storage 
        R&D, related technical challenges and barriers. and cross-
        referenced specific research tasks.
---------------------------------------------------------------------------
    \3\ See http://www1eere.energy.gov/vehiclesandfuels/pdfs/program/
vt_mypp_2011-2015.pdf

    In addition, the Quadrennial Technoloi. Review (September 2011)\4\ 
establishes an overarching framework for DOE strategy in energy 
technologies, including energy storage. As it notes. the deployment of 
storage technologies faces harriers that include deficient market 
structures, limited understanding of system value, and limited large-
scale demonstrations. Quantifying the benefits of storage under various 
operating conditions will be a priority so that industry and regulators 
alike can fully assess the value of deployed storage capacity. The 
Department will measure. validate, and disseminate performance 
intbrmation for grid-integrated storage technologies, and develop the 
analytic tools necessary to assess and predict value and service as a 
function of operation and location.
---------------------------------------------------------------------------
    \4\ See http://energy.gov/quadrennial-technology-review
---------------------------------------------------------------------------
    A key part of DOE's strategy in energy storage is the Batteries and 
Energy Storage Hub. The interdisciplinary research and development in 
the Hub is designed to advance next-generation electrochemical energy 
storage technologies to improve the reliability and the efficiency of 
the electrical grid, to better integrate clean, renewable energy 
technologies as part of the electrical system, and for use in electric 
and hybrid vehicles. The Hub will also serve as an interaction, 
information, and communication nucleus for the basic and applied 
battery and energy storage communities--encouraging the flow of people 
and information to ensure that the problems and issues being faced in 
today's technologies are understood and to ensure that Hub research 
will spur innovation and problem-solving broadly. The Hub is currently 
under review, and an award is anticipated later this year.
          hydraulic fracturing and other drilling technologies
    Question 4. Your budget has a $2 million increase in Fossil Energy 
for interagency research on hydraulic fracturing for natural gas. Those 
are the right ideas, both to increase funding on hydraulic fracturing 
and working with other agencies, but my sense is that the do.telopment 
of safer, more predictable hydraulic fracturing technologies is a 
bigger problem than a few million dollars can solve. Please describe 
the scope of work and roles and responsibilities and budget of each 
agency working on this interagency effort.
    Answer. On April 13, 2012 DOE, the Environmental Protection Agency, 
and the Department of the Interior's U.S. Geological Survey signed a 
Memorandum of Agreement formalizing this Multi-Agency Collaboration on 
Unconventional Oil and Gas Research. Through this collaboration, a 
robust Federal R&D plan is being developed, taking into account the 
recommendations of the Secretary of Energy Advisory Board (SEAB) 
Natural Gas Subcommittee. DOE's role in this initiative will focus on 
priorities identified by the interagency collaboration in a research 
plan to be formed over the next nine months within its area of core 
research competencies, including wellbore integrity, flow and control; 
green technologies; and systems engineering, imaging and materials. The 
three agencies request to support this work with $45 million; of this 
amount, DOE is requesting $12 million.
    Question 5. There are other energy-related technologies, like 
geothermal energy development, and carbon sequestration, that could 
benefit from advances in hydraulic fracturing technology and which have 
similar problems including seismic disturbance from hydraulic 
fracturing. To what extent are the Department's natural gas drilling 
and hydraulic fracturing research programs coordinated with the 
geothermal and sequestration programs?
    Answer. These DOE programs are coordinated through various types of 
formal and informal technical exchanges including workshops, in-house 
technical meetings, and one-on-one discussions. Organizationally, the 
Office of Fossil Energy includes both the oil and gas program and the 
carbon storage program. These programs are coordinating efforts through 
periodic meetings to share and exchange program-related information.
    There has been long-standing interaction between the oil/gas and 
geothermal programs. This includes the participation of Fossil Energy 
personnel in the review of project proposals for the DOE Geothermal 
Technologies Program and in the Interagency Geothermal Working Group 
led by the National Academies. Further, through a collaborative effort 
with the DOE Geothermal Technologies Program, the DOE Office of Fossil 
Energy's Rocky Mountain Oilfield Testing Center demonstrated a 
geothermal power generation unit using fluids from oil field wastewater 
streams.
                    advanced nuclear fuel cycle r&d
    Question 6. The Blue Ribbon Commission on America's Nuclear Future 
recently recommended that the Nation continue to pursue research, 
development and demonstration on a range of reactor and fuel cycle 
technologies. As the Commission noted, potential alternative fuel 
cycles must account for all elements of the fuel cycle including waste, 
safety, security, and non-proliferation concerns. There are advanced 
electro-processing technologies, especially uranium dioxide 
electrolysis, which appear to have significant benefits over more 
conventional reprocessing technologies. Please describe the technical 
viability, proliferation value, security, waste treatment, safety, and 
reactor design advantages and disadvantages of uranium dioxide 
electrolysis and other electro-processing technologies and the extent 
to which the Department is supporting research into these technologies.
    Answer. The Fuel Cycle Research and Development (FCR&D) Program in 
the DOE Office of Nuclear Energy is researching sustainable nuclear 
fuel cycle technologies that improve resource utilization, reduce waste 
generation, enhance safety and limit proliferation risk. 
Electrochemical processing, also called pyroprocessing, is one of the 
technologies being researched by the FCR&D program.
    Unlike conventional aqueous reprocessing technologies, 
pyroprocessing operates at elevated temperatures using molten salts as 
solvents. The use of molten salts in pyroprocessing may provide 
advantages over aqueous systems. Molten salts are not affected by 
temperature or radiation damage, so relatively short-cooled fuel can be 
processed. The technology can handle large quantities of fissile 
material needed for fast reactors, since a hydrogenous moderator is not 
present. The technologies are also potentially more compact. However, 
this technology is not sufficiently mature for commercial deployment 
and further research is required to fully develop its technical 
capabilities and better understand its costs, risks, and potential 
benefits. Specifically, the technologies for the recovery and 
accountability of transuranic elements (for either recycling or for 
material/waste management purposes) must be improved. Also, because 
this is a batch process, engineering studies would be needed (in 
conjunction with the resolution of the technology challenges) in order 
to evaluate the ability to ``scale-up'' this process and the associated 
economic feasibility.
    Research activities supported by the FCR&D program have focused on 
understanding the fundamental principles that govern the efficiency of 
several separations processes, showing technical viability at 
laboratory scale where appropriate, evaluating waste management needs, 
and developing an understanding of the non-proliferation features of 
the processes. Questions about proliferation risks, environmental 
concerns, economics, technology, and other issues still exist. Current 
research efforts are focused on understanding the science and reducing 
the uncertainties.
                  manufacturing and materials research
    Question 7. The Department's FY2013 budget includes several 
initiatives to expand research and development of manufacturing and 
advanced materials. For example, the Industrial Technology Program 
within the Office of Energy Efficiency and Renewable Energy is being 
reorganized as the Advanced Manufacturing Office. The National Energy 
Technology Laboratory (NEIL), including its facility in Albany, Oregon, 
has unique expertise in materials and manufacturing technology although 
it has historically supported the Office of Fossil Energy. To what 
extent, will the Department take advantage of the expertise of the 
Albany lab and other elements of NETL in its expanded manufacturing and 
materials research efforts?
    Answer. The Advanced Manufacturing Office (AMO) has pending funding 
opportunity announcements that will seek to leverage existing 
manufacturing research and development resources including workforce, 
infrastructure and capabilities in areas all across the country to help 
advance important initiatives. The National Energy Technology 
Laboratory (NETL) facility in Albany, Oregon is an example of the type 
of facility that could potentially offer these resources. AMO 
encourages NEIL to apply when these competitive, merit-reviewed 
solicitations are issued.
    Responses of Hon. Steven Chu to Questions From Senator Cantwell
             funding for the hanford waste treatment plant
    Mr. Secretary, while I am pleased to see DOE's continued commitment 
to cleaning up nuclear wastes on the Hanford Reservation, I have a few 
significant concerns. The Waste Treatment Plant is currently undergoing 
a re-baselining effort and DOE's FY 13 budget request for the Waste 
Treatment Plant is down $50 million from last year--about $110 million 
below the average costs of the past 3 years.
    Question 1. Can you reassure my constituents in the Tri-Cities that 
this budget request and re-baselining effort will keep the Waste 
Treatment Plant on schedule to be completed and operational by 2019?
    Answer. The Department is committed to working with the Congress, 
the Defense Nuclear Facilities Safety Board, and other key stakeholders 
to deliver a safe and efficient Waste Treatment Plant that addresses 
the major environmental risk at Hanford as close to the current cost 
and schedule baseline as possible.
    At the requested funding level of $690M, the project will 
prioritize its FY2013 efforts on: 1) resolution of remaining technical 
issues, including the Defense Nuclear Facilities Safety Board 
Recommendation 2010-2 Implementation Plan commitments for Pulse Jet 
Mixing performance demonstration; 2) completion of the Low-Activity 
Waste Facility (LAW), Balance of Facilities (BOF), and the Analytical 
Lab; and 3) focus remaining resources first on the High-Level Waste 
Facility(HLW), and then on the Pretreatment Facility (PT). Until the 
Department develops its independent cost estimate, the rebaselining 
proposal is received from the contractor, and the independent reviews 
are concluded, cost and schedule implications cannot be defined.
    Question 2. Is there any risk that Hanford clean-up funding at the 
President's FY13 budget request will prevent DOE from meeting the 
milestones of the Tri-Party Agreement?
    Answer. The President's FY13 budget request positions DOE to meet 
all FY13 Tri-Party Agreement milestones.
    Question 3. Is there any risk that Hanford clean-up funding at the 
President's FY13 budget request will increase the likelihood that 
radioactive materials will contaminate the Columbia River?
    Answer. The Department has made significant progress in removing 
hazards from the Columbia River corridor. The risk posed by radioactive 
material contamination of the Columbia River in the short-term is 
extremely low based on groundwater modeling done in support of the Tank 
Closure and Waste Management Environmental Impact Statement. At the 
Tank Farms, all pumpable liquids have been transferred from the older 
single-shell tanks to the newer and more durable double-shell tanks. 
Barriers have been placed over some tank farms to reduce the risk of 
further contamination. The FY13 President's Budget request provides the 
resources to continue retrieval of the tougher sludge and saltcakes in 
single-shell tanks and transfer it to the double-shell tanks. No double 
shell tanks are believed to have ever leaked, and no single-shell tanks 
are currently leaking. The Department remains fully committed to 
completing this important mission of removing the threat posed by 
Hanford's tank waste.
    Question 4. I'm also concerned about some recent reports, including 
concerns raised by whistleblowers, about the design of the Waste 
Treatment Plant. I understand this is a challenging project and that 
some of the Hanford waste treatment facilities and technologies are 
one-of-a-kind, but the plant must have the ability to operate reliably 
for decades once it comes online. When the waste treatment plant begins 
processing waste, high levels of radioactivity inside the facility will 
prohibit humans from entering it to make repairs. While we all want the 
plant to be completed in a timely and cost-efficient manner, we simply 
cannot allow any margin for error.
    How exactly is the Department of Energy providing oversight to 
guarantee that the Waste Treatment Plant will be able to accomplish its 
unique mission, and have you looked into the design issues?
    Answer. The Waste Treatment Plant (WTP) is the chosen method by 
which the majority of the tank waste will be stabilized for long-term 
disposal. As such, the Department, its regulators and contractors work 
closely together to ensure the plant is capable of safe and efficient 
operations. In this relationship, the Department oversees and is 
ultimately responsible for all aspects of the WTP nuclear safety, 
design, verification and validation, and construction and 
commissioning. Given the importance, scope and visibility of this 
project at Hanford, the Department routinely engages experts from 
government, industry and academia to provide additional independent 
reviews and assessments of the WTP project. The Department will 
continue to work closely with its contractors, stakeholders, technical 
oversight, regulators, Congress and others to ensure that the WTP will 
safely achieve its tank waste treatment mission at Hanford.
   waste isolation pilot plant (wipp) and nuclear defense waste from 
                                hanford
    Mr. Secretary, waste retrieval and reversibility have historically 
been major limiting factors in the siting and cost of proposed waste 
disposal facilities. Yet the high level waste at the Hanford site is 
scheduled to be vitrified in the Waste Treatment Plant beginning in 
2019, a process that will render materials in high level waste both 
stable and unrecoverable for future commercial or nuclear purposes. A 
permanent storage site will then be necessary for these vitrified 
wastes. Allowing Hanford to become the de facto repository for these 
wastes--which represent 90 percent of the nation's high-level 
radioactive defense waste--is unacceptable to me and my constituents.
    Question 5. How do you propose that we resolve the long-term 
storage problem and move to establish a permanent repository for 
treated military wastes?
    Answer. The Department's inventory of high-level waste and spent 
nuclear fuel resulting from historic defense-related operations is 
currently safely managed at four sites within the complex. The high-
level waste and spent nuclear fuel can be safely stored on site for 
several decades pending the availability of a geologic disposal 
facility.
    To ensure that nuclear power continues to be a safe, reliable 
resource for our nation's long-term energy supply and security, the 
United States must put in place a sustainable fuel cycle and used fuel 
management strategy. To advise the Administration, Secretary Chu 
convened the Blue Ribbon Commission on America's Nuclear Future (BRC). 
This expert panel completed their final report and recommendations in 
January of 2012. The Administration is giving full consideration to the 
BRC recommendations as we work to define a path forward. The 
Administration anticipates providing additional information later this 
year, and will work with Congress to implement a new strategy to manage 
our nation's used nuclear fuel and nuclear waste.
    Question 6. At a hearing two weeks ago, former Energy Committee 
Chairman Domenici suggested that military waste should be prioritized 
and that the Waste Isolation Pilot Plant (WIPP) in New Mexico might be 
ideally situated for Hanford's waste.
    Do you agree that WIPP is well-suited to accommodate the waste at 
Hanford?
    Answer. The Department is currently evaluating the recommendations 
of the Blue Ribbon Commission regarding long-term waste disposal. The 
Department's experiences at WIPP will be considered as part of that 
assessment.
    Question 7. What advantages and disadvantages do you see in using 
WIPP to dispose of Hanford waste in terms of cost, safety, and timing?
    Answer. The Department is currently evaluating the Blue Ribbon 
Commission recommendations for disposal of high-level waste and spent 
nuclear fuel. At this stage it is premature to assess the impact on 
cost, safety, and timing.
    Question 8. Do you see any technical barrier to disposal of 
additional volumes of vitrified high-level waste, spent nuclear fuel, 
and other wastes from Hanford at the WIPP facility? Could the facility 
potentially accommodate higher levels of both contact-handled and 
remote-handled wastes?
    Answer. At present, WIPP's mission is limited by statute to the 
disposal of defense transuranic waste. Therefore, WIPP's design and 
regulatory approvals currently support only transuranic waste disposal. 
Additional evaluation is necessary to determine whether any technical 
barriers exist to disposal of high-level waste and spent nuclear fuel 
at WIPP. Based on early studies and ongoing international efforts, 
disposal of these wastes in a salt repository appears to be technically 
feasible.
    The WIPP Land Withdrawal Act of 1992, as amended, limits the 
repository disposal volume to 175,675 m\3\ of defense-related 
transuranic waste. In addition, WIPP is limited to a total curie level 
for remote-handled transuranic waste which is not to exceed 5.1 million 
curies and a volume requirement not to exceed 7,080 m\3\.
    There are no technical barriers to WIPP accepting additional 
volumes of contact-handled and remote-handled transuranic wastes.
    Question 9. Considering that WIPP has now been operated 
successfully for over a decade now, what barriers prevent the facility 
from being expanded beyond its current maximum of 175,500 cubic meters 
of defense-generated transuranic (TRU) waste.
    Answer. The Waste Isolation Pilot Plant (WIPP) Land Withdrawal Act 
of 1992 (WIPP Land Withdrawal Act), as amended, limits the repository 
disposal volume to 175,675m\3\ of defense-related transuranic (TRU) 
waste. The WIPP Land Withdrawal Act and the Environmental Protection 
Agency certification impose a limit on total curie level for remote-
handled TRU of 5.1 million curies. Additionally, the Consultation and 
Cooperation Agreement with New Mexico limits the total volume of 
remote-handled TRU to 7,080 cubic meters. While there are no apparent 
technical barriers to WIPP being expanded to receive additional TRU 
waste volumes beyond the statutory limit, there are significant legal 
barriers.
    With respect to additional TRU waste, it would be necessary to 
revise the statutory limits in the WIPP Land Withdrawal Act and the 
Consultation and Cooperation Agreement with New Mexico, and to obtain 
the appropriate regulatory approvals from EPA and the State of New 
Mexico.
    Question 10. Under the Land Withdrawal Act, does the Department of 
Energy have the authority to transfer larger quantities of defense 
wastes, including spent nuclear fuel and vitrified high level wastes, 
from Hanford to WIPP within the current limits of WIPP's license? If 
not, what authority would be necessary?
    Answer. Under the Waste Isolation Pilot Plant (WIPP) Land 
Withdrawal Act of 1992, as amended, DOE does not have the authority to 
dispose of spent nuclear fuel or high-level radioactive waste at WIPP. 
Section 12 of the Act specifically states, ``The Secretary shall not 
transport high-level radioactive waste or spent nuclear fuel to WIPP or 
emplace or dispose of such waste or fuel at WIPP.''
                 pending land transfer at hanford site
    Mr. Secretary, DOE completed its Comprehensive Land Use Plan (CLUP) 
in 1999 that identified nearly 10% of the Hanford Site that could be 
used for industrial development in the future. The remaining 90% of the 
Hanford Site was identified for preservation or conservation. That CLUP 
met all requirements under the National Environmental Policy Act (NEPA) 
and the Comprehensive Environmental Response, Compensation, and 
Liability Act (CERCLA) at the time, and a Record of Decision was made 
following the release of the final CLUP.
    Question 11. To what extent can the current process and review rely 
on existing data, particularly from the CLUP, to expedite finding new 
productive uses for Hanford land?
    Answer. DOE is taking steps required prior to any potential 
transfer including review under NEPA. DOE will complete an 
Environmental Assessment (EA) for any proposed land transfer action and 
will engage interested members of the public in the NEPA process. Any 
land transfer EA will review/consider existing documents and studies 
that are pertinent to the land transfer action, including the CLUP, 
which was updated in a supplement analysis in 2008.
    Question 12. Knowing that the CLUP had extensive public involvement 
in support of industrial development, why doesn't this satisfy certain 
NEPA/CERCLA requirements? What is the NEPA/CERCLA legal structure 
governing this current review and process, and the requirements for any 
public comment?
    Answer. The CLUP provides broad NEPA coverage for land-use 
designations such as ``industrial'' but does not satisfy NEPA 
requirements for site-specific activities, such as the transfer of 
Federal lands. DOE recognizes that in accordance with NEPA, public 
input is an important component of its evaluation, and that input 
received from the CLUP will be considered in the preparation of the EA.
    The CERCLA process to ensure that cleanup activities are sufficient 
to meet the anticipated land use has not been completed for the lands 
being considered for transfer. Upon completion of the work required to 
meet CERCLA remedy requirements, DOE will request Environmental 
Protection Agency concurrence on a Clean Parcel Determination pursuant 
to section 120(h)(4) of CERCLA.
    Question 13. What are the baseline studies that DOE envisions that 
will take 18 or more months to complete before the 1,641 acres 
requested are transferred to the Tri-Cities community? How can this 
process be streamlined and expedited?
    Answer. As part of the NEPA process to prepare the Environmental 
Assessment (EA), DOE will need to conduct cultural and natural resource 
surveys for portions of the lands where such surveys have not been 
completed to date. In addition, DOE will take advantage of existing 
surveys where they are available and will complete necessary further 
data-gathering activities as efficiently as possible. We hope to arrive 
at a consensus as to reasonable alternatives and the scoping process 
for the EA involving the public and interested stakeholders.
                        u.s. fossil fuel exports
    Mr. Secretary, I was troubled by your recent comments in Houston 
which seemed to suggest that you may have pre-determined that exporting 
natural gas was in the public interest, or that it was okay if natural 
gas exports led to moderately higher natural gas prices for American 
consumers and businesses.
    Question 14. Do you think that fossil fuel prices would increase 
domestically as a result of expanding our exports of fossil fuels? If 
so, how do you weigh the likely impact of those price increases on the 
economy? Please provide individual responses to these questions for oil 
and petroleum exports, natural gas exports, and coal exports taking 
into account the different market dynamics for each fuel.
    Answer. DOE has not conclusively studied the domestic price impact 
on fossil fuels as a result of an increased export of fossil fuels.
    Oil and Petroleum Exports: Crude oil from the United States (U.S.) 
cannot be exported without a special clearance from Congress, and as a 
result, crude oil is rarely exported--the one exception being some 
crude oil exports from Alaska in the 1990's when the U.S. West Coast 
had excess supplies of oil. Refined oil products can be exported 
however. In theory, assuming both crude or refined products could be 
exported, it appears that increasing exports of U.S. oil (if U.S. 
production remained the same) might have little, or no, effect on oil 
prices since these prices are determined in international markets. 
Thus, if U.S. exports increased the U.S. would have to increase imports 
to balance out its domestic needs--i.e., basically this would appear to 
be a net balancing of oil supplies with no price effects. However, if 
the U.S. increased domestic oil production, either for export or 
domestic use, this might, depending on the size of the increase 
relative to the size of the global market, put downwards pressure on 
international oil prices because it would increase the overall supply 
of oil in international markets.
    Natural gas: In January 2012, the Energy Information Administration 
(EIA) released a study that found domestic natural gas prices could 
increase as a result of domestic natural gas exports, in addition to a 
number of other findings. This report is available on the EIA website 
at: http://www.eia.gov/analysis/requests/fe/
    Coal: The U.S. has traditionally been a net exporter of coal. The 
EIA shows the U.S. currently exports about 5% of the approximately 1.1 
billion tons of coal it now produces annually. Thus, the effects, if 
any, of these levels or exports have already been factored into the 
prices paid for coal in the U.S. The effects of increasing coal exports 
beyond these levels would depend on how readily, and at what price, the 
U.S. coal could increase its production.
    Question 15. Does it make sense for the United States to export 
more raw energy commodities--and the resulting environmental impacts--
across the Pacific just to have finished goods such as solar panels be 
imported back to the U.S.?
    Answer. In general, free international trade of goods and services 
could benefit all parties with each party exporting the products it can 
produce most efficiently, and importing the products it cannot produce 
as efficiently as others.
    Question 16. Do you think exporting natural gas and coal would make 
them behave more like oil--a world market commodity, governed by 
higher, more volatile day-to-day prices?
    Answer. It is more likely that exporting natural gas or coal into 
international markets would not cause them to act like international 
oil markets. International oil markets are fully integrated and buy and 
sell oil in an international market where virtually all transactions 
are valued according to the dynamics of that international market with 
price adjustments for quality and location. The international markets 
for natural gas and coal, to the extent that these markets exist, are 
much more regional and local in operation. Thus, these markets do not 
set an international price for natural gas or coal. The prices and 
transactions that do take place in these markets are much more likely 
to reflect local or regional market conditions and often are point-to-
point transactions with long term contracts. These contracts tend to 
reduce price volatility.
 relationship between gasoline prices to supply and demand fundamentals
    Mr. Secretary, there are few economic drivers more significant than 
prices at the pump. Even small gas price increases can significantly 
impact every family budget and the bottom lines of virtually every 
American business. Higher gas prices hurt consumer confidence and can 
also be a serious threat to economic recovery. Many industry analysts 
think we are just a few months away from $4 per gallon of gas, which 
tends to be the point at which the price of gas starts to undermine 
economic growth. And we'll shoot right past that if Iran reacts to 
additional economic sanctions by restricting its production or even 
attempting to close the Strait of Hormuz.
    While these geopolitical considerations have an understandable 
impact on prices at the pump, every year the oil markets seem to be 
getting further and further divorced from the laws of supply and 
demand. During a Finance Committee hearing last year, I asked Exxon-
Mobil CEO Rex Tillerson what he thought the price of oil should be if 
it were based on supply and demand fundamentals. His answer was $60 to 
$70 a barrel, rather than the $100--$115 we see today. I've studied 
this issue closely for many years now, and I think the evidence is 
clear that excessive speculation in the oil futures market drives 
disruptive behavior in the price of oil.
    Question 17. What do you think is responsible for our new era of 
volatile and elevated oil and gasoline prices?
    Answer. Volatility in the oil market and periodic high gasoline 
prices have been concerns during the last four decades. Continuing 
unrest in many oil-supplying nations of the Middle East and North 
Africa has contributed to price volatility in the oil market by adding 
uncertainty about the availability of supply. Additionally, the global 
demand for oil has increased, particularly with the rapid industrial 
growth and development in countries like China, India and Brazil. For 
instance, in 2010 alone, China added roughly 13 million cars on its 
roads. As standards of living rise throughout the world, there will be 
more demand for oil, and that will affect prices of petroleum and 
petroleum products worldwide.
    Question 18. Do Americans simply have to live with high prices and 
high volatility until better alternatives allow us to run our cars and 
trucks on something other than oil, or make them all run on less oil?
    Answer. Without changing their fuel or vehicles, Americans do have 
options for reducing oil consumption by making choices about vehicle 
maintenance and operation. FuelEconomy.gov, one of DOE's most heavily 
trafficked websites, offers its many visitors information on those 
options. Americans can choose when and how to make trips both locally 
and long-distance. The Administration has called for transportation 
policies that offer Americans more choices among available modes of 
transportation to make those trips. These are some of the options 
available to Americans who wish to control their energy costs without 
replacing their existing vehicles or changing fuels.
    Question 19. It was just a decade ago that Saudi Arabia was trying 
to keep world prices in the range of $22 to $28 dollars per barrel to 
discourage the development of alternatives, why isn't $100 per barrel 
helping spur alternatives to gasoline?
    Answer. High oil prices have, and will continue to, spur the 
development of alternatives to gasoline. Higher prices at the pump 
impact consumer preferences for vehicles with greater fuel economy, 
helping spur innovation in the design and production of those vehicles. 
Driven by these innovations and by the Administration's historic new 
fuel economy standards, the fuel economy of America's light duty 
vehicle fleet has achieved an all-time high over the last year. U.S. 
Department of Energy (DOE) programs have also seen an unprecedented 
response from entrepreneurs and applicants with innovative technologies 
that could reduce oil consumption. Specifically, these programs have 
cut the cost and improved the performance of promising electric 
vehicle, biofuels and fuel-efficient technologies. To achieve full 
commercialization of alternative fuels, we must continue to invest in 
innovations that make alternatives competitive with fossil fuels on 
both price and cost.
    Question 20. What is necessary to break oil's monopoly on our 
transportation system, and what will bring alternative fuels online on 
a scale to compete with fossil fuels?
    Answer. Developing alternative fuels and advanced vehicles through 
investments in innovation is essential to diversifying the energy used 
in the U.S. transportation sector. The recent introduction of more 
electric vehicles into the light duty fleet is a major step toward that 
objective. In the long-haul heavy duty truck fleet, greater use of 
natural gas has the potential to be a complementary approach to 
addressing the dependence on oil. 'In addition to pursuing advances in 
technology and infrastructure for electric and natural gas vehicles, 
DOE is also investing in the development of biofuels that can be 
produced at a commercial scale and sold at a cost that is competitive 
with fossil fuels. The DOE Biomass Program is taking specific steps 
such as developing fuels that can be directly dropped into existing 
infrastructure for gasoline, diesel, jet fuel, and a host of other 
useful products. Sustained investment in these innovation paths is 
necessary to fully develop and deploy the technology solutions that can 
address oil dependence in the transportation sector.
    Question 21. The President announced a significant amount of new 
oil and gas drilling in his State of the Union speech. Yet based on the 
testimony from experts we have heard in the Energy Committee, drilling 
or bringing in more oil from Canada is not going to make a bit of 
difference in the world price of oil, especially in the short run. The 
same would hold true even if we opened up drilling off every coastline 
in the United States. The Energy Information Administration states that 
even the most comprehensive domestic drilling proposals would only 
decrease gasoline prices by 3 to 5 cents--and not until 2030.
    In your opinion, will any amount of additional drilling lead to 
substantially lower prices at the pump today, tomorrow, or any time in 
the next 20 years?
    Answer. Oil prices are set on a global market and fluctuate 
depending on global the market conditions. Even if the United States 
were a net oil exporter, U.S. gasoline prices would be set based on 
global oil prices as they are today. Given the complexity and 
uncertainty of predicting the future global oil market it would be 
difficult to determine whether additional domestic drilling would 
substantially lower prices.
                     budget cuts to water power r&d
    Mr. Secretary, as you know hydropower is the largest source of 
clean, renewable energy in the United States. And Washington State 
produces almost a third of the nation's total. This affordable, 
emissions-free, and renewable power source has helped attract new 
business investments to the Pacific Northwest and there is great 
potential remaining, as was recognized by the 2011 Hydropower 
Improvement Act, bipartisan legislation led by Senator Murkowski. A 
recent study has shown that with the right policies, hydropower could 
create over 1.4 million cumulative direct, indirect, and induced jobs 
by 2025. Given this potential, I have some concerns about the FY 2013 
request for water power programs, which take a disproportionate 
reduction from FY 2012 level--a two-thirds reduction, in fact--whereas 
virtually all other EERE research program areas get increases of the 
same magnitude or more.
    Question 22. Why is there such a dramatic decrease in your funding 
request for this particularly promising area of clean energy 
generation?
    Answer. The Department believes that the $20 million requested for 
water power research in FY 2013 will allow its Water Power Program to 
continue its ongoing projects to advance water power technologies and 
accelerate their market adoption. At this funding level, a number of 
water power technologies can be developed for both conventional 
hydropower and emerging marine and hydrokinetic energy technologies.
    For hydropower specifically, DOE selected 16 new innovative 
hydropower technology development projects for funding in FY 2011, and 
that work will continue into FY 2012 and FY 2013. Additionally, DOE 
expects to continue its efforts to analytically quantify the benefits 
that conventional and pumped-storage hydropower provide to the electric 
grid, which can also support the integration of variable renewable 
resources like wind and solar. For marine and hydrokinetic (MHK) 
technologies, in FY 2013 activities are slated to focus on developing a 
suite of technologies that harness the energy from wave, tidal, and 
current resources. Specifically, MHK research is expected to focus on 
maintenance and development of advanced open water test infrastructure 
for MHK devices and research into the costs and performance of 
innovative, early-stage MHK systems and components. Finally, DOE 
anticipates conducting resource and technology assessments in FY 2012 
and FY 2013 to accurately characterize all opportunities for new water 
power development across the country. As data from these assessments 
become available and results from ongoing research and technology 
development projects are produced, DOE will evaluate the need for 
further innovative hydropower R&D.
    Question 23. Isn't a strong hydropower R&D program important to 
achieving the ambitious clean energy goals that the Department of 
Energy has identified?
    Answer. Yes, a strong hydropower R&D program is critical to meet 
the President's clean energy goals, including the goal of producing 80% 
of U.S. electricity from clean energy sources by 2035. Hydropower has a 
major role in the renewable portfolio. On average 6% of the nation's 
electricity and 70% of the renewable electricity has come from 
hydropower over the last decade, and it will continue to have a strong 
role in the renewable energy portfolio for the foreseeable future. 
Hydropower is clean, low-cost energy source with a well-developed 
industry that not only has a significant role in the renewable energy 
portfolio, but is also a critical part in the electricity operation and 
electrical power grid. Hydropower's quick response time has been 
critical to ensuring power grid reliability and security. Pumped-
storage hydropower is the only reliable and cost-effective utility-
scale energy storage available today.
    In FY 2012, the Department will continue and complete a number of 
important water power technology research and development projects 
initiated in FY 2010 and FY 2011. The $20 million requested in FY 2013 
allows the Department's Water Power Program to continue its ongoing 
efforts to advance water power technologies and accelerate their market 
adoption.
    Question 24. Do you believe that no further innovation or 
technological advance is possible for hydropower?
    Answer. The Department believes that further innovation and 
advancement of hydropower technologies are both possible and necessary 
to improve the efficiency and sustainability of existing assets that 
provide a substantial amount of energy and services for the nation, and 
to encourage the development of new sustainable hydropower generation. 
In FY 2012 and FY 2013, the Department will continue and complete a 
number of research projects that will develop and test new hydropower 
generation technologies and water utilization tools, demonstrate a 
state-of-the-art fish friendly turbine, develop standardized assessment 
guidelines for upgrading existing hydropower facilities, and quantify 
the benefits that conventional and pumped-storage hydropower provide to 
the electric grid (which can also support the integration of variable 
renewable resources like wind and solar). Finally, DOE anticipates 
conducting resource and technology assessments in FY 2012 and FY 2013 
to accurately characterize all opportunities for water power 
development. The FY 2013 request would allow for the completion of 
these activities, after which the Department will have more information 
to evaluate the need for additional innovative water power R&D.
    Question 25. Please provide a summary of DOE's spending on 
hydropower R&D over the last two decades and measureable outcomes from 
the taxpayer investment.
    Answer. DOE has made hydropower R&D investments since 1991, but 
funds for such initiatives and programs were relatively limited 
compared to investments in recent years. Since Congress re-established 
the Water Power Program in 2008, DOE has spent a total of $58.5 million 
on conventional hydropower R&D through annual Water Power 
Appropriations and an additional $30.6 million for hydropower upgrades 
as part of the American Recovery and Reinvestment Act. Over the last 
five years, new opportunities in small hydropower have emerged as well 
as opportunities for upgrades of existing hydropower which results in 
increased generation. DOE's R&D has also included detailed laboratory 
tests of efficiency and fish survival rates of a fish-friendly turbine, 
which potentially provides a more sustainable option for producing 
electricity at an estimated 1,000 environmentally sensitive hydropower 
facilities and thousands of new potential developments.
    Another leading role that DOE has played is in conducting credible 
resource assessments, which developers, states, and other federal 
agencies can use to inform decisions about infrastructure investments. 
For example, DOE recently completed a study that finds that there are 
50,000 non-powered dams in the United States with the potential to add 
over 12 GW of capacity. The majority of these dams are operated by the 
U.S. Army Corps of Engineers, and power stations can likely be added to 
many of these dams without impacting critical habitats, parks, or 
wilderness areas while powering millions of households and avoiding 
millions of metric tons of carbon dioxide emissions each year.
    The analysis did not consider the economic feasibility of 
developing each unpowered facility.
    As part of the Recovery Act, DOE awarded $30.6 million to create 
jobs and help modernize infrastructure, increase generating efficiency, 
and reduce environmental impacts at seven hydropower facilities. For 
example, the Abiquiu Hydroelectric Facility boosted output from 13.8 MW 
to 16.8 MW, increasing renewable energy generation capacity by 22%, and 
will produce enough energy to power 1,100 homes annually. Construction 
is in progress for several more of these modernization projects.
    Over the last decade, hydropower has provided on average 6% of the 
nation's electricity and 70% of renewable electricity output annually. 
DOE has sponsored new innovative hydropower R&D at more than a dozen 
universities across the country.
            renewable energy price parity with fossil fuels
    Mr. Secretary, we clearly have to make some difficult choices with 
regard to the allocation of funding across energy R&D and other 
technology specific incentive programs. While there have been major 
improvements in many of these technologies in recent years, they still 
have some way to go before they can compete on an equal footing with 
fossil fuels and seize the expanding world market for clean energy.
    Question 26. What is your sense of the future with respect to the 
competitiveness of renewable energy technologies? When might we expect 
them to be competitive in the marketplace on their own?
    Answer. Renewables, such as wind and solar, are competing today in 
some electricity markets where the highest quality resources (wind 
speed and solar irradiation) can be tapped. Although there are 
currently policies in place (production and investment tax credits, 
accelerated depreciation schedules, State Renewable Portfolio 
Standards, Renewable Energy Credits, etc.) that help incentivize the 
emerging renewable energy market, DOE's goal is to enable all renewable 
energy technologies to compete with fossil fuels on an unsubsidized 
basis. This means that the true installed cost of renewable 
electricity, without subsidies, needs to be approximately $0.06 per 
kilowatt-hour. Currently, land-based wind power at approximately $0.08 
per kW-hr is within striking distance of this goal. In some wholesale 
electricity markets accessible to high class winds and transmission, it 
is already competitive. In some areas of the country that have real-
time pricing, high peak retail electricity rates and good solar 
irradiance, rooftop photovoltaics (PV) energy is becoming competitive.
    DOE has been committed to promoting R&D in high potential renewable 
technologies that have specific goals to become cost competitive over 
time. For example, off-shore wind technology is currently not cost 
competitive, however, through the development of deepwater wind 
technology, DOE has an interim goal of $0.10 per kW-hr by 2020 for off-
shore wind systems to be more competitive and an ultimate goal of price 
parity with fossil fuels by 2030.
    DOE's Sunshot Initiative puts us on track to enable photovoltaics 
to meet this $0.06 per kilowatt-hour goal by the end of the decade. 
Concentrated solar power technologies will require lower cost and 
higher performance materials before they are competitive on an 
unsubsidized basis.
    Naturally-occurring steam or hydrothermal geothermal systems can be 
cost competitive if the resource is well characterized. The Department 
is now developing better exploration tools to facilitate resource 
characterization. Enhanced geothermal systems are still in the early 
stages of development but have an advantage over hydrothermal systems 
in that they could be deployed almost anywhere in U.S., not just where 
natural occurring geothermal exists (which is primarily in western 
U.S.). DOE's goal is to prove EGS feasibility by 2020 and cost parity 
with fossil fuels by 2030.
    In addition, the Department sees hydropower playing a critical role 
in continuing to produce renewable generation while integrating higher 
penetrations of variable solar and wind power into the grid. For 
instance, a common current practice is to curtail wind power in times 
of lower demand. Instead of curtailing the wind generation, it can be 
used to pump water to a higher altitude reservoir and then to use that 
potential energy when wind generation is low. Small hydropower and 
marine and hydrokinetic devices (current, tidal, wave, etc.) require 
more research and development but have the potential to be cost 
effective in the future.
    Finally, renewable energy generation has nearly doubled over the 
last 3 years. Continued investment in research and development can help 
create domestic manufacturing jobs and make the U.S. more competitive 
in this global competition for alternative energy sources.
    Question 27. Do you agree with the many energy experts who argue 
that a predictable price on carbon designed in a way that minimizes 
price volatility is the most economically efficient and technology 
neutral way to realize greater energy efficiency and diversity?
    Answer. The Administration supports a Clean Energy Standard (CES) 
as the centerpiece of a strategy for creating clean energy markets in 
the power generation sector. A CES will provide the signal investors 
need to move billions of dollars of capital off of the sidelines and 
into the clean energy economy, creating jobs across the country and 
reducing air pollution and greenhouse gas emissions. By setting an 
annual target for electricity from clean energy sources, while allowing 
businesses and entrepreneurs to figure out the best way to meet it, the 
CES is a flexible, market-based approach that taps American ingenuity 
and innovation--and channels it toward a clean energy future.
    Question 28. In your view, what are the most economically efficient 
policies to increase U.S. energy diversity without the need for 
government to pick technology or special interest winners or losers?
    Answer. The Administration supports a Clean Energy Standard (CES) 
as the centerpiece of a strategy for creating clean energy markets in 
the power generation sector. A CES will provide the signal investors 
need to move billions of dollars of capital off of the sidelines and 
into the clean energy economy, creating jobs across the country and 
reducing air pollution and greenhouse gas emissions. By setting an 
annual target for electricity from clean energy sources, while allowing 
businesses and entrepreneurs to figure out the best way to meet it, the 
CES is a flexible, market-based approach that taps American ingenuity 
and innovation--and channels it toward a clean energy future.
                 investments in grid modernization r&d
    Mr. Secretary, you have called attention, for example in your FY 
2011 budget request, to the nation's chronic underinvestment in R&D 
supporting the modernization of the electric power grid. I am referring 
specifically to grid-scale energy storage technologies and control 
technologies that will enable the integration of larger shares of 
renewable energy and give operators better tools to manage the grid in 
real time and make it more reliable and efficient. I am concerned with 
the substantial cuts to the Office of Electricity Delivery and Energy 
Reliability's R&D budgets in your budget request. For example, the 
Smart Grid R&D budget request for FY 2013 is 40 percent lower than the 
FY 2012 budget, and the request for energy storage R&D is 24 percent 
lower than last year. I realize that this year's budget request 
includes $20 million for an Electricity Systems Innovation Hub, but I 
am concerned that funding for the new Hub comes at the expense of other 
programmatic priorities.
    Question 29. Could you explain your strategy for the Office of 
Energy Delivery, as it is reflected in the budget request?
    Answer. The FY 2013 budget request of $143 million for the Office 
of Electricity Delivery and Energy Energy Reliability (OE) supports the 
President's commitment to an ``all-of-theabove'' energy strategy that 
includes critical investments in innovative technologies, tools and 
techniques that will enhance the capabilities of a modern power grid. 
As such, strategic decisions were made to prioritize activities 
providing a balanced portfolio of projects and activities that increase 
electricity reliability and security nationwide by taking a systems-
level approach to grid modernization, developing the computational 
capabilities to improve system planning and operations, and emphasizing 
cybersecurity. FY 2013 also reflects our ongoing efforts to continue to 
leverage funding throughout the Department, with other Federal agencies 
and the industry to maximize cost effectiveness.
    Question 30. Does it make sense to take funds from other R&D 
programs within OE to pay for the Energy Systems Hub?
    Answer. Strategic priorities and tradeoffs were made to maximize 
resources and results while at the same time minimizing programmatic 
impacts. Investing in the Electricity Systems Hub will allow us to 
focus on the seam between transmission and distribution--a pinch point 
of grid modernization where power flows, information flows, policies 
and markets intersect--to tackle the critical issues and barriers 
associated with integrating, coordinating, and facilitating the 
numerous changes that are happening system-wide. The Hub activities 
will accelerate adoption of new technologies within a policy and 
regulatory framework that allows efficient utilization of assets and 
capital investment, including minimizing consumer costs for grid 
modernization.
    Question 31. Can you share how you envision this innovation hub 
providing leadership in shaping our national pursuit of a transformed 
power system for the 21st century?
    Answer. The Hub will serve as a platform to test and evaluate new 
technologies and concepts developed by the Hub, DOE, or industry. Key 
stakeholders will convene at the Hub to observe, discuss, and 
understand the market, regulatory, and institutional implications of 
these advancements. It will serve as a center of excellence for sharing 
information and best practices and be a training ground for future 
engineers needed in a transformed power system.
       intermittent resource integration in the pacific northwest
    Mr. Secretary, with the growth of intermittent generation 
throughout the West--and especially the Northwest--there is a 
legitimate desire to find ways to integrate wind economically. To that 
end, I have concerns with the potential results of blindly relying on 
``markets'' to meet consumer needs in an affordable fashion. My 
constituents suffered the consequences of the Enron-induced West Coast 
energy crisis, and I believe that any new proposal, which claims to 
address legitimate issues through the market, needs to be evaluated 
carefully. My concern is that we not presume that organized and 
centralized markets are the only or best solution without the due 
diligence to support that claim.
    Question 32. Do you agree that utilities and generators in the 
west, including the power marketing agencies under your supervision, 
should look at all options to integrate intermittent resources and 
focus on the solution with the least cost to consumers?
    Answer. The decisions made by utilities, including the Power 
Marketing Administrations (PMAs), should always be made with the 
consumer in mind and the impact those decisions will have on consumers' 
bills. The electric sector is facing unprecedented changes as our 
nation moves towards cleaner energy sources. These changes must be done 
cost-effectively to ensure electricity rates remain affordable.
    As the United States. becomes fueled more and more by clean energy, 
we will need to improve our ability to integrate variable resources. 
All options are on the table, but the country cannot wait indefinitely; 
we must transition from studying to decision making sooner rather than 
later.
    Question 33. How does the proposed Energy Imbalance Market (EIM) 
compare to operational measures within and between so-called balancing 
authorities? What approach to integrating intermittent resources do you 
think would be the most effective while impacting the consumers the 
least?
    Answer. Some utilities have developed a range of operational 
measures within and between balancing authorities (BAs) over the last 
few years. These include new wind forecasting techniques, intra-hour 
scheduling, reserve sharing, and a new electronic bulletin board for 
intra-hour transactions. These operational measures, which have been 
developed at low cost among groups of interested utilities, have been 
designed to work with the existing market structure. They help 
utilities maintain reliability and provide balancing reserves at 
reasonably low cost to consumers.
    While these operational measures have provided benefits, they may 
face limitations as the amount of renewable resources increases over 
time. Currently, the balancing of load and renewable generation occurs 
within each individual BA without taking advntage of the natural 
diversity of variable generation and load fluctuations between 
different BAs. Spreading the variability of generation over a wider 
footprint and sharing diversity among a broader group of BAs could 
result in reductions in total balancing reserve requirements, 
potentially reducing costs to consumers and reducing wear and tear on 
existing balancing resources.
    In an EIM, balancing requirements are consolidated amongst all 
participating BAs. An independent market operator conducts a continuous 
least-cost dispatch of available resources to maintain the balance of 
loads and resources across the footprint of the participating BAs. The 
netting of system variability over the entire EIM footprint reduces the 
amount of balancing reserves that must be set aside in anticipation of 
such movement (though the benefits of this netting can be constrained 
by transmission access to the offered flexibility). These measures may 
be more economically efficient than current practices and have the 
potential to lower the cost of integration. The operation of the EIM 
could also provide price signals that would facilitate the development 
of controllable loads (e.g., the smart grid) and incentivize optimal 
location of new resources. Finally, the wide area visibility and 
resource responsiveness facilitated by an EIM could improve system 
reliability.
    Some of the diversity benefits of an EIM may be achievable through 
operational measures. These include the sharing of variable energy 
resource diversity between BAs and enhanced dynamic transfer 
capabilities. To further the evaluation of benefits that maybe gained 
from an EIM, DOE has partnered with utilities to evaluate the costs, 
benefits, and design requirements of a number of enhanced balancing 
market options, including an EIM. The Department expects to receive 
regular updates on the status of this work and is also monitoring other 
work streams on the topic underway in the West.
   standby power provisions of the energy independence and security 
                              act of 2007
    Mr. Secretary, I authored Section 524 of the Energy Independence 
and Security Act of 2007 (EISA 2007) which directs federal agencies to 
procure appliances and other equipment that use no more than 1 watt of 
electricity in standby power mode, if such products are available, and 
to procure products with the lowest standby power consumption 
otherwise. The requirement is stated in 42 USC 8259b(e) in the Federal 
Acquisition Regulation, under Subpart 23.2--Energy and Water Efficiency 
and Renewable Energy, which states that, in their procurements, 
agencies must purchase items listed on FEMP's Low Standby Power Devices 
product listing.
    Question 34. To what extent are new products and appliances that 
meet FEMP standby power requirements available for off-the-shelf 
purchase?
    Answer. In product categories where FEMP has had a long-standing 
low standby power program we have seen migration of the market towards 
production of low standby power products. New products are becoming 
available that meet the low standby power requirement.
    In addition, new product categories frequently appear on the 
market. FEMP currently requires standby power of 1W or less for three 
product categories: cordless phones; desktop computers, workstations, 
and docking stations; and fax/printer machines. FEMP monitors market 
changes in order to identify opportunities for significant energy 
savings through new low standby power requirements. FEMP also 
coordinates with the DOE EERE Building Technologies Program, which 
establishes test procedures and standards for energy-consuming product 
categories.
    Question 35. What progress have federal agencies made to comply 
with these procurement guidelines?
    Answer. DOE's Federal Energy Management Program (FEMP) has 
assembled lists of qualified products and made them available to 
agencies. FEMP has worked with the Federal supply sources (DLA and GSA) 
to indicate compliant products within those systems. FEMP has also 
worked to incorporate the low standby requirements into other market 
transformation programs, such as the Electronic Product Environmental 
Assessment Tool (EPEAT) and ENERGY STAR. Data from the Federal 
Electronics Challenge suggests that over 90% of Federal purchases 
covered by EPEAT are of EPEAT-qualified models. The success of EPEAT 
and ENERGY STAR combined with the notable increase in models that meet 
the low standby power requirements suggest that agencies are purchasing 
an increasing number of low standby power products. FEMP's low standby 
power program helps make it easier for Federal agencies to find and 
comply with requirements.
    Question 36. Specifically, what does the Department of Energy need 
to do, if anything, to meet these guidelines?
    Answer. DOE ensures sustainable procurement mandates are followed 
internally through continuous review and updates to the Department's 
contract writing system. All contracts are required to contain clauses 
and provisions to ensure offerors and contractors meet the Federal 
government's sustainable acquisition goals and initiatives.
    The Department also ensures that all personnel involved in the 
procurement process are made fully aware of DOE's current policies and 
objectives through training courses and involvement in working groups.
    DOE's official policies and progress for meeting sustainable 
acquisition mandates and goals are included in its annual Strategic 
Sustainability Performance Plan (SSPP).
    Question 37. To date what have been the energy and financial 
savings resulting from FEMP's standby power requirement and what 
savings to you anticipate in the future?
    Answer. While Federal market penetration data regarding devices 
with stand-by power is difficult to acquire, FEMP estimates savings on 
the order of--19,000MWh or--2MW, approximately $1.5 million annually in 
avoided Federal energy costs. This is based on preliminary analyses for 
a report being prepared by FEMP on Federal Energy Savings Potential, 
which will estimate savings potential by product category. FEMP is 
currently researching Federal sales volumes in order to better estimate 
Federal energy savings potential associated with FEMP-designated 
efficiency requirements and standby power requirements. FEMP has 
observed an increase in the national availability of low standby power 
products that is likely attributable to Federal leadership in this 
area.
    Question 38. Please provide a summary of other DOE efforts to 
minimize standby power losses and the benefit they could provide 
American consumers.
    Answer. The Department is making great strides towards amending 
test procedures and energy conservation standards to account for energy 
consumption in standby mode and off mode to help consumers of these 
products save money. Per Section 310 of EISA 2007, all final rules 
establishing or revising a standard for a covered consumer product, 
adopted after July 1, 2010, shall incorporate standby mode and off mode 
energy use. To date,. DOE issued standards that consider standby and 
off mode for clothes dryers, room air conditioners, furnaces, central 
air conditioners, residential refrigerators, and fluorescent lamp 
ballasts and has revised test procedures for clothes dryers, room air 
conditioners, furnaces, boilers, battery chargers, and external power 
supplies. DOE is currently engaged in a rulemaking to amend standards 
for Class A external power supplies and establish standards for non-
Class A external power supplies and battery chargers. This rulemaking 
considers the energy consumed in standby and off mode, as required by 
EISA 2007. In the Notice of Proposed Rulemaking, DOE's proposal 
estimates that standards for battery chargers and external power 
supplies (in all modes of operation) could save an estimated 2.35 quads 
of energy cumulatively over the years 2013-2042. The benefit to the 
nation for this rulemaking, represented as the cumulative net present 
value of total consumer costs and savings from the standards is 
estimated to be $6.83 billion over the years 2013-2042 (7% discount 
rate, in 2010$). Until this proposal is finalized, these energy savings 
estimates are subject to change.
        supporting domestic regional fuel stocks demonstrations
    Mr. Secretary, although the lack of qualified cellulosic biofuels 
has made it more difficult to meet the requirements of the Renewable 
Fuel Standard (RFS), I am encouraged that the DOE is coordinating with 
the U.S. Navy and the U.S. Department of Agriculture (USDA) to promote 
the development of cellulosic biofuels.
    Question 39. Can you tell me more about this partnership, and how 
it is developing regional strategies for cellulosic biofuels?
    Answer. DOE has a robust and growing partnership with the U.S. Navy 
and USDA to promote the development of biofuel technology for future 
military and civilian use. The collaboration is creating a better 
understanding of the biofuels needs of the military and the potential 
of the technology. In June 2011, Secretary Chu signed a Memorandum of 
Understanding (MOU) with Secretaries Vilsack and Mabus to request that 
funds be transferred through the Defense Production Act or other 
appropriate authority to DOD to jointly develop biorefineries that will 
produce military specification fuels. DOE also works closely with USDA 
on feedstock issues such as the Feedstock Regional Partnership and the 
Biomass Research and Development Initiative. Finally, DOE is continuing 
to work with USDA to better understand the regional needs and 
sustainability issues required for wide spread commercialization of 
advanced biofuels.
    Question 40. What level of support for RDD&D programs is necessary 
to reach the targets set in the RFS? Does the current budget request 
meet this need?
    Answer. The RFS has set aggressive volumetric goals for biofuels, 
such as ethanol. In FY12 the Biomass Program will have developed, 
demonstrated, and validated multiple integrated systems for the 
conversion of biomass to ethanol and other industrial alcohols cost 
competitively. This will conclude the program's R&D effort in this area 
and the data will be available to industry and others looking to 
commercialize these technology pathways. In addition, four commercial 
scale biorefineries based on cellulosic ethanol technologies have 
already broken ground and anticipate operations by FY 13. Leveraging 
this knowledge and investment to date on ethanol, including feedstock 
logistics and intermediates production such as sugar, the program is 
shifting efforts to producing drop-in fuels and bio-products in future 
years to displace the entire barrel of oil, and DOE believes the FY13 
request is adequate to support the necessary RD&D needed to advance 
this effort.
    Question 41. What can the DOE do to alleviate the current market 
reality that there are not enough qualified products, and how can the 
DOE support the qualification of renewable fuels, such as oil derived 
from woody biomass for process heat, to qualify under the RFS?
    Answer. Within the President's budget request, DOE is supporting 
the necessary research, development and demonstration (RD&D) of 
technologies that can help meet the requirements of the RFS. Support of 
the collaborative demonstration project with the Navy and USDA will 
allow the private market to make more informed investment decisions 
regarding renewable fuels. In fact, four commercial scale biorefineries 
supported by DOE have already initiated construction and will have the 
capacity to produce more than 80 million gallons of cellulosic ethanol 
by 2013. In support of the qualification of additional renewable fuels 
for the RFS, DOE conducts research and analysis and provides data and 
expertise related to qualifying cellulosic renewable fuels. As an 
example, for ethanol, DOE conducted the engine testing of ethanol 
blends at its national laboratories and supported pioneer cellulosic 
ethanol demonstration and commercialization efforts through the Biomass 
Program.
                future electricity generation from coal
    Mr. Secretary, in an investment analysis published in November 
2010, Deutsche Bank concluded that coal use for electricity production 
in the United States is likely to decline significantly in coming 
decades--from 47 percent in 2009 to 22 percent in 2030. Several factors 
contribute to coal's decline, including capital cost increases relative 
to gas, retirement of aging plants, increasingly stringent regulation 
of criteria pollutants, rising ash disposal costs, and financial 
barriers due to the regulatory uncertainty associated with greenhouse 
gas emissions. In contrast, EIA's Annual Energy Outlook 2012 Early 
Release projects that U.S. aggregate coal use will continue to rise and 
that coal will still account for 39 percent of U.S. electricity 
production in 2035.
    Question 42. Which forecast do you think is more likely?
    Answer. The two cited energy outlooks by Deutsche Bank and EIA are 
based on different assumptions in areas important to the future 
domestic energy outlook where there is considerable uncertainty, 
including: legislation to achieve major greenhouse (GHG) emission 
reductions, future natural gas costs, electricity demand assumptions, 
the competitiveness of gas and coal power plants with carbon capture 
and storage (CCS), and the impacts of new regulations impacting power 
plants.
    The Deutsche Bank analysis is driven by a policy-oriented 
initiative, specifically, the identification of a low cost solution for 
achieving a 17-percent reduction in overall U.S. greenhouse gas (GHG) 
emissions by 2020 and an 83-percent reduction by 2050 relative to the 
2005 level. Those specific policy goals were not represented in the 
Annual Energy Outlook 2012 (AEO2012) Early Release. If they were, the 
coal share of 2035 electricity would likely be lower.
                future electricity generation from coal
    Question 43. Do you concur with the broad consensus that 
anticipated plant retirements, increasing regulatory obligations, and 
higher hurdles to capital finance for new coal plants.will have a 
profound impact on U.S. coal consumption?
    Answer. EIA is providing the answer to this question. EIA is 
currently studying U.S. coal consumption in its Annual Energy Outlook 
for 2012 (AEO2012) and its findings will help to inform the 
Department's analysis. There are numerous factors including relatively 
slow electricity demand growth, low natural gas prices, high coal 
prices and upcoming environmental rules that will lead to some coal 
retirements and impact future coal use for power generation over time. 
However, DOE does not project as large an impact as is seen in the 2010 
Deutsche Bank analysis. Deutsche Bank provides an analysis driven by an 
assumed policy-oriented initiative, where the primary goal of the study 
was to find a low cost solution for achieving the Administration's 
proposed 17-percent reduction in overall U.S. greenhouse gas (GHG) 
emissions by 2020 and an 83-percent reduction by 2050 relative to the 
2005 level.
    In addition, it appears that some of the assumptions used for 
Deutsche Bank's analysis may vary substantially from those used by EIA 
for the AEO2012 Early Release Reference case. For example, in their 
analyses Deutsche Bank indicates that natural gas prices will remain in 
a range of $4.00 to $8.00 per million Btu in nominal dollars, with 
perhaps $6.00 being their primary forecasting assumption. In the 
AEO2012 Early Release Reference case, the nominal price of natural gas 
at Henry Hub increases from $4.39 per million Btu in 2010 to $8.98 per 
million Btu in 2030 and to $11.48 per million Btu in 2035. Another 
important difference between Deutsche Bank's analysis and EIA's AEO2012 
Early Release Reference case is the outlook for electricity demand, 
with Deutsche Bank projecting average electricity demand to increase by 
0.5 percent per year between 2009 and 2030 and EIA projecting more 
rapid growth of 1.0 percent per year for this same time period.
    In the area of coal-fired generating capacity retirements, Deutsche 
bank projects 152 gigawatts of capacity retirements (most likely 
nameplate) by 2030, which is considerably higher than the 33 gigawatts 
of net summer coal-fired capacity retirements projected in the AEO2012 
Early Release during the years 2011 through 2030. In the Deutsche Bank 
report, the authors indicate that the costs of some environmental rules 
not represented in EIA's AEO2012 Early Release, such as the EPA's 
recently finalized Mercury and Air Toxics Standards (MATS) and 
forthcoming EPA rules on cooling water intake and ash disposal were 
represented in their analyses. EIA plans to represent the new MATS rule 
in the updated AEO2012 Reference case scheduled for publication later 
this year.
    Question 44. In 2011 the Environmental Protection Agency (EPA) 
issued a number of new rules. As these policies go into effect, the 
price of coal-fired generation is expected to rise. The National 
Research Council's 2010 report ``The Hidden Costs of Energy'' showed 
that the average additional cost of coal generation due to emissions of 
SO2, NOX, and particulate matter was 3.2 cents 
per kilowatt-hour in 2005 and will decrease to roughly 1.7 cents per 
kilowatt-hour by 2030.
    How do the costs of reducing these emissions from recent 
regulations compare?
    If the additional cost of coal generation estimated by the NRC were 
included in EIA's modeling, how would that change the estimate for 
future coal consumption and the price through 2035? How do the costs of 
reducing these emissions from recent regulations compare?
    If the additional cost of coal generation estimated by the NRC were 
included in EIA's modeling, how would that change the estimate for 
future coal consumption and the price through 2035?
    Answer. EIA is providing the answer to this question. EIA has not 
performed an analysis of the potential impacts of the non-market 
externalities referred to in the NRC report. If externality cost were 
incorporated into pricing, coal plant operators would have an incentive 
to abate emissions in order to reduce impacts on generation costs and 
prices. However, there would likely be some increase in coal generation 
costs, some reduction in coal generation and increase in other 
generation sources, and some increase in electricity prices.
    Question 45. The Congressional Research Service documented in a 
2007 study that significant bottlenecks in rail transport caused 
billions of dollars in losses in previous years, and that many billions 
of dollars of improvements would be required to avoid such problems in 
the future. How much would this increase the true cost of coal? What 
must be invested to ensure the national reliability of inputs to coal-
fired power plants considering that that EIA also projects coal mining 
to become more geographically constrained?
    Answer. EIA is providing the answer to this question. The report 
cited is CRS No. RL34186, Rail Transportation of Coal to Power Plants: 
Reliability Issues, September 26, 2007. The report found (pp. 38 and 
39) that:

          ``just as there are no public metrics that directly measure 
        current rail system capacity, there are also no firm estimates 
        of future capacity needs or costs.... In summary, rigorous 
        national-level assessments of rail system capacity needs and 
        expansion costs do not appear to exist.''

    In general, the limited availability of rail infrastructure costs 
and capacity data make their specific impacts on rail costs difficult 
to assess in the National Energy Modeling System used to produce the 
Energy Information Administration's Annual Energy Outlook. But, because 
projected changes in coal volumes are relatively small (0.4% growth per 
year in U.S. coal production) , significant capacity constraints and 
related impacts on projected transportation rates are not anticipated.
                             coal reserves
    Mr. Secretary, the U.S. Geological Survey (USGS) has been updating 
data on U.S. coal reserves in the last few years. The AEO 2012 updated, 
and reduced, previous estimates for technically recoverable reserves of 
shale gas based on new data from USGS. The AEO 2012 does not mention 
its reference for coal reserves.
    Question 46. Why do you think the Energy Information Administration 
(EIA) has not updated its estimates of coal reserves? Do you find the 
latest USGS data for coal reserves to be reliable?
    Answer. EIA is providing the answer to this question. EIA 
frequently reviews options for updating coal reserve estimates, but has 
not under taken such an effort at this time because the known resource 
base appears large enough to meet current and expected demands. While 
the United States Geological Survey (USGS) does not maintain a 
centralized one-stop source of coal data for some key coal basins, data 
exists at state geological surveys, mining companies, and in localized 
USGS studies. Additionally, EIA has documented declining productivity 
in the Appalachian Basin (the main eastern U.S. coal producing region).
    Question 47. In 2009 USGS published an analysis that included 
evaluations on how to calculate economic recoverability, estimating 
that 6% of the Demonstrated Reserve Base (DRB) was 'economically 
recoverable' without a rise in price per ton that is well beyond 
current EIA projections. How should EIA integrate the USGS analysis on 
economic recoverability of coal reserves into its analysis? If USGS 
estimates on economic recoverability were included in the AEO, how 
would the projected prices, exports, and production for all energy 
types be affected?
    Answer. EIA is providing the answer to this question. In the USGS 
report, the 6 percent relates to original resources, not to the 
Demonstrated Reserve Base (DRB). For clarification purposes, DRB 
represents a portion of original resources.
    The differences in the assumptions and methodology used in the USGS 
and EIA analysis should be acknowledged. For example, EIA reports 
Estimated Recoverable Reserves (ERR) of Wyoming surface-mined coal at 
15.3 billion short tons (bst) comparable to the ``economically 
recoverable'' estimate of 18.5 bst made by the USGS. The discounted 
cash flow analysis done by USGS assumes that future mining is done with 
today's technology so it also is an approximation of coal availability. 
(Note: the USGS assessed the Gillette field, which while it is the 
major part of all the coal in Wyoming, leaves out some coal included in 
the EIA estimate of ERR for all of Wyoming. However, this difference is 
not large and does not alter the comparisons.)
    EIA has considered projected coal prices, recovered coal 
quantities, and available coal reserves in its latest long-term 
assessment of U.S. energy markets published in the Annual Energy 
Outlook 2012 (AEO2012) Early Release Reference case in January 2012. 
For the time horizon represented in the AEO2012 Early Release Reference 
case Wyoming coal reserves are felt to be sufficiently abundant to meet 
the projected levels of coal demand. For Wyoming's Powder River Basin, 
coal prices increase from $12 per short ton in 2010 to approximately 
$25 per short ton in 2035 (constant 2010 dollars). Based on the USGS 
assessment, the amount of recoverable coal in Wyoming's Gillette 
coalfield at $25 per short ton would be about 40 bst. The AEO2012 Early 
Release Reference case shows cumulative coal production of 12 bst for 
the Wyoming's Powder River Basin during the years 2010 through 2035. 
The USGS estimates of economically recoverable coal exceed the 
cumulative AEO coal production forecasts by a wide margin.
      Responses of Hon. Steven Chu to Questions From Senator Coons
                                 arpa-e
    I am pleased to see a continuing commitment to the ARPA-E program. 
The budget request for S325 million indicates the administration's 
commitment for breakthrough, transformational research. ARPA-E's focus 
on exclusively high-risk, high-payoff concepts--technologies promising 
genuine, high-impact innovation in the ways we generate, store and 
utilize energy has been essential. While the Department has invested 
heavily in conventional energy research. ARPA-E has augmented that 
original mission and acquired support from many different stakeholder 
interests.
    Question 1. With the Department's FY 2013 budget request. do you 
plan to continue solicitations in the portfolios already in place, 
establish new opportunities around potentially transformational ideas. 
or open one or more opportunities to a more general set of ideas that 
might evolve from public input?
    Answer. In FY 2013. ARPA-E plans to continue investing in some 
technology areas that are already represented within its research 
portfolio while also seeking out and identifying new high-impact areas 
of focus. For example. ARPA-E's Electrofuels program has successfully 
supported several technologies on the lab-scale that allow 
microorganisms to combine chemical or electrical energy with carbon to 
create liquid transportation fuels. Through the recently issued 
Electrofuels II Request for Information (RFI)\5\ ARPA-E is seeking 
input from industry, academia, and other interested stakeholders on the 
steps and challenges necessary to scale-up and apply these and related 
technologies in a commercial-scale facility.
---------------------------------------------------------------------------
    \5\ DE-FOA-0000671: Request for Information (RFI) on Funding 
Opportunity Announcement (FOA) DE-FOA-0000671 for Chemo/electro-
autotrophic Synthesis of Liquid Fuels at Scale. available at: https://
arpa-e-foa.energy.gov/
---------------------------------------------------------------------------
    ARPA-E issued an Open Funding Opportunity Announcement (FOA) on 
March 2, 2012 to support transformational and disruptive high-impact 
energy R&D projects for energy-related technologies that enhance our 
nation's energy and economic security. These projects are expected to 
include: renewable power, bioenergy, transportation, the electrical 
grid, and building efficiency, among other technology areas. The 
release of the Open FOA followed a three-week RFI, which produced 
public comments that were utilized in finalizing this FOA. Since ARPA-E 
issued an Open FOA in FY 2012, it does not plan to issue one in FY 
2013, holding to a pattern of issuing an Open FOA every two to three 
years.
    ARPA-E's prides itself on constant innovation and its 
organizational model reflects that by allowing a timeline from 
conception to execution that is greatly accelerated--typically only six 
to eight months. This allows ARPA-E to respond rapidly to newly 
emerging technological discoveries in its creation of new programs.
                       quadrennial energy review
    Over the years, there have been calls for a national approach to 
formulate an integrated, forward-looking energy policy. Energy policy 
touches many different federal agencies. The Quadrennial Technology 
Review done by the Department of energy is broader than many review 
before it, but still does. not consider Administration-wide priorities. 
The intent of developing a government-wide Quadrennial Energy Review 
(QER) is to bring greater coherence and interagency cooperation to 
Administration-wide energy projects, as well as point for effective 
dialogue with Congress on a coordinated legislative agenda. However, 
that very interagency cooperation will be required to make the QER 
possible, which makes this undertaking more complicated than its 
predecessors.
    Question 2. How will the DOE, as the agency in charge of 
coordinated the QER process, deal with this complexity, ensure that the 
final product is useful, and engage with the many different entities 
across the Administration?
    Answer. Pursuing the QER as a fully integrative effort from the 
outset with comprehensive recommendations later in the process is a 
critically important, but complex challenge. Discussions are underway 
about taking a ``moving spotlight'' approach in which attention would 
be focused sequentially on each of the six strategies defined in the 
QTR, which would allow DOE and its interagency partners to develop 
recommendations more quickly. The series of spotlight QERs would let 
the agencies tackle the overall complexity in manageable pieces.
    To ensure that the fmal QER product is useful and to engage with 
stakeholders inside and outside the Administration, DOE will actively 
pursue stakeholder engagement, including engagement across the Federal 
government, as taken during development of the QTR. The DOE-QTR 
demonstrated a successful approach for substantive consultation that 
involved public comment on a framing document and a series of focus 
groups, topical workshops and a capstone workshop. I anticipate each 
spotlight QER will adopt a similar approach.
    Question 3. What preparation has been done already within DOE to 
prepare to execute the QER process? Are there impediments to 
implementing a QER, and if so, what are they?
    Answer. Discussions are underway currently, and DOE will fully 
brief Congress on our plans as soon as we are ready to announce them.
                  biofuels--replacing the whole barrel
    I applaud DOE's newfound focus on utilizing biomass to replace the 
``whole barrel'' of products from crude oil--not only gasoline, but 
also diesel, jet fuel, and petrochemical products. Today, a variety of 
companies are seeking to scale technologies to produce drop-in and 
direct replacement fuels that can be seamlessly integrated into 
existing refineries, transported in existing pipelines, dispensed from 
existing tanks and pumps, and used to fuel any engine used today--as 
well as chemicals that can replace petroleum derived products used in 
plastics, packaging, clothing, and other fibers.
    Question 4. How is DOE utilizing programs across the department (in 
the Office of Science, EERE, and ARPA-E) to address biomass conversion 
to drop-in and direct replacement fuels?
    Answer. DOE's Undersecretary level technology team, which brings 
together the Office of Science, ARPA-E, and EERE's Biomass Program, 
coordinates efforts to conduct research, development, demonstration and 
deployment (RDD&D) activities to overcome barriers to commercializing 
advanced biofuels. Office of Science is focused on basic or fundamental 
R&D that increases knowledge and the suite of tools available to the 
research community. The Bioenergy Research Centers, supported through 
the Biological and Environmental Research program (BER) of the Office 
of Science, are pursuing the basic research underlying a range of high-
risk, high-return biological solutions for bioenergy applications. 
Advances resulting from the BRCs will provide the knowledge needed to 
develop new biobased products, methods, and tools that the emerging 
biofuel industry can use. Also supported by BER, the Joint Genome 
Institute sequenced the genomes of key industrial organisms that 
produce novel enzymes for the degradation of biomass to sugar, 
providing the applied programs with the necessary information to make 
industrial grade improvements. One of ARPA-E's goals is to accelerate 
technology development from basic science to applied science through 
high risk high reward research that is not mature enough for the 
applied research programs. For example, ARPA-E's Electrofuels program 
looks for solutions with non-photosynthetic biofuel production, and 
ARPA-E's PETRO (Plants Engineered to Replace Oil) program looks to find 
new paradigms in feed stocks and bioengineering techniques. EERE 
focuses on the applied research, development, demonstration and 
deployment (RD&D) activities, working in partnership with the industry 
that is commercializing the technologies to reduce costs, ensure 
reliability and help fund the first-of-a-kind technology. The 
Department's efforts support the goal to produce renewable gasoline, 
diesel, or jet fuel at $3/gal by 2017.
    Question 5. How are these efforts coordinated across various 
programs to accelerate technology development toward commercialization?
    Answer. The Department of Energy has established a team at the 
Undersecretary level that meets monthly to discuss key issues such as 
technical, economic, and market barriers to fostering the development 
of the U.S. biomass industry. This technical team focuses on setting 
goals that drive all three programs (Office of Science, ARPA-E, and 
EERE's Biomass Program) in a coordinated fashion. Additionally, staff 
from the three programs meet quarterly to discuss progress, new 
opportunities, and strategic direction. In December, 2012, EERE's 
Biomass program sponsored a ``roadmapping'' workshop, inviting industry 
as well as academics and national laboratories to present on the 
scientific barriers that have already been overcome, what new or 
remaining barriers exist and the best solutions for overcoming these 
through research and development from fundamental science through to 
demonstration.
    Question 6. Has there been any attempt to try and coordinate these 
various programs across agencies as well?
    Answer. The primary coordination mechanism for bioenergy activities 
across agencies is under the Biomass R&D Act of 2000 (as amended). The 
Act directs three primary efforts: an annual Initiative solicitation 
administered by the Department of Energy (DOE) and the Department of 
Agriculture (USDA); the Biomass Research & Development Board (Board); 
and the Biomass Research and Development Technical Advisory Committee.
    The Board is an interagency collaboration chaired by DOE and USDA 
and composed of senior officials from federal agencies and the White 
House. The Board meets quarterly and currently includes members or 
representatives from the DOE, USDA, Environmental Protection Agency 
(EPA), National Science Foundation (NSF), Department of Interior (DOI), 
Department of Defense (DOD), and the White House of Office of Science 
and Technology Policy (OSTP). In their 2008 National Biofuels Action 
Plan (NBAP), the Board directed the formation of several Interagency 
Working Groups to facilitate the coordination of efforts across 
agencies related to feedstock production and logistics, conversion, and 
distribution infrastructure and end use.
    In addition to formal coordination efforts that take place through 
the Board, DOE and USDA coordinate on a regular basis through other 
mechanisms and collaborate on projects such as the Regional Biomass 
Energy Feedstock Partnership under the Sun Grant Initiative. DOE is 
also working closely with DOD and USDA to advance the MOU that was 
signed by three Secretaries last year to assist the development and 
support of a sustainable industry for drop-in hydrocarbon biofuels in 
military applications.
             biofuels--military biofuels mou & doe funding
    In the summer of 2011, President Obama announced a $510 million 
Memorandum of Understanding (MOU) between the Secretaries of Energy, 
Agriculture, and the Navy to assist the development and support of a 
sustainable industry for drop-in hydrocarbon biofuels to power the 
Department of Defense and private sector transportation. The FY12 
Energy and Water Development appropriations bill proposed by the Senate 
included language that would have given DOE the authority to transfer 
up to $170 million from EERE into the Defense Production Act (DPA) for 
this initiative. Unfortunately, that language was not included in the 
final appropriations act. The FY13 budget request asks for authority to 
shift up to $40 million in DOE biomass funding to DPA to support pilot-
scale demonstrations, rather than the commercial production envisioned 
by the MOU.
    Question 7. Has the DOE's role in this program shifted since 
release of the MOU, and if so, how?
    Answer. There has been no revision of DOE's role in the MOU. The 
MOU states an objective of supporting domestic commercial or pre-
commercial scale advanced drop-in biofuel plants and refineries. DOE is 
planning on requesting an intended $170M over multiple years to fulfill 
its commitment. This commitment will primarily come in two forms. 
First, we have requested $40M in FY 13 funds, along with the authority 
to transfer these funds to the DPA, to support a competitive 
solicitation with DOD and USDA for a commercial scale biorefinery that 
produces drop-in military jet and diesel biofuels. In addition, DOE has 
requested $20M in FY13 to competitively solicit innovative pilot scale 
demonstrations for producing military specification fuels. In FY12, we 
are also committing $20M for innovative pilot demonstrations.
    Question 8. How did the DOE determine the request for ``up to $40 
million'' for FY13?
    Answer. The DOE fully supports the MOU between the DOD, USDA, and 
DOE. DOE is planning on a total of $170M to support the initiative. The 
$40M funding request was determined based on the total cost of each 
biorefinery being at least 50% cost-shared by the private sector and 
the recognition that the multi-year project does not need all of the 
money the first year. Furthermore, DOE's experience in funding 
commercial and pre-commercial scale facilities suggests that the first 
year of funding includes critical go/no go decision points including 
NEPA compliance, and securing of private cost share that will determine 
when they can move into the more expensive construction phase. In 
addition to this $40M, $20M is requested in FY2013 along with $20M in 
FY 12 for innovative pilots that will demonstrate initial scale up of 
technologies and provide essential data to produce military grade 
fuels.
    Question 9. Does the DOE still intend to contribute funding on the 
scale of $170 million for this initiative?
    Answer. DOE continues to fully support the joint DOD/USDA/DOE MOU. 
DOE's intended commitment of $170M will be requested over multiple 
years. We plan to invest $60M in FY 2013 with $40M going to the DPA 
procurement for a commercial scale biorefinery and $20M for innovative 
pilot scale facility to demonstrate initial scale up of technologies 
and provide essential data to produce military grade fuels.
    Question 10. Does the DOE still support use of the DPA to fund 
commercial scale advanced drop-in biofuels plants?
    Answer. Yes, DOE is fully supportive of the DPA initiative to fund 
commercial or pre-commercial scale biorefineries and is requesting $40M 
under the President's FY 13 budget request. In addition to the DPA 
effort, another $20M in FY 13 is requested for innovative pilots that 
would produce advanced ``drop-in'' fuels for military applications. Our 
intended total commitment is $170M and is subject to appropriations.
        biofuels--advanced biofuels hurdles to commercialization
    Today, many companies seeking to produce advanced drop-in and 
replace fuels are on the verge of commercialization. These companies 
have proven their technologies at the pilot and demonstration scales, 
but nonetheless face significant hurdles in building bio refineries at 
a scale whereby the product volumes are large enough to be cost-
competitive with existing refineries. The capital required to deploy a 
commercial scale bio-refinery is an order of magnitude higher than the 
cost of development or demonstration, and typically beyond the limits 
of venture capital. Moreover, private lenders generally will not offer 
low-cost debt to finance a first-of-its kind plant or technology. I 
believe there is a role for the Federal government to play in 
addressing this Valley of Death--which in turn will help meet our 
nation's energy, economic, and security goals.
    Question 11. How does the DOE plan to help companies and investors 
address these hurdles, either through existing programs or new policy?
    Answer. DOE is addressing the hurdles associated with biofuel 
commercialization by funding a robust portfolio of projects that 
address the research, development, and deployment needs of the biofuels 
industry. Continued RD&D is critical to driving the cost of production 
down so that the industry can attract private sector capital and stand 
on its own without government incentives or subsidies. In addition to 
R&D activities, DOE is funding 21 integrated biorefineries ranging from 
pilot to commercial demonstration scales. The Department is also 
working with the Department of Defense (DoD) and US Department of 
Agriculture (USDA) toward the funding of commercial scale facilities 
via the Defense Production Act advanced biofuels initiative. DoD is an 
appropriate first user for advanced biofuels since they are the largest 
purchaser of fuel within the Federal Government system. The combination 
of these initiatives and continued price volatility in the oil markets 
could create the conditions necessary for the industry to overcome the 
challenges associated with biofuel commercialization.
    Question 12. Will the DOE be convening events and seeking input 
from potential investors to address the unique financial and commodity 
risks facing biofuels companies?
    Answer. DOE's Biomass Program continually seeks input from private 
sector investors and the biofuel fmancing community by participating in 
multiple, recurring forums including its annual Biomass Conference. The 
Biomass 2012 Conference will have an opening plenary session on 
Advanced Biorefineries that have obtained financing and broken ground 
as well as a break-out session on innovative financing strategies. The 
conference is scheduled for July 10-11, 2012 at the Washington 
Convention Center and is open to the public. There are several other 
investor events in which DOE participates, including the Annual 
Cellulosic Ethanol Financing Summit. Additionally, DoD, USDA, and DOE 
jointly sponsored an industry information exchange on March 30, 2012. 
This information exchange took place at USDA and the objective was to 
bring feedstock suppliers, biofuels conversion companies, and end users 
together to discuss process integration issues. Additional exchanges of 
this type are being planned.
            biofuels--national advanced biofuels consortium
    The DOE's National Advanced Biofuels Consortium (NABC) has had 
great success in developing technologies to convert lingo-cellulosic 
biomass feed stocks to biofuels that are compatible with the existing 
transportation infrastructure. Originally funded with $35 million in 
American Recovery and Reinvestment Act funds, the NABC has successfully 
leveraged $14.5 million of partner funds and recently announced two 
promising technology pathways would move forward.
    Question 13. How have the R&D successes of the NABC addressed 
technical risks of converting cellulosic material to drop-in fuels?
    Answer. The NABC was competitively awarded to bring together a 
multidisciplinary team of experts from academia, national labs and 
industry to assist the program in accelerating the development of 
biomass processing technologies for advanced biofuel production to 
industry-ready status. In Stage I of the NABC, six processing 
strategies were evaluated for their potential to successfully launch a 
pilot-scale biorefining facility by 2014. This process resulted in two 
strategies that convert lignocellulosic sugars to hydrocarbon fuels to 
be selected to move forward to Stage II. One strategy utilizes 
catalytic conversion of corn stover and loblolly pine and the other 
uses a proprietary yeast strain and hydrocracking to produce a diesel 
and jet fuel blendstock.
    Additionally, the NABC identified two technology pathways which 
demonstrated considerable promise for achieving drop-in biofuels but 
were missing key data to fully complete the feasibility study. These 
pathways--hydrothermal liquefaction and hydropyrolysis--use 
thermochemical processing regimes to convert biomass to bio-oils, which 
can be subsequently upgraded to hydrocarbon fuels. These two 
technologies are on a track solely focused on addressing the primary 
technical and economic barriers that were identified in Stage I. This 
is the best mix of routes and allows the consortium to focus resources 
where they will have the greatest probability of providing the best 
benefits.
    Question 14. How will the FY13 budget request support the ongoing 
activities of the NABC?
    Answer. Since the NABC was funded through ARRA, all money has been 
obligated, and the FY13 request will not directly support ongoing 
activities in the NABC. The NABC is focused on developing two pilot 
ready routes to producing hydrocarbon fuels, but there are numerous 
other routes that show long term potential. The FY13 request supports a 
wide array of research, development, and demonstration that focuses on 
routes to hydrocarbon fuels through biomass-derived oil and 
carbohydrate intermediates. Additionally, the Biomass Program will 
continue to fund a FY12 solicitation that targets the construction of 
pilot scale biofuel production facilities that use terrestrial and 
algal biomass in FY13. The Biomass Program's diverse portfolio of 
research aims to enable many pathways by reducing the technology cost 
of producing cost effective lignocellulosic intermediate streams and 
final hydrocarbon fuels or blendstocks.
    biofuels-quadrennial technology review and diesel and jet fuels
    The DOE's Quadrennial Technology Review (QTR) notes that in FY 
2011, energy technologies addressing the transportation sector have 
been underfunded as compared to stationary energy by a ratio of 3:1. 
Within transportation, the QTR notes that ``advanced hydrocarbons'' 
especially for diesel trucks and jet aircraft should be a priority.
    Question 15. Do you believe there should be a different balance 
between transport and stationary energy within the DOE portfolio?
    Answer. Consistent with the DOE-QTR findings, the FY2013 budget 
emphasizes increased funding to technologies supporting the 
transportation sector.
    Question 16. How does the FY2013 budget address the QTR findings 
that energy for the transport sector, and specifically biofuels (13% of 
funding) has been underfunded compared to clean electricity (51% of 
funding)?
    Answer. The Department provided a concerted effort to prioritize 
technologies related to the transportation sector across the Office of 
Science, ARPA-E, and EERE, resulting in increased funding in 
technologies such as biofuels and advanced batteries.
    Question 17. How does the FY 2013 budget request address the QTR 
findings that alternative hydrocarbon fuels, particular to replace 
diesel and jet fuel, should be an area of emphasis for DOE?
    Answer. The EERE Biomass program builds on success in converting 
cellulosic material to ethanol by increasing the focus on converting 
non-food cellulosic feedstocks to hydrocarbons that can be directly 
substituted for gasoline, diesel and jet fuel at competitive prices. 
ARPA-E continues to explore other innovative solutions that use 
biological processes to harness solar, chemical, or electrical energy 
directly, converting CO2 into hydrocarbon fuels. The Office 
of Science-led Fuels from Sunlight Energy Innovation Hub (known as the 
Joint Center for Artificial Photosynthesis) is researching advanced 
non-biological materials that can mimic photosynthesis and produce 
chemical fuels directly from sunlight. In addition, the 3 Office of 
Science-led Bioenergy Research Centers are investigating the basic 
biological processes that underlie biofuels production, to improve our 
scientific understanding of these mechanisms.
    In FY13, DOE has requested $40 million to transfer to the Defense 
Production Act in order to support a competitive solicitation with the 
Department of Defense and the Department of Agriculture for a 
commercial scale biorefinery that produces military jet and diesel 
fuels. DOE has also requested $20 million in FY13 to competitively 
solicit innovative pilot scale demonstrations for producing military 
specification fuels.
                             offshore wind
    The DOE's budget request for the offshore wind is $95 million for 
FY 2013, and your program is beginning to shift from onshore to next-
generation offshore technology applications. The DOE has indicated that 
it will be releasing a funding opportunity award soon. I worked with my 
colleagues to make it possible for this to happen in the FY 2012 in the 
Consolidated Appropriations Act of 2012 (P.L. 112-74). Offshore wind 
has struggled to get the first major large-scale projects in place, but 
initiating demonstration-scale projects is an important step.
    Question 18. What advancements does the DOE believe will be made in 
terms of cost reductions, technological improvements, and other 
advancements through this upcoming solicitation?
    Answer. Much of DOE's FY 2013 $95 million request for the Wind 
Energy Program is crosscutting and is intended to lead to technology 
advances that will benefit both the,landbased and offshore wind 
industries.
    On March 1, 2012, DOE announced its $180M multi-year demonstration 
program via a competitive solicitation. An initial $20 million will be 
available in FY 2012 as the first step in supporting the preliminary 
phases of up to six initial R&D projects resulting, after a later down-
selection process, in up to four innovative offshore wind energy 
installations in United States waters. These offshore wind projects are 
expected to accelerate the deployment of breakthrough wind power 
technologies that will help diversify our Nation's energy portfolio, 
promote economic development and launch a new industry here in America.
    While the specific technical improvements that will be proposed by 
applicants to this new funding opportunity are difficult to predict, 
DOE expects to support projects with improvements and innovations in 
area such as turbine and drivetrain architecture, blade and rotor 
design, support structures, foundation designs, electrical systems and 
other balance of system items that result in levelized cost of energy 
(LCOE) reductions. These improvements and innovations may reduce the 
LCOE by reducing initial capital, operational and maintenance, and 
lifetime costs. LCOE may also be reduced with technologies that allow 
improved access to higher wind speed environments and reduced plant 
losses. In addition, data collected by these demonstration projects 
will be disseminated to industry with the expectation that they will 
contribute to further technological advancements and LCOE reductions 
from future R&D.
    DOE believes that this program is important because more cost-
effective technology is needed to harvest the Nation's vast off-shore 
wind resources.
    Question 19. Is there an advantage to encouraging multi-vendor 
turbine technology proposals so that multiple designs can be tested and 
so that costs can be spread across the program and more partners can be 
included in the program?
    Answer. The current $180M multiyear solicitation is set up to 
initially evaluate multiple designs and then to down-select the best 
designs before more expensive construction phases. In addition, DOE is 
encouraging researchers and companies throughout the entire supplier 
chain to provide greater cost share leveraging and to decrease overall 
technical risks. Testing multiple turbines from one or more turbine 
manufacturers on a common foundation or multiple foundations at a given 
site may provide enhanced project benefits in the form of increased R&D 
results and engagement of additional partners for the same amount of 
DOE investment. For this reason, the Advanced Technology Demonstration 
Projects funding opportunity included language to encourage multiple 
turbines and multiple turbine vendors as follows: ``Examples of 
potential candidate projects include, but are not limited to, a stand-
alone single turbine, multiple turbines from one or more turbine 
manufacturers, or turbines that are a first phase of a planned larger 
commercial project.''
                   weatherization assistance program
    I am concerned about the DOE's funding request for the 
Weatherization Assistance Program (WAP). WAP has turned in a solid 
success after a slow start on recovery act implementation. By early 
December 2011, the production goal for March 31, 2012 was reached. 
Secretary Chu announced local partners had weatherized more than the 
target number of homes-or more than 617,000. In 2011 alone, more than 
200,000 homes were weatherized and more than 14,000 full-time jobs were 
filled by this program. However, DOE's budget request for FY 2013 
significantly reduces the WAP below previous years' enacted funding 
levels. The budget request for $139 million would be the lowest since 
1996. In real dollars, it would be one of the lowest levels in the 
program's 30-year history.
    Question 20. Would there not be significant cuts to DOE's state and 
tribal partners based on a normal formula distribution?
    Answer. The Weatherization Assistance Program (WAP) experienced a 
$5 billion investment over three years under the American Recovery and 
Reinvestment Act of 2009 (ARRA) in addition to receiving base funds in 
each fiscal year. Additionally, many states received extensions to 
continue weatherization work using ARRA funds. These funds have 
successfully enabled and accelerated weatherization work for hundreds 
of thousands of families, thereby bringing significant savings on home 
energy costs. Under the current fiscal situation, the $139 million 
request for WAP ensures that, if fully funded, important weatherization 
work will continue to progress in FY13.
    Question 21. Would the reduced funding request, if enacted, have an 
impact on the workforce that is in place now to support the program?
    Answer. The $5 billion American Recovery and Reinvestment Act of 
2009 (ARRA) investment for the Weatherization Assistance Program (WAP) 
expanded employment to more than 24,000 workers at peak production, 
compared to 7,500 to 8,000 nationwide at the state, local and 
contractor levels prior to the Recovery Act period. Additionally, 
during this time period, DOE received appropriations ranging from $200 
million to $250 million each year and leveraged funds from other 
federal and private sources (LIHEAP; utilities, state funds, etc.).
    The 2013 funding request of $139 million will continue important 
WAP activities, but cannot replace the infusion of more than $1.66 
billion that was available each of the three years the WAP network had 
to use the ARRA funds.
      Response of Hon. Steven Chu to Question From Senator Shaheen
    Recently, your agency proposed updated national energy efficiency 
standards for electric distribution transformers. Better transformers 
will reduce electricity losses in the distribution grid and lower 
electric bills.
    However, the DOE proposal calls for only a very modest increase in 
the standards. DOE estimates that the proposed standard will save 
consumers about $3.7 billion over 30 years. But a higher standard, 
which was recommended by the largest companies that make the 
transformers, would save almost four times as much electricity. In my 
own state, Warner Power makes transformers that will provide 40 percent 
savings compared with current technology while also creating good jobs.
    Question 1. Are you confident that these proposed standards are at 
the maximum achievable level as the law requires? Will you take another 
look at this before you issue the final standard?
    Answer. As required by statute, DOE must set standards that are 
technologically feasible and economically justified. DOE's analysis for 
the proposed rule recognized that many technologically feasible 
transformer types and designs are more efficient than the levels 
proposed in the notice of proposed rulemaking (NOPR). Indeed, as 
required by law, DOE thoroughly assessed the technical and economic 
merits of these designs.
    While standards more stringent than those DOE proposed would likely 
save more energy, the Department weighed these benefits within the 
context of several critical economic considerations, including: the 
financial impact on manufacturers, the ability of manufacturers to ramp 
up currently low-volume designs to meet the needs of the market, the 
availability of essential high quality steels, and the impact on 
competition in the steel supply and transformer markets. For the 
proposed rule, DOE tentatively concluded that these and other potential 
impacts of the more stringent energy efficiency levels would outweigh 
the projected benefits. In the recent public meeting on DOE's proposal 
for these products, companies that manufacture transformers supported 
the standard levels proposed by the Department, likely due to their 
concerns over these same issues.
    As stated in the NOPR, DOE will reevaluate the costs and benefits 
of various standard levels based on consideration of the public 
comments DOE receives in response to this notice and related 
information collected and analyzed during the course of this rulemaking 
effort. DOE may ultimately adopt standards that are either higher or 
lower than the proposed standards, or some combination of energy 
efficiency level(s) that incorporate the proposed standards.
      Responses of Hon. Steven Chu to Questions From Senator Udall
    Question 1. With regards to the proposed Critical Materials Hub, 
what do you see as some of the milestones that you would like to lay 
forward for the next four years--in particular the research milestones 
that would define success? Where do you envision this research taking 
place--within DOE labs or at Universities or within industry?
    Answer. DOE's goal for the Hub is to create a coherent, full 
spectrum research team focused on conducting basic and applied 
research, development, and demonstration (RD&D) to reduce criticality 
for existing materials and prevent criticality of new materials that 
are essential to modem and emerging energy technologies. The Hub 
applicants were asked to direct R&D across the entire lifecycle 
including materials discovery and design, feedstock supply, processing, 
manufacture, use, recycling, and re-use. Success metrics would include: 
efficiency demonstrations in recovery from secondary sources; reduction 
in critical material use for a given application(s); and effective 
substitution of critical materials in a given application(s).
    The specific milestones for the Critical Materials Hub will be 
determined once the applicant has been selected and will be based upon 
the specific research program proposed. Once awarded, the Department 
will develop goals and milestones that will be clear, precise, and 
measurable. These goals and their associated milestones will be 
continually reviewed by DOE, and the Hub will be subject annually to 
rigorous review of the RD&D program along with its management 
structure, policies, and practices.
    There are multiple locations at which the research can take place. 
The Hub Funding Opportunity Announcement will be open to DOE 
laboratories, universities, industry, and other entities. In fact, the 
Hub model encourages consortia teams spanning multiple disciplines and 
institutions. For these consortia, industry participation is highly 
encouraged to transition technologies quickly to manufacturing and 
commercialization. DOE will select all research locations based upon 
merit.
    Question 2. What do you see are some of the criteria that must be 
met in the research activities for the Hub to be considered for funding 
beyond 2016?
    Answer. Funding of the Critical Materials Hub beyond five years 
will be based upon a number of factors including the extent to which 
the critical material needs persist, the extent to which there is a 
plausible approach for addressing those needs, the extent to which the 
Department determines the Hub model is best-suited to addressing these 
challenges, and the success or promise of the Hub's efforts funded over 
the course of the first five years.
       Response of Hon. Steven Chu to Question From Senator Risch
                          idaho cleanup vision
    Question 1. Can you please provide details of what the Department 
of Energy will be funding at the Idaho Cleanup Project, as it relates 
to Environmental Management's plan to accelerate the cleanup at Idaho 
by nine years to 2015? Is the 2015 vision still on track? Under this 
funding scenario what are the impacts to the cleanup scope and 
staffing?
    Answer. The FY 13 request for Idaho supports all the activities 
necessary to achieve the regulatory milestones, including:

          1) Sodium Bearing Waste treatment and tank closures by 12/31/
        2012.
          2) Submittal of the Calcine RCRA Part B Permit Modification 
        to the State of Idaho by 12/01/2012.
          3) Processing of EM Transuranic waste to complete all 
        campaigns by 12/31/2018.
          4) Continue wet-to-dry EBR-II used fuel transfers to complete 
        by 2023 regulatory milestone date.
          5) Continue exhumations of targeted waste at the Accelerated 
        Retrieval Project.

                                    

      
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