[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




                       ENERGY AND WATER DEVELOPMENT
                         APPROPRIATIONS FOR 2016

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FOURTEENTH CONGRESS

                              FIRST SESSION
                                  _______

               SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT

                   MICHAEL K. SIMPSON, Idaho, Chairman

  RODNEY P. FRELINGHUYSEN, New Jersey   MARCY KAPTUR, Ohio
  KEN CALVERT, California               PETER J. VISCLOSKY, Indiana
  CHARLES J. FLEISCHMANN, Tennessee     MICHAEL M. HONDA, California
  JEFF FORTENBERRY, Nebraska            LUCILLE ROYBAL-ALLARD, California
  KAY GRANGER, Texas                    
  JAIME HERRERA BEUTLER, Washington
  DAVID G. VALADAO, California

  NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

           Donna Shahbaz, Angie Giancarlo, Loraine Heckenberg,
                    Perry Yates, and Matthew Anderson
                             Staff Assistants
                                 ________

                                  PART 6
                                  
                           DEPARTMENT OF ENERGY

                                                                   Page
  Environmental Management......................................      1
  Nuclear Regulatory Commission.................................    101
  Applied Energy Funding........................................    153
  Office of Science.............................................    300

                                ________

          Printed for the use of the Committee on Appropriations
                                ________

                    U.S. GOVERNMENT PUBLISHING OFFICE

  96-876                    WASHINGTON : 2015

                            

                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
                   HAROLD ROGERS, Kentucky, Chairman


  RODNEY P. FRELINGHUYSEN, New Jersey     NITA M. LOWEY, New York
  ROBERT B. ADERHOLT, Alabama             MARCY KAPTUR, Ohio
  KAY GRANGER, Texas                      PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho               JOSE E. SERRANO, New York
  JOHN ABNEY CULBERSON, Texas             ROSA L. DeLAURO, Connecticut
  ANDER CRENSHAW, Florida                 DAVID E. PRICE, North Carolina
  JOHN R. CARTER, Texas                   LUCILLE ROYBAL-ALLARD, California
  KEN CALVERT, California                 SAM FARR, California 
  TOM COLE, Oklahoma                      CHAKA FATTAH, Pennsylvania
  MARIO DIAZ-BALART, Florida              SANFORD D. BISHOP, Jr., Georgia
  CHARLES W. DENT, Pennsylvania           BARBARA LEE, California
  TOM GRAVES, Georgia                     MICHAEL M. HONDA, California
  KEVIN YODER, Kansas                     BETTY McCOLLUM, Minnesota
  STEVE WOMACK, Arkansas                  STEVE ISRAEL, New York
  JEFF FORTENBERRY, Nebraska              TIM RYAN, Ohio       
  THOMAS J. ROONEY, Florida               C. A. DUTCH RUPPERSBERGER, Maryland     
  CHARLES J. FLEISCHMANN, Tennessee       DEBBIE WASSERMAN SCHULTZ, Florida        
  JAIME HERRERA BEUTLER, Washington       HENRY CUELLAR, Texas          
  DAVID P. JOYCE, Ohio                    CHELLIE PINGREE, Maine 
  DAVID G. VALADAO, California            MIKE QUIGLEY, Illinois 
  ANDY HARRIS, Maryland                   DEREK KILMER, Washington   
  MARTHA ROBY, Alabama                              
  MARK E. AMODEI, Nevada
  CHRIS STEWART, Utah
  E. SCOTT RIGELL, Virginia
  DAVID W. JOLLY, Florida
  DAVID YOUNG, Iowa
  EVAN H. JENKINS, West Virginia
  STEVEN M. PALAZZO, Mississippi

                William E. Smith, Clerk and Staff Director

                                   (ii)

 
          ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2016

                              __________                             

                                        Wednesday, March 18, 2015.

             DEPARTMENT OF ENERGY--ENVIRONMENTAL MANAGEMENT

                               WITNESSES

DAVID KLAUS, DEPUTY UNDER SECRETARY, MANAGEMENT AND PERFORMANCE, 
    DEPARTMENT OF ENERGY
MARK WHITNEY, ACTING ASSISTANT SECRETARY, ENVIRONMENTAL MANAGEMENT, 
    DEPARTMENT OF ENERGY
    Mr. Simpson. I would like to call this hearing to order. 
Good morning, everyone. We are just a few minutes late, but we 
have before us today David Klaus, the Deputy Under Secretary 
for Management and Performance, and Mark Whitney, the Acting 
Assistant Secretary for Environmental Management. This is the 
first time for both of you to have testified before this 
subcommittee and we appreciate your being here today.
    While the subject of this hearing is the budget request for 
the Office of Environmental Management, this hearing will also 
provide members of the subcommittee an opportunity to discuss 
issues of management and performance on a department-wide 
basis.
    The budget request for the Office of Environmental 
Management totals $5.8 billion, $63.8 million or 1.1 percent 
below the fiscal year 2015 inactive level. I do not include in 
those figures the $472 million requested for the federal 
contribution into the Uranium Enrichment Decontamination and 
Decommissioning Fund. The budget request incorrectly counted 
this contribution as part of the Defense Environmental Cleanup 
Appropriation, though the Congress directed how to account for 
these costs in a transparent manner in the fiscal year 2015 
act. Continuing to count these funds as part of the funding for 
the Defense Environmental Cleanup creates confusion and makes 
the overall funding levels provided en mass to the overall 
funding levels provided to those sites.
    The Department of Energy is facing some very difficult 
challenges in its cleanup program this year. Transuranic waste 
programs are essentially running in place or were stopped 
altogether following the shutdown of the Waste Isolation Pilot 
Plant. While the department has set ambitious goals to get that 
facility operating for fiscal year 2016, there are significant 
hurdles to overcome to meet this timeline. Meanwhile, relations 
with many of the states are at an all-time low as milestones 
previously promised will no longer be met.
    The path to resolution is unclear and funding will not be 
available to make up for the department's management and 
performance failures. Fortunately, there have been modest gains 
in project management and project management has been a focus 
area for this Secretary. Nevertheless, whether these efforts 
will lead to demonstrable improvements in performance is 
unclear. Of the 29 projects in the $52 billion project 
portfolio managed by the Office of Environmental Management, 
nine of those projects, estimated to cost $20.7 billion to 
complete, are considered in the red and will not be completed 
within current estimates.
    Restoring confidence in the department's ability to deliver 
on its commitments will be necessary before progress can be 
made on renegotiating the numerous cleanup agreements that must 
be modified over the next several years.
    Please ensure that the hearing record, responses to the 
questions for the record, and any supporting information 
requested by the subcommittee are delivered in final form to us 
no later than four weeks from the time you receive them. I also 
ask members to submit any additional questions for the record 
to the subcommittee by close of business tomorrow.
    With those opening comments, I would like to yield to 
today's ranking member, Mr. Honda from California.
    Mr. Honda. Thank you, Mr. Chairman. Ranking member Kaptur 
is unable to be here at the moment so, Mr. Chairman, I ask 
unanimous consent that her opening statement be entered into 
the record.
    Mr. Simpson. Without objection.
    Mr. Honda. Environmental Management has the important job 
of cleaning up the environmental impacts of over five decades 
of nuclear weapons development and nuclear energy research and 
I believe we have some cleanup still to be done in and around 
Lawrence Livermore National Lab in California. So I look 
forward to your testimony about your budget proposal and 
requested plans for 2016 and to our discussion to follow. And 
before I yield back, I just want to say good seeing you again, 
David.
    Mr. Klaus. All right, good to see you.
    Mr. Honda. Thank you.
    Mr. Simpson. Thank you. David, the floor is yours.
    Mr. Klaus. Thank you, Chairman Simpson, Congressman Honda, 
and members of the subcommittee to come. I appreciate the 
opportunity to appear before you today to discuss elements of 
the Department of Energy's fiscal year 2016 budget request and 
the efforts of the Office of the Under Secretary for Management 
and Performance.
    Since the onset on his tenure, Secretary Moniz has made 
clear that the department must renew its focus on improving 
management and performance in order to address the many 
challenges presented by the department's portfolio. For that 
reason, in July of 2013 the Secretary implemented a top-level 
reorganization, a primary aspect of which was the establishment 
of the Office of Under Secretary for Management and Performance 
to focus on having the department operate more as an enterprise 
rather than a collection of silos, which some have previously 
described the way in which the department operates. The 
reorganization also aimed to improve project management and 
increase the efficiency and effectiveness of mission-support 
functions across the department.
    Consolidating mission-support functions in the Office of 
the Under Secretary for Management and Performance establishes 
a senior policy official dedicated to the task of management 
improvement on a full-time basis. The continuing goal is to 
institute enterprise-wide solutions to common challenges faced 
by programs across the complex such as information management, 
acquisition, and human resources. Specific examples of key 
management initiatives undertaken by this office since it was 
established are included in my full statement.
    Separately, moving the Office of Environmental Management 
under the purview of the Under Secretary for Management and 
Performance brings the department's strongest project 
management capabilities, resident in the Office of Acquisition 
and Project Management, directly to bear on the department's 
most complexing yet vital challenges in project management.
    The fiscal year 2016 budget provides $6.4 billion for 
programs within the Office of the Under Secretary for 
Management and Performance. Given the subject of this hearing, 
the balance of my testimony focuses primarily on project 
management principles and major projects within the Office of 
Environmental Management. My colleague, Mark Whitney, the 
Acting Assistant Secretary for Environmental Management, will 
focus on the specifics of the budget for environmental 
management.
    The portfolio of large projects undertaken by the 
Department of Energy is not only unique from other projects in 
the public and private sector, but with few exceptions, each of 
these projects is unique from other departmental projects. 
These diverse, one-of-a-kind projects present uncommon 
challenges. In light of these challenges, the department has 
struggled with project and contract management with too many 
projects going over budget and taking longer than originally 
planned.
    To meet the challenges associated with project management, 
changes are being instituted to improve the department's 
performance on major projects across the agency. In addition to 
the aforementioned reorganization to create the Office of Under 
Secretary for Management and Performance, the Secretary 
recently initiated a multi-faceted program to improve project 
management, including strengthening the Energy System's 
Acquisition Advisory Board, establishing a Project Management 
Risk Committee, and improving the peer review process. The 
department, led by the Project Management Risk Committee, is 
also exploring other actions that can improve project 
management.
    For projects within the Office of Environment Management, 
we are strengthening the project review and assessment 
function, which will bring greater focus and discipline to the 
major projects in this program, including the waste treatment 
project at Hanford, the salt waste processing project at 
Savannah River, as well as numerous smaller cleanup projects 
across the complex.
    Ultimately, though, the key is execution. The reforms that 
Secretary Moniz is putting in place are designed to emphasize 
continuous improvement in our contract and project management 
by, for example, requiring detailed upfront planning before a 
shovel hits the ground, ensuring that federal project directors 
and contracting officers are well trained and certified, 
improving our cost estimating capabilities, conducting more 
frequent and better project reviews, selecting proper contract 
types, and tying fees to final outcomes.
    As public servants we have a solemn responsibility to be 
accountable stewards of the taxpayer dollars. The reforms and 
processes we are instituting at the Department of Energy with 
respect to project management are critical to ensuring that we 
meet this responsibility.
    In closing, a primary aim of the Office of Under Secretary 
for Management and Performance is to serve as a pivotal point 
where operations, accountability, evaluation, and sound 
management come together. This responsibility is heavily 
motivated by the environmental cleanup obligations of the 
department. With this in mind, the fiscal year 2016 budget 
request supports clear, discreet progress in the cleanup of the 
environmental legacy of the Cold War. The department will 
continue to strive to institute improved and lasting project 
management processes and standards. More importantly, the 
department is committed to conducting the environmental cleanup 
within a framework that integrates worker and community safety, 
regulatory requirements, and best business practices.
    Mr. Chairman and members of the subcommittee, that 
concludes my statement. I would be pleased to answer any 
questions you may have.
    Mr. Simpson. Thank you. Mr. Whitney.
    Mr. Whitney. Good morning, Chairman Simpson and Congressman 
Honda. I'm pleased to be here today to represent the Department 
of Energy's Office of Environmental Management and to discuss 
with you the achievements that the program has achieved and 
accomplishments that we anticipate under the President's fiscal 
year 2016 budget request.
    Our request for $5.818 billion will allow the EM program to 
continue the safe cleanup of environmental legacy brought about 
by five decades of nuclear weapons development and government-
sponsored nuclear energy research. The request includes $5.055 
billion for Defense environmental cleanup activities and as you 
noted, Chairman, an additional $472 million for the Defense 
contribution to the Uranium Enrichment Decontamination and 
Decommissioning Fund. The request also includes a total $542 
million for the Uranium Enrichment Decontamination and 
Decommissioning cleanup activities, and $220 million for non-
Defense environmental cleanup activities.
    EM continues to pursue its cleanup objectives safely within 
a framework of regulatory compliance commitments and best 
business practices. The rationale for cleanup prioritization is 
based on achieving the highest risk-reduction benefit. Most 
importantly, EM will continue to discharge its responsibilities 
by conducting cleanup within a safety-first culture that 
integrates environmental, safety, and health requirements and 
controls into all of our work activities. This ensures 
protection for the workers, the public, and the environment.
    We continue to make cleanup progress. We have produced 
nearly 4,200 canisters of vitrified high-level waste at the 
Savannah River site in South Carolina and at West Valley in New 
York. Converting it to a solid glass form safe for long-term 
storage and permanent disposal. This is about half of the 
entire sludge at the Savannah River site in the Savannah River 
site tanks.
    We converted and packaged additionally over 19,600 tons of 
depleted uranium hexafluoride for permanent and final 
disposition at Portsmouth. At Hanford we have completed cleanup 
of the bulk of the river corridor, including more than 500 
facilities and 1,000 remediation sites. At Oak Ridge we are on 
track to complete preliminary design for the Outfall 200 
Mercury Treatment Facility and that will be complete by the end 
of this fiscal year.
    The fiscal year 2016 budget request will allow us to 
continue to make significant progress in our ongoing cleanup 
priorities of liquid tank waste treatment and recovery of the 
Waste Isolation Pilot Plant. For example, at the Idaho National 
Laboratory the request supports operations of the integrated 
waste treatment unit in preparing for cleaning and grouting 
activities to support final closure of the final four tanks 
there. The request will support high-level waste tank progress 
at the Savannah River site with planned production of 
approximately 130 canisters of vitrified waste derived from 
tanks and processed at the Defense Waste Processing Facility. 
In addition, the request will support completion of 
construction of the Salt Waste Processing Facility at the 
Savannah River site in 2016.
    The fiscal year 2016 request will also allow us to expedite 
tank waste treatment at the Office of River Protection at 
Hanford through the direct feed low-activity waste approach, by 
continuing design of the low-activity waste pretreatment 
system, and continuing construction of a low-activity waste 
facility, the analytical laboratory, to balance the facilities 
all in the waste treatment plant.
    The fiscal year 2016 request provides funding in accordance 
with the Waste Isolation Pilot Plant recovery plan. There are, 
of course, many sites around the EM complex that have TRU 
waste, transuranic waste, that is planned for disposal at the 
Waste Isolation Pilot Plant. With that said, resumption of WIPP 
operation remains a high priority and we will resume waste 
operations and waste emplacement activities in fiscal year 
2016.
    Building on the successful demolition of K-25 in Oak Ridge, 
the fiscal year 2016 request supports demolition activities of 
the K-27 facility, the last remaining gaseous diffusion plant 
process facility at the East Tennessee Technology Park in Oak 
Ridge. The request also allows for continued planning and 
design of the Outfall 200 Mercury Treatment Facility there.
    The request also completes major facility cleanout and 
demolition projects, including a plutonium finishing plant at 
Hanford.
    Lastly, but certainly not least, the fiscal year 2016 
request will also EM to address key infrastructure needs across 
the complex, especially upgrades to the firewater system and 
replacement windows in the B hot cell at the Savannah River 
National Laboratory.
    In closing I am honored to be here today representing the 
Office of Environmental Management. We are committed to 
achieving our mission and will continue to apply innovative 
environmental cleanup strategies to complete work safely and 
efficiently, thereby demonstrating value to the American 
taxpayer. Thank you, and I would be pleased to answer any 
questions you may have.
    Mr. Simpson. Thank you, and thank you both for being here 
again today. As you can tell, there are a variety of hearings 
going on in almost every subcommittee. I am supposed to also be 
at the Interior subcommittee and at the Labor HHS subcommittee 
and I cannot, obviously, be in three places. Members have those 
obligations for a variety of subcommittees, but the EM program 
in the Department of Energy is obviously a very important 
program and completing the work to clean up the legacy of the 
nuclear past is vitally important if nuclear energy is going to 
be a part of the future frankly.
    Mr. Klaus, you lead the Office of Performance Management, 
which was established by the Secretary not long after he was 
confirmed. Can you explain your role with respect to overseeing 
project contract management at the Department of Energy, as 
well as your responsibilities for the Office of Environmental 
Management? Is it business as usual within the department or 
are the Secretary's organizational reforms changing the way the 
department does business? What do you believe to be the root 
cause of the department's continued struggle to execute its 
large capital projects? What is the department doing to get off 
the GAO's high-risk list entirely? What are you doing 
specifically to change the way the department is executing EM 
projects?
    Mr. Klaus. Well, I guess just one note with regard to the 
high-risk list. We are pleased that when we were first on the 
high-risk list, it was for all projects. And then as of about 
two years ago, we were removed from the high-risk list for 
projects under $750 million on which we are making better 
progress. We also are working hard within the department and 
particularly within Environmental Management to break down the 
larger projects into smaller projects where we have 
demonstrated greater success. So instead of having one major 
contract that covers a large number of different elements of a 
particular cleanup, we have ``chunked'' it down so that we can 
work on discreet projects and have greater success on those.
    With regard to the Secretary's project management 
initiatives, one of the things that he has done is to focus on 
accountability and, frankly, execution and discipline. From the 
standpoint of accountability, one of the things that we 
recognize is that not all projects had what we now refer to as 
a ``project owner''. The project owner is an official within 
the department who brings together responsibility for the 
project, but also the budget and the ability to identify where 
those funds are. So we have now identified project owners for 
each of these projects. In fact, Mr. Whitney is the project 
owner for many of the major projects because he brings together 
both the budget responsibility, but also the ability to execute 
on those projects. And that is where we are trying to focus the 
accountability.
    A second aspect is better discipline. We have strengthened 
our independent review capability or are in the process of 
strengthening our independent review capability. We also 
established a project management risk committee. That project 
management risk committee is comprised of our best experts in 
project management from across the department. So, for example, 
we have the lead project manager from NNSA, the Office of 
Science, the Office of Environmental Management, and the 
experts from the Office of Acquisition and Project Management. 
That group meets as a committee to review projects from each of 
the different areas. The Committee was recently established and 
the first project that it reviewed was the low-level activity 
waste project at WTP. This project was about to reach critical 
decision 1 from the standpoint of whether it was ready to go, 
whether the technology was mature, whether we had the 
appropriate contract managers and officials in place, and 
whether the contract structure was right. That review took 
place over two or three different meetings of the Committee and 
really put the officials who are managing that project on the 
spot to answer those key questions. The goal is to make sure 
that when that decision came forward on whether we were ready 
to go to critical decision 1 that it reflected the best input, 
knowledge and cross-departmental expertise. We are doing that 
on an ongoing basis with projects across Environmental 
Management and, frankly, across the entire department.
    Mr. Simpson. Speaking of contract management, the Office of 
Environmental Management has been adjusting its contracting 
strategies to shift more risk for performance to its 
contractors. EM tried to do this with its renegotiation of the 
contract for the Salt Waste Processing Facility, but the 
contractor would not agree to modify the current contract for 
what they viewed as unfavorable terms. Now DOE is left with an 
outdated contract and few mechanisms for keeping the project on 
track.
    In contrast, EM was successful in negotiating a contract 
change to cap federal costs at the Separations Process Research 
Unit in New York and progress at that site has been proceeding 
at a snail's pace since the cost cap was reached several years 
ago.
    EM has proposed a similar contracting model for the award 
of the EM contract in Idaho, but has met with significant 
industry pushback. What do you hope to accomplish through the 
use of the cost-cap contracting model? Do you believe that the 
department got the outcome it was hoping for at SPRU? Is it 
really a contract model for success, or are there alternative 
contracting reforms you are considering? And when you get to 
the point where a contractor has repeatedly failed under this 
contracting model, what are the government's options at SPRU? 
At what point does the department take responsibility for 
completing the cleanup in a timely manner? And what have you 
learned from these experiences with this contracting model?
    Mr. Whitney. Do you want me to start?
    Mr. Klaus. Why don't you start, sure.
    Mr. Whitney. Okay. Thank you Chairman Simpson. Yes, I think 
one thing I would like to point out is the recent request for 
proposal that was released Friday for the Idaho Corps Clean Up 
Project. That did not have a cost cap. I think each project, 
each scope of work needs to be treated differently, and 
different types of contracts need to be used depending on the 
type of work, if it is a discrete project, very discrete 
activities, discrete scope of work. You can use one type of 
contract that might have more of a fixed cost or a fixed unit 
rate associated with it, but there are other projects that have 
less certainty and perhaps more risk, those are not appropriate 
for. The RFP that came out for the Idaho Clean Up Contract on 
Friday did not have the cost cap and, but I do think that our 
intent is to balance the risk and the rewards between the 
taxpayers and the contractors doing the work. And so we share 
in the risk and we allow the contractors to share in the 
rewards when the job is performed well. And so we are 
continuing to learn how to best structure these. As new 
contracts, we have several new contracts coming up within the 
next few years and we will try to continue to find the right 
balance to achieve that.
    Mr. Simpson. One of the challenges I guess is to make sure, 
or ensure that when we do a bid, we have a sufficient number of 
bidders to make it a true bid. And that was kind of the 
challenge at the Idaho, when they were originally talking about 
it before you made the changes to the RFP that came out on 
Friday. Are you finding that we have a sufficient contract 
bidding under this model that we are moving towards I guess?
    Mr. Whitney. I think to date we would say that we have had 
a level of competition that we are comfortable with that gives 
the government and the taxpayer the best value and for the 
Idaho contract of course, we have had a lot of discussion. And 
one of the reasons that we engage so much with industry, when 
we came out initially with draft information on the proposed 
contract, and then with the draft request for proposals in 
December, was to get their feedback. And so we have spent a lot 
of time meeting with them, doing site tours, doing individual 
sessions, to try to understand what the contract terms would 
mean for that competition in ensuring that we have a level of 
competition. And so with the release of the RFP this past 
Friday, and the proposals anticipated within the next 60 days, 
we hope that the final RFP is structured in a way to encourage 
as much competition as possible. Because you are right, we 
think that is how you get value for the government, the more 
competition the better.
    Mr. Simpson. What do you do, like in SPRU, where the cost 
cap is met and the activity is essentially slowed down? What 
options does the department have?
    Mr. Whitney. On SPRU, we negotiated with the contractor and 
it was a bilateral agreement to cap the government's cost at 
145 million dollars. There were some mistakes made, quite 
frankly, by the contractor, that contribute to the situation we 
are in right now with the project not being complete and us 
having exceeded that 145 million dollars. The contractor has 
accepted that responsibility, is moving forward with the 
project. I understand they are probably spending about three 
million dollars a month to complete the clean-up of the 
project. It is not going to be complete on the schedule that we 
would like but we think we have protected taxpayer interests on 
the cost and we will continue to work with the contractor. And 
that clean up job at SPRU is important for us and we are still 
committed to completing that, working with the contractor 
there.
    Mr. Simpson. Okay. The largest increase in the EM budget 
request is for the Office of River Protection, which is 
requested at 1.4 billion, or 202 million over the fiscal year 
2015 level. Part of this increase is to support modifications 
to the waste treatment plant consistent with the Department's 
new framework agreement, even though the funds requested for 
the WTP line itself is flat at 690 million. It has been three 
years since the subcommittee first directed the department to 
re-baseline the WTP project. That still has not happened. Why 
should Congress dedicate an even greater portion of overall 
clean up funds to advance WTP before a performance baseline is 
established?
    Mr. Whitney. Thank you. Thank you for acknowledging also 
the department's new approach. I think under this new approach, 
which we have proposed to modify the consent decree with the 
State of Washington, we are trying to achieve a treatment of 
tank waste as soon as reasonably possible, as early as 2022, 
and that is through the direct feed activity waste approach. 
And Mr. Klaus mentioned that low activity waste pretreatment 
system which is a critical component for that and our funding 
for that in the FY16 budget as well. The low activity waste 
makes up about 90 percent of the waste in those tanks and we 
admit that we of course have had technical issues with the high 
level waste portion of the project and the pretreatment system, 
and we need to work through those. Until we are able to work 
through those technical issues and we have a technical issue 
resolution project ongoing, and we anticipate that concluding 
in FY16, perhaps into FY17, only then will we understand 
completely the schedule and the cost associated with the 
project. We are continuing to move forward. We think this is 
the right approach, to one, start treating waste as soon as 
possible, two, once we have resolved the technical issues 
associated with the other facilities and the waste treatment 
plant, we will have a basis with treating the low activity 
waste that will help us as we learn lessons in that process, 
and feed into the high level waste mission as well. So we feel 
like this is the right approach. We feel like it is a sound 
approach. We do not have the same technical issues with the low 
activity waste approach as we do with the high level waste 
approach.
    Mr. Simpson. So is it the technical issues that you have 
got to resolve that have kept you from re-baselining the 
project?
    Mr. Whitney. Yes, sir.
    Mr. Simpson. Basically. Okay, Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman and thank you for being 
here. Sounds like you got a job that is virtually almost 
impossible. And I wanted to ask a question about the thing you 
call root cause analysis and it sounds like it is a process by 
which you go back to the get go and try to figure out what 
happened and how it can be, how some of the mistakes can be 
avoided and what lessons are learned. Could you explain a 
little bit about the root cause analysis and help me understand 
its application on the kinds of projects that you are working 
on and the projects that we are working, I guess you could 
start out by saying these projects were required or came about 
because, and then go from there.
    Mr. Klaus. The root cause analysis with regard to project 
management really took place and was initiated in conjunction 
with being put on the GAO high risk list--we did a substantial 
root cause analysis of our entire project management system and 
what we tried to do is identify why it is that we were missing 
schedules, why we were going over budget and what mistakes we 
were making. I think we have instituted a number of changes. 
One of the ones that I mentioned earlier was that instead of 
doing a single large contract that covers five or six different 
types of clean-up activities in a particular site, we issue 
five contracts, where we have a much more definable scope of 
work where we can define what the risks are, that we can as Mr. 
Whitney suggested, where if we can really define what the risk 
is and what the scope of work is, identify where we can do it 
on a fixed fee contract or one that really minimizes the risk 
to the government by putting the responsibility to implement 
that on the contractor insofar as they have the ability to 
perform. The Secretary's project management reforms build on 
that initiative. One of the lessons we learned when we went 
back is that we discovered we were getting pressed by, frankly, 
regulatory requirements or pressure from, ``why are you not 
cleaning up this site now.'' When asked why are you not moving 
forward, we would rush to start building a project before we 
had fully reached design maturity. And that would cause us to 
go back and then re-do some work or restructure issues, et 
cetera. So one of the things that the Secretary's project 
management reforms do is reinforce the discipline that we have 
on making sure that we do not start digging before we are 
really ready to do it and that we have broken contracts out in 
discrete ways in which we can. And as I said, we have made sure 
that we provide training and certification to all of our 
project managers. We have actually reached a point where 100 
percent of our major project managers are certified at 
appropriate levels. So we have really moved forward in terms of 
doing that.
    With regard to why we moved forward on those projects, you 
know we are dealing with the legacy waste of the atomic weapons 
complex. The nuclear weapons program moved forward for 50 to 60 
years and left a residue of cleanup challenges that are going 
to take us 30 or 40, or if not more, years to clean up. They 
were very focused on meeting the mission and basically put, in 
many instances, for example, in Washington, at Hanford, they 
put the waste into tanks, saying we will deal with that later. 
Well, later is now. And that is what drives our requirement to 
move forward on those cleanups and make sure we prioritize them 
so we deal with the risky ones first and protect the 
environment and protect the public that surrounds our sites.
    Mr. Honda. Someone through the Chair, then what I gather is 
that at one point in our history we had initiatives of 
developing nuclear power, nuclear weapons, and other kinds of 
activities around this country in certain places, and we went 
forward without really thinking of its total future impact. We 
just did not know enough about it then probably, and now, from 
hindsight, we understand what it is that we left behind with 
what kind of problems that we caused. So this is really an 
effort by the government to clean up the kinds of messes that 
we have created and in doing so, we provided sufficient funding 
to be able to do this in a timely manner so that you are not 
caught up in a lot of litigation or a lot of pressures coming 
from the outside rather than being internal pressures.
    Mr. Whitney. Want me to take it?
    Mr. Klaus. Well, I will take a quick bite at it. I think 
folks have--I think the estimates that I have seen are that We 
probably have somewhere between a 190 and 220 billion dollars' 
worth of clean up effort to go forward. Congress and the 
administration have identified that you can only tackle that 
in, I guess at this point our proposal is a 5.8 billion dollar 
bite at a time. It is a long term challenge. I think we are 
going to be at this a while. And we have made enormous 
progress. I mean, I do not want to--at one point we had 107 
sites that we were cleaning up. We are down to 16. At one point 
we had 3000 square miles of area that had potential 
contamination. We are down to about 250 square miles of 
contamination. That is not small. And the challenges that are 
left are in many respects those we find to be the toughest 
challenges. But I think it is really a question of how we as a 
country are tackling the legacy of the nuclear weapons system 
that we built for protecting the national security of this 
country, going back to World War II. We started this with the 
Manhattan Project and from that point forward, that is kind of 
how we got there.
    Mr. Honda. Thank you Mr. Chairman.
    Mr. Simpson. And I would just say, along the very lines 
that Mr. Honda was talking about, the science changes also. In 
Idaho we dug trenches and they buried nuclear waste in the 
trenches because earth is a great barrier. We found out that 
probably was not the best thing to do, but at the time it was 
the best thing that we thought. And things change over time and 
I am certain that as we sit here today, there are things that 
fifty years ago, or that fifty years from now, we will look at 
and go, yeah, maybe that was not the best thing to do. But at 
the time, you have to do and go with the best knowledge you 
have and the best science that you have. So that is not only 
true in this arena, it is true in every arena we deal with. So 
that does create challenges. And even if we could put the 220 
billion dollars this year all appropriated, you still could not 
clean it up this year. I mean, some of this is long term stuff. 
The challenge that you really face, a lot of the challenge you 
face, is a lot of this is new stuff. And while it sounds like I 
am being very critical of the department and I do want you to 
get off the high risk and all that kind of stuff, a lot of 
these things are the first time they have ever been built or 
designed and they present unique challenges. If I ask the Army 
Corps to go build a dam, they have built a lot of dams. They 
can pretty much tell me what it is going to cost to build that 
dam. This is a little different. So while we are critical, and 
we want to hold your feet to the fire as we have tried to do in 
this committee to make sure that we are getting the best buck 
for the taxpayer, I am sure you want to do the same thing. And 
we do want to, as I said, we do want to clean this up, because 
if we do not, there will not be a nuclear future in this 
country. That is just the reality. Mr. Fleischmann.
    Mr. Fleischmann. Thank you Mr. Chairman. I appreciate your 
comments. Mr. Klaus, good to see you this morning. Mark it is 
always great to see you. I do want, for the record to say I am 
the chairman now of the nuclear clean up caucus and I cherish 
that position and Mr. Whitney, I appreciate your being at our 
inception meeting and I know our great chairman is also a 
member of that caucus as we can come together in a bipartisan, 
in a nonpartisan way, to clean up these nuclear legacy sites, 
particularly all across the nation, but we have a particular 
problem as you all well known in Oak Ridge. Mark, you know our 
site well. If East Tennessee Technology Park, ETTP, is only 
funded at the President's budget request level, what will be 
the impacts to the ETTP D&D work?
    Mr. Whitney. Thank you Congressman Fleischmann. The budget 
request for Oak Ridge is 366 million dollars and I believe with 
that request, and really building off the tremendous momentum 
that we have at that site and the great work that the team 
there has done, building off of the K-25 demolition project 
success just last year, moving straight into K-31, that 
demolition project will be complete in the very near future and 
we will be able to move right into K-27 and begin the 
demolition of that. I do not anticipate we will necessarily be 
able to finish the demolition of K-27 in FY16 but we will be 
well on our way. And that as I noted, in my opening statement 
is the gaseous diffusion plant process building at ETTP, and 
that will be a significant milestone, not just for Oak Ridge, 
but for the EM clean-up program.
    Mr. Fleischmann. Okay, thank you sir, now, at that 366 
billion level though, I have heard that there is potentially a 
high number of layoffs. Could you speak to that?
    Mr. Whitney. I do not have the data on that. Of course we 
will, when we provide funding guidance to the contractors and 
they will prepare analysis and provide us the impacts of the 
funding guidance, we will be able to address that, and I will 
certainly be happy to come back and talk to you about that when 
we have that information.
    Mr. Fleischmann. Sure, because as you can understand, one 
of our missions of course, is to protect our workers that do 
such a tremendous job there in this clean up mission. My 
understanding is also that the TRU waste processing center 
would be impacted with an expected shortfall of 3 million 
dollars in funding required to maintain facility work at ORNL 
in Y12. Including the layoff of approximately 30, possibly 30 
full time equivalent workers, is that your understanding as 
well sir?
    Mr. Whitney. That is not my understanding at this point. 
The TRU waste processing center, of course we are recompeting 
that contract right now. And so a lot will depend on how that 
contract, how we end up structuring the final contract, the 
winning proposer and what the price tag associated with that 
work is. And again, on that one, I will certainly of course 
come back and talk to you when we have more information 
associated with that.
    Mr. Fleischmann. Appreciate that. And my final question 
sir, it is my understanding that the L Basin at Savannah River 
is at storage capacity for spent HIFER fuel and rapidly 
approaching capacity for other nuclear fuel. I am concerned 
that the H Canyon funding is not adequate to meet current 
reprocessing needs. Have your plans for reprocessing spent fuel 
changed? Do you anticipate any future storage costs or delays 
in being able to receive shipments? And what impact, sir, if 
any, will there be to Oak Ridge considering L Basin is at 
storage capacity for the HIFER cores?
    Mr. Whitney. Yes, the L Basin right now, has 120 of the 
HFIR cores, and in order to receive additional cores from HFIR, 
we would need to create additional space, re-rack or install 
additional racks in L Basin. We, of course, have been working 
very closely with our colleagues in Office of Science, and at 
the Oakridge National Laboratory in the Federal Officer there 
as well, to understand their timeframe.
    Right now it looks like, you know, their onsite storage at 
HFIR for their fuel, for their spent fuel, would probably be 
exhausted later this decade or early next decade. We are 
continuing to work with them, have had detailed discussions. We 
certainly want to make the EM assets available to other 
programs, to support their missions, and part of that is 
understanding the incremental costs associated with processing 
the fuel in H Canyon, so we are working through those thing 
with Office of Science right now, and I suspect that ultimately 
that will not be an issue.
    Mr. Fleischmann. Well, again, Mark, I want to thank you for 
your commitment to clean up. That is my steadfast commitment as 
well, and I look forward to working with your office, so that 
we can ultimately tackle this problem, which is national 
problem. And I thank you. And Mr. Chairman, I yield back.
    Mr. Simpson. Thank you. And before I turn to Mr. 
Fortenberry, let me must follow up for a second and ask a 
question on the line of questioning that Mr. Fleischmann was 
asking. When you put together your budget, do you do an 
analysis of the potential impact on jobs at the various sites? 
Because it is--these are not jobs programs, these are mission 
programs, and yet we represent people who are employed, and to 
be fair to them, they need to know, or at least roughly know if 
the potential budget you are proposing for a given site is 
going to cause layoffs on the site, so that they can make plans 
and stuff. Do we do an analysis of that?
    Mr. Whitney. Yes. Yes, we do. You know, generally, from the 
time that we formulate the budget and prepare the budget, a lot 
can happen between that, and the budget actually being enacted 
including Congress, among other things, and understanding what 
the carryover is, as you move into the next year to help, 
potentially, offset a lower funding level. And so we do an 
initial valuation to try to understand some of the workforce 
impacts.
    You are right, we try to look at the--we do not try to, we 
look at the complex as a whole and try to allocate our 
resources where we get the most risk reduction benefit, and so 
that is what is reflected in our budget request this year. Of 
course with the high-level waste tanks and WIPP recovery, 
continuing those, and you see that.
    And what it does mean is many other sites have a lower 
budget number than they did previous years. And so we do a 
calculation in the type of work impacts, the type of 
calculation you do; $100,000 per FTE is one calculation that is 
commonly used, and you can do the quick math that, the bottom 
line is a lot can change between the time that you formulate 
the budget, and the time that the budget is actually enacted 
the following year. So to give a specific number is just very 
difficult to do.
    Mr. Simpson. No. And you hate to throw a number out there 
and scare the heck out of people, and say there is going to be 
30 people laid off at this facility in Oak Ridge; when in fact, 
that might not happen until you know what the budget is going 
to look like.
    Mr. Whitney. Yes.
    Mr. Simpson. I understand. Okay. Mr. Fortenberry?
    Mr. Fortenberry. Thank you, Mr. Chairman. Good morning, 
gentlemen.
    Mr. Whitney. Good morning.
    Mr. Fortenberry. Are we paying for Canada's reprocessing of 
their spent fuel?
    Mr. Whitney. No, sir. We are not. Canada is funding the 
entire project, and we anticipate actually being able to 
process the HEU liquids in FY '16, at least beginning the 
campaign. And so that, the HEU liquids that are coming in that 
Canada is funding, as well as some pre-stage spending for fuel 
of our own, will be processed in H Canyon, in FY '16.
    Mr. Fortenberry. So the full cost of that are being borne 
by the Canadians?
    Mr. Whitney. Yes, sir. That is my understanding.
    Mr. Fortenberry. And the plans to reprocess the Japanese 
and German spent fuel as well?
    Mr. Whitney. The processing of the German material, are you 
referring to the German spheres, Congressman?
    Mr. Fortenberry. I do not have that----
    Mr. Whitney. Okay. Let me, I think that might be it, that 
will also be paid for by the Germans if it occurs. You know, we 
have to make sure the technology is right before we receive 
that material to make sure it is actually workable. It is a 
unique fuel type, we have not necessarily processed at H Canyon 
before, and so they are also funding that effort to develop the 
technology and make sure the technology readiness level is 
appropriate before we even receive the waste. So we will not 
receive waste, we will not agree to do anything until we know 
that the technology works, and they will fund that technology 
development effort.
    And on the Japanese material, that is part of the global 
threat reduction initiative, and under that Foreign Research 
Reactor Return Program, this is a little different but it is 
part of the Non-proliferation Program. High-income countries 
pay for the campaigns.
    Mr. Fortenberry. Okay. So we are not subsidizing stable, 
high-income countries, as you put it, their return or their 
movement of fuel to us for reprocessing blending down?
    Mr. Whitney. We are not subsidizing the movement of the 
fuel or the processing campaign, there is, of course we 
maintain the facilities, and so we pay for the base operations 
of H Canyon, and K-Area to receive the material, and so that is 
part of our appropriation in the request we make.
    Mr. Fortenberry. So, we are subsidizing it through the hard 
cost, that they pay for variable to cost, we are paying for 
fixed cost?
    Mr. Whitney. They pay for the incremental cost.
    Mr. Fortenberry. The question then becomes, is that fair?
    Mr. Whitney. I believe the----
    Mr. Fortenberry. I am with you on the non-proliferation 
goals, please understand, and if the United States has to take 
a decided leadership role here, who else will? But at the same 
time other countries with thriving economies, with stabilized 
governments; we are not talking about Former Soviet Bloc 
countries here, with minimal threats for the prospects of some 
kind of proliferation, the need to cost share.
    Mr. Whitney. And I will tell you that we have begun a 
working group within the department, NNSA and EM, to look 
exactly at the cost of operations of our facilities 
specifically Savannah River, where both programs are users of 
the facilities to try to understand. Sometimes it is very 
difficult to actually, you know, you have a base operations in 
trying to determine exactly what one campaign share of the cost 
is.
    And so that is one of the things that we are looking at; 
one, understanding all the campaigns and the needs for the 
different programs over the next several years, and then trying 
to see if we can attribute the cost appropriately across the 
program.
    Mr. Fortenberry. It is just math. It is just math. If the 
facility costs a certain amount, it has a lifetime of a certain 
amount, this processing from other countries takes up 5, 10 
percent of your capacity, there is your number.
    Mr. Whitney. And we, of course, are willing to talk to you 
more about this, and probably better if also have our 
colleagues from NNSA with us when we do. And so, we would 
definitely like to reach back out to you.
    Mr. Fortenberry. The point being, in certain circumstances 
there might be reasonableness to subsidize, indirectly, the 
movement of these fuels, particularly when there is 
proliferation threat. But again, with strong partner countries 
with strong economies, you called it high-income, to ask for a 
fairer portion that is beyond just the variable or incremental 
cost, as you put it, seems to me to be reasonable.
    Mr. Whitney. Mm-hmm. I will look at that.
    Mr. Fortenberry. Is that reasonable to you, Mr. Chairman?
    Mr. Simpson. It sounds reasonable.
    Mr. Fortenberry. Okay. I will yield back.
    Mr. Whitney. Thank you.
    Mr. Simpson. Thank you. The Department reported to place 
conditions on the extension of the $2.2 billion annual contract 
in order to meet deadlines for packaging TRU waste, according 
to an accelerated timeframe and Los Alamos, which may have 
inadvertently provided incentives for the contractor to cut 
corners, in a way that ultimately led to the shutdown of WIPP.
    These circumstances sound disturbingly similar to the story 
we heard at the waste treatment plant, where the contractor 
provided strong financial incentives to the contractor; or the 
contract provided strong financial incentives to the 
contractor, to improperly declare safety-related design issues 
solved, or resolved.
    What exactly failed at Los Alamos? Why do we believe the 
contractor--or do you believe the contractor cut corners? Why 
does EM continue to struggle to provide effective oversight of 
its clean up contractors? Is this a problem with contract 
structure? Or is there an inadequate focus on safety issues as 
EM struggles to meet its performance goals?
    And the more difficult question, which I do not know that 
you can answer, because it is kind of a relative sort of thing. 
Where should the line be drawn between providing incentives to 
achieve a certain level of performance from the contractor, in 
setting up a situation where only bad things can happen? How 
will the New Federal Oversight Plan prevent these events from 
happening in the future, to the extent we can?
    Mr. Whitney. I will start and then you can?
    Mr. Klaus. Sure. Sure.
    Mr. Whitney. Yeah. Congressman Simpson, you are exactly 
right. It is the balance; it is a very delicate balance. You 
want to incentivize the contractors to get the work scope done, 
and particularly when you have tangible, concrete performance 
elements that you can assign to the contractor and to the scope 
of work.
    At the same time, safety, and we say this and we have to 
mean it, safety is our top priority, and we have prioritize 
that above everything, and having a strong safety culture is 
not mutually exclusive with having a strong performing 
contractor that is heavily incentivized, or properly 
incentivized to get the work the work done. We have to have 
both and they can both coexist, and we have to find that 
balance.
    With respect to Los Alamos, we have, actually on Sunday, we 
will be formerly standing up the Environmental Management Los 
Alamos Field Office, and one of the reasons is to align 
accountability and responsibility for the cleanup program, from 
Los Alamos directly to EM Headquarters, instead of having that 
managed by another program.
    And so there is focus on the cleanup, a singular focus on 
the cleanup activities, and accountability will also--you know 
flows through that chain as well. This also allows the other 
contractor to focus on their core national security mission, so 
it is a balance.
    With respect to LANL, there is the final--the Phase 2 
Accident Investigation Board Report will be coming out soon, 
and that will outline some of the things that we need to 
address, and look forward to correcting those items and working 
with the contractor to do so.
    Mr. Simpson. Okay. In their October 2013, letter--the item 
was submitted to the Advisory Board, you stated DOE has taken 
steps to form an independent project team to evaluate potential 
future missions for the advanced mixed waste treatment plant. 
Who are the members of the project team, and have they made any 
progress?
    Will EM issue publicly-available report for their work? And 
how serious is EM in identifying future missions?
    And are you identifying infrastructure improvements that 
might need to be made? Is there any funding in your budget 
request for any infrastructure investments that the advanced 
mixed waste treatment plant to complement the current and 
future missions?
    Mr. Whitney. So the Advanced Mixed Waste Treatment Plant 
has been a very successful facility, and has operated very 
successfully for many years. And so, definitely as a 
department, and the environmental management, when we have a 
facility that is operating well, if it is possible to reuse 
that facility rather than building another one we would like to 
do that. I will have to get back with you, Chairman Simpson, on 
that letter and where we are with respect to the commitments 
made in that letter. And I will do so.
    [Insert]
    Mr. Simpson. Okay. Mr. Whitney, if higher levels of 
spending were possible, persistent management mishaps and 
difficult technical issues, both of those, continue to plague 
the cleanup program, how many of the missed milestones, or of 
those that you anticipate you will miss over the next few 
years, are strictly funding related? And how many are due to 
other issues, and what are those issues? And what are you doing 
to improve your relationship with state regulators in the 
communities as you work through these site-by-site challenges?
    Mr. Whitney. I will have to get back with you, Chairman, on 
the exact numbers and the attribution of those, whether it is 
funding or technical issues. It is generally a combination of 
both. For the FY '16 budget, we have--in FY '16 we have over 
100 milestones. We have 40 compliance agreements that help 
govern our work, and in the past we have been pretty 
successful.
    Ideally we would be 100 percent successful on the inner 
milestones, but there have been a combination of technical 
issues that have arisen, as well as some budgets that 
ultimately did not, you know, come to the fruition of what we 
anticipated when we signed up to the milestone. But we have 
been successful in about 90 percent of the--of meeting about 90 
percent of our milestones. Again, ideally we would meet them 
all.
    And our relationship with the regulators is absolutely 
critical to us, we treat it very seriously. And I think the 
fact that we have met 90 percent of those, and we are able to 
work in the vast majority of cases with our regulators, both 
the state and with the EPA to find a common ground on how to 
renegotiate the milestones in the path forward. I think we have 
been fairly successful there.
    Mr. Simpson. Well, the Department's relationship with the 
stakeholders could be adversely impacted by missed cleanup 
milestones. Many states either have already levied fines or 
looking to levy fines. New Mexico, in particular, has announced 
unprecedented amounts for such fines. Can you please clarify 
for us, what you see as the Department's responsibility at Los 
Alamos and other sites for paying fines? How will you determine 
whether the Department has a liability to New Mexico or any 
other state where fines might be imposed?
    And if fines are due, can you verify the Department has the 
authority to pay fines from appropriated funds, and does it 
come from appropriated funds or from the Justice Fund?
    Mr. Whitney. I will, on New Mexico specifically, if you do 
not mind Congressman, sine that is the subject of active 
administrative litigation based on the compliance orders issued 
by the State.
    Mr. Simpson. Okay.
    Mr. Whitney. I would just say that we are in discussions 
with the State, and our relationship with New Mexico and the 
New Mexico Environment Department is very important to us, and 
we treat very seriously, like all the regulators. And we are 
committed with respect to LANL, to doing the cleanup there, and 
to get the LANL up and operating again, and the same with WIPP, 
of course, as I had mentioned. And with respect to the ability 
to use appropriations, I think we will have to get back with 
you on that, if you do not mind.
    Mr. Simpson. Okay. Well this whole idea of fines, as I told 
you yesterday when we talked, that I am fearful that states are 
looking at fines as the golden goose, if you will, getting 
money, because they are under budget constraints also, and if 
they can receive money for some of these things, and I think 
that is the inappropriate use of fines.
    Fines are imposed that, if you miss milestones because you 
are holding back, you are not doing your job, you are not 
paying attention, you are not spending the money that has been 
appropriated to do something. It is to keep your feet to the 
fire. When you have challenges that you meet that were 
unanticipated and that kind of stuff, but you are trying to 
address them, then I think fines are kind of inappropriate.
    But I think states, as I said, might be looking, or some 
states anyway, might be looking at it as a way of getting 
additional revenue for a variety of things. So I do have some 
concerns about that. I would like to know where the fines come 
from, where the money comes from, and whether it is 
appropriated dollars, or if it can be appropriated dollars, or 
if it is out of the Justice Fund.
    One other question I have. The Department issued a notice 
this week, for public comment on using new criteria to 
determine whether a planned uranium transfer would have an 
adverse material impact on the uranium industry, and is 
required by statute. How does the Secretary currently make this 
determination? If not, the impacts on the price of uranium, 
what additional factors do you have in mind that you believe 
should be taken into account? And do you believe these 
additional factors will make it easier or harder for the 
department to meet the criteria to transfer uranium?
    Has the Department ever held back on a planned transfer 
because you were concerned about the impact on the industry?
    Mr. Whitney. Well, certainly the department is concerned 
about the impact on industry, and the public comment period for 
the most recent secretarial determination began in December and 
extended until January 22nd, I believe. We actually extended it 
for a time just to ensure that we received all the comments, 
and I understand they were very substantive comments. We are 
currently reviewing those prior to the determination being 
made.
    Mr. Simpson. Okay. Ms. Roybal-Allard.
    Ms. Roybal-Allard. Thank you, Mr. Chairman. I apologize for 
being late. I was in labor H and----
    Mr. Simpson. I told them that. I should have been in labor 
H.
    Ms. Roybal-Allard. Yes. The chair was most generous in 
letting all six members respond to my questions, so it took a 
little bit longer than I anticipated. Assistant Secretary 
Whitney, first of all, I would like to commend you for the work 
that the department has done in cleaning up 107 sites 
throughout the nation.
    Today I'd like to talk about one of the 16 remaining sites 
in my State of California, the Energy, Technology, Engineering 
Center. In your opinion, is the department on track to issue 
the draft environment impact statement for this site this year? 
Is the department on track to meet the 2017 deadline for soil 
remediation, including the establishment of a clean-up remedy 
for the ground water?
    Mr. Whitney. Thank you, Congresswoman. I actually recently 
had the opportunity to visit ETEC, just within the last couple 
months. That is a very important site for us, of course, and we 
are committed to doing the clean-up there. I need to better 
understand it.
    Ms. Roybal-Allard. In the middle of our winter, you were 
lucky.
    Mr. Whitney. Yeah, it was nice.
    Ms. Roybal-Allard. Yes.
    Mr. Whitney. It was nice. I did have to come back.
    Ms. Roybal-Allard. Good timing.
    Mr. Whitney. But it was very nice. The FY-16 budget does 
fully fund our NEPA activities, including the draft 
environmental impact statement. Once the environmental impact 
statement, of course, is published there will be a public 
comment period, and then we will work towards a final EIS. So 
the FY-15 budget and the FY-16 budget fully fund those NEPA 
compliance activities.
    In parallel, the state, has a CEQA process which is similar 
in nature to the federal NEPA process. They are currently going 
through that as well. Once we have that final environment 
impact statement we will better understand the nature and the 
full scope of the work and the schedule. I would be honored to 
come back and talk to you as we move through the process.
    Ms. Roybal-Allard. But so far you feel like it is moving in 
a timely manner----
    Mr. Whitney. I do.
    Ms. Roybal-Allard [continuing]. And they may meet the goal?
    Mr. Whitney. I do.
    Ms. Roybal-Allard. Okay. Undersecretary Klaus, the 
department is doing incredibly important work right now. Since 
2011 under the cloud of the Budget Control Act reductions, the 
Department of Energy has been asked to do more with less. Can 
you address the impact that the FY-16 spending reductions will 
have on your operations, including your work on the sites in my 
State of California?
    Mr. Klaus. Well, I do not have the specific numbers if you 
are asking in terms of science budgets, and in terms of how 
that affects the labs or whether you are asking about the 
clean-up program. The major one of which, I think, Mr. Whitney 
just addressed.
    I can tell you that within your state you have the Berkeley 
Lab, you have got SLAC up at Stanford, and you have the 
Lawrence Livermore Lab. I can say that those are--and I have 
visited two of the three of those--those are very important 
laboratories. Not just from the standpoint of the government 
work that goes there, but from the standpoint of the many users 
who use those facilities.
    I think the number at Berkeley, I believe, is there are 
over 10,000 users per year of those one-of-a-kind facilities. 
It is where we develop the new biotech drugs. It is where the 
drugs come from. It is material science that affect our ability 
to do all sorts of requirements. It is where nanotechnology 
takes place, etcetera. I do not know specifically the 
reductions that you are referring to, but I do think that if we 
reduce the level of funding at those facilities, I think there 
are something like 60,000 applicants for the 10,000 slots that 
are available to utilize some of those user facilities. If we 
have to cut the number because we do not have the capacity, the 
dollars to be able to do that basic science, I think it is 
critical to moving the U.S. innovation economy forward. If that 
is what you are referring to----
    Ms. Roybal-Allard. Yes.
    Mr. Klaus [continuing]. From the clean-up standpoint, you 
know, we just face a continuing challenge to try and accomplish 
as much as we can within the resources that are available, 
recognizing this is a long-term challenge that we have got to 
meet.
    Ms. Roybal-Allard. I have one other question for you.
    Mr. Klaus. Sure.
    Ms. Roybal-Allard. Secretary Klaus, I realize that this 
hearing is on the EM program specifically, but I would like to 
take advantage of having you here to ask a question related to 
your role as the Chief Operating Office at the department.
    My colleagues and I, we spend a great amount of time 
thinking about cyber security and how we can best mitigate 
cyber risks in this constrained funding environment. Can you 
tell us a little bit more about the efficiencies achieved by 
the cyber security crosscut?
    Mr. Klaus. Sure. Actually, one of the things a cyber 
security crosscut does is, in fact, what it is designed to do 
is to give us an accurate assessment of what we are spending on 
cyber security across the department. The reason that we need 
to do that is that there is no central funding for all cyber 
security across the department. We do fund a portion of that 
through our CIO office, but a lot of the cyber security work 
takes place in the Office of Intelligence, in the NNSA.
    Part of what is going on, and just, sort of, to take two or 
three steps back, historically IT really developed in each of 
the programs. We have never really had a centralized IT system 
within the department, so each of the programs, as IT became 
more and more important, developed their own IT. They built 
their own central servers, etcetera.
    We are at a point now where we have multiple IT systems in 
different programs. From a cyber security standpoint that is a 
much bigger challenge because we have to develop cyber security 
and put it in place at each of the different systems, and each 
of the different access points. One of the things that we are 
trying to move forward to with the Secretary's overall 
management iniative is to bring those systems together and 
operate more as, if you will, an enterprise. If we can 
consolidate those systems then we have fewer access points, and 
we will have more of an ability to manage cyber security 
effectively. I don't know the number of systems we have, but if 
we can consolidate down to fewer systems then we will achieve 
both efficiency, as you ask, and we will be able to see from 
the crosscut that we have achieved efficiently from the 
standpoint of better use of our IT dollars. We will do a better 
job on cyber.
    Also, we will be better prepared, for example, to take 
advantage of the new technologies, to go to the cloud. It is 
much harder to do that through multiple systems than it is if 
we can consolidate and reduce the number of pathways and 
systems that we need to do that. So I think that is a good 
example of, frankly, why the Office of Undersecretary for 
Management Performance was created. It was to have the 
department operate as an enterprise as opposed to silos. In 
this case, accomplishing the cyber, particularly given, as you 
know, the nature of the information that we have within the 
department, it is something we can better achieve if we do that 
as an enterprise rather than in silos.
    Ms. Roybal-Allard. Okay. I would like to follow-up with you 
on that.
    Mr. Klaus. Sure. Be pleased to do that.
    Ms. Roybal-Allard. At a later time, okay? Thank you.
    Mr. Simpson. One last question, many of the clean-up sites 
have coped with tight budgets by first reducing workforce for 
subcontractors, resulting in a disproportionate impact on small 
business. Is the number of subcontracts going to small business 
decreasing for the Office of Environment Management, and have 
you identified new strategies to promote greater opportunities? 
Are you taking any actions to make sure the bulk of the 
reductions do not fall on small business?
    Mr. Whitney. Thank you, Congressman Simpson. The small 
business participation in the Environment Management program we 
feel is critical, for many reasons, including the performance 
of the program. I wish I had our score card for this past year 
on small business participation, on my desk before I left, I 
wish I had brought it, but yes, we have exceed the Department's 
goals for small business participation.
    I believe prime subcontracts, it was around 8 percent, and 
if you include the direct contracts through our M&O contracts 
it was over 10 percent small business participation, so we are 
very proud of that, and definitely are mindful of anything that 
we do that might have impacts on the small business community 
because of importance.
    Mr. Simpson. I appreciate that. I bring that up because I 
just want to know that you have got your eye on the ball there 
because it is part of the infrastructure in these communities 
of cleaning up these sites and so forth.
    Lastly, not a question, let me just say I encourage you to 
get out to Idaho and meet with our Attorney General and other 
officials and resolve the disagreements or different 
interpretations of the agreement because I really do not want 
the EM side of this laboratory in Idaho to affect the lab site. 
Our inability, or if they prevent us from bringing in research 
quantities of nuclear material.
    It would greatly impact the future of the Idaho National 
Lab and our ability as the lead nuclear lab in the country to 
do the job which we have asked them to do. So I really do not 
want these two entities going at one another, so I would 
encourage you to get out and resolve these differences so that 
we can resolve the overall issue of allowing these research 
quantities' material to come into the state. It makes sense to 
do it, and it is the smart thing to do, so thank you for doing 
that.
    I will tell you that every person that held this job before 
you has left with grey hair. Now, that didn't affect you, Mr. 
Klaus.
    Mr. Klaus. I will be glad to have more of it, sir.
    Mr. Simpson. You have already got it.
    Mr. Klaus. Thank you, sir.
    Mr. Simpson. I hope you are getting some of that coloring.
    Mr. Klaus. I know. I am, sir.
    Mr. Simpson. It is a difficult job you all do, but it is a 
highly important job for the future, and thank you for the work 
that you do, and the challenges that you face, and trying to 
meet those for both the taxpayers of the country, for cleaning 
up the waste, and to do it in an efficient manner. So thank you 
all and thank you for being here today.
    Mr. Klaus. Thank you.
    Mr. Whitney. Thanks for the opportunity.
    Mr. Simpson. The hearing is closed.
    
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                                           Tuesday, March 24, 2015.

                     NUCLEAR REGULATORY COMMISSION

                               WITNESSES

STEPHEN BURNS, CHAIRMAN, NUCLEAR REGULATORY COMMISSION
KRISTINE SVINICKI, COMMISSIONER, NUCLEAR REGULATORY COMMISSION
WILLIAM OSTENDORFF, COMMISSIONER, NUCLEAR REGULATORY COMMISSION
JEFF BARAN, COMMISSIONER, NUCLEAR REGULATORY COMMISSION
    Mr. Simpson. Hearing come to order. Today's hearing is on 
the budget of the Nuclear Regulatory Commission. We have before 
us Stephen Burns, the Chairman of the Commission, and his 
fellow Commissioners, Kristine Svinicki, William Ostendorff, 
and Jeff Baran. Thank you for all being here today and we look 
forward to your testimony.
    Our government should not make policy based on energy 
sources that the market favors at any given time. It is our job 
to address our energy needs strategically and to work to create 
an environment where all forms of energy can compete. A robust 
energy portfolio is the best path to a secure energy future. I 
believe that nuclear energy is a critical component of that 
portfolio.
    The Commission plays an important role in assuring nuclear 
energy's success. Nuclear energy must continue its strong 
safety record, but regulations need to ensure safety without 
placing undue burdens on the industry. We must move forward on 
long-term waste storage, and the Commission must be prepared to 
advance new and innovative nuclear technologies.
    I look forward to your thoughts on all of these subjects 
and many more. And I would also ask that witnesses to please 
ensure that for the hearing record, questions for the record, 
and any supporting information requested by the subcommittee be 
delivered in its final form to us no later than four weeks from 
the time you receive them. Members who have additional 
questions for the record will have until close of business 
tomorrow to provide them to the subcommittee office. With that 
I will turn to my Ranking Member, Ms. Kaptur, for her opening 
statement.
    Ms. Kaptur. Thank you, Mr. Chairman, very much. Thank you, 
Chairman Burns, and Commissioners Baran and Svinicki and 
Ostendorff. Thank you so very much for being here today and for 
the important work that you do for our country.
    Nuclear energy is a critical component of our nation's all-
of-the-above energy strategy, and I think we are united as a 
committee on that. To meet this need we currently rely on an 
aging fleet of nuclear power generation facilities with an 
average age of 34 years. Many have already outlived their 
initial 40 year licenses and with others quickly approaching 
it.
    We know also that safety is paramount. One in three 
Americans live within 50 miles of a nuclear power plant. So you 
have serious work in your portfolios. As a member who 
represents one such facility, the Davis-Besse Nuclear Power 
Plant in Oak Harbor, Ohio, our region is keenly aware of the 
need to strike a balance between the jobs and economic 
opportunity these facilities support in the surrounding region. 
But we need to ensure the highest level of oversight and 
security to protect local people and communities.
    Unfortunately, our region has experienced three incidents 
with the potential for great calamity if oversight and 
regulation are not handled properly. Design flaws in the past 
and lax oversight brought our region within three-quarters of 
an inch from disaster.
    I am interested in hearing more about your plans for 
relicensing and continuing operations at these facilities while 
maintaining the utmost attention to safety. The NRC faces 
additional security concerns in addressing spent fuel storage 
and eventual disposal. The current approach is far from ideal. 
I think we can all agree on that. In the absence of real 
forward motion on Yucca Mountain or another site, our nation 
has no long-term solution to this pressing challenge. More than 
$10 billion has been spent on Yucca, yet America has nothing to 
show for that investment.
    The government has to live up to its responsibility to 
provide for the eventual safe disposal of commercial spent fuel 
that is currently stored at these sites, and I look forward to 
your thoughts on how we can meet this obligation. And as we 
discussed in the past, I have a particular interest in the 
training of personnel who work in nuclear power facilities and 
would be very grateful for additional insight you could provide 
us on how we make sure that is done in the most excellent way 
for the current generation and the next.
    Thank you so very much, Mr. Chairman, and we look forward 
to your testimony.
    Mr. Simpson. Thank you. Mr. Burns?
    Mr. Burns. Good morning and thank you, Chairman Simpson and 
Ranking Member Kaptur. My colleagues and I appreciate the 
opportunity to appear before you today to discuss the NRC's 
fiscal year 2016 budget request.
    NRC, as you know, is an independent federal agency 
established to license and regulate the nation's civilian use 
of radioactive material and nuclear facilities, to ensure 
adequate protection of the public health and safety, to promote 
the common defense and security, and to protect the 
environment. The resources that we are requesting for fiscal 
year 2016 will allow the NRC to continue to ensure the safe and 
secure use of material and facilities in the United States.
    In addition to the agency's routine regulatory and 
oversight activities, the fiscal year 2016 budget is expected 
to include and will cover continuing work in the licensing and 
construction of new reactors, the continued implementation of 
lessons learned from the accident at the Fukushima Daiichi 
Power Plant in Japan in 2011, and preparation for licensing of 
small modular reactors.
    The NRC readily acknowledges that it is in a changing 
environment. Since 2001 the agency grew significantly to 
enhance security and incident response and to prepare for the 
projected growth in the use of nuclear power in the U.S. That 
forecast in growth has been adjusted downward in response to 
changes in the nuclear industry. And as is appropriate, we are 
being scrutinized by our stakeholders and the Congress for our 
responsible use of resources. The Congress has charged the NRC 
with a critical mission to ensure public health and safety and 
the common defense and security, and we can never lose sight of 
that mission. Still we can and should maintain our focus on 
that mission while also taking a responsible and hard look at 
whether we are effectively using our resources.
    Our fiscal year 2016 budget reflects the NRC's efforts to 
demonstrate its responsiveness to the current environment in 
which we find ourselves. Continuing with trends that began in 
2014, the 2016 budget request reflects a reduction in both 
dollars and staff from budget proposals in recent years. But it 
will still provide for the necessary resources in our view to 
carry out our mission.
    As required by law, the fiscal year 2016 budget request 
provides for 90 percent fee recovery, less the amounts 
appropriated for certain specific activities. As such, 
approximately $910 million of the fiscal year 2016 budget 
request will be recovered from fees assessed against NRC 
licensees. Our proposed fee rule for the current fiscal year, 
2015, which was published for public comment yesterday on March 
23, includes estimates for reductions in the overall licensing 
annual and hourly fees.
    Another key step the NRC is taking to prepare for changes 
in its environment is Project Aim 2020. The project was 
initiated in June 2014 to enhance our ability to plan and 
execute our mission while adapting in a timely and effective 
manner to our dynamic environment. After gathering perspectives 
from internal and external stakeholders to forecast future 
workload and the operating environment in 2020, the staff 
recommended to the Commission a number of measures designed to 
transform the agency over the next 5 years to improve our 
effectiveness, our efficiency, and our agility. The staff's 
report was provided to the Commission on January 30 of this 
year, and the Commission considers this to be an important part 
of the dialogue about the future of the NRC. We want to be 
timely in acting on the report, but we also want to do so 
deliberately and smartly. And although the NRC recognizes the 
need for adaptation and change, we are also keenly aware that 
any major organizational change if not done wisely can have a 
detrimental effect on our mission and on the morale of our 
employees. We have a critical mission and some of the most 
dedicated and knowledgeable employees in the federal 
government.
    One final initiative I would mention is the Commission's 
focus on the past few years on its rulemaking process in order 
to understand and, if possible, reduce the cumulative effects 
of regulation. We are continuing to engage our stakeholders on 
this issue and will receive further recommendations from our 
staff for additional improvements this spring.
    In sum, we are cognizant of our changing environment and we 
are committing to taking a hard look at ourselves in order to 
assure that we are prepared for the future.
    This concludes my formal testimony on the fiscal year 2016 
budget request. Again, on behalf of the Commission, I thank you 
for the opportunity to appear before you. I look forward to 
working with you to advance our important safety and security 
mission. I am pleased to answer any questions you have. Thank 
you very much.
    Mr. Simpson. Thank you. Do any other Commissioners have 
opening statements you would like to make? Ms. Svinicki?
    Ms. Svinicki. Thank you, Chairman Simpson and Ranking 
Member Kaptur, for the opportunity to appear before you today. 
The Commission's Chairman, Stephen Burns, in his statement on 
behalf of the Commission has provided an overview of the 
agency's budget request as well as a description of some key 
agency accomplishments and challenges in carrying out the NRC's 
important work.
    The NRC continues to implement safety-significant lessons 
learned from the Fukushima accident in accordance with 
established agency processes and procedures while also 
maintaining our focus on ensuring the safe operation of nuclear 
facilities and the safe use of nuclear materials across the 
country. The current period of implementation of Fukushima-
related regulatory actions, which is a set of complex, 
interrelated actions lasting several years, will require 
discipline and focus from the NRC staff as they review and 
process an extremely high volume of regulatory submittals and 
inspect the implementation of these requirements at licensee 
sites. At the same time the agency will be carrying out a set 
of complex rulemaking activities related to Fukushima actions. 
In short, very demanding work continues before us.
    Concurrent with this, the NRC is undertaking a 
comprehensive initiative to improve agency budget formulation, 
budget implementation, and program execution; in other words, 
an effort to sharpen our delivery of the basics. This is truly 
a homegrown initiative involving the efforts and feedback of 
many hundreds of individual NRC employees who have demonstrated 
strong ownership of its core elements. These elements are--
rightsizing the agency, streamlining agency processes to use 
resources more wisely, improving timeliness in regulatory 
decision making, and promoting a more unified agency purpose 
through agency-wide priority setting. We look forward to 
reflecting progress on these fronts in future budget submittals 
to you.
    I appreciate the opportunity to appear today and look 
forward to your questions. Thank you.
    Mr. Simpson. Mr. Ostendorff.
    Mr. Ostendorff. Good morning, Chairman Simpson and Ranking 
Member Kaptur. The Chairman has already provided an overview of 
NRC's budget, the changing environment, and steps we are taking 
to improve the operations of the NRC through Project Aim.
    I am in complete alignment with his testimony. I do want to 
expand just a bit upon the status of post-Fukushima safety 
enhancements.
    Along with Commissioner Svinicki, I have been involved in 
all the Commission's decision making related to what safety 
changes we should require as a result of the operating 
experience from a tragic earthquake and tsunami in Japan 4 
years ago. Looking back over the actions NRC has taken over 
these past 4 years as a result of Fukushima lessons learned, I 
firmly believe the agency has acted on a foundational basis of 
science and engineering. We have appropriately given highest 
priority to Tier 1 items associated with greatest safety 
significance.
    I will not go into any details, but will make two very 
brief comments. First, as a career nuclear submarine officer, I 
spent 16 out of my 26 years in the Navy operating submarine 
reactor plants. I am confident based on that experience of the 
NRC's safety actions post-Fukushima.
    The second is as I compare our safety actions to that of 
the broader international community, I am convinced that the 
NRC and the United States industry continue to be world leaders 
in nuclear safety. I had a chance just last week to visit the 
industry's Regional Response Center in Phoenix. I believe 
Commissioner Svinicki was there with Commissioner Fuketa from 
the Japanese agency just the week before. I think those steps 
we have seen in the industry and the regulatory body have been 
significant, but perhaps not widely published.
    In closing I appreciate the chance to be here today and I 
look forward to your questions.
    Mr. Simpson. Thank you. Mr. Baran.
    Mr. Baran. Chairman Simpson, Ranking Member Kaptur, thank 
you for the opportunity to appear today before the 
subcommittee. It is a pleasure to be here with my colleagues to 
discuss NRC's fiscal year 2016 budget request and the work of 
the Commission.
    First and foremost, NRC is focused on our mission of 
protecting public health and safety. Yet the agency faces a 
different environment than what was expected just a few years 
ago when substantial new reactor construction was anticipated 
and no licensees had yet announced plans to shut down any 
reactors.
    To meet our responsibilities now and in the future, we need 
to enhance the efficiency, effectiveness, and agility of the 
agency. In order to avoid disrupting the agency's work, I think 
it is important to set a thoughtful trajectory to the 
appropriate resource and staffing levels over the next few 
years. We need to make sure that we do a good job matching 
resources to expected workload.
    Before I joined the Commission, my colleagues had the 
foresight to initiate Project Aim, an internal working group 
tasked with looking at the changes NRC should make to prepare 
for the future. This is a valuable and timely effort. We are 
actively deliberating on the recommendations of the Project Aim 
team, and I expect that the Commission will approve some 
prudent actions in the near term.
    While we work to increase the agency's efficiency and 
agility, we need to ensure that NRC also maintains its focus on 
its ongoing safety work. Currently, five new reactors are being 
built in the U.S. and five reactors recently ceased operations 
and are entering decommissioning. At the construction sites, 
NRC is conducting oversight to ensure that the new plants are 
built safely and in accordance with regulatory requirements. 
For the decommissioning plants, the agency reviews requests for 
exemptions from some of the requirements that apply to 
operating plants. Meanwhile, the NRC staff is beginning a 
rulemaking to take a fresh look at a number of decommissioning 
issues.
    NRC is continuing to address post-Fukushima safety 
enhancements and lessons learned, as my colleagues indicated. 
Progress has been made in several areas, but we recognize that 
more work remains to be done.
    NRC also is responsible for having an efficient and 
effective licensing process for new designs and facilities. 
While NRC continues its work on pending applications for new 
reactors, we need to be ready to accept and review applications 
submitted for new technologies. We are expecting to receive the 
first application for a small modular reactor design next year 
in 2016. NRC already is reviewing an application for a new 
production facility for medical isotopes and anticipates 
additional applications of this type in the future.
    Thank you, and I look forward to your questions.
    Mr. Simpson. Thank you all and first let me say I 
appreciate the work that you all do. This is both a challenging 
and a very important job for the future of this country and for 
nuclear safety, and I do appreciate the hard work that all of 
you do.
    All of you I think, or almost all of you, mentioned in your 
statements Fukushima and the lessons learned there in trying to 
increase the safety in our reactors and so forth and our safety 
plants. We all talk about lessons learned. Can you give me some 
examples of what have we learned from Fukushima?
    Mr. Burns. Certainly, Mr. Chairman. I think one of the 
things that we learned actually built on a lesson I think we 
learned in terms of the agency's response after the 9/11 
attacks, and that is having the availability of supplemental 
equipment that could be used to provide additional power or to 
assure essential systems were operational or could be put back 
in operation after an event. If you look at the Fukushima 
accident, the inability, particularly in units 1 through 4, to 
restore the electric diesel generators, that was one of the 
primary problems that led to additional problems. One of the 
things that we have done, and Commissioner Ostendorff 
mentioned, is reflected in these regional support centers, but 
also onsite centers at each of the facilities, is basically 
stockpiling of this additional equipment--pumps and valves, 
things like that--that might be needed in the event of a severe 
event.
    So I would say perhaps that is the most significant lesson 
that we have learned in terms of making that availability of 
equipment, to cope with those unusual and rare events, being 
able to do that, that is probably the most important lesson. My 
colleagues might have something else to say.
    Mr. Simpson. Kristine.
    Ms. Svinicki. Mr. Chairman, thank you for that question. 
Commissioner Ostendorff in his statement just now, which I had 
not heard until just now, made an important point, which is 
that if you look across the international nuclear community, 
you see tremendous coherency in terms of the set of near-term 
actions that we all are calling our lessons learned from 
Fukushima. And at bottom, it is really no more complicated that 
this--witnessing and experiencing something like the Fukushima 
accident I think challenged all countries with mature nuclear 
programs or those who are considering nuclear to really 
confront their assumptions about high-consequence, low-
probability natural events. And so when Chairman Burns talks 
about further enhancing the set of equipment onsite to mitigate 
in these low-probability, high-consequence events, as 
Commissioner Ostendorff pointed out, you see across nations 
that that was the immediate first step.
    Now countries can also overreact. I am proud of the United 
States having from early days after the accident, President 
Obama stood outside the White House with our Chairman at the 
time, Chairman Jaczko, and he asked for assurances, for NRC to 
give assurance to the nation that nuclear power plants were 
safe. We did not shut all our plants down as Japan did. We did 
a quick look and as the safety regulator, we were able to tell 
the American people it was safe to continue operating plants, 
but that did not mean that there were not opportunities for 
enhancement. As we have prioritized those, those are under 
implementation and have been for some time.
    So I think at bottom that is the core lesson learned.
    Mr. Ostendorff. I want to chime in. I agree with everything 
that Chairman Burns and Commissioner Svinicki said. One thing, 
and Commissioner Svinicki and I went through this in great 
detail 4 years ago. I think one of the most significant steps 
decision-making wise NRC as a body went through was to look at 
the near-term taskforce, which our staff in a short, 90-day 
period, presented to the Commission in July of 2011. It had 12 
recommendations with different subparts to that. This is a very 
thoughtful body of work, but two comments I would make, 
Chairman, in response to that report.
    One, our level of knowledge has significantly increased 
over the last 4 years as we have gotten into details working in 
very collaborative engagement with industry to figure out what 
really makes sense here, where do we add value.
    And the second piece I would say is we have been very 
thoughtful in saying we cannot do all this at one time nor 
should we try to. Let us take those high-priority action items 
and sometimes it takes a little bit longer than we thought it 
would, but we believe it has been important to get it done 
right the first time rather than get it done fast.
    So I would just add those comments.
    Mr. Simpson. Is industry in agreement with that?
    Mr. Ostendorff. I believe so.
    Mr. Simpson. Jeff.
    Mr. Baran. I think my colleagues have done a really good 
job covering this. But the only thing I would add--I think one 
of the important lessons learned that the near-term taskforce 
detected right away when they worked in the immediate aftermath 
of Fukushima is really the cliff-edge effect of flooding, which 
I do not know that was fully appreciated. So the plants there 
did pretty well in terms of the seismic event, the earthquake 
itself. But the flooding is what really knocked out the power 
and the ability to provide core cooling that was so essential.
    And so I think one of the focuses that the NRC has had over 
the years before I arrived obviously was the work on flooding, 
the focus on flooding. There were walk-downs immediately after 
the event to check the status of defenses against flooding. And 
then there has been an effort ongoing to reevaluate the 
flooding hazards, to make sure that in the decades of the past 
since some of these plants were licensed, we make sure we 
really understand what are the potential flooding hazards in 
our plants, prepared to mitigate it with new equipment or to 
protect against it with any modifications that might be 
necessary.
    So I think that is a key lesson learned that has been 
responded to significantly in what the NRC has done in the past 
few years.
    Mr. Simpson. Thank you. It is my understanding that the 
Commission will work to develop and issue a supplemental 
environmental impact statement for Yucca Mountain, that 
noncontroversial subject, this year because the Department of 
Energy will not. Can you lay out for us the schedule to 
complete the EIS Supplemental? And as you do so, could you 
please highlight for us what responsibilities and activities 
the Commission will have to take on as a result of Department 
of Energy's decision to only provide an update to the 2009 
technical report? And can you please tell us how much the 
Commission will need to spend in 2015 to address EIS 
Supplemental activities that the Department of Energy completed 
during the previous EIS process? Do you have sufficient funds 
to complete the Supplemental?
    Mr. Burns. The basic schedule, Mr. Chairman, is about 12 to 
15 months, so perhaps about this time next year we would issue 
the Supplemental Statement. We do have the funding. You may 
have mentioned it. There is approximately $4 million left in 
the carryover funds the agency has. That would be sufficient to 
cover doing the Supplemental EIS as well as there are some 
other activities related, primarily the archiving of some of 
the documents, assuring the documentation on the overall, that 
we have on the overall application and review process are 
preserved appropriately. We have been preserving them but there 
are some others. Those are the steps. We can provide the 
details if you like. But that is essentially what we would do 
with that. And I am not sure whether I answered all of the set 
of your questions, but if I have to, I can try to supplement.
    Mr. Simpson. That pretty much covers it. I have suggested 
in the past that we not, as this debate on Yucca Mountain went 
forward, that we not do anything to ruin that cave because we 
are going to need a cave that size to store all the study 
papers that have been done on Yucca Mountain; it is probably 
the most studied piece of earth on earth. In a report provided 
to the Committee in August 2014 the cost for the Commission to 
complete all the activities required to authorize construction 
at Yucca Mountain was estimated at $330 million. What could the 
Commission accomplish towards moving the Yucca construction 
license forward in 2016 and how much would you need to do that 
if you assume a willing, responsive applicant, and what would 
you need for the Department of Energy to do in 2016 to support 
those activities?
    Mr. Burns. As I say the approximate $330 million would be 
for activities with respect to the NRC's completion of its 
role. That primary thing beyond this step where I talked about 
the completion, the EIS, then we have the adjudicatory hearing 
which is provided for by law; there are close to 300 
contentions in front of our licensing board. So much of it 
would go to that and then I think there are probably some 
supplemental staff activities if you got through the hearing 
process. And assuming a favorable decision, you would have some 
staff activities. My understanding is that I think somewhere in 
the order to $25-$30 million might be the amount for agency 
activities reflecting a resumption of the adjudication for the 
fiscal year 2016 period. Again I think if you have, from my 
perspective, a willing applicant--because again the significant 
step you are now in is an adjudication where you in normal 
terms you expect an advocate for the application, like you 
would in other types of licensing proceedings. Again because 
the NRC's role is as a licensing authority and the oversight of 
the application process.
    Mr. Simpson. I showed you a coin that I had in my office 
the other day.
    Mr. Burns. Yes, you did.
    Mr. Simpson. And it was from 2009. It was a nice coin that 
they minted. It was to commemorate the application of license 
for Yucca Mountain. I think that is going to be a historical 
coin at some point in time.
    It is my understanding that Waste Control Specialists, a 
private company that provides waste treatment storage and 
disposal has announced their intent to apply for a license for 
the interim storage of used nuclear fuel by April 2016. In 
developing the fiscal year 2016 budget request did you estimate 
the resources that would be needed to process this license and 
were they included in this budget request?
    Mr. Burns. I believe that they are not in the request. That 
is my----
    Mr. Simpson. Can you please discuss what activities were 
included in the budget for nuclear materials and waste safety? 
And if Congress does not include more than requested can you 
tell me that they requested activities will have priority over 
license applications that were not proposed as part of this 
request? In other words over WCS?
    Mr. Burns. Well, the activity that are in that part of our 
budget would reflect other ongoing activities with respect to 
licensing related to materials, oversight of existing fuel 
facilities and the like that are within that portion of the 
budget. I might need to get back to you unless one of my 
colleagues may want to----
    Ms. Svinicki. If my memory is correct the Waste Control 
Specialists alert to us for notification came a bit late in our 
budget formulation process. So we did not. It was not because 
of any intentional decision, but just because of that timing. 
We did not include funds explicitly for review or starting the 
review of such a storage facility application. I should mention 
that we have a well established regulatory framework for a 
spent fuel storage installation. It is 10 Code of Federal 
Regulations, Part 72. So we do not need to come up with a new 
framework for reviews such as this, and commensurate with that 
we would anticipate or our staff informs us that resource 
requirements in the first year would not be significant. I 
think if funds were not appropriated specifically to support 
the review our staff has informed the Commission that it would 
likely be possible to reallocate amongst funds. It is one of 
our larger budget lines so we should be able--I cannot make a 
commitment that it would take priority over other work. We 
would have to look at that, but we do think it could likely be 
accommodated.
    Mr. Simpson. Okay.
    Mr. Ostendorff. I will just add the estimate we received 
from our staff, Chairman Simpson, was about $3 million. If the 
application is full and complete and detailed enough--and we 
have had some experiences in the agency dealing with a similar 
application back in the 1990s with a private fuel storage 
facility of a similar nature that was proposed for the State of 
Utah.
    Mr. Baran. Just briefly to build off Commissioner 
Ostendorff's remarks, what the staff was telling us was that $3 
million was what it probably cost for the safety and security 
review. You would also have to do an environmental impact 
statement which would be about $2 million. And their 
expectation is that process, the review process, would take 
about three years assuming no contentions were filed. In other 
words three years without the adjudicatory step. So $5 million 
over a three year period is their estimate right now without 
actually, of course, seeing the application.
    Mr. Simpson. I have had people come to me and talk to me 
about deep bore hole storage. Have you guys done anything on 
that? Would they need a license? Obviously they would need a 
license. Is that a reality? I heard it mentioned just yesterday 
as a matter of fact.
    Mr. Burns. As far as I know as an agency we have not done 
anything with respect to the deep bore hole storage. If as you 
say, if it is an entity that we would have the responsibility 
to license we would prepare to do what we need to do in terms 
of the technical criteria and reviewing it. But, to date, as I 
understand, we have not.
    Mr. Simpson. An interesting idea.
    Ms. Svinicki. I would just like to distinguish that where 
deep bore hole is discussed, it is typically a disposal option, 
not a storage option, so just making that distinguishable case.
    Mr. Simpson. But it would still need licensing?
    Ms. Svinicki. Yes. It would. And I believe that DOE's Blue 
Ribbon Commission spoke to this technology option for disposal 
as something that was promising, but as the regulator we have 
not conducted any work on it.
    Mr. Simpson. Okay. I don't know how this--and I just say 
this for whoever is listening--I don't know how this is going 
to work out in our budget and stuff. The House obviously 
believes that Yucca Mountain is the law of the land and we need 
to be following the laws that exist and we need to proceed down 
that line. The Senate has a provision that they have tried to 
implement relative to interim storage, and they have put that 
in their bill. And so far we have knocked them both out when we 
conference because as Senator Feinstein and I discussed it is 
either--it is not one or the other, it is both as far as the 
House is concerned if you are going to do those. And so I don't 
know how it is going to work out with the Senate this year. We 
all know that if Yucca Mountain were to open tomorrow that we 
would need additional storage beyond that to capacity anyway. 
So I have been supportive of moving forward with the pilot 
program and of moving forward with Yucca Mountain, but as I 
said that is kind of out of the technical area and into the 
politics area. So, Marcy.
    Ms. Kaptur. Thank you, Mr. Chairman. Chairman Burns, 14 
commercial nuclear reactors will go through relicensing over 
the next 10 years, and some of these are facing a checkered 
past of safety concerns. What assurances can you share that due 
diligence is being taken in the relicensing process and that 
there will be an emphasis on continued safe operations?
    Mr. Burns. Well, safety is at the heart of everything we do 
and the touchstone for our requirements, whether we are 
conducting inspections and oversight or doing undertaking our 
licensing responsibilities. The Commission's renewal process 
has been well established. There are about 75 units that have 
gone through the license renewal process already. License 
renewal focuses primarily on the aging effects and assuring 
that those are managed in the renewal term. Beyond just the 
license renewal we have ongoing oversight, particularly over 
the last 15 years or so. And partly from lessons learned from 
our own experience and looking at ourselves as well as the 
performance of licensees, we developed what we called the 
Reactor Oversight Process. That is intended to look at the 
various areas of not only operation but radiation safety and 
other types of performance, and from our inspection program 
assess the performance of licensees. So that is what I would 
call the primary focus in terms of integrating performance, 
assessing performance, and assuring that there is adequate 
oversight based on the results of inspections and reports of 
events and things like that at power plants.
    Ms. Kaptur. If you were to compare the variety of designs 
in the plants that you will be evaluating for relicensing, 
compared to a nation like France for example, how many 
different designs do we have in this country compared to 
others, and are you thinking about streamlining the number of 
plants that are out there in order to have more symmetry 
between what it is we are regulating?
    Mr. Burns. Well, I am not sure I know a particular number. 
There have been several major vendors within the United States 
that constructed or provided the design for power plants. For 
example, Westinghouse, General Electric Corporation, formerly 
Combustion Engineering Corporation, and Babcock and Wilcox. So 
there are those basic designs and there may have been 
variations in terms as they developed. Within France again I 
won't say there is a single design or one design, but basically 
my understanding is that the French having obtained the 
Westinghouse technology then basically adapted it. They have in 
effect a homegrown facility and essentially have used that 
design at most of the French installations. What we did in the 
United States is--and I think this was one of the lessons 
learned actually coming out of the Three Mile Island accident--
was in looking at enhancing standardization. And one of the 
things that we did in terms of adopting the licensing process 
we are using now for new reactors is focusing on design 
certifications that then can be applied in different individual 
applications. And we have gone through in terms of certifying a 
number of designs, a Westinghouse design, a General Electric 
design for example. As I say there are policies, particularly 
in the '80s and on into the '90s, in terms of enhancing that 
standardization which I think has benefits to the industry, but 
it does have benefits I think for us in terms of our oversight 
and inspection.
    Ms. Kaptur. Does anyone else wish to comment because we 
have about 100 plants operating in the country? I guess with 
relicensing the question is can there be more standardization 
or is that an impossibility? Yes, I think both the 
Commissioners Svinicki and Ostendorff wish to comment. And I 
thank you both.
    Ms. Svinicki. Thank you. Speaking to your question about 
what assurance can the NRC give in terms of the safety of aging 
plants, I think a key assurance that NRC gives is that any 
emerging issue will not await a relicensing review, and 
Chairman Burns spoke to this a bit in his response. Many of the 
issues that have been encountered, concrete aging for ocean 
side plants in the northeastern United States, the material 
corrosion of the vessel head at Davis-Besse. These things do 
not await any review, the agency takes regulatory action 
immediately. So I would hope that would be an assurance to the 
public that we don't store up these issues and wait for any 
kind of relicensing or license renewal process.
    I would draw a key distinction between France and the 
United States and it is that France has in essence one 
operator, Electricite de France, and therefore there is greater 
coherency and consistency among the program they have 
implemented across their country. And while some speak to a 
more homogenized power reactor fleet that France has as an 
advantage, and I am sure it does pose advantages, in the same 
way that the all of the above energy policy is intended to 
provide strength through diversity of supply, having diverse 
designs in the United States is viewed by many as a strength of 
the U.S. system if there should be some emergent, unpredicted 
phenomenon or aging management issue that would arise. If you 
have a diversity of plants you have a greater likelihood that 
it will not be problematic at all of them and essentially would 
not be emerging all at the same time. So there are two ways of 
looking at whether or not there is strength in resiliency and 
having the same plant built over and over again. That is just a 
perspective that some have.
    Ms. Kaptur. Of 100 plants in our country, if you could 
classify them by design, how many different designs do we have? 
I know it is not 100.
    Ms. Svinicki. It is not 100 designs, but what is 
interesting is because there are site specific adaptations and 
then there was knowledge gained over time evolving and 
improving the designs, candidly the answer many give is that 
there are 100 different plants. And that is the complexity of 
NRC's regulatory challenge. Even if the same design has been 
built it has probably been modified for each location. Now the 
significance of those adaptations and modifications varies, but 
I think if the French regulators come here they see a rather 
dazzling diversity in our fleet compared to their own.
    Ms. Kaptur. You know, the auto industry had to streamline 
and had to reduce the number of models. And it is still about 
the task of doing that. And when you have a lot of permutations 
and combinations, forgetting just that they are nuclear power 
plants, just mathematically you have more chances for error. 
Now where that balances, I don't know. I am just saying that I 
think it is something to really think about in the relicensing 
process. And looking forward how we use whatever power we have 
to streamline and to limit the possibility for error, and for 
mechanical failure and different things that happen inside 
these plants. I think Commissioner Ostendorff wanted to make a 
comment as well.
    Mr. Ostendorff. Yes. Thank you. I wanted to maybe just 
piggyback on both the Chairman and Commissioner Svinicki's 
comments. I wanted to talk about just very quickly one program 
we have that I think gets to part of your concern and that is 
called a Component Design Basis Inspection Program. It is for 
our existing operating nuclear power plants. Every three years 
each of the nuclear power plants in the United States undergoes 
a five week inspection. That inspection is to look at is the 
pump that is supposed to pump water, pumping at the hundreds of 
thousands of gallons per minute it is designed to. Is the 
electrical distribution system functioning as it is designed 
to. So on top of some of the aging management concerns that 
have been alluded to by my colleagues, there is a very deep 
dive inspection done every three years at each power plant, 
looking at a focused area to ensure that we have a good 
understanding of the basic engineering operation and is that 
plant operating as designed. So I think to a certain extent one 
of your concerns comes from how do we know that these are safe 
with the various designs. That is one component we think is 
very important to our regulatory approach.
    The second piece, and this is relating to Commissioner 
Svinicki's comments, I would say that yes, there are a number 
of different designs in the United States. At a high level we 
have pressurized water reactors and boiling water reactors. So 
two fundamental types of designs, but they are all water 
cooled. We are not talking about for our commercial power 
reactors--we don't have molten salt or the high temperature gas 
reactors, some other experimental designs. So they are in two 
fundamental families. But what we have seen over decades it 
that as industry and NRC have worked together to ensure that 
equipment upgrades are accomplished at these different design 
plants, we are seeing a convergence on some systems. I will use 
one example. Many of our systems have gone from analog to 
digital control systems for feed water control. So you will see 
a lot of commonality in digital feed water control 
installations at various nuclear power plants. Just as one 
example how there is a lot of commonality in upgrade features 
based on lessons learned and operating experience.
    Ms. Kaptur. Thank you for that. Commissioner Baran, did you 
want to add something here? You were shaking your head there.
    Mr. Baran. Sure. I agree with everything my colleagues have 
said. The only other thing I would mention is just as part of 
the response to Fukushima one of the requirements was that 
there be equipment on site and also in regional response 
centers to deal with situations where there was a loss of power 
at a plant. And one of the things I would mention in terms of 
standardization is all that equipment and all the connections 
for that equipment are standard across the country. So the 
generators, the pumps, those types of equipment. If there was 
anything that happened, a beyond design basis event, at a 
plant, an emergency situation, there is equipment that is going 
to be on site at that plant to deal with that in terms of 
mitigation, but you could take equipment from any other plant 
in the country or from the regional response centers, and it 
would all fit and work at every plant. And so that is a key 
kind of standardization development that I think is directly 
relevant to safety.
    Ms. Kaptur. Chairman Burns, you happened to mention in one 
meeting that we had about the different ways in which equipment 
was colored for connections. Do you want to restate that for 
the record here in trying to standardize for ease of operation?
    Mr. Burns. Yes. What I discussed with you, I had recently 
visited the North Anna plant which is south of Washington 
between Fredericksburg and Richmond. And Dominion Power 
operates North Anna, was one of the lead plants in terms of 
doing what we call the FLEX equipment, this additional 
equipment to respond to the beyond design basis accidents, and 
what they did is a lot of the things that you would expect 
connections to, cabling or some sort of piping. They would be 
pumps and things like this. They would have in effect color 
coding. Color coded so the equipment that you would bring in 
when you look into the plant that it helps you recognize where 
you need to make the connections. And I think that is a very 
good, very smart way of doing things in terms of helping the 
people who are there, who are under duress because you have got 
this event going on. They want to make sure the plant is safe. 
I think it helps them in terms of getting the right things 
done.
    Ms. Kaptur. I hope that as you proceed in the relicensing 
process that these kinds of good practices, best practices are 
shared industry wide. I am sure that you are doing that, but I 
just want to encourage it in any way that I can having lived 
through three different incidents in the region that I 
represent. Anything we can do to streamline, anything we can do 
to promote safety as this relicensing occurs I think is a very 
good step.
    In that regard, in your testimonies and comments here this 
morning the one word I have not seen is workforce development 
and training. And that is of concern to me. As you conduct your 
affairs what can you tell us about how the NRC engages and 
provides oversight for the training of nuclear power plant 
personnel? Not just the in plant operators, but the contract 
and the critical skills that most often are hired through these 
contracted relationships. I am talking particularly about 
plumbers and pipefitters, electricians, boilermakers, who are 
called in at different points, but they might not be full-time 
employees of that company. What can NRC do to recognize, 
engage, elevate the vital importance of these skilled trades 
people in the operation and repair of our nation's nuclear 
power endowment, or do you just leave that to somebody else? Or 
do you think about that training aspect and the regularity of 
how workers are trained?
    Mr. Burns. You know, I think we do think about it and it is 
reflected in the requirements that we expect licensees to meet 
in terms of conducting all of their operations. Now in terms of 
company personnel, but for contract, contract workers and I 
think as you and I were discussing, off and on outages where 
you come and do refurbishment, you may often have--use a 
contract workforce. And often that is--these are folks 
sometimes who may go around the country, go other places.
    Part of that, the fundamentals go to, and it may not at 
first blush seem like it is about training, but I think it is, 
it is things like our quality assurance requirements, that say 
that in order to conduct an activity in the plant, the safety-
related activity, or other activity important to safety you 
need to understand what are the things you need to do.
    You have to have personnel who are equipped and trained and 
understand what it is. The environment they are going into, 
what it is they are expected to do. You know, you may have a 
sheet that they need to sign off, so critical to that, is 
understanding that those requirements, and that is an 
expectation, and that is something, we in terms of our 
inspections that we audit, with respect to the conformance to 
those types of requirements.
    So at a sort of general overview, I think maybe I will 
leave my answer there, and then my colleagues might have 
something they would like to add.
    Ms.  Svinicki. If I may, Congresswoman. To the extent your 
question went to looking to the future and preparing for the 
workforce of the future. Maybe in the realm of encouraging not 
so much compelling, but I have engaged with a number of nuclear 
power plant operators in the United States when I visit their 
plants. I engage them on the topic of local vocational and 
technical community colleges, and what I am pleased to hear is 
that many of them have extensive cooperative programs with 
local vocational colleges.
    I was, as Commissioner Ostendorff notes recently at the 
Palo Verde Plant out in Arizona, Maricopa County has a 
community college program. The plant is almost exclusively 
hiring and helps to design the curriculum for that vocational 
program. Again, this is welders and maintenance crafts people, 
trades people. They have worked with the community college to 
develop the curriculum.
    And as a result they are hiring almost exclusively trades 
people that come out of that program, because they know that 
they will arrive on site with the right training to the high 
quality nuclear standards required. The same thing in Bay City, 
Texas, near the South Texas project. I actually visited the 
community college there, and engaged with students that are 
either summer hires, and hope eventually to work full time in 
various trades roles at nuclear power plants.And I do not kid 
myself that this was all philanthropy. Frankly, these plants 
need to have access to a pipeline of workers for the future. 
And so in their own interest, if nothing else, they have 
engaged with local trade schools to make sure that they have a 
pipeline of people who will be ready to do the job on day one.
    Ms. Kaptur. Well, first of all, I congratulate you for 
going to those institutions. And I would like to invite you to 
my region, and to meet the people that, three times, prevented 
catastrophe in our region. And to take a look at the pipeline 
through which they came in order to do their job, and to 
consider how we can learn from the matrix of entities that are 
out there producing this talent, and I think we can do a better 
job of linkages between those places that are training with 
those who are doing this incredibly difficult work. And I will 
be there myself if you come.
    Ms.  Svinicki. Thank you. I will take you up on that.
    Ms. Kaptur. Because I think the NRC has something to learn, 
and to appreciate from what is being done in places like I 
represent. But I just wanted to point out the absence of that 
whole focus on workforce in training in the testimony that was 
presented today. Thank you, Mr. Chairman. I know there are 
others waiting.
    Mr. Simpson. Ms. Lowey.
    Ms. Lowey. Thank you very much, Mr. Chairman. I apologize 
for coming late. As the Chair knows we have several hearings 
all scheduled at the same time today. So thank you for being 
here.
    My congressional district includes Indian Point, which 
houses one decommissioned, two nuclear power plants, owned and 
operated by Entergy, another country's spectra--another 
company's spectra has proposed the Algonquin Incremental Market 
expansion, which is called the AIM Project, which would expand 
a natural gas pipeline which transverses the Indian Point 
property.
    This is of great concern to me and to many of my 
constituents, and I strongly believe that the NRC has not 
adequately investigated the risk nor responded substantively to 
the concerns that have been raised.
    Why did the NRC rely on Entergy's hazards analysis instead 
of performing an independent analysis of risk and consequences 
of construction and operation of the AIM Project? That is the 
first question.
    Mr. Burns. Well, actually Congresswoman, the NRC did review 
the analysis, and did its own confirmatory analysis of the 
energy hazard analysis which they are required to submit to us.
    Ms. Lowey. But it was not an independent analysis of risk 
and consequences of construction and operation, was it?
    Mr. Burns. Well, it was an analysis by our staff. We are 
independent of the applicant or the licensee. So, from that 
standpoint I think we provided--our staff did do an analysis 
and documented that analysis in an inspection report, I think 
the end of last year, November last year.
    Ms. Lowey. Is this typical procedure, where you rely on the 
owner's analysis?
    Mr. Burns. Well we expect the owner--I think it is typical 
that we expect the licensee, who has ultimate responsibility--
is responsible for safe operation on the site; we would expect 
the licensee to submit the analyses, and then we would review 
that, and reach our conclusions, whether it conformed to the 
analytical standards or the outcome. And from my understanding 
that is what the staff did.
    Ms. Lowey. Now, did the NRC evaluate the impact of drilling 
fluids used in the horizontal directional drilling for AIM on 
the spent fuel, rod pools located at Indian Point?
    Mr. Burns. My understanding is that the horizontal 
directional drilling is planned for that portion of the 
pipeline that runs under the Hudson River, and the Staff does 
not review or inspect how that drilling will be performed 
particularly in the river and that location is about a half-
mile or so away from the site is a--or the spent fuel pool 
building, as I understand it.
    The spent fuel pool buildings are seismically--qualified 
seismically designed, and the impact of drilling fluids would 
not have an impact as we understand it, on those structures. 
Underground drilling with drilling fluids would have to be very 
close in proximity to the spent fuel pool buildings in the 
protected area, for that to be of a safety concern to the 
agency.
    Ms. Lowey. Well, as I understand it, compared to AIM, there 
is a smaller pipeline with lower gas pressure near the Turkey 
Point Nuclear Power Plant, in Homestead, Florida. However, the 
NRC predicted a greater damage radius in Florida, than it did 
for AIM at Indian Point. Can you explain why? It does not make 
any sense.
    Mr. Burns. Well, at the Turkey Point, as I understand it, 
at the Turkey Point 6 and 7 application, the applicant 
evaluated the natural gas pipeline near the proposed units, the 
staff evaluated the potential effects in the same manner as it 
did for the AIM Project, and the resulting effects were lower 
Turkey Point due to the smaller sizes of pipeline.
    What the applicant at Turkey Point did, is it submitted an 
analysis that used a very conservative assumption on, I think, 
on the confined explosion, and it resulted in a larger 
calculated distance for the pressure release, or pressure wave, 
than the NRC analysis.
    Again, I think that at the core here, the applicant decided 
to use a very conservative analysis, we thought, using 
appropriate analyses that were acceptable. If they wanted to 
use a more conservative analysis they could, but in terms of 
the outcome, you know, we believe that both the Turkey Point 
situation and the Indian Point situation were satisfactory.
    Ms. Lowey. Well, another question. I do not understand why 
the NRC used the ALOHA Manual instead of the NRC regulatory 
guide 1.91, when it performed a sensitivity study and 
determined that a delayed closure of the pipeline's isolation 
valves after rupture would result in only a minimal increase in 
over-pressure, and heat flux at safety-related structures, 
systems and components at the plant. The ALOHA Model assumed an 
incident at the end of the pipeline. Why was a rupture in the 
middle of the pipeline not considered?
    Mr. Burns. Okay. Again, from my understanding and speaking 
with the NRC staff, the ALOHA Model calculates the release rate 
of gas based on the pipeline and its operating characteristics, 
and computes the resulting effects of a vapor cloud explosion. 
Jet fire heat flux, and cloud fire based on flammable 
concentration limits, and since an instantaneous explosion of 
the pipe rupture is not considered realistic and not computed 
by the ALOHA Model, the calculated release of gas from using 
that model was used to determine the amount of gas available 
for an instantaneous explosion.
    Now, the evaluation of instantaneous explosion used in the 
Regulatory Guide, as opposed to the ALOHA Model, to compute, it 
is basically used to compute the TNT equivalent for determining 
the minimum safe distance, where the overpressure would be 
predicted to occur.
    Ms. Lowey. Well, that was puzzling to me. Does not 
Regulatory Guide 1.91 have provisions for jet flame, cloud fire 
and vapor cloud?
    Mr. Burns. Now, essentially, again, my understanding is 
that the Regulatory Guide 1.91 calculates minimum safe distance 
by evaluating potential explosion at the source based on a 
amount of explosives in terms of TNT and in terms of you having 
a certain amount of TNT at that particular point, and it uses 
that to evaluate for a potential explosion. There are not 
provisions in the Reg Guide for vapor cloud explosion or this 
heat flux, jet flame or the cloud fire.
    Ms. Lowey. Why is that?
    Mr. Burns. I would have to get my staff to explain that 
more. Again, I think the idea is that the Reg Guide assumes 
there is an equivalent explosion to TNT, whatever the source of 
the explosion is. But we can certainly, for the record, provide 
you some more information or have the staff brief you or your 
staff on that issue.
    Ms. Lowey. Well, thank you for your comments. As you can 
see I have many people, including myself, that have real 
concerns about the proximity. And I hope we can follow up on 
that, and have an additional in-depth discussion. Thank you, 
Mr. Chairman.
    Mr. Simpson. Thank you. Mr. Fleischmann.
    Mr.  Fleischmann. Thank you, Mr. Chairman. And good 
morning, everyone. It is great to be with you all. My first 
question is, can you provide an update on the operating 
approval process at Watts Bar Unit 2, please? And my follow-up 
question to that will be, when do you think we can expect to 
see Unit 2 reactor generating electricity?
    Mr. Burns. TVA has proposed a fuel load date, I think it is 
in about June this year. I expect to get a recommendation soon 
from our staff with respect to the licensing decision on Watts 
Bar 2, you know, assuming there are no issues identified, I 
think the nominal prediction is, again, assuming they receive 
the licenses after the final Commission review is toward the 
end of, for operation, toward the end of this year.
    There may be a couple other matters that the Commission has 
to look at in terms of late contentions or something but that 
is what I understand the schedule to be.
    Mr.  Fleischmann. Okay. And then for when it is generating 
electricity, do you think by the end of this year, is that 
what----
    Mr. Burns. Again, that depends also on what the Tennessee 
Valley Authority, plans are. I think some of their announced 
plans talk about the end of this year, or early next year.
    Mr.  Fleischmann. Okay. Thank you. I want to turn to a 
topic that very important to me and I know very important to 
this entire Sub-Committee, the small modular reactors. They 
provide an opportunity for clean, reliable energy and this Sub-
Committee has been strongly supportive of SMR development. I 
have got four questions.
    How many SMR licenses do you expect to begin reviewing in 
fiscal year 2016, and was that workload included in the budget 
request?
    Mr. Burns. I believe we expect one application in 2016, and 
we did provide for that review in the budget.
    Mr.  Fleischmann. Can the NRC provide and update of the 
licensing processing for the new scale of small modular reactor 
design? And it is my understanding that you are currently 
working with them at the pre-application stage?
    Mr. Burns. That is correct. And that is the application we 
expect in 2016.
    Mr.  Fleischmann. Can you provide the Committee with the 
timeline for the NRC to complete its review and approval for 
design certification for the new scale, SMR?
    Mr. Burns. Yes. We can. If I could I would provide that for 
the record. I do not have it in my head at this point.
    Mr.  Fleischmann. Fair enough. And we would ask you to do 
that. Does the NRC require additional funding to complete 
review of the design certification application for new scales 
SMR? What about other applications for advanced reactor design?
    Mr. Burns. At this point I do not believe that we require 
additional funding for that. We have tried to put in the 2016 
budget what our expectations are. Some of those expectations 
are--those expectations reflect our communication with industry 
in terms of their plans. The same way we have some work with 
respect to advanced or next generation reactors, that we have 
on going, and I believe at the current level of activity, are 
covered within the budget request for 2016.
    Mr.  Fleischmann. Okay, sir. Can you comment on creating a 
multinational certification process for future Generation 3 
reactors such as SMRs, and Generation 4 type reactors?
    Mr. Burns. Yes. The United States participates, and the NRC 
is a participant in the Multinational Design Evaluation 
Program, which is--basically it is supported out of my former 
organization, the Nuclear Energy Agency, at the OECD in Paris. 
It was founded, and actually the U.S., among other European 
regulators, are the ones who founded that initiative, and it is 
a way of communicating with respect to approaches to design, 
learning from experience in the development, and implementation 
of new designs.
    The step it has not gone so far as, and I think a step that 
is probably some time off, is an absolute international 
harmonization over particular design standards.
    In other words, we are not at the point of, say, the 
airline industry, whereas if you build the aircraft in the 
United States it is recognized immediately in, say, France or 
Brazil, or vice versa.
    I think we are some time off from that but, again, through 
this, MDEP, the Multinational Design Evaluation Program, I 
think there are good steps toward harmonization. Again, 
communication and learning from experience, and we continue to 
support that.
    Mr.  Fleischmann. Well, as a follow up, and I thank you for 
your answer to that question. As a follow up to that, what are 
your views of these multinational applications going through 
country certifications simultaneously, rather than 
sequentially? And this would help to reduce cost and time to 
license new reactor designs. Is that correct, sir?
    Mr. Burns. Let me make sure I understand your question. If 
they went through simultaneously----
    Mr.  Fleischmann. Simultaneously as opposed to 
sequentially.
    Mr. Burns. Potentially, the reason I say potentially is 
because in some circumstances, and we have seen this, and I 
think in our country, where, there has been great interest in 
terms of obtaining the U.S. design certification from the NRC 
because then that is viewed as an effective good housekeeping 
seal, that is then looked to by other countries in terms of 
their proceeding with implementation of those particular 
designs.
    Again, to the extent that there is harmonization, I can 
see, you know, potential benefits. But again, each country, the 
responsibility under, for example, the Convention on Nuclear 
Safety is that each country still needs to make its 
determination with respect to its regulatory regime whether it 
meets its safety requirements.
    That said, you know, I would agree that, coming to greater 
harmonization, learning from the experience of others, not only 
our own country, but from others is a helpful thing.
    Mr.  Fleischmann. Thank you very much. Appreciate you all. 
Mr. Chairman, I yield back.
    Mr. Simpson. Mr. Fortenberry.
    Mr.  Fortenberry. Thank you, Mr. Chairman. Let me address 
an issue that is, I think should be in forefront of all of our 
minds. Where are we going in the 21st Century with regard 
nuclear technology, the proliferation, not only of the 
intellectual assets, to be able to derive power, but potential 
military applications.
    And then you talked about not yet a harmonization of design 
standards, but not yet a harmonization of nonproliferation 
efforts either, some movement in that regard, but clearly with 
the tensions with Russia, a suspension of a lot of very good, 
older programs that have helped secure those material. That is 
where I want to start and specific question would be; in your 
work, what do you see as the greatest thread to 
nonproliferation, both domestically as well as internationally?
    Mr. Burns. I think from----
    Mr.  Fortenberry. Are these lines between commercial and 
military usage blurring?
    Mr. Burns. Well, I think you have always had the issues in 
terms of those lines.
    Mr.  Fortenberry. Yeah. Just because we create a line, does 
not mean there is a line.
    Mr. Burns. No. And I would draw on the experience, and in 
the United States, for example (NSG), has supported the effort 
of, say, the Nuclear Suppliers Group, in terms of looking at 
dual use technologies and assuring--getting high assurance that 
technology is used appropriately in civilian applications.
    Mr.  Fortenberry. Which has been very helpful, obviously as 
an entity outside formal regulatory authority to regulating 
this dynamic.
    Mr. Burns. Yes. But we also have as I said about the NSG, 
is essentially much like this Multinational Design Evaluation 
Program I spoke to. A cooperative effort of various states and 
various suppliers in the nonproliferation community, 
particularly through the IAEA. Within our own country we have, 
again, requirements with respect to export controls and export 
reviews.
    We have responsibility in that area, as does the Department 
of Commerce and the Department of Energy. So I think those 
efforts--I think those are the efforts that are important in 
terms of a country-specific application and implementation.
    Mr.  Fortenberry. Is it enough?
    Mr. Burns. I think what we have today needs----
    Mr.  Fortenberry. What you have got going on, the 
technology is out of bottle, so to speak. The ability to do 
these things is widespread now, much more widespread, and will 
continue to grow. So that comes down to then, control of 
materials which, hopefully, will always be in the hands of 
nation states. In some places nation states, the whole concept 
is under threat and is collapsing.
    So, again, it creates--we ought to constantly be 
reevaluating our framework here, which is going back decades to 
an era where we decided that we are going to have Atoms For 
Peace. There is going to be peaceful nuclear usages. And there 
is going to be a military dimension in our country that is an 
important component of our own deterrents from the use of 
military weapons.
    Yet at the same time, again, lines of distinction are not 
as neat as they used to be and with enhanced capabilities 
through, again, the intellectual capabilities of doing this 
stuff, are we in front of that curve. We also have enhancement 
of, though interconnectedness with other countries to harmonize 
efforts as never before, but are we in front of it?
    Mr. Burns. I am not sure. I do not think I would say we are 
behind it. I think this is something we looked at, we learned 
from experience, we have learned from the information we have, 
that we receive, in terms of the nature of the threat that is 
out there.
    We have requirements, as we are obligated to do in the 
United States under our treaty obligations with respect to 
material accounting and control.
    Again, I think within our export policies and in terms of 
our implementation, I think those are effective. By the same 
token, I would not disagree that greater awareness and thinking 
about the context in which we are internationally, particularly 
since I started out as a young lawyer in the late 1970s, we are 
certainly more interconnected with respect to civilian nuclear 
technology, components come from all the world. e-Commerce is 
all over the world.
    Mr. Fortenberry. Can we have a robust, full, and complete 
understanding of that inventory?
    Mr. Burns. The inventory? I think we can have a complete 
understanding or at least a robust understanding of inventory 
with respect to material within the United States. I think that 
is the objective. Do we know where every widget, component, et 
cetera, goes? Probably not.
    Mr. Fortenberry. This begs the earlier point of what can we 
do better in this regard.
    Mr. Burns. We would probably say we can always do better, 
but again, I think we have a regime that in terms of looking at 
items that are, for example, dual use items, items that are 
controlled for export, that addresses the threat and addresses 
the national interest.
    I think a lot of what we can do is make sure we are 
dedicated to implementing that and carrying through on it.
    Mr. Fortenberry. I can come back, Mr. Chairman, if the time 
is up, or I can keep going, either way.
    Mr. Simpson. How much longer do you have?
    Mr. Fortenberry. One minute.
    Mr. Simpson. Go ahead.
    Mr. Fortenberry. Back to this issue of inventory of 
material, ultimately, again, a new architecture of non-
proliferation, if we are going to continue down the same 
pathway and ensuring that commercial uses are not readily 
transferrable to military uses, and if we are going to clean up 
messes and identify prior material that has been out there and 
that is loose, and then secure that going forward, does it not 
beg a construct that has all inventory counted everywhere?
    Mr. Burns. It is good to know where everything is. Again, I 
think within this country, we have pretty high standards, and I 
think we do that. This has been an issue certainly at the fall 
of the Soviet Union and efforts that were undertaken both on a 
bilateral and multilateral basis to address that, try to 
address those issues.
    Again, I think that within our own country we have done 
pretty well.
    Mr. Ostendorff. Can I add? I used to be the number two 
official of the National Nuclear Security Administration where 
all the DOE non-proliferation programs resided, and have been 
watching this area for a number of years, from my time in the 
military, my time working for the House Armed Services 
Committee, and then for the last five years, NRC.
    I would say this Commission has been heavily engaged with 
the White House, Department of State, Department of Energy, the 
intelligence community, to ensure that we have proper 
situational awareness of where the materials are outside of our 
country.
    I think with the advent of the Nunn-Lugar programs in the 
1990s, there was a lot of stuff that was found 20 years ago 
that surprised a lot of people. I think our awareness today in 
2015 is infinitely better than where it was 20 years ago.
    We do not have authority as an agency to conduct our own 
assessments overseas, but we are fully plugged in with the 
interagency group and the intelligence community to have the 
awareness that I think is your concern.
    Mr. Fortenberry. This is the key, because you are not going 
to be able to control the technology, the information 
technology, like we were able. It is the flow of material. That 
is the key if we are going to keep ourselves safe.
    Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Valadao.
    Mr. Valadao. Thank you, Chairman. Thank you very much for 
coming out and spending some time with us as well.
    The NRC is proposing to amend its regulations related to 
the medical use of by-product material. It has been suggested 
that the training requirements for physicians treating patients 
with therapeutic radiopharmaceuticals can vary widely, 
depending on the drug.
    Is it currently the case or is the NRC proposing a rule 
that would make this the case? How does the NRC determine 
physician training requirements?
    Mr. Burns. I am sorry, Congressman. I may have to provide 
that for the record. I am not sure of the status. There was a 
rulemaking effort. I am not sure exactly of the status of where 
it is now. I will be happy to provide you the full information 
on that.
    Mr. Valadao. I will skip the next one on the same issue. 
The decommission sites, the U.S. Nuclear Regulatory Commission, 
NRC, held a public briefing on July 15, 2014 to give the 
Commission an overview of the nuclear power plant 
decommissioning process, status, and issues related to the four 
nuclear plants that recently entered decommissioning, including 
San Onofre nuclear plant, in my home state.
    Chairman Burns, can you briefly describe the challenges of 
decommissioned plants and the public reaction, and do you 
expect additional plants to enter the decommissioning process 
in 2016?
    Mr. Burns. To answer the last question first, we do not 
expect additional plants in 2016. We have not been informed of 
that, recognizing there are some plants that some utilities may 
be evaluating because of some of the economic challenges that I 
think the chairman noted at the beginning.
    What we are doing now, we have successfully gone through 
the decommissioning process with a number of facilities, and as 
you know, more recently we have had five facilities come into 
the decommissioning process.
    One of the things the Commission has done is ask the staff 
to undertake a rulemaking to ensure that we have an effective 
and efficient process there. The way primarily we have gone 
through the process now often requires the utility or the 
licensee to ask for exemptions from our requirements, although 
that has been effective from the standpoint that we maintain 
health and safety, it is a bit cumbersome sometimes, and also 
in terms of the perceptions of the local community about what 
is going on, or sometimes it may not be as best communicated as 
it can be.
    That is the thing we are looking at. Again, licensees, we 
have had a well established process for them in terms of what 
they need to address from a safety standpoint, security 
standpoint, and to work to those requirements.
    As I say, we are working through the process now, and we 
hope to get a rule in a few years that would make it a little 
more effective and coherent.
    Mr. Valadao. Thank you. Thanks a lot, Chairman.
    Mr. Simpson. Thank you. You are the first one that made the 
mistake of the NRCC. I thought about that all the time. The 
NRCC is the National Republican Congressional Committee. We get 
them confused all the time.
    Let me delve in a little bit about the operations of the 
NRC itself. As you noted, the Commission has received the 
Project AIM Report and is in the process of reviewing 
recommendations. Although you are still reviewing the report, 
were you able to incorporate any of the Project AIM 
recommendations into the fiscal year 2016 budget request?
    The report recommends that the NRC--brilliantly 
recommends--that it have the right number of people with the 
right skills at the right time. Easier said than done 
sometimes. The Commission must be staffed at a level that can 
respond to the needs of the nuclear industry but licensing fees 
should not make it harder for nuclear energy companies to 
compete.
    I think most of you mentioned at one point during your 
testimony today about right sizing the agency. What exactly do 
you mean by ``right sizing the agency,'' where is un-right 
sized now, and what needs to be done to address that, if you 
will.
    Mr. Burns. Yes. The particulars of the AIM Report were not 
the fiscal 2016 budget, given the timing. The report came out 
at about the time, I think, the budget was released or 
submitted to Congress.
    The idea, I think, in the Commission in developing the 2016 
budget was focused on are we concentrating our resources on the 
work that needs to be done, and that is both the importance of 
our safety oversight mission, safety and security oversight 
mission, and also in terms of the licensing work that is put on 
our plate.
    Overall, it reflects a reduction in terms of the overall 
resources that are available in 2015 to 2016. It is looking at 
those areas where there is not as much a need for resources. 
Some of that area will be in the nuclear reactor area because 
of the number of applications is not what it was expected to be 
say six or seven years ago, as I noted in my statement.
    Let me stop there. If there is something I did not answer 
in your set of questions, I would be happy to.
    Mr. Simpson. Are there others who would like to comment on 
right sizing the agency and what exactly that means? Kristine?
    Ms. Svinicki. One of the things that the Commission is 
deliberating on now both in terms of embarking upon it and what 
form it might take is what is called a ``rebaselining.''
    In our prior careers, many of us know if there is a major 
Government acquisition or long multi-year construction project, 
at some point, departments and agencies will rebaseline that 
project. It is to make sure that you have fundamental adherence 
to what you were trying to accomplish, you do not have a lot of 
mission creep, a lot of bells and whistles.
    Rebaselining for NRC, if we pursue it, may take a form of 
looking at work in-house, work projections, truing that up to 
the world as we understand it now, and then deciding what skill 
sets and people you would need to have, and then creating the 
organizational agility to move those people to that work, 
perhaps with better performance than we have done to date.
    We have seen some of the vectors in the external economy 
emerging for a number of years now, and we still find that we 
have bureaucratic obstacles to moving people to work that is 
needed.
    I think to a person, we all feel like that should not be, 
so we are going to look organizationally at having a better 
understanding. I know it sounds so straightforward, and to me, 
``right sizing'' means we probably think we are maybe a little 
larger than we need to be, to be real honest with you.
    If we thought we were under-sized, we would not have asked 
for a budget flat or declining. By virtue of mathematics, I 
think you define ``right sizing'' to mean we need to perhaps 
trim down in some areas. We may have other skill sets that are 
critical and in shortage.
    My understanding is the NRC has not rebaselined 
fundamentally, I think, in 15 years. I think an agency in my 
personal opinion can benefit from going back to just looking at 
the fundamentals every now and then and seeing if you are in 
alignment with the world as it exists, although we are still 
deliberating on a set of recommendations.
    Mr. Simpson. I would agree with that. I would note that 
over the years, I have been very supportive of increased 
staffing that was necessary at the NRC or that we thought was 
going to be necessary, for example, for SMRs.
    We wanted to make sure there was not delays in doing the 
license applications and stuff that we thought would be coming 
along because of insufficient staff. We have plussed up the 
staff in order to make sure they were available, and then we do 
not have the license applications that we originally thought 
maybe three or four years ago might come at this time.
    They might be there in the future. We might need those 
personnel at the time.
    It is a constantly changing environment, and the nuclear 
renaissance that we thought was going to be bigger than it 
currently is, we thought we would maybe have several more 
reactors that we would be licensing around the country than we 
currently do.
    Rebaselining, right sizing, whatever you want to call it, I 
think is an appropriate thing to do.
    How do you determine what your fees are going to be that 
you are going to charge the industry? Ninety percent of your 
budget comes from fees charged to industry; right?
    Mr. Burns. Correct.
    Mr. Simpson. How do you determine what that is going to be?
    Mr. Burns. Ultimately, it is based on the final 
appropriation that we receive, and I believe in consultation, 
in terms of both the estimate of the types of applications that 
come in.
    As you may recall, there are two types of fees. There is in 
effect a fee for service, for example. An applicant comes in 
and wants a license amendment or a new license. There is a fee 
paid there. Then there is in effect an annual fee that is 
imposed on operating power reactors.
    Mr. Simpson. How much of that 90 percent is from fees that 
are charged because someone wants an application or an 
amendment or something like that? How much of it in the base 
out there that is charged to everybody?
    Mr. Burns. My CFO is telling me apparently it is about one-
third related to applications, the so-called Part 170 fee, so 
that would mean about two-thirds are derived from the annual 
fee.
    Mr. Simpson. A key outcome of the Project AIM 
recommendations is the development of an overhead structure 
that is well defined, reasonable, and acceptable to external 
stakeholders.
    How have or will you involve stakeholders in the 
transformation of your budget process?
    Mr. Burns. What we have done through the AIM process, we 
have engaged stakeholders on that. I think we will continue to 
do that as we implement--I forecast, as Commissioner Svinicki 
says, we have not completed deliberations, but I think it may 
be safe to say to the extent where these things have impact on 
the stakeholders, I think it is important to engage them as we 
go forward, so that we understand what the concerns are and 
then in reaching some solution, we have something that is 
workable and effective.
    Mr. Simpson. In your testimony, you mentioned that the 
Commission has recently received a benchmarking report looking 
at how the NRC fee practices compare with those of other 
regulatory agencies.
    What has the NRC learned from this report, and how does the 
NRC fee practices compare, and how has this information been 
incorporated in the fiscal year 2015 rule fee?
    Mr. Burns. I think we are in the process of still getting 
the report. Apparently, we just received a draft report, and 
our CFO will be taking a look at it. I would imagine to the 
extent it is relevant, again, the rule that was published 
yesterday was a proposed rule, and I think to the extent that 
it helps us, from my standpoint, understand where we ought to 
be with the final rule, we would take that into consideration.
    Mr. Simpson. I look forward to seeing how these changes are 
being implemented and how the Commission is working to do that.
    I am a little concerned in the effort to streamline the 
rulemaking process. The NRC staff now spends significant 
resources on new rulemaking efforts--we talked about this 
yesterday--prior to obtaining Commission approval.
    How is the need for a new rule determined? Is that a staff 
driven decision or is that a Commission driven decision?
    Mr. Burns. For the most part, Commission driven decisions. 
The staff, obviously, we rely on our staff from looking at 
things, like operating experience, industry requests, or the 
like, to identify areas where there might be a need for a new 
rule or modification of existing rules.
    For most rulemaking actions, it requires Commission 
approval.
    Mr. Simpson. At what stage does it require Commission 
approval?
    Mr. Burns. For the most part, it would require approval at 
the proposed stage.
    Ms. Svinicki. If I may bring to the subcommittee's 
attention something that I recently discovered. It occurred in 
2006. I joined our Commission in 2008.
    Once again, forecasting a strong nuclear renaissance in the 
United States, in 2006, the Commission undertook to delegate to 
the agency staff a significant set of what I call ``front-end 
Commission approval and involvement steps'' in looking at what 
rulemaking's would be embarked upon.
    Again, I would expect that Commission in 2006 thought they 
were going to be facing a crushing agency workload related to 
having 28 new reactors under construction and the various 
things that were forecast in that time period, and they did not 
think it was sustainable for the Commission to be so involved 
in the early approval steps for new rulemaking activities 
before they were embarked upon.
    These were steps such as requiring the staff submittal to 
the Commission of a rulemaking plan, requiring the submittal of 
early regulatory analyses. Again, these are precursors well in 
advance of a proposed rule stage.
    The Commission delegated many of those activities to office 
directors and waived wholesale other requirements, such as--
although the sound of this committee is a bit strange, we have 
a committee to review generic requirements, and it is a body 
made up of senior staff that looks across programs, and in some 
ways is looking at the cumulative impact of agency rulemaking 
activities. The requirement for review by that committee was 
waived and was left entirely discretionary to agency staff.
    I think some of these steps, while I am sure well 
intentioned and probably well merited given what they predicted 
in 2006, were key in involvement of the Commission, which in my 
view, has a unique opportunity to look across programs in the 
agency that office directors simply do not have that 
perspective.
    As we look at having X number of rulemaking's, either 
active or inactive, ongoing, people throw around this number of 
60 rulemaking's, I challenge myself as to whether that change 
in the Commission's involvement in 2006 perhaps had some impact 
to where we are today. I have not engaged my colleagues on this 
research I just discovered in the last couple of weeks. I was 
not aware this significant change had been made at that time.
    I think again it is nearly 10 years later, is it worth the 
Commission maybe looking at that? Possibly. I hope to engage my 
colleagues on that.
    Mr. Simpson. Commissioner Ostendorff.
    Mr. Ostendorff. I would add to Commissioner Svinicki's 
comments to say in our current deliberations by the Commission 
on Project AIM, this is one specific aspect that I believe will 
be discussed and vetted, and I cannot predict the outcome in 
the context of the rebaselining of work effort mentioned by 
others.
    Mr. Simpson. I am just curious. I am trying to get this in 
my head. If the staff is out there working in a particular area 
and they decide this is something we need to actually write a 
rule on, how far do they go before the Commission has to say 
yes, that is an area we need a rule written on? How much work 
and money is expended on looking at proposed rules before the 
Commission gets involved and says yes, proceed with that, or 
no, we do not need that? Where do you step in, at what point?
    Mr. Burns. Again----
    Mr. Simpson. As you can tell, I am a little bit concerned 
about staff driven rules rather than Commission driven rules.
    Mr. Burns. Certainly. No, I understand that. As 
Commissioner Svinicki said or indicated, I was not particularly 
aware of some of the information in terms of this.
    Again, as Commissioner Ostendorff said, I think this is 
something right for us to look at. The Commission can always 
step in. We have the responsibility. We have the ability to 
obtain--each Commissioner individually can obtain the 
information they want to carry out as they see fit their 
responsibilities.
    We as a collegial body can reverse a direction on a 
particular thing, and I think the importance for us is even if 
we have a circumstance now where there may be some rulemaking 
activity that may be going on that does not formally come for 
the approval, we actually have the ability to do that and 
maintain awareness. We do get reports from our staff on various 
activities.
    I think the responsibility rests with us in terms of 
obtaining that oversight and awareness of what is going on.
    Mr. Simpson. Well, I will tell you what drives part of my 
concern I guess. When we on the one hand talk about right 
sizing the agency, which we talk about right sizing the agency. 
And on the other hand, we talk about rules being driven. I have 
been around long enough, both at state and federal level, to 
know that bureaucracies have a tendency to, when hands are 
idle, we think of things to do. And that concerns me to some 
degree, and I am just wondering how much of this thinking of 
things to do drives some of the rules, if at all. I don't know. 
But I have heard concerns about the number of rules and so 
forth, and I am trying to drive at where is the Commission's 
responsibility versus how far can these go before the 
Commission actually gets involved? I know you can get involved 
at any stage along the way, but do you? And that is why I ask 
these set of questions. So it is an issue that we will continue 
to look at. Marcy.
    Ms. Kaptur. Thank you, Mr. Chairman. Chairman Burns, on the 
issue of the continued storage of spent nuclear fuel, the NRC 
determined that spent fuel could be safely stored on site well 
past the reactor's life span. I understand that there is a 
legal challenge to the NRC's waste confidence rule. Could you 
give us an update on the status of that challenge please?
    Mr. Burns. Certainly. The continued storage rule is really 
a, well, a continuation if you will of the Commission's 
previous waste confidence rule. The waste confidence rule of 
course dated from the early 1980s. The challenge, the 
petitioners who were challenging the agency's final rule now 
called continued storage, have filed for a petition for review 
in the Court of Appeals I believe here in the District of 
Columbia Circuit.
    And my understanding is that the expectation is the 
briefing will be done before the court toward the latter part 
of this year. The general counsel is confirming my impression.
    Ms. Kaptur. What do you expect the challenger's argument 
will be in court?
    Mr. Burns. I haven't read the petitions for review, which 
are normally often very general or very cursory at this stage 
of the proceeding. Again, I think they will question the 
Commission's conclusions with respect to the outcome of the 
rule itself. I think the Commission's action was completed 
before I came onto the Commission in November. But having been 
involved in this rule as general counsel before and my 
experience with it, I think the staff has done a good job in 
terms of considering the various comments on the rule and 
establishing a firm basis for it. So we will put ourselves in 
front of the court and the process allows it to be.
    Ms. Kaptur. Should the court side with the challengers, 
what would be the impact to the rule and by extension to the 
operating plans?
    Mr. Burns. I wouldn't want to speculate too much because 
again, it depends on what the court says. There are 
circumstances which the court may say, you need to correct and 
effect, there might be some procedural issues you need to 
correct. But the court might say, we are not going to stay the 
agency's actions in other cases, and it could be the opposite. 
So I wouldn't want to speculate too much on that. Again, if the 
court thinks we need to do something else, again, I think we 
are confident that we have done a good job already. But if 
there is something we will do, we will address what the court 
tells us to do.
    Ms. Kaptur. Thank you. I am very impressed with this panel, 
Mr. Chairman. I think it is energized. It is informed, and I am 
really glad that you invited this number of people up. They 
seem quite awake and attuned to the challenges ahead. I just 
wanted to go back to an experience that I have had and share it 
with you, because you might be in a position to do something 
about it.
    Commissioner Ostendorff, you having come from the military 
will maybe identify with what I am saying here. I view working 
in these plants as not just another job. And what has surprised 
me over the years in our region where we have had very serious 
challenges, those that actually helped both the company and the 
public, were never properly acknowledged. In the military, when 
you do something really exceptional you get a battle ribbon.
    When you are part of a corps that has a brotherhood and 
sisterhood, your commander even has a special medal that is 
struck that he hands to special people that meets along the 
way. And I have been actually surprised and disappointed that 
we haven't done more to recognize these exceptional Americans. 
I don't think they even got a letter from the governor of the 
United States for preventing hazard in our region.
    So I am just asking you, and I don't know who could 
actually do it, but you have how many staff that work at the 
NRC?
    Mr. Burns. About 3,700.
    Ms. Kaptur. Three thousand seven hundred people. There must 
be somebody there somewhere that cares about people who work in 
these plants, either directly or on contract, and could help us 
figure out when they do something great, like, they run into a 
plant that is at a critical moment and at risk to their own 
lives, they have done things that have stopped damage. My gosh, 
they should have a big medal, and they get nothing.
    So I am just saying to you, if somebody could look at the 
workforce issue. I have invited Commissioner Svinicki out to 
our area, and you are all welcome, I want you to meet some of 
these people. And maybe as you go through these plants, by 
happenstance you bump into them. But they are remarkable. I 
couldn't do what they do. I don't have the muscular strength to 
do some of what they do and the training they go through. I 
just think that there should be something initiated that 
acknowledges their importance and recognizes it when they do 
something great. And I don't think we do that as a country at 
the NRC. And I don't know why we don't. If you don't have 
legislative authority to do it, let me know. But I think it 
could be done under the existing authorities that you have.
    So all I am asking you to do is to think hard about where 
something remarkable has been done, to figure out a system of 
acknowledgement. I am not asking for any money. Maybe you would 
have to pay for a little patch they could sew on their uniform. 
For those that are contracted employees, who regularly go into 
some of these plants, they work so humbly. And they just don't 
get any recognition of a national nature and I think they 
deserve it.
    So they are not military. They receive their own 
apprenticeship and journeymen's cards in the community that I 
represent. And I really respect them, and I think our federal 
government should to. Do you have a means to think about this 
within the NRC? Do you need a formal letter from me to ask you 
to think about how to identify some of these folks? Yes 
Commissioner Ostendorff?
    Mr. Ostendorff. I appreciate it. I think all four 
commissioners here agree with the sentiment and the spirit 
behind your remarks and your question. Let us provide some 
feedback to you on this area if we may. I think that there are 
some industry representatives even in this hearing today. I do 
believe, from our experience collectively, when we go to 
nuclear power plants we will see some indication that various 
licensees are providing some recognition to their employees. 
But I would like to have the opportunity to give you a more 
fulsome response and in addition, what else we might be able to 
do.
    Ms. Kaptur. Yeah, I really think some of these folks that 
helped us 25 years ago or more, they are still alive. The 
incident that occurred in 2003 I think it was, some of the 
workers who were contract workers ended up staying in motels 
where they moved from plant to plant, where nuclear particles 
were on their work clothes. I am going, is this really 
happening?
    So I just think there is something missing in the way we 
treat the people. The worst example I have of how people have 
been treated in nuclear power plants is the example of under 
the former Soviet Union when Chernobyl occurred and workers 
were sent in with no protective. They were sent in to their 
deaths, right.
    We don't have that situation here in this country. We have 
more respect for those who have these skills. But I just think 
that we need to regularize recognition. I don't know how one 
does that working with the private sector because these are 
private plants. But I think when workers who are contracted 
workers go into a facility that is having difficulty, their 
national government should care about them and should 
acknowledge that service to our country. And with the private 
sector, we need to figure out how to do that. And if you could 
tell me who to work with within the NRC, I will be your 
strongest advocate because they deserve a recognition that they 
never get.
    So thank you for allowing me to put that on the record. I 
wanted to ask, on securing radiological material, the omnibus 
included direction that the NRC provide a report to the 
committees that evaluate the effectiveness of the requirements 
of 10CFR part 37 and determines whether such requirements are 
adequate to protect high risk radiological material. Has the 
NRC initiated this review, and can you speak to what you have 
found if you have or how you are implementing the requirements 
for radiological source licenses?
    Mr. Burns. Congress set the requirement basically to do a 
review after two years, and we will be prepared to do that. I 
am sure that we will take some steps before we reach the two 
year mark to get there. Part of the background on the 
requirement was to allow a period of time for implementation of 
this part 37 that addresses source security because there is a 
fairly new rule. And so we will do that. We are very 
conscientious about the requirement to do the review, and we 
will do so.
    One of the things that the agency--part of the background 
of this too is a requirement that goes back to the Energy 
Policy Act of 2005 related to source security. And there is a 
periodic task force that the NRC and other sister agencies who 
have an interest in it participate in. And there was a report 
last year which concluded that there were essentially no gaps 
in domestic source security. But again, I think it is important 
for us to follow through on the language because we have a new 
rule. You want to understand from the experience with your 
implementation, is it doing what you tried to design it to do?
    And so we will take that on in terms of doing the report 
within the next two years that was requested.
    Ms. Kaptur. Thank you. Mr. Chairman in closing, this will 
be my last comment, your leadership Chairman Burns is so 
important and every one of the commissioners. I have been 
impressed with every one of you this morning. And I have had to 
deal with the NRC now for over three decades. Without 
leadership being set at the top for a well managed 
organization, things happen downstream that are very dangerous.
    And so I just encourage you to set the kind of leadership 
to revive the NRC and its multiple connections around the 
country, to managing this very important asset that exist 
within the United States of America. And I wish you well in 
your duties and to enliven your board, to keep your board 
engaged and make sure that the Commission does what it is 
chartered to do. And thank you very much for your testimony 
this morning.
    Mr. Burns. Thank you.
    Mr. Simpson. Mr. Fortenberry.
    Mr. Fortenberry. What is the future of the nuclear 
industry?
    Mr. Burns. Well, as the regulator, I am not sure that I am 
really the one to speak to that from----
    Mr. Fortenberry. But you could look at the trajectory of 
the current dynamics, both here and internationally and give me 
a--since you are immersed in this world. It would be helpful to 
have your perspective on that.
    Mr. Burns. And again, I will perhaps take from my prior 
experience.
    Mr. Fortenberry. I just looked at you. Anybody else can 
answer it if they want.
    Mr. Burns. Well, what you see, you see a very dynamic and 
concentrated building program in China and other interests in 
emerging, what we call emerging nuclear countries such as 
Vietnam. India, now that it is mostly back into the fold, has a 
vigorous program. So that is what you are seeing, and then the 
Gulf states as well. So that is what sort of picture you are 
seeing internationally. It is a cloudier picture in Europe, 
although you have the United Kingdom. And in Eastern Europe, a 
lot of interest in new nuclear development.
    In the U.S. you have, again, a dynamic that between things 
like cheap natural gas, questions in terms of how the energy 
market is regulated or unregulated and things like that, that 
have led to the current lower interest in pursuing some of the 
applications we thought we might have a few years ago.
    That said, as we recently had a hearing on the Detroit 
Edison, or as they are renamed, the Fermi 3 plant in Michigan, 
and there is also Dominion and its potential for North Anna 3. 
Both of those utilities have indicated to us they are 
interested in pursuing the combined licenses, partly as part of 
their future planning portfolio. They will defer a decision 
whether they will actually construct until the early 2020s, 
again, looking at energy markets, issues about carbon pricing 
and things like that. All of which are fairly much outside the 
NRC's regulatory regime.
    Mr. Fortenberry. But in the race for commercial markets, 
who is leading that? You said it is very dynamic?
    Mr. Burns. Well, what I said is in China you have an 
extraordinary vigorous construction program. You have had US 
technology in terms of Westinghouse. They are building the 
AP1000, but the Chinese have also looked at interests in 
others, such as Areva designs and have built them, Areva, the 
French company. So again, you have U.S.-based marketing from 
the US based industry as well as other players in the market. 
The Russians are very vigorous in terms of their marketing 
strategies for their newer designs.
    Mr. Fortenberry. So if we have got no harmonization of 
design standards, do we have harmonization of security 
initiatives? Not only in terms of actual commercial plant 
protection, but again, applying these lessons for the potential 
diversion of materials or accounting for materials.
    Mr. Burns. Well, in terms of the designs themselves, I 
think in terms of material accounting and control, that is not 
so much in the reactor design. That is in terms of the fuel and 
the types of fuels that are used. And again, I would say with 
respect to----
    Mr. Fortenberry. I don't want to impose on things that are 
outside your purview, but again, sitting from where I sit, when 
you look across the spectrum of nuclear security issues, you 
operate within a certain set of parameters, ensuring that we 
have commercially licensed, safe use of radiological materials 
here. However, this has implications moving forward in a world 
of fast moving technology and new resource players with large 
capacity, to make us all think critically as to how again, back 
to your words, which I like, harmonization either of design, 
but certainly harmonization of commitments to material security 
as well as non-proliferation, is the key question. And you 
might occupy a sort of narrower seat in that bandwidth, and I 
understand that. So I won't put you in an awkward position.
    But at the same time, in terms of all of us working 
strategically to ensure that your mission is met, these other 
questions loom very large as well, I would assume for you.
    Mr. Burns. Oh, yes, they certainly do. And again, in terms 
of us looking at designs, obviously in many instances we are 
looking at the design in the United States. But as I said, we 
have responsibilities with respect to potential export of 
design and export of particular equipment.
    I think as Commissioner Ostendorff said earlier, we work 
well within the inter agency community in terms of those types 
of issues. And again, there are controls domestically, we have 
our safety, our security. We have safeguards, requirements, and 
again to the extent that we are involved in terms of approval 
of exports and export of technology, that is part of our 
responsibility. And also working with the inter agency 
community, particularly Department of Energy, Department of 
Commerce in some of these other areas.
    Mr. Fortenberry. Thank you, Mr. Chairman.
    Mr. Simpson. I thank you all for being here, Chairman Burns 
and Members of the Commission. Normally for the 12, 13 years, 
whatever it has been that I have been on this committee, 
whenever we have had the NRC testify, we have always had the 
chairman come up and give the budget requests and stuff. And I 
think it was important to have all the commissioners come up, 
so that we had a chance to get to know you and talk to you. And 
I know that you don't all think the same thing. If you did, 
only one of you would be necessary.
    But it is good for us to get a chance to know you a little 
better and talk to you about the important work that the NRC 
does because it is vitally important work. And it is very 
critical that the NRC maintain the credibility that currently, 
I think exists and has across the country, both for the public 
to know that we have safe, nuclear operating plants in this 
country and also for the regulated industry to know that you 
are working with them to make sure that we are not unduly 
driving the cost and making nuclear energy less competitive or 
anything like that.
    So I appreciate the challenge that you face. We look 
forward to working with you and hearing about how you are 
implementing some of the rebaselining or whatever you want to 
call it and the rule making processes that you are going 
through and those types of things. So thank you all for being 
here today. Committee is adjourned.

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                                           Tuesday, March 17, 2015.

           U.S. DEPARTMENT OF ENERGY, APPLIED ENERGY FUNDING

                               WITNESSES

FRANKLIN ORR, UNDER SECRETARY FOR SCIENCE AND ENERGY
DAVID DANIELSON, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND 
    RENEWABLE ENERGY
JOHN KOTEK, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR NUCLEAR ENERGY
CHRISTOPHER SMITH, ASSISTANT SECRETARY FOR FOSSIL ENERGY
PATRICIA HOFFMAN, ASSISTANT SECRETARY FOR ELECTRICITY DELIVERY AND 
    ENERGY RELIABILITY
    Mr. Simpson. The hearing will come to order.
    I would like to welcome our witnesses: Dr. Franklin Orr, 
Under Secretary for Science and Energy; Dr. David Danielson, 
Assistant Secretary for Energy Efficiency and Renewable Energy; 
John Kotek, Principal Deputy Assistant Secretary for Nuclear 
Energy; Pat Hoffman, Assistant Secretary for Electricity 
Delivery and Energy Reliability; and Christopher Smith, 
Assistant Secretary for Fossil Energy. Big panel this morning.
    In 2012, the President unveiled an all-of-the-above energy 
strategy that sought to develop every source of American-made 
energy. Over the years, we have come to realize that this all-
of-the-above approach really means a prioritization of 
renewable energy research and development at the expense of 
nuclear and fossil energy accounts.
    Together, your programs account for almost $4.5 billion of 
the Department's budget request for fiscal year 2016. As in 
previous years, half of this request is for the Office of 
Energy Efficiency and Renewable Energy.
    I agree that an all-of-the-above approach should fund 
research in new energy sources, but we also need to ensure that 
we are efficiently and effectively using our existing sources. 
Last year, fossil and nuclear energy sources provided about 85 
percent of all electricity produced in this country. Just 
increasing the production efficiency by 1 percent of any fossil 
or nuclear energy source would have a tremendous effect on net 
electricity generation. A true all-of-the-above approach would 
not make these sources the lowest priority of the Department of 
Energy.
    Each of you has an important role in managing and 
developing the future of these diverse energy sources. I look 
forward to hearing how your vision supports a true all-of-the-
above approach and continues to make investments in our energy 
future.
    Please ensure that the hearing record, questions for the 
record, and any supporting information requested by the 
subcommittee are delivered in the final form to us no later 
than 4 weeks from the time you receive them. Members who have 
additional questions for the record will have until the close 
of business tomorrow to provide them to the subcommittee 
office.
    Mr. Simpson. With that, I will turn to Ranking Member 
Kaptur for her opening statement.
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    Ms. Kaptur. Thank you, Mr. Chairman, very much.
    Good morning, Dr. Danielson.
    Mr. Danielson. Good morning.
    Ms. Kaptur. Welcome back.
    And, Dr. Orr, Secretary Smith and Hoffman and also Mr. 
Kotek, so glad to have you all here today. America just keeps 
producing this incredible talent that you represent, and that 
bodes well for the future. Thank you for all being here today 
to present to our subcommittee your 2016 program requests.
    It is no secret that United States reliance on foreign 
energy imports presents a significant strategic threat as well 
as drain on our economy of jobs and productivity. Last year, 
America turned a corner, producing more energy than we 
imported. The President's--I should mention, imported energy 
remains America's number-one category of trade deficit. Your 
offices deserve a great deal of credit for your 
accomplishments.
    And I just want to put on the record some numbers so we 
have the big frame in which we are operating. For 2014, our 
overall trade deficit as a country in every category was up 6 
percent, over half a trillion dollars, $505 billion. That was 
up from 2013, when our trade deficit for $476 billion. Yet 
domestic energy and the boom here at home with natural gas kept 
the deficit in check--gas and additional oil. Oil costs, at the 
same time, plunged, but U.S. production by fracking has reduced 
our dependence somewhat.
    2014 petroleum imports fell 9.6 percent to $334.1 billion, 
and that was the lowest we have seen since 2009. And U.S. 
petroleum exports actually went up 5.9 percent to $45.7 
billion.
    Nonetheless, as a country, in the energy realm we sustained 
a $289 billion deficit last year, and that translates into lost 
jobs in our country--if you calculate 5,000 jobs for every 
billion dollars of trade deficit, of 1,445,000 jobs just in 
2014 alone.
    We must push forward even harder to meet the energy demands 
of a new era with an all-of-the-above clean and innovative 
energy strategy. And you are all about that.
    You all have exciting jobs in inventing the future, and the 
applied Offices of Energy Efficiency and Renewable Energy, 
Nuclear Energy, Fossil Energy, and the Office of Electricity 
provide important resources that the American people need to 
success at home and abroad. And the gap is huge still.
    Secretary Smith, the work you and your predecessors did to 
help develop the new drilling technology spurred a revival of 
American oil and gas production. That resource helps meet 
America's strategic challenges while domestically creating jobs 
and advancing our economy. You don't get enough credit for 
that.
    Our renewable energy installations are growing their share 
of the generation market, and innovation will propel them 
forward. We must strive for full-price parity while supporting 
domestic manufacturing.
    Energy conservation: Energy efficiency presents a huge 
opportunity for our country, and it is heartening to see 
American business and both in the public and private sectors 
rise to the occasion. It makes good business sense, c-e-n-t-s 
as well as s-e-n-s-e.
    Buildings and vehicles are becoming increasingly efficient 
beyond where we ever imagined. And targeting the biggest energy 
users, like the steel industry, the auto industry, the glass 
industries--all of which, by the way, I represent--and 
America's industrial heartland and focusing additional 
attention there can yield real results.
    The Advanced Manufacturing Office has an important role to 
play in developing energy-saving processes that will help drive 
down costs for producers and ultimately consumers, and it is a 
win-win for everyone.
    The energy innovation championed by your offices holds the 
key to unlock the full potential of America's modern energy 
economy. And we look forward to hearing your goals for 
advancing our Nation to a place where she is more sustainable 
here at home, diversified, and--very important to me--self-
reliant.
    Thank you, Mr. Chairman. I look forward to the testimony.
    Mr. Simpson. Thank you.
    And, again, welcome to all of you.
    It is good to see you again, John.
    Mr. Kotek. Thank you.
    Mr. Simpson. As I understand it, Dr. Orr is going to give 
an opening statement and that any other opening statements will 
be included in the record and so forth.
    So, Dr. Orr, the floor is yours.
    Mr. Orr. Thank you very much, Chairman Simpson, Ranking 
Member Kaptur, and members of the subcommittee. Thanks for the 
opportunity to appear before you today to talk about the 
Department of Energy's applied energy budget for fiscal year 
2016.
    As both of you observed, we are in the midst of an American 
energy renaissance, and the good news is that there is no 
shortage of primary energy resources--wind, sun, fossil, 
nuclear--that we can put to work to supply our energy needs.
    But the question we have to face carefully over time is how 
we take advantage of them. And this is really a central message 
of human ingenuity--how we supply energy services by using some 
primary energy resource to make something like electricity or 
transportation services, services that we all take, I think, 
for granted but also are woven through every aspect of human 
societies. We need to apply our ingenuity to supply those 
services safely, cleanly, reliably, and economically, and 
thereby enhance the Nation's energy security while mitigating 
carbon emissions and other impacts.
    So DOE is charged with advancing the all-of-the-above 
strategy to enable the transition to a low-carbon economy 
through innovative, lower-cost, clean energy technologies. And 
we employee the expertise and capabilities of 17 national labs, 
13 of which are under the part of DOE that I am supposed to 
look after, and they have tremendous expertise and ability to 
influence and help us do what we do.
    As Under Secretary for Science and Energy, my job is to try 
to coordinate the Department of Energy's scientific research 
efforts with applied energy research and development, including 
by enhancing the productive links among all the science and 
energy programs. And we will reassemble this afternoon, I 
think, to talk about the science programs, so we actually will 
get a chance to see where we stand on that. The fiscal year 
2016 science and energy budget request reflects our attempt to 
make those links and our attempts to make them stronger.
    The Department's total science and energy request, which 
also includes the Loan Programs Office and ARPA-E and the 
Energy Information Administration request, is $10.7 billion, 
about $1.4 billion above the fiscal year 2015 enacted level. 
For the applied energy portion of our science and energy 
portfolio, the fiscal year 2016 budget is $4.76 billion, an 
increase of $1.06 billion over the fiscal year 2015 enacted 
level.
    Before I talk a bit about the applied energy programs' 
budgets, I will note that my colleagues are here to join me, as 
was observed earlier, and I am very grateful that they are here 
because I am pretty new at this. And I am fully aware that the 
actual knowledge sits on either side of me, and they will be 
called into action for sure as we go forward.
    In the energy efficiency and renewable energy area, which 
you can think of as three distinct offices, the budget request 
continues a diverse suite of sector investments in sustainable 
transportation--that is $793 million; renewable power 
technologies at $645 million; and development of manufacturing 
technologies and enhanced energy efficiency in our homes, 
buildings, and industries at $1.03 billion.
    A key highlight in this office is its advanced 
manufacturing work. The budget request for that area includes 
$404 million to fully fund two new clean energy manufacturing 
institutes, and then it continues funding for four institutes.
    In nuclear energy, DOE proposes $908 million, $74 million 
above the fiscal year 2015 enacted level, to continue 
supporting the pursuit of several new concepts and nuclear 
reactor designs, including increased funding for licensing 
technical support for development of small modular reactors.
    For the Office of Fossil Energy, the Department requests 
$842 million to continue development of carbon capture, 
utilization, and storage technologies for coal plants and 
research to improve the performance of the natural gas 
infrastructure. We have made a commitment to coal and natural 
gas in concert with new carbon capture use and sequestration 
tax credits in the administration's POWER Plus initiative to 
harness our domestic fossil resources in an environmentally 
prudent manner.
    The Office of Electricity Delivery and Energy Reliability 
is working hard to accelerate the modernization of the Nation's 
grid. To carry out this work, the fiscal year 2016 budget 
request proposes $270 million to support research and 
development activities, cybersecurity work, and grant programs 
to develop and update energy assurance plans for States, 
localities, and tribes.
    The request also includes $20 million for a fifth energy 
program in my office, the Office of Indian Energy Policy and 
Programs, which works to address the fundamental challenges to 
broad clean energy deployment on tribal lands. The request also 
includes $11 million for a new Tribal Indian Energy Loan 
Guarantee Program that leverages our department's Loan Programs 
Office to help improve access to capital for energy products in 
Indian country.
    So the Department's all-of-the-above applied energy 
portfolio is quite widespread, and, as I mentioned before, my 
office is working to try to increase the productive links 
amongst these programs to increase their efficiency and to 
coordinate on some of the big shared challenges that we have to 
face.
    So one significant way to do this is through the 
crosscutting initiatives that we introduced in the fiscal year 
2015 budget. So the fiscal year 2016 request includes just over 
$1.2 billion in crosscutting research and development across 
six initiatives: exascale computing; grid modernization; 
subsurface technology and engineering; supercritical carbon 
dioxide power generation technology; cybersecurity; and new for 
this year, the energy-water nexus.
    So the applied programs are involved in five of these 
crosscuts, so let me say a word about each of them to give you 
an idea of how that works.
    So we are starting here with the grid modernization 
crosscut, which is focused on providing tools to set the Nation 
on a cost-effective path to the flexible, secure grid of the 
future. Investment in a modernized grid is a critical component 
of energy and economic security, and, through this crosscut, we 
are focusing the efforts of our experts across the relevant 
offices on this particular challenge.
    The subsurface technology and engineering crosscut is 
focused on a fundamental objective: mastery of the subsurface. 
Specifically, adaptive control technologies that can control 
where fluids go, where they flow in the subsurface, can have a 
transformative effect on a host of subsurface applications, 
ranging from carbon and nuclear waste storage to responsible 
geothermal and hydrocarbon extraction.
    The supercritical technology crosscut is aimed at working 
to mature a supercritical CO2 technology that could 
improve efficiency of electric power generation and harness 
that in a way that would reduce costs and reduce the footprint 
of the equipment required. The crosscut team is working towards 
a pilot-scale facility to evaluate just how transformative this 
technology can be over a range of operating conditions that 
would apply to a wide range of thermal energy sources.
    For increased coordination on cybersecurity, DOE requests 
$306 million to fund the cybersecurity crosscut. Cybersecurity 
is increasingly important in today's modern age, and DOE is 
working to protect its cyber assets as well as to strengthen 
the security of the national grid.
    And, finally, I will mention the energy-water nexus 
crosscut. It is new in our fiscal year 2016 budget request. 
Water use is absolutely fundamental to electric power 
generation. Some 40 percent of the withdrawals of water that 
come through the system are associated with cooling and 
electric power generation. And through data modeling and 
analysis as well as targeted technology development, this new 
initiative positions DOE to support the Nation's transition to 
more resilient energy-water systems.
    And before I finish here, let me say a word about one more 
initiative my office is overseeing that cuts across all the 
Department's applied energy programs as well as the Office of 
Science. This is the Quadrennial Technology Review.
    The purpose of this effort is to inform the future of the 
Department's science and applied energy research portfolio by 
examining the state of existing and emerging energy 
technologies and by identifying the most promising research and 
development opportunities across those technologies. It is 
meant to give us a picture of where we are and where it makes 
sense to go in the research effort going forward.
    The release of that report is planned for the summer, and I 
will look forward to briefing the committee and other Members 
of Congress when that review is complete.
    So let me conclude by saying that the Department of Energy 
is pursuing an all-of-the-above approach to build a portfolio 
of advanced energy technologies that will lead us to a low-
carbon economy. And, in doing so, a key aspect we are focused 
on is fostering increased coordination and efficiency 
throughout the science and energy enterprise.
    I and my colleagues here would be pleased to answer your 
questions on how the fiscal year 2016 budget supports those 
efforts and our effort to use the funds efficiently and 
effectively. Thank you very much.
    Mr. Simpson. Thank you.
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    Mr. Simpson. Let me ask you just a general question first. 
The price of energy, in whichever form it is, has a great 
impact on other forms of energy. Natural gas is making nuclear 
energy less competitive and every other form of energy less 
competitive. And, as you know, our economy kind of goes, 
rightfully so, to whichever is the cheapest form of energy 
production.
    What I am really concerned about is reliability. Because 
prices of various forms of energy, whether it is wind, solar, 
natural gas, oil, nuclear, whatever, will go up and down.
    Mr. Orr. Yep.
    Mr. Simpson. How does that affect your department and where 
you put your resources as you are looking at the future of 
energy development in this country?
    Mr. Orr. So you are absolutely right that energy prices are 
commodities. They are hard to predict--well, if asked about 
this, I usually say that the price will go up and then go down 
but not necessarily in that order.
    Mr. Simpson. Yeah.
    Mr. Orr. But the real goal of the Department of Energy and 
really the Nation as a whole, I think, is to have a well-
diversified portfolio of energy resources in the mix and energy 
conversion methods that give us the flexibility to adapt to 
those price changes as they happen.
    I don't discount the markets as important. They are 
fundamentally important to this. But we also want to make sure 
that we don't have all our eggs in any one basket. And I think 
that means that we need a long-term view that makes sure that 
the well-diversified portfolio is there, and that means 
investing across the spectrum of energy technologies in the way 
that we have been trying to do.
    The Department is really aimed at supplying the fundamental 
idea flow into the marketplace that will, over time, affect the 
prices of all those conversions, in addition to responding to 
the commodity prices. So I think the important issue is that we 
not react too much to short-term price fluctuations.
    If you remember back to the mid-1980s, when the price of 
oil went down, for a period we paid less attention to investing 
in research for the future than we should have, and so we don't 
want to do that again. We really need to make sure that we 
build a diverse and capable portfolio for the future.
    Mr. Simpson. Well, I appreciate that, because one of the 
concerns is that while natural gas is cheap and so forth, I 
don't expect it to stay that way forever. While the outlook 
looks good right now, the reality is, as Dr. Danielson and I 
were talking yesterday, the price of solar has been coming 
down----
    Mr. Orr. Yep.
    Mr. Simpson [continuing]. And we still need to do research. 
Same thing with nuclear and----
    Mr. Orr. Uh-huh.
    Mr. Simpson [continuing]. Other commodities that we work 
on. And we shouldn't de-emphasize those because of the current 
situation that we are in.
    Mr. Orr. Uh-huh. And I would observe also that using energy 
efficiently across the full portfolio, as you observed at the 
beginning, is an important way we can make sure that everything 
we do is more efficient and, therefore, more cost-effective.
    Mr. Simpson. Dr. Orr and Mr. Kotek, I would like to take a 
few minutes to talk about the Department's nuclear energy 
program. What is your vision for the strategy of moving forward 
DOE's nuclear energy program, its research and development 
activities, and DOE's assets across the enterprise?
    Mr. Kotek. Would you like to start?
    Mr. Orr. Well, I would say that we believe fully that there 
needs to be a nuclear energy component in the Nation's energy 
mix. And we are committed, through both the research for 
advanced reactors and things like small modular reactors and so 
on, to contribute in an important way to that future.
    I would actually like to ask John to fill you in on some of 
the details of what is in the budget.
    Mr. Kotek. Yep. Thank you very much.
    As I look at any program budget, you know, I think the 
overall program categories are right. I mean, we have work 
going on to extend the safe operating lives of today's 
reactors. We have work going on to develop multiple pathways 
for new deployments, including small modular reactors, which 
could be a great opportunity for both, you know, domestic and 
export markets. We have research going on on alternative fuel 
cycles and alternative, you know--and disposal methods on the 
back end. And then we have some crosscutting things, workforce 
development, computational capabilities, and then, of course, 
the research infrastructure, which of course I am very familiar 
with, at our lead lab in Idaho and elsewhere.
    So a question I have is, you know, what is the right vector 
going forward and what are the right areas of emphasis. And so 
what we are trying to do is we are trying to draw on the best 
ideas across the nuclear industry and beyond. So you may be 
familiar, earlier this month we had a series of workshops 
across the country involving our labs, universities, industry, 
and others to really give us input that is going to help guide 
those future investments. And so I am looking forward to 
receiving that synthesized input to help us guide our 
programmatic directions and budget requests in fiscal 2017 and 
beyond.
    Mr. Simpson. Thank you.
    Dr. Orr and Mr. Smith, last year's omnibus included 
direction to develop--and you guys don't mind if I have a cold 
and keep coughing and all that kind of stuff.
    Mr. Orr. Oh, that is all right.
    Mr. Simpson. But last year's omnibus included direction to 
develop a comprehensive program plan and research and 
development roadmap for the Office of Fossil Energy.
    I know it is too early to ask for the specifics, but I want 
to get a broad sense of your vision for this roadmap 
development. And what is your vision for the fossil energy, and 
where will the biggest technological advancement opportunities 
exist?
    Mr. Orr. Chris, why don't you just dive right in on that?
    Mr. Smith. Well, thank you, Mr. Chairman, for the question.
    First of all, I would emphasize that I think we have a very 
robust request this year for the Office of Fossil Energy, a 
total request of $842 million for this year, which is an 
increase over the fiscal year 2015 omnibus bill. So we think 
that this is a very important part of the strategy, and it is a 
key component of the technologies that are going to provide 
power and energy in the future.
    In terms of the request, there is an increase for carbon 
capture. We think this is going to be an important part of what 
we are working on throughout this fiscal year and going 
forward.
    There is also an increase in the request for natural gas 
technologies. There we are going to be focused on environmental 
sustainability and safety of producing oil and natural gas. We 
feel that one of the most important components of our R&D 
program, in terms of a government role, is to give communities 
the confidence and the assurance that we have good science that 
is quantifying things that people are concerned about in terms 
of production technologies and that we can develop and deliver 
these molecules safely, get them out of formations and get them 
to the burner tip and to power plants, where they can provide 
energy for our economies.
    So those are our two broad programs, the coal program and 
the oil and natural gas program. We think both of them are 
really important in terms of diversity of energy supply, 
reducing our reliance on imports, and ensuring that we are 
looking at reliability and the benefits we can provide for our 
economy.
    Mr. Simpson. Thank you.
    Ms. Hoffman, this year's budget request contains a proposal 
for two new grant programs aimed at assisting the States with 
electrical reliability planning programs and formula grants to 
update energy assistance assurance plans.
    Can you discuss how the proposal came about? Are the 
proposals intended as multiyear programs? And will these grants 
go out under the same formula as previous grants?
    Ms. Hoffman. Thank you very much.
    I appreciate the question because the interface and the 
dialogue with States are an extremely important issue as we 
move forward for grid modernization and looking at energy 
security of the electric grid.
    Both of these programs were to address specific 
conversations and dialogues that need to occur at the State 
level, the first for the energy reliability programs. These 
programs are looked to be competitive programs where it will be 
an ongoing program in support of reliability investments. So 
how do we really keep the State engaged in very tough 
conversations that have to occur between the utility planners 
and the States and the policymakers for grid modernization?
    The second effort is energy assurance plans. These plans, 
we are looking at grants to the States. This program would 
probably be updated every--request to have these plans updated 
maybe every third year.
    The intent of this program is to really go after having the 
States have a good situational awareness of their energy assets 
and how these assets are changing over time so they can really 
look at the availability in an emergency. For example, you look 
at Hurricane Sandy--where was the availability of gasoline in 
the New York area? Or as you look at maybe an earthquake or 
other sort of events--what assets do you have to rely upon? 
Those must be updated on a regular basis so that the State 
energy offices and the State constituents really understand 
what the options are in an emergency.
    Those are the two goals of the program--what we hope to 
achieve. It is an important effort as we look at assurance in 
the future.
    Mr. Simpson. Thank you.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Dr. Orr, I listened carefully to what you said about the 
water-energy nexus, and I am very interested in comments from 
yourself and the other panelists on this topic.
    Could you summarize some of the key findings of your 
report--I read this summary--and tell us how they are 
influencing your program?
    Mr. Orr. Uh-huh.
    Ms. Kaptur. And let me just say, as a representative of 
several large cities, places like Cleveland, Lorain, Toledo, in 
the industrial heartland, I am wondering if your focus in the 
energy-water nexus is merely on energy-producing plants and 
their water-draw or if your program includes thinking about how 
to help some of our older cities deal with their power needs 
related to their water and their sewage treatment.
    I am interested in your--I read the summary. I didn't read 
the whole report----
    Mr. Orr. Yeah.
    Ms. Kaptur [continuing]. But I----
    Mr. Orr. You can be forgiven for not reading that.
    Ms. Kaptur. Okay.
    Mr. Orr. Yeah. So----
    Ms. Kaptur. So, in any case, you know, the question is, 
what are your findings? What is some of the direction, and 
would it include a look at both sides of that?
    Mr. Orr. Yes, indeed. And the reason that this is a 
crosscut is because there is exactly that interlocked use.
    So part of the effort--we will actually talk about this 
again this afternoon in the hearing, because part of this 
involves our science program, in building much more detailed 
and careful models of how water flows through the whole system. 
But there is also emphasis on specific work of using 
nontraditional waters, both to provide energy and to be treated 
in such a way that they can have beneficial uses, and that can 
include the whole water treatment area.
    And then, of course, there is the whole question of the 
sustainable, low-energy water utilities that will allow us to 
increase energy efficiency and perhaps energy recovery for 
water and wastewater treatment.
    So it is an attempt to focus the efforts of the Department 
of Energy, which, you know, we are involved in a lot of water 
use through energy generation, but also to recognize that it is 
linked to all kinds of other things that we do through 
agriculture and everything else. So cities are certainly an 
important part of that, and I anticipate that that will cover 
both of those areas.
    Ms. Kaptur. With the intensive interest of the Federal 
Government in the 17 Western States--and I can understand the 
water-shortage challenges that many places face. I don't 
represent that part of America, but I wanted to just put on 
your screen some of the cities and the--going through some of 
the water plants and sewage treatment plants in the district 
that I represent, and the efforts that they are trying to make, 
very slowly, too slowly, to produce power on site, to try to 
reduce their energy footprint. Many of these facilities are 
over 50 years old.
    So I just wanted you to see that----
    Mr. Orr. Uh-huh.
    Ms. Kaptur [continuing]. Particularly in these heavy 
manufacturing regions, where there has been--two-thirds of the 
jobs have been lost, and yet they have these antiquated systems 
that they are dealing with. And they could use some of your 
expertise as you think through how you are going to structure 
the energy and water nexus.
    Mr. Orr. Yeah. One component, I should have said the first 
time around, of this would be enhanced technical assistance and 
R&D related to a variety of the areas that you just mentioned. 
We could talk more about that if that would be helpful.
    Ms. Kaptur. If you just look at this panel, you see people 
from Gary, Indiana; Los Angeles; Cleveland; Toledo. I mean, so 
I think that there would be a great deal of interest in that, 
though I can't speak directly for my colleagues on that.
    Does anyone else wish to comment on that energy-water 
nexus? Anyone else on the panel?
    Mr. Danielson. I can add a little bit about some of the 
work that we have in the fiscal year 2016 budget in this area.
    One area that the Under Secretary mentioned is the 
importance of developing more sophisticated models to actually 
understand the water-energy system in the United States. And 
so, through our Water Power Program, we are investing some 
funds in developing new models for how to manage water power 
systems in a more effective way. And those will be integrated 
with other models that will be a more comprehensive set of 
models around energy-water use in the country.
    In the area of technologies for producing more freshwater, 
our geothermal program is proposing a research and development 
effort to use low-grade geothermal waste heat to make 
freshwater. There is a project we have today on an exciting 
technology called forward osmosis being done at Idaho National 
Laboratory, which is a technology that presents a lot of 
opportunity there for taking low-grade geothermal waste heat 
and producing freshwater.
    And then, finally, we have an effort in our Advanced 
Manufacturing Office, about a $4 million effort, on sustainable 
water utilities. Our water processing infrastructure uses a lot 
of energy, and a lot of energy comes into those systems. We are 
going to be doing research and development and technical 
assistance with water utilities to help them lower their energy 
footprint and also find ways to convert waste into energy that 
they can use on site to lower their energy costs.
    Ms. Kaptur. I am glad you said that latter point, because, 
though I can't direct what you do, I can talk and suggest 
ideas, that you look at the United States in terms of its 
watersheds and that the watersheds of the West are very 
different than the watersheds of the Great Lakes, let's say.
    Mr. Orr. Indeed.
    Ms. Kaptur. And if you look at our watersheds and what is 
happening in the Midwest, in the Great Lakes region, with 
drainage and the large amounts of freshwater, and you look at 
the facilities that treat the water or treat the sewage, we 
have large amounts of organics that are associated with 
processing on site. They are like big mixing bowls, right? And 
we have a problem throughout the Great Lakes with water runoff 
that is polluted with manures from agriculture and so forth.
    But if one starts thinking about these big mixing bowls and 
the way of reprocessing that regional waste, that organic 
waste, in a manner that produces heat, let's say, or produces 
power, that kind of thinking is not really going on, because 
people aren't thinking about the watershed. They are just 
involved in their own little operation, whatever it might be.
    But your kind of technical assistance to regions like that 
could really be important to unleash the creativity and 
innovation that is possible on those sites that have had 
multibillion dollars of investment over the years but they 
don't view power as part of their mandate. So I just think this 
is a really important initiative.
    And I have one other question in the first round, and then 
we will move to others.
    To your knowledge, Dr. Orr, is the Department of Energy 
effectively engaged in some manner in assisting Europe and 
Ukraine to meet their strategic energy challenges as they 
grapple with Russian aggressiveness rooted in Russia's energy 
relationships with Western Europe and now the invasion of 
Ukraine? Is the Department of Energy aggressively involved in 
any kind of effort to try to help Europe reposition----
    Mr. Orr. Uh-huh. So----
    Ms. Kaptur [continuing]. From an energy standpoint?
    Mr. Orr. [continuing]. We, of course, are in more or less 
constant contact with energy colleagues around the world. The 
Secretary has participated in a series of clean energy 
ministerials, for example, that have some relationship to the 
issues you mention. And I know that there is effort in thinking 
about the questions of natural gas availability in Ukraine.
    I am too new to the program to know for sure any details of 
that, and I don't know whether--maybe I will ask Chris Smith to 
jump in on that.
    Mr. Smith. Well, thank you, Dr. Orr.
    So I will make a couple of points on the ways that the 
Office of Fossil Energy has been directly engaged.
    So, as Dr. Orr mentioned, this is a--you know, it is a 
long-term challenge. It is multifactorial. There are a lot of 
moving parts here.
    Over the long term, we have been engaged with our partners 
throughout Europe to help take the lessons that we have learned 
here in the United States with regards to development and 
production of unconventional oil and gas resources and try to 
transfer some of that knowledge, some of that information to 
some of our allies and trading partners in Europe.
    A couple years ago, predating this effort, I traveled with 
one of my colleagues from the State Department and engaged in 
an IEA engagement that was putting together what they called at 
the time the golden rule, sort of a golden age of gas, that was 
an attempt to take the lessons learned in the United States and 
establish a playing field in Europe, in terms of thinking about 
shale gas extraction.
    It is those types of long-term collaborations that are 
critical. So, as Dr. Orr mentioned, in the immediate term, we 
do have teams that have been working with our allies and 
trading partners to think about planning, to think about 
contingency planning, some things that we do well here in the 
United States. But, also, over the long term, there are a lot 
of issues around development of infrastructure, around putting 
in place smart rules, around commonsense regulation to make 
sure that infrastructure can be built safely and that resources 
can be developed prudently. And that is the type of 
collaboration that we have had to have over the long term and 
over the short term.
    Ms. Kaptur. Thank you very much.
    For the record, I would like to ask if maybe Dr. Orr could, 
or by letter, develop a reply to that question a little bit 
further, focused in at least three areas. One is the 
possibility--I represent the largest coal-shipping port on the 
Great Lakes. It may be cost-prohibitive to ship coal from our 
full committee chairman's district in Kentucky through the Port 
of Toledo to Ukraine, which is the shortest distance, by the 
way, from the United States to the ports of Northern Europe. 
But I have asked myself the question, if they use that coal, it 
would actually be better coal than they have in Ukraine, so it 
would lower the carbon footprint. Is that possible?
    Number two, small-package nuclear. Could we do something 
quickly to help some of the countries that are involved adjust?
    And, thirdly, LNG. Can we do anything on export quickly? 
Not 5 years from now, but quickly. Are there short-term energy 
initiatives that we could undertake to help that situation, 
which is being lived in real time right now. I would very much 
appreciate that.
    Mr. Orr. Yeah, we will be happy to do that for you.
    Ms. Kaptur. Thank you.
    Mr. Simpson. Mr. Fleischmann.
    Mr. Fleischmann. Thank you, Mr. Chairman.
    And, Dr. Orr, I want to welcome your entire panel. I really 
appreciate you all being here before us today. I work very 
closely with many of you all, and I appreciate each and every 
one of you all's commitment to our Nation's energy needs. This 
is a critical area for, I think, discussion, not only for my 
constituents, I think, but for the whole Nation as we move 
forward.
    I have a few questions. Last Thursday, I had the privilege 
again of visiting the Oak Ridge National Lab's Manufacturing 
Demonstration Facility with Deputy Secretary Liz Sherwood-
Randall. We saw the world's largest polymer 3D printer being 
installed and watched as manufacturing parts were being 
printed. I wish the full committee could visit this amazing 
facility that last year made the world's first printed car.
    Dr. Danielson, we have been there together, as well. Our 
subcommittee's investment in these programs will help foster 
innovation and promote U.S. leadership.
    My first question is for you, Dr. Danielson: How does 
advanced manufacturing connect to EERE core research programs 
that you divided into sustainable transportation, renewable 
energy, and energy efficiency, sir?
    Mr. Danielson. Thank you, Congressman. And we have been 
very excited to see the work that has come out of the 
Manufacturing Demonstration Facility at Oak Ridge. It is a 
model for what we want to see with our advanced-manufacturing-
oriented efforts going forward, and with the manufacturing 
innovation institutes, as well.
    One thing I will point out is that we are in a pretty 
exciting and unique time as it relates to manufacturing 
competitiveness in the country. The low energy prices mentioned 
are a result of some early great work done by the Fossil Energy 
department here. We are seeing significant increases in labor 
rates overseas. And we are also seeing a whole suite of new 
advanced manufacturing technologies emerge, especially here in 
the United States, that have the potential to give us a 
competitive advantage.
    And so what our focus has been, in our Advanced 
Manufacturing Office, which is a significant focus in this 
budget request, is we are looking to invest in those advanced 
platform, foundational manufacturing technologies that will 
apply to a wide variety of the technologies within our 
sustainable transportation offices, renewable electricity, and 
end-use efficiency.
    To give you an example, in the additive manufacturing area, 
we are seeing opportunities not only in sustainable 
transportation for more efficient engines, but we are also 
seeing it be applied more broadly in the building technologies 
office, as well. Just recently, Oak Ridge National Lab is 
leading an effort to put out an open call for America's best 
innovators' ideas that Oak Ridge will then go, and within a 
short period of months using 3D printing, prototype those 
advanced technologies and show what they can do.
    And so we are seeing some exciting synergies amongst the 
Advanced Manufacturing Office's capabilities, resulting in end-
use innovation in the various sectors that we invest in in 
energy.
    Mr. Fleischmann. Thank you, sir.
    This question is for either Dr. Orr or for Dr. Danielson. 
Can you please tell me how the Advanced Manufacturing Office 
might benefit other technology programs, such as the vehicle 
technologies program and the Carbon Fiber Test Facility at ORNL 
or the building technologies program, any of those three?
    Mr. Orr. Well, let me give you a brief answer, and then 
Dave can help out.
    The good thing about these fundamental changes--additive 
manufacturing, the 3D printing is an example of that--is that 
there are many applications that kind of cut across. They are 
fundamentally enabling for more efficient, lower materials 
requirements, lower cost, and much faster prototyping. And all 
of those things can find applications in lots and lots and lots 
of ways.
    So we have good examples and good applications to start 
with, but they should have much broader impact.
    Mr. Danielson. And I would add that although this additive 
manufacturing capability, for example, was initially funded out 
of the Advanced Manufacturing Office, we are seeing the Vehicle 
Technologies Office engage on this with the 3D-printed car 
technology that you just talked about, in addition to the 
automotive industry using 3D printing as a way to much more 
quickly and cheaply develop new molds so that they can lower 
tooling costs for manufacturing.
    We have also seen the first ever 3D-printed packaging and 
heat sinks around advanced power electronics between the 
Vehicle Technologies Office and the Advanced Manufacturing 
Office work at Oak Ridge.
    And we are also seeing, as I mentioned in the building 
technologies area, all kinds of opportunities that are just 
emerging as we get these offices engaged with the capability, 
including advanced new nozzles that can enable much more 
efficient heating, ventilation, and air-conditioning units.
    Mr. Fleischmann. Thank you.
    For several years now, it has taken congressional direction 
to fund the nuclear infrastructure at the Oak Ridge National 
Laboratory. The hot cells are essential capabilities that serve 
multiple missions for the United States Government, yet they 
lack an institutional steward.
    The Office of Science has provided a portion of the funding 
needed in this budget request, but support for these facilities 
is still not evident in the fiscal 2016 request for the Office 
of Nuclear Energy despite direction from Congress to work 
jointly with the Office of Science on this issue.
    Mr. Kotek, I was pleased to see in the fiscal 2016 budget 
proposal that the Office of Science, for the first time, is 
providing partial funding for the nuclear infrastructure at Oak 
Ridge National Lab. This funding, while an important step, only 
partially covers the operating costs. What do you see as your 
role to ensure full funding for these multi-program facilities?
    Mr. Kotek. Thank you for the question.
    It was my understanding that the transfer of responsibility 
to the Office of Science was to be for the complete 
responsibility. And so I will go back and work with the folks 
in the Office of Science to understand what their plans are, 
and maybe there will be an opportunity to ask them about that 
later. But at least my understanding for this budget request 
was that was to be moved over entirely into their office.
    Mr. Fleischmann. Okay. Thank you.
    Mr. Kotek, I would like to discuss the Modeling and 
Simulation Energy Innovation Hub funded with your office.
    The hub's primary task is to create a computer model that 
simulates a reactor. What has the hub accomplished? How far 
along is this model? And how is it being used?
    Mr. Kotek. Thank you very much for the question.
    The model is being used, you know, fairly widely by 
industry to understand a range of issues that can occur within 
nuclear reactor types. And, as you may know, we have several 
different reactor types that are currently in use.
    And so what we have started with is the simulation of a 
pressurized water reactor, a certain type of reactor that is 
commonly in use. As we look and go forward, what we are looking 
to do is take that capability and use it to help us examine 
certain phenomena in other reactor types, so boiling-water 
reactors and even small modular reactors.
    So it is something we expect to see broadly applicable by 
the time we are done with this second 5-year term.
    Mr. Orr. And could I just add to that that, in building 
these models, they look at the underlying physics of the 
details of the fuel rods and bundles, of how the fluids flow 
around them, and building better descriptions of those than to 
have applications kind of throughout the nuclear enterprise 
but, actually, more broadly in other kinds of power plant 
applications, as well.
    So the knowledge base that is applied in that specific area 
will have much broader application.
    Mr. Kotek. Absolutely.
    Mr. Fleischmann. Thank you, gentlemen.
    As a followup to that, I have two questions.
    One of the unique features of the hub is its management 
structure. It is comprised of a consortium of national labs, 
universities, and industry partners.
    Can you talk about the successes and lessons learned from 
this approach? And how does each of the different partners 
contribute to the hub success?
    Mr. Orr. Well, as you know, there has been some 
experimentation in the way we have done the hubs in a variety 
of places. The ones that have been very successful--and I would 
cite the battery hub led out of Argonne as another example of 
those, and the Oak Ridge effort--have started with a capable 
organization leading it, so a group that is used to managing 
complicated enterprises. It needs a good leader, a person who 
is in charge who really is in charge and who has the technical 
chops to deal with all the players.
    It needs to have the right range of expertise of people 
contributing to it. And because of the way these things have 
been selected in a competitive proposal kind of environment, 
there is a real test as the teams have to assemble and make the 
argument that they are well enough equipped to do that.
    And then they need to keep focused, to keep their eyes on 
the ball as they work through. The fact that they have funding 
for a finite time has a way of focusing the intention of all of 
the participants on really making progress that can matter.
    So each of the problems is a little bit different, so you 
have to adapt those ideas in the right place, but I think we 
have seen enough examples of very successful hubs that we can 
see how to do that going forward.
    Mr. Fleischmann. And one final question: Can you describe 
how the Office of Nuclear Energy's other research activities 
into advanced modeling and simulation complement the activities 
of the hub?
    Mr. Kotek. Certainly.
    So we have had work underway under our NEAMS Program, the 
Nuclear Energy Advanced Modeling Simulation Program, that 
develops specific codes looking at what they call high-impact 
problems. So there is integration between the two activities, 
but the CASL hub is focused on, you know, sort of this broader 
request of reactor modeling. The NEAMS Program is looking more 
at specific issues, so what they call high-impact problems, all 
right? So looking at, for example, the question of 
understanding tube vibration within a steam generator. That is 
a specific thing that we would dive into under that program to, 
sort of, you know, in part, build off of what we are doing 
through the CASL effort.
    Mr. Fleischmann. Okay.
    Thank you all.
    Mr. Chairman, I yield back.
    Mr. Simpson. Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman.
    And welcome, all of you. Good to see all of you.
    And, Dr. Danielson, good seeing you too.
    Dr. Danielson, this year's budget request proposes a 
significant increase for Clean Energy Manufacturing Innovation, 
or CEMI, institutes as part of the White House initiative to 
revitalize American manufacturing, including establishment of 
two new CEMI institutes.
    This committee has been very supportive of the Advanced 
Manufacturing Program within the Office of Energy Efficiency 
and Renewable Energy. And in the Cromnibus for fiscal year 
2015, the committee included the Revitalize American 
Manufacturing and Innovation Act, or the RAMI, to authorize a 
National Network for Manufacturing Innovation.
    But I know some folks, at least in my district, are a 
little confused by the way the budget request rolls out these 
centers, because they expected that the RAMI authorization to 
reprogram $250 million would mean a more rapid expansion of the 
program, whereas the budget request seeks appropriations for 
the centers and goes about the establishment of the nationwide 
network more slowly than they envisioned.
    So can you explain to us how your vision, to the extent you 
can, the administration's vision for rolling out the network? 
And can you give us an update on how the existing institutes 
are working out right now?
    Mr. Danielson. Yes. Thank you, Congressman.
    The National Network for Manufacturing Innovation is an 
interagency effort across Department of Commerce, Department of 
Energy, Department of Defense, and a number of other agencies.
    The vision is to build a national network of innovation 
centers that will allow the United States to tap into those 
emerging advanced manufacturing technologies that are just 
around the corner, that we think, if the United States can 
assert leadership, will establish us as a major player and make 
us a magnet for the manufacturing jobs of the future.
    The Department of Energy's request would support four 
ongoing institutes that would already exist going into fiscal 
year 2016 and would fund two fully front-funded new institutes 
at $70 million each. This would be in addition to the 
Department of Commerce putting forward in their budget a 
proposal to do two new institutes, I believe, the Department of 
Defense looking to do one new institute, and the U.S. 
Department of Agriculture doing one more institute, as well.
    The RAMI bill you are talking about, I think, authorized 
transfer authority, but that is not an authority that we are 
planning to use in fiscal year 2015 or 2016.
    Mr. Honda. So with the RAMI project in mind, how would that 
go about becoming realized?
    Mr. Danielson. The institutes that I just spoke of are in 
the budget request this year. And, in my office alone, this 
budget requests support for six total institutes in addition to 
the institutes that I mentioned that the other agencies will be 
putting forward.
    Mr. Honda. Okay.
    Mr. Danielson. But I would be happy to take that question 
for the record to give you a little more clarity on the 
interagency strategy around NNMI.
    Mr. Honda. It would be really helpful for me. Thank you.
    Mr. Danielson. Okay.
    Mr. Honda. The SunShot Initiative, access to solar for 
lower-income folks--2016 marked the halfway point of the 
President's SunShot Initiative to make solar-power costs 
competitive without subsidies by 2020. Can you update the 
subcommittee on where we stand in achieving that goal?
    And, as I understand it, we are currently 70 percent of the 
way towards achieving the goal of reducing the cost of solar-
energy technologies. It is the halfway mark, and we are more 
than halfway there, yet the request increases the solar-energy 
budget by almost 50 percent.
    This may be a stupid question, but can you explain the 
challenges that remain to be overcome and how these justify the 
increase, which I am not unhappy about, in your budget request?
    Mr. Danielson. Thank you, Congressman. You and I visited 
SunPower manufacturing----
    Mr. Honda. Right.
    Mr. Danielson [continuing]. Facility in your district, 
which I think is a great example of some of the momentum that 
we are building in the United States around solar 
manufacturing.
    We have made significant progress since 2010 when we kicked 
off the SunShot Initiative--and that was in 2010--with the goal 
by 2020 of achieving directly cost-competitive solar without 
subsidies.
    When we are here, about 40 to 50 percent of the way through 
that decade-long initiative, I would say we are about 50 to 60 
percent of the way to the goal. And we have seen significant 
reductions in module prices, but we still have a lot of work to 
do. We are at about 70 cents per watt on modules, and we need 
to get another 40 percent reduction, down to about 50 cents per 
watt, for direct cost-competitiveness.
    We really have three major thrusts within the program that 
are becoming more urgent as we approach this SunShot goal. The 
first is innovation in modules for much more efficient modules, 
low-cost modules, and modules that can give the United States a 
competitive advantage as it relates to manufacturing.
    And I will note that last year was a great year for solar 
manufacturing in the U.S.--an announcement of 2 gigawatts of 
new capacity that will come on line, which is doubling the U.S. 
solar manufacturing capacity, including a gigawatt-scale plant 
to be built up in Buffalo, New York, that is based on 
technology that we originally funded, in addition to DOE-funded 
technologies scaling up in Michigan and Oregon.
    Mr. Danielson. Secondly, in addition to the technology 
innovation on modules, we have a major focus on grid 
integration, which is part of the grid modernization initiative 
that has been put forward. Whereas we get more and more cost-
effective distributed solar power, we are going from having 
maybe thousands of centralized power plants that need to be 
controlled to potentially millions of distributed power 
plants--small solar power plants, that need to be integrated 
into the grid in a reliable, resilient fashion. So we are 
looking at things like control strategies, control of energy 
storage behind the meter, smart inverters that can sense what 
the grid needs and adjust what is being put back.
    Finally, one of the sticky cost points with solar is on 
what we have called soft costs, which includes things like 
permitting, customer acquisition, financing costs, and a number 
of other areas. We are also investing in an increased way in 
attacking those finance costs by working with industry partners 
to streamline documentation, and are working with a number of 
jurisdictions around the country to develop technology 
solutions to dramatically reduce the red tape and the 
permitting time and cost associated with solar, as well.
    Mr. Honda. It sounds like it is a good investment, that we 
could drive this thing forward more quickly.
    Something I brought up in our hearing with Secretary Moniz 
is my desire to do more in the way of helping low-income 
families gain access to solar energy so that they can reap the 
benefits of reduced energy bills that are currently largely 
enjoyed by more affluent Americans.
    Can you tell us a bit about what the Department is doing to 
improve access to solar for all Americans?
    Mr. Danielson. Yes. Thank you very much.
    You know, one of the important programs that is under my 
purview is the Weatherization Assistance Program.
    Mr. Honda. Right.
    Mr. Danielson. It is a program that, since 1976, more than 
7 million low-income families have had retrofits of their homes 
to enable up to, on average, about $400 a year of energy 
savings, in addition to making these homes actually comfortable 
and warm in winter and things like that.
    Solar thermal is a measure that is currently on the 
weatherization approval list, so that is a technology that is 
available to low-income families to be able to access solar 
energy to heat their homes and cut their energy costs, as one 
example.
    Mr. Honda. For the chair, if I may ask another question?
    The budget request for weatherization assistance, again, 
includes two initiatives: the $50 million for competitively 
selected products to demonstrate financing models that would 
support the retrofit of low-income and multifamily buildings; 
and second was $20 million for certain local communities to 
develop economic development roadmaps in achieving the clean 
energy goals.
    Can you provide us more details about this proposal? And 
would it be through the States or directly to the project 
recipients? And what sort of financing models are you currently 
considering for this program? And what criteria would you use 
to make an award?
    This sounds like this new proposal represents your vision 
for the future of weatherization, and that would be an activity 
that would supplant the existing form of grants, grant 
programs. Are there comments you can make on that?
    Mr. Danielson. Yes. Thanks for that question.
    Those are two important new initiatives we put forward 
under the Weatherization Assistance Program within the 2016 
request.
    The first you mentioned was the multifamily program----
    Mr. Honda. Yeah.
    Mr. Danielson [continuing]. And the challenge there is 
that, with the Weatherization Assistance Program today, a 
disproportionate number of the retrofits occur on single-family 
homes relative to the number of multifamily homes there are. 
And so this program is meant to competitively try out new 
programs that would unlock private capital to allow the 
multifamily side of the equation to have a significantly larger 
number of retrofits.
    One example of a program that could enable that are PACE 
programs, as you know--that is Property Assessed Clean Energy--
which allows financing to be repaid through municipal taxes 
however we would put this out for the best ideas that the 
Nation's finance community would have to put forward.
    And then on the local energy program, under the Recovery 
Act, we were able to establish partnerships with municipalities 
and cities directly through the EECBG program, Energy 
Efficiency Community Block Grants, and we found that to be 
incredibly productive. We ended up successfully retrofitting 
more than 700 million square feet of buildings through that 
program.
    And since the Recovery Act has sunsetted, we don't have a 
direct mechanism to engage on innovative clean energy policy 
development and deployment program development with localities. 
This program would put forward the first time we would be 
working directly with those localities on innovative programs 
to help them lower their energy bills and their carbon 
footprint.
    Ms. Kaptur. Would the gentleman yield at some point?
    Mr. Honda. Yeah.
    Ms. Kaptur. I just wanted to follow on Congressman Honda's 
excellent questioning here on this differential between single-
family units versus multifamily units.
    I am going to throw in a third perspective here, and that 
is, as the program is developed, think about neighborhoods that 
both single-family and multifamily are located in certain 
neighborhoods. And what is not happening at the local level, in 
my opinion, is that the systemic energy needs of a given 
neighborhood are not thought through initially because of the 
way the program functions.
    So, for example--and I will just take historic preservation 
neighborhoods, which tend to be located in the older parts the 
cities----
    Mr. Honda. Sure.
    Ms. Kaptur [continuing]. All right? And because of the 
historic preservation tax credits and all the other things that 
attend to them, what is happening is that the private sector is 
reluctant to invest for different reasons, but the houses leak 
energy because they are not allowed to put in windows that 
actually save energy because that violates some historic 
preservation code.
    And, from a market standpoint, over time, these 
neighborhoods aren't going to make it. I hate to be that bold 
in saying that, but there has to be an energy perspective that 
takes in the neighborhood.
    In some of the neighborhoods I am talking about and have 
visited, there is waste heat from big industrial plants that 
sit in the same neighborhood. There are landfills that leach 
methane that could be put into an energy grid for that 
neighborhood. But nobody is thinking big enough. They are 
thinking at the unit level or at the apartment level. But it is 
not--it can't be a successful strategy.
    So I just would urge you to think about a footprint that 
includes a neighborhood and--for instance, on a landfill, if 
you could put up solar panels, let's say, and help to move 
power into one of these older neighborhoods, wow, what you 
could do for those communities. But nobody is thinking at a 
systemic level.
    So I just thank you for yielding. I just wanted to put that 
on the record.
    Mr. Honda. Yeah. Well, that would give a more comprehensive 
carbon footprint kind of an impact, if we do that. And I think 
historical designations is a problem also, so I think that is 
what you are talking about, that third point on the soft cost 
challenges that we need to look at. So perhaps we can figure 
out how we could work through that problem.
    My last piece on the weatherization was----
    Mr. Simpson. Quickly.
    Mr. Honda. Yes. Thank you, Mr. Chairman.
    The inclusion of solar in the weatherization program, 
because it is not part of the program. How can we work together 
where we can include solar in the weatherization program so it 
would impact also more temperate parts of country rather than 
just the high-impact neighborhoods, parts of our country?
    Mr. Danielson. Thank you, Congressman. I would actually 
like to follow up with you directly on that specific issue.
    As I mentioned, I know that solar thermal is on the 
weatherization approved list. And I do want to dig in to 
determine where we are in terms of photovoltaics and getting it 
onto that weatherization approved list.
    Mr. Honda. Thank you so much, Mr. Chairman.
    Mr. Simpson. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chairman.
    Thank you all for coming today.
    This is an important discussion for a variety of reasons, 
one of which, though, that we do not consider is that the 
externalities of traditional energy production--we talk about 
those not being embedded into the cost fully, in terms of 
environmental impact, but there are other considerations, as 
well, such as entanglement in foreign affairs, that make a 
compelling case that we should, as quickly as possible, as is 
feasible, have a market-driven policy to move toward 
sustainable energy, a more robust sustainable energy dynamic in 
our country, using renewables, that is undergirded by public 
policies that help correct or advance certain distortions that 
the market can't take of by itself. So, market-driven, certain 
public policies that assist that, in order for us to bridge to, 
again, a more robust integration of renewables into our 
portfolio.
    So what you do is important in a very broad sense. And I 
think the growing awareness of this in the country is real. The 
growing demand for it is real. The innovation in the 
marketplace in terms of reducing cost and making it competitive 
is real. And those are all good dynamics.
    In this regard, my question follows up a bit on what you 
just spoke with Mr. Honda about, but I would like just a broad 
overview of the current status of the wind/solar energy 
industries, battery technology, as well as the opportunity for 
homeowners to build out their own distributed energy systems.
    Now, one of the difficulties that utilities have--and it is 
very understandable--is they are carrying legacy cost from 40 
years. And 40 years ago, they were told, ``Build out your 
energy systems, delivering as much power as you can, as cheaply 
as possible, for economic development reasons.'' Now they are 
being told, ``Conserve as much power as you can, and integrate 
a renewable portfolio, but, yeah, you still have to pay your 
bills.'' So they are caught in this difficult transition 
period.
    So the more that we can, again, creatively recognize the 
legacy difficulty but have smart, market-driven policies that 
actually encourage the fullness of the development of 
renewables that meet a growing market demand, that meet the 
interest of American consumers, and that do untangle us from 
some of the externality problems that really are hard to 
quantify in terms of traditional energy production, 
particularly in foreign affairs--dependence on Middle Eastern 
oil, for instance--I think it provides the justification 
legitimacy not only for this conversation but for certain 
expenditures.
    So I am with you in spirit. We just need to, obviously, 
make sure we are using the taxpayer dollar wisely, not 
investing in things that, again, are foolhardy from a market 
perspective. But, nonetheless, when there are market dynamics 
that are broken or have gaps or are too long-term to be of 
benefit to fix this short-term problem of real externality 
costs, we need to move in those directions aggressively.
    Home-based distributed energy production using wind and 
solar, geothermal potentially, I think is one way to do that. 
But give me an overview of the status of these opportunities, 
if you will.
    Mr. Orr. Maybe I will start, and then Dave can----
    Mr. Fortenberry. And I also want to save time for a modular 
nuclear discussion.
    Mr. Orr. We can do that.
    Mr. Fortenberry. Okay.
    Mr. Orr. So there is actually a common thread among some of 
the comments here, and that is that we really need to be 
thinking about the way we supply energy services as a set of 
interlocked, complex systems.
    And part of that is the technology part, and I have to say 
that all of us engineers amongst us are probably happiest in 
that part of the sandbox. But part of it is the market 
structures and the policy arena.
    The market structures are changing as the mix of 
distributed and central generation changes over time. My own 
personal opinion is that we are not evolving to a system with 
no central generation; we are just evolving toward one with a 
lot more distributed generation----
    Mr. Fortenberry. Well, the two can be complementary, I 
think.
    Mr. Orr. Indeed.
    Mr. Fortenberry. And I think we are living with the 
residual of some----
    Mr. Orr. Yeah.
    Mr. Fortenberry [continuing]. Tension, but that is giving 
way to a more realistic future of complementarity, I think.
    Mr. Orr. Yeah. I----
    Mr. Fortenberry. And that ought to be the goal.
    Mr. Orr. I agree with that.
    But the market structure was put together with the central 
model in mind, and so, therefore, there has to be some 
evolution. It is deeply connected to the whole grid 
modernization part of it, and it is regulated in a relatively 
complex way across the country.
    So this is a problem, I think----
    Mr. Fortenberry. If I could interject right quick, I liked 
the phrase--I think you said it, Dr. Danielson-- ``the soft 
cost of implementing solar.'' There a variety of soft costs 
here that may not make sense, but because of the legacy of 
complexities----
    Mr. Orr. Yep.
    Mr. Fortenberry [continuing]. Particularly a regulatory 
model that is diverse, that creates this.
    Mr. Orr. That is a good way to say it.
    So that gives us a real challenge, and it is one that we 
can participate in in a very big way but don't control entirely 
because so much of this is regulated at the State and local 
level. So I----
    Mr. Fortenberry. But where are we in terms of a timeline to 
get to--I just laid out a certain set of goals.
    Mr. Orr. Uh-huh.
    Mr. Fortenberry. In terms of reaching those goals, what are 
we looking at?
    Mr. Orr. I think we are actually relatively early days in 
figuring out the details of that.
    Pat, maybe you are the right one to--Pat Hoffman has been 
engaged in a series of conversations with utilities and grid 
operators and others, various stakeholders, as we think about 
these market strictures going forward.
    Ms. Hoffman. It is an important discussion, and it is also 
a challenging discussion, as you appropriately brought up, in 
that we know that the grid is evolving, and I think we need to 
really create a set of parameters where we can have a 
transparent conversation on how the grid should evolve but 
allow for the incorporation of distributed energy resources and 
technologies at the customer level.
    What we are actually looking at is how do we merge both of 
those capabilities, having a strong distribution system but 
also allowing customers to advance with on-site generation 
technology.
    Mr. Fortenberry. Okay. So that is the academics. So where 
are we in terms of realistic implementation of this?
    Ms. Hoffman. So we----
    Mr. Fortenberry. Are there templates/models out there? And 
then where is the front end of the curve?
    Ms. Hoffman. So we----
    Mr. Fortenberry. I am sorry to cut you off. Our time is so 
limited. I just want to kind of get to the core of the problem.
    Ms. Hoffman. We have done several different demonstration 
programs where we looked at pilot projects where we have 
integrated solar with storage on the distribution system. We 
have our project in Vermont that brought 2 megawatts of solar 
with energy storage at an optimized distribution level. We----
    Mr. Fortenberry. At competitive market rates? Or does it--
there is a deep capital subsidy there, I would assume.
    Ms. Hoffman. The purpose was to increase the resiliency of 
the electric grid. So there was a value of having increased 
resiliency. The whole purpose of that was to support an 
emergency response facility at a local school, which they 
needed additional reliability. So you are going to have to--
there is a lot of----
    Mr. Fortenberry. There is a value beyond the market. I 
understand.
    Ms. Hoffman. There is a value beyond that. So there is 
progress being made.
    Mr. Fortenberry. I think you understand what I am driving 
at. Let's just take a typical homeowner who has this desire to 
place themselves in a smart grid situation, where they create 
on a typical city lot a distributed energy mechanism, backed up 
perhaps by a centralized utility structure, but maybe even put 
themselves in a position to make money, if you will, through 
small-scale wind, small-scale solar, some implementation of 
geothermal.
    A back-of-the-envelope analysis by me would suggest that 
that is a $30,000 to $50,000 upfront cost based upon a probable 
$3,000 utility bill a month, something like that. Is that a 
fair assessment of where we are?
    Mr. Orr. Gosh, the actual dollar numbers depend hugely on 
where you are in the country and what the----
    Mr. Fortenberry. I get that. But in terms of an average, a 
basic template model----
    Mr. Orr. But I can give you an example. I mean, I am one of 
those people, in my previous reincarnation, living in 
California, I actually make more electric power using a PV 
system than I use, but, you know, I need those grid services 
because my solar cells don't generate electricity at night. And 
so I should have to pay for that portion of the grid services.
    I think the California model has not yet quite gotten there 
in recognizing the balance of those costs. But I think 
utilities and--we all realize that we have to do this. So it is 
a really important conversation going forward, and it has to 
have all the stakeholders present in it.
    Ms. Hoffman. So, two things.
    We need to create a market and a distribution system that 
allows for better valuing of services. One of the things is how 
do you price differently at the distribution system. But, also, 
it is the conversation with the States, going back to the 
reliability conversation earlier, of how important it is to 
have that dialogue for grid modernization and how we are going 
to lead the evolution to that.
    Mr. Fortenberry. Are we 30 years out? Five years out? Ten 
years out? Depends on the segment of this you are looking at?
    Mr. Orr. Okay, so now I am going to engage in rank 
speculation.
    Thirty is too long. We will have made big progress. I would 
say we will have made quite significant progress over the next 
5 but will not have solved every problem that----
    Mr. Fortenberry. Okay. Thank you.
    Mr. Orr. That is my guess.
    Mr. Fortenberry. Right quick, the status of battery 
technology in the market, as well as small modular reactors?
    Mr. Orr. Yeah. So who wants to--batteries here quickly. 
Small modular here.
    Mr. Danielson. Thank you, Congressman. And if we don't get 
to it, we will take for the record your questions on wind and 
solar, as well.
    Mr. Fortenberry. Okay.
    Mr. Danielson. On batteries, we have seen tremendous cost 
reduction in the last few years. In 2008, we were at around 
$1,000 per kilowatt-hour. A kilowatt-hour can take you 3 or 4 
miles in an electric vehicle or can interact with the grid. 
Today, we have prototype cells that are working and showing 
that, if we took those into manufacturing, it would be about 
$300 per kilowatt-hour. So we have seen a 70 percent reduction 
there.
    Most of the production we are seeing in batteries is in the 
electric vehicle space right now. But we have significant 
capacity in this Nation. About 20 percent of global capacity 
for battery production is in the United States now.
    And then the other forms of grid storage particularly 
lithium ion batteries, which is what my office invests in, like 
flow batteries or other low-cost storage methods, are under the 
purview of the Office of Electricity and Pat Hoffman.
    Ms. Hoffman. So, with respect to flow batteries, there has 
been a significant reduction in flow battery costs. We have 
achieved about $350 per kilowatt-hour. And what we are going 
after is to continue to drive that cost down because we know 
the value that energy storage brings in integrating all those 
pieces of grid assets.
    Mr. Kotek. And then on the small modular reactor piece, we 
as a department had engaged in cost-shared arrangements with 
two companies to try and bring forward designs to the--for 
design certification. One of those companies had made a 
corporate decision to reduce their funding, so we are not 
investing in that one anymore, but the other company is in fact 
moving forward. Hope to have the design certification 
application to the Nuclear Regulatory Commission within the 
next 2 years.
    And then there are other companies, you know, that we are 
not working with that are also developing----
    Mr. Fortenberry. Are there other countries investing in 
this technology heavily?
    Mr. Kotek. Yeah.
    Mr. Fortenberry. Who?
    Mr. Kotek. We certainly have seen the Japanese with 
designs. China has had several interesting reactor concepts 
that I think could fit into SMR space. And there are probably 
others, as well, but those are the ones I know the most about.
    Mr. Fortenberry. Thank you, Mr. Chairman.
    Mr. Simpson. Mr.--Ms. Herrera Beutler.
    Ms. Herrera Beutler. I get that a lot. That is why I have 
two names, because then it is like, two names, it has to be a 
girl, right?
    Thank you all. Thank you, Mr. Chairman.
    I have a couple questions. And it is interesting, I think 
most of them will probably be directed at you, Dr. Danielson, 
as it relates to renewables.
    And so my district in southwest Washington runs along the 
Columbia River out to the Pacific, so you can guess my 
interest. The Columbia River Basin generates, according to 
PNNL, about 30 gigawatts of power and over 40 percent of U.S. 
hydroelectric generation. And I think our future challenge is 
going to be improve the current system, as we are having to 
renew the generation capacity in our dams, and still protect 
our wild salmon runs, still make sure our tribal treaty 
obligations are met--which we are doing well right now, by the 
way.
    Our salmon runs are at record numbers. Now we are trying to 
deal with the sea lions that are eating these amazing salmon 
that we as ratepayers in the region worked very hard to make 
sure are there. So it is an interesting dynamic. Nonetheless, 
it is a good problem to have.
    And I appreciate your ongoing support of hydroelectric 
technologies. I am concerned that--I am not sure, and hopefully 
you can speak to this, that the Department has put enough 
emphasis on next-gen hydro technologies.
    Because, you know, we hear all this talk about solar and 
wind, and Dr. Orr spoke to the need for firming our grid. And 
we have a lot of wind in our area, we have a lot of different 
renewables, but here is an amazing carbonless source of energy 
that--you know, we have a lot of lofty goals on the West Coast 
of people driving electric cars up and down I-5. We are going 
to need that--unless you only want to drive when the wind 
blows, we are going to need this firming power. And it is 
carbonless.
    So I guess what I would like to hear is the plan for next-
gen hydro and what you see 30 years from now. Why are we 
picking 30 years?
    Mr. Danielson. Thanks for that question.
    The hydropower part of our portfolio is becoming an 
increasingly important part of the portfolio for the reasons 
that you mentioned. And our work in looking at where we could 
take hydro for the Nation has really focused, first and 
foremost, in the last couple years on determining how much 
resource is out there in the next-gen opportunities.
    We have about 78 gigawatts, including a lot on the Columbia 
River Gorge. And we have done resource assessments that show 
that, if you look at existing unpowered dams around the country 
that don't have any power being generated from them, we could 
get another 12 gigawatts or so.
    We did a very comprehensive study on what we call new 
stream reach development that would be very low-impact, 
smaller, not-large-impoundment kind of development. And when 
you exclude a number of resources for various reasons, it gets 
you to about 65 gigawatts.
    And those are reasonably conservative estimates. We think 
that, with the right technology, the right new technologies and 
approaches, that we could double hydropower. And we have a 
vision to potentially do that around 2030.
    The big technology challenges that we see are, with these 
large impoundments, you make these very large generators that 
are one-off. They are actually designed for the application. 
And so you actually get an economy of scale from how big the 
equipment is. But when you start looking at these smaller 
opportunities, we need to develop modular technologies that can 
benefit from manufacturing economies of scale.
    And so that is a big focus for us, developing common 
platforms, modular new technologies that will be cost-
effective, in addition to developing new approaches to the 
civil works of redirecting the water that are much more cost-
effective, as well.
    Ms. Herrera Beutler. Very good. I appreciate that.
    I think we may stay with you, although it might jump over.
    So we have talked about an abundance of different types of 
technology. And I missed the first part; I assume we talked 
about fossil fuels. I wanted to switch a little bit to timber.
    Timber is prevalent in my district. In fact, the woody 
biomass from our forest--and I am not talking about clear-
cutting. Let's go on record. I am not talking about clear-
cutting. I am not talking about chipping whole Douglas firs. I 
am not talking about cutting down old growth. The amount of 
foliage and dead and dying timber that hits the floor that 
creates fuel for catastrophic wildfires, I am talking about 
that stuff, the woody biomass that we could--really, it is a 
twofer. You could keep our forests cleaner and more healthy and 
possibly generate energy.
    And I know that there are small-scale projects, but I 
wanted to see if there were any--we have had some challenges in 
the D.C. Area with explaining, kind of, the lifecycle of a tree 
to some folks who work in cubicles. I have invited a lot of 
people out to come tour our region, tour our forests. We love 
it. We don't want to get rid of our forests. We want to help 
take care of them, have them take care of the families, and, in 
turn, utilize and conserve and do the best job we possibly can 
in using some of this woody biomass, as a great example.
    I wanted to see if there were any projects or anything 
taking place at your level in this area.
    Mr. Danielson. Yeah. One exciting project I would point to 
is, through a partnership with the Department of Defense under 
the Defense Production Act, we are funding a pioneering project 
to turn waste wood into jet fuel, hydrocarbon jet fuel, using 
gasification technology.
    And with the DOD and the commercial aviation sector having 
interest in the off-take, these projects actually have off-take 
agreements with companies like Southwest Airlines and other 
companies.
    That is a 10-million-gallon-per-year plant----
    Ms. Herrera Beutler. So----
    Mr. Danielson. Yes, go ahead.
    Ms. Herrera Beutler. So can I add to that? Because this is 
one of the things I wanted to bring up.
    Is it true that they are prohibited from using the woody 
biomass off the Federal floors in Washington State and that has 
to be poplar-grown biomass? Or someone is growing plantations 
to meet that--because I love the idea, and when I first heard 
about this, I was ecstatic. Because, hey, we could reduce our 
catastrophic forest fires. And then I was told it is 
specifically prohibiting the use of the woody mass, the biomass 
on our Federal floors.
    Mr. Danielson. I am not familiar with that specific issue, 
but I ould like to take the question for the record to follow 
up.
    Ms. Herrera Beutler. I would love to.
    Mr. Danielson. Our national laboratories bid a pretty 
definitive study on how much biomass could be sustainably 
harvested while not affecting food or other industries. And it 
was about a billion tons a year of biomass, which could 
displace about a third of our oil usage.
    Within that report, we would have a number on biomass from 
sustainable forestry, and I would like to take that for the 
record and follow up and get you the right number.
    Ms. Herrera Beutler. I would like to. Because I was 
thrilled when I heard about this. So let's run that one down.
    Mr. Danielson. We will.
    Ms. Herrera Beutler. And that, Mr. Chairman--I guess, just 
in parting, I wanted to make sure that, as we are talking about 
modernization, keep those of us in the Northwest in your 
conversations and relationship as you move forward.
    Mr. Orr. Indeed.
    Ms. Herrera Beutler. That was, I guess, my parting shot. 
Thank you.
    Mr. Simpson. Thank you.
    Dr. Orr and Mr. Kotek, this year's request eliminates 
funding for the Integrated University Program, which supports 
nuclear energy engineering students with fellowships and 
scholarships and proposes a new account, the Nuclear Energy 
Traineeship, which supports students in the radiochemistry 
field of nuclear science.
    This subcommittee has tried to broaden this focus over the 
years by supporting programs to ensure the next generation of 
nuclear scientists and engineers across all fields of nuclear 
science. Why does the request specifically target students in 
radiochemistry instead of what the committee has been trying to 
do?
    And what other fields of study within the nuclear science 
are there that face a growing demand and an aging workforce? 
And can you assess the current state of nuclear science at the 
university level and where else support can occur?
    Mr. Orr. I will ask John to take that.
    Mr. Kotek. Yeah. Thank you, Mr. Chairman.
    So, specifically on the traineeships first, so we have 
identified radiochemistry as one of those areas where there 
aren't a lot of programs, there aren't a lot of students coming 
in. It is something we need in the laboratories as we look at 
separations technology, for example. So we are trying to focus 
on that.
    Looking forward for other traineeships, there are other 
areas. For example, some folks in the industry point to the 
need for seismic experts as another area that might be ripe for 
a traineeship-type program. So we are working internally right 
now to identify are there other specific areas where it would 
be important for us to bring a proposal for a traineeship 
program forward.
    Looking more broadly at the university support piece, one 
of the things that our office does in the nuclear energy 
program is we involve universities very heavily in each of the 
research areas that we have going. So, in this budget and in 
past budgets, we have had $50-million-plus going for 
university-based nuclear research programs. So we have an 
opportunity there for people who are pursuing whether it is 
bachelor's, master's, Ph.D. To work on challenges that are 
directly relevant to our program.
    So that has been the way that we have been supporting 
university-based nuclear engineering science education over the 
last couple of years.
    Mr. Simpson. I was--well, let me ask you, how close do you 
work with the NRC on this?
    Because several years ago--and I was asking Taunja when it 
was, because she has been here about as long as I have. I think 
it was when Mr. Hobson was chairman. I was wondering if it was 
when Visclosky was chairman. But we were a little PO'd at the 
Department and their lack of moving forward on a nuclear 
education and training program. We took it all and gave it to 
the NRC because they wanted it and they said they would do a 
good job, and apparently they are doing a good job.
    How closely do you work with them on this issue? Because 
having the workforce in the future is going to be a big issue. 
I mean, not only in radiochemistry and other things, but just 
having nuclear-trained welders is a big issue.
    Mr. Kotek. Do you want me to take that one?
    Mr. Orr. Go ahead.
    Mr. Kotek. Thank you, Mr. Chairman.
    So we are working with the NRC. For example, I believe it 
was this committee asked for a report looking at workforce 
issues next year and asked the NRC to take the lead on that. So 
my staff is working with the NRC now to be responsive to that 
request. I have to say I am not familiar with the details of 
those discussions thus far, so----
    Mr. Simpson. Okay.
    Mr. Kotek [continuing]. We will be in a position to follow 
up with you on that.
    Mr. Simpson. As long as you are aware of it----
    Mr. Kotek. I am aware.
    Mr. Simpson [continuing]. And this committee's desire to 
make sure that we have the trained nuclear experts in the 
future when that time comes.
    Mr. Kotek. Thank you.
    Mr. Simpson. Mr. Kotek, the request for the Advanced 
Reactor Concepts program decreases funding from last year's 
level of $23 million to account--or decreases it by $23 million 
to account for a transfer made from the Nuclear Energy Enabling 
Technologies program. The transfer concerns studies on hybrid 
energy systems performed in concert with EERE.
    It is difficult to view the difference in funding with the 
transfer, and I wanted to dig a little deeper. Can you explain 
why these funds were moved and describe the work your office 
performed with Secretary Danielson?
    And the transfer placed funds within the crosscutting 
technologies account of the Nuclear Energy Enabling 
Technologies program. Do you have plans to collaborate with 
EERE on future studies?
    Mr. Kotek. Yeah, certainly. I think there are several of us 
who can talk about the--certainly, the supercritical 
CO2 project. And that involves the----
    Mr. Simpson. Right.
    Mr. Kotek [continuing]. Fossil Energy Office, as well. But 
that----
    Mr. Simpson. You were the lead agency on that previously, 
but under this budget it is proposed to be----
    Mr. Kotek. Yeah. Now it is in the Fossil Energy----
    Mr. Orr. Maybe I could just say a word, and then maybe 
Chris will chime in, as well.
    The good news about that technology option is that, if we 
can solve all the issues that have to be solved, it has 
application across a variety of areas. The nuclear area is one, 
but geothermal is another, and coal and even potentially 
natural gas all could be the thermal energy resource that gets 
turned into electric power.
    The judgment in looking at where the potential for earliest 
applications might be, it seemed likeliest to us that the coal 
applications had the greatest potential for early application. 
But the problems that we have to solve are really common across 
all of those areas, so it made sense to move that program over 
but to keep the nuclear energy group connected to it so that we 
work on the problems that they are interested in at the same 
time.
    Mr. Simpson. Okay.
    Mr. Smith. I will just add very briefly that the fiscal 
year 2015 omnibus bill specifically pointed out that cycles 
above 500 degrees was the area in which you get the greatest 
benefit from supercritical CO2. Those primarily lie 
in fossil applications, and so that is one of the drivers 
behind some of the observations that Dr. Orr has made.
    So this shift is consistent with the language that we saw 
in the 2015 omnibus bill.
    Mr. Simpson. Okay.
    Any others?
    Mr. Danielson. On the specific issue of the collaboration 
between nuclear and EERE on hybrid energy systems, in fiscal 
year 2015 we got $2 million at EERE that we are going to be 
investing into analysis to identify and develop a multiyear 
research agenda that next year we would be putting forward the 
best ideas that have come out of our analysis and roadmapping. 
The vision being thinking of nuclear heat and renewable heat or 
electricity in also a refinery context. What is the best use of 
that primary energy? Do you build an industrial park that can 
make hydrogen or use the heat for industrial processes?
    We are in the, kind of, ideation and discovery phase of 
that this year. And in 2016 and then in 2017, I would expect we 
would come forward with a research agenda.
    Mr. Simpson. Okay.
    Mr. Kotek. And then, Mr. Chairman, just specifically on the 
nuclear energy applications, back looking at the supercritical 
CO2 question, we have some funds in our request for 
a collaborative effort across our offices. And then we have I 
think it is $3.3 million in the request to look at specific 
issues associated with coupling one of those energy systems to 
the back end of a nuclear reactor. So we are making sure we 
keep active in both areas.
    Mr. Simpson. I will never criticize you for working across 
and between different offices. In fact, I have said we need 
more of that in the future.
    Mr. Orr. Yeah. The good news is that I have a very good 
team of colleagues here interested in doing exactly that.
    Mr. Simpson. Good.
    Mr. Kotek, the Advanced Test Reactor at the Idaho National 
Lab serves as an important role for the health of our nuclear 
Navy as well as for civilian nuclear energy research and 
development. The ATR is an old reactor but is still going 
strong day-in and day-out.
    What is the general health of the reactor, and has it been 
adequately funded to provide maintenance and upgrade necessary 
for it to last? And what projects and upgrades to the ATR are 
still outstanding that were not funded in this year's budget 
request?
    Mr. Kotek. Thank you, Mr. Chairman. I can answer that.
    Generally, right now, the ATR is an essential piece of 
equipment for us. And, of course, when I was at DOE Idaho, we 
spent a lot of time focused on maintaining the safe long-term 
operation of that facility. And let's face it, machines like 
that are not cheap to replace and may not be replaceable, and 
so we are really committed to ensuring the long-term safe 
operation of that facility.
    What we have done is we have asked the contractor to start 
by looking at just that question: What are those investments we 
need to make to ensure the long-term health of the facility? 
They have created a report that has been submitted to my office 
and the Office of Naval Reactors.
    The Office of Naval Reactors and my staff are going to sit 
down here, I think next month, to talk through, okay, how do we 
ensure that these funding requirements are met going forward. 
So that is something that is going to be----
    Mr. Simpson. So you will discuss the share of----
    Mr. Kotek. Yeah, how we do that going forward.
    Mr. Simpson [continuing]. How much Naval Reactors pays for 
it and how much civilian pays for it----
    Mr. Kotek. Yeah.
    Mr. Simpson [continuing]. And so forth?
    Mr. Kotek. Right.
    Mr. Simpson. Okay.
    Mr. Kotek. And we have been making investments, for 
example, in the uninterruptible power supply system out there. 
So there are things we have been trying to do each year through 
the budget to ensure the long-term safe operation of the 
facility, and that will remain a focus of ours.
    Mr. Simpson. This year's budget request includes an 
additional $22 million for the Idaho safeguards and securities, 
which provides critical security operations for the Idaho 
National Lab. I understand those additional funds will finally 
allow you to support protective forces staffing levels 
consistent with the approved site protection plan and also to 
address the backlog of physical security systems.
    Can you discuss how this request supports the Idaho 
National Lab? And what will be the biggest cost drivers of the 
Idaho National Lab security infrastructure moving forward?
    Mr. Kotek. Yes, Mr. Chairman. And you correctly point out 
that part of it is manpower-driven. So we are adding staff in 
2015, and so we will have a full year of costs for those people 
in 2016. So that is part of the reason for the increase.
    We also need to make some improvements at the Materials and 
Fuels Complex to the PIDAS, the intrusion detection system, and 
to the central alarm system there. So that is a part of it.
    And then there is another piece that is tied to 
cybersecurity.
    So those are the big drivers for the increases here.
    Mr. Simpson. Okay. Thank you.
    And, Ms. Hoffman, we talked about this a little bit 
yesterday, and so I would like to just have it for the record. 
I have been reading several books, or maybe not several, but a 
few books on the threat to our grid and the infrastructure of 
our grid from EMPs and solar flares, those kind of things. And 
maybe that is dangerous to read those books, I don't know, but 
it is a potential risk out there.
    And we discussed this yesterday and what are we doing as a 
Federal Government and why aren't the private utilities that 
own this infrastructure more concerned about it. And do you 
want to get into that discussion a little bit?
    Ms. Hoffman. Sure. Thank you very much.
    You have brought up a set of emerging challenges that are 
facing the electric grid. EMP, as we have discussed, is an 
emerging challenge. We know that threat actors are getting more 
sophisticated on the cybersecurity side as well as on the 
physical security side.
    And what we really need to do, as we look at grid 
modernization and evolution in securing the grid, is put into 
perspective what are some of the near-term challenges that we 
have to address now within the electric infrastructure--
hardening, mitigation, continuous monitoring--and then provide 
some joint public-private partnership in some of the riskier 
areas, some of the things that are a little bit beyond the 
ability of the utilities to truly understand the impact and 
consequences and the magnitude of the threat in those areas.
    The public-private partnership with utilities, I think, 
will be one that will help address some of those advancing 
threats.
    Mr. Simpson. Thank you.
    I have one more question I will ask before I let the others 
go.
    Dr. Danielson, as someone who came from ARPA-E, you are 
well aware of the successes that an active project management 
approach has created within the program. EERE has had its share 
of management difficulties in the past, and I want to give you 
an opportunity to explain how you have changed some of EERE's 
management problems and implemented a strategic plan for EERE's 
future successes. Can you talk us through the effort you have 
made to improve the office and why you felt you needed to make 
these changes?
    In order of implementing an active project management 
approach to programs, there must be mechanisms in place to 
track progress and terminate projects that are underperforming. 
What mechanisms are you using so that you can cancel 
underperforming projects and reclaim unspent funds? And what 
have been the results of your project management 
implementations?
    Mr. Danielson. Thank you, Mr. Chairman.
    You know, we have put in place a number of important new 
mechanisms under the active project management banner.
    One thing we are doing across the whole portfolio is every 
2 years we get an external set of experts to provide peer 
review, commentary, and scoring on our whole portfolio to give 
us a feel for which projects are having the greatest impact and 
which are potentially not providing the impact for the 
taxpayer.
    And then we put in place this active project management 
approach. We are no longer doing grants. We are only doing 
cooperative agreements, which allows us to have a much more 
substantial interaction with our performers.
    And we are also putting in place annual go/no-go 
milestones, where when performers are not able to hit those and 
don't show promise to deliver value on the taxpayer investment, 
we terminate or redirect those projects. And since we have 
implemented this over the last year and a half or so, more than 
68 projects and more than $100 million has been redirected from 
projects that we thought weren't performing to the standard 
that we would expect into more high-impact projects.
    Those are the kind of things we are putting in place in 
order to make sure that our performers are delivering as much 
value for the taxpayer investment as possible.
    Mr. Simpson. Thank you.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Secretary Hoffman, I wanted to ask you, do you maintain a 
ranking at the Department relative to States and their 
leadership in grid modernization?
    You mentioned Vermont earlier in your testimony. If I were 
to ask you, where does Ohio rank in terms of grid 
modernization, where would it rank compared to Vermont, for 
example?
    Ms. Hoffman. So I don't have a ranking with respect to 
States in comparison of grid modernization. Each State is 
developing differently with respect to how the grid is 
evolving, based on whether they participate in a market like 
PJM's market or whether they are in a vertically integrated 
area.
    But I will tell you that the basic principles of what we 
are trying to drive is better situational awareness through the 
deployment of sensors on the system and the ability of the grid 
to integrate distributed energy resources but provide improved 
reliability.
    I don't have a ranking that I could give for one State to 
another State with respect to how well they are doing because 
each State has its own goals and objectives.
    Ms. Kaptur. Hmm. Does that serve the national interest?
    Ms. Hoffman. It is part of, unfortunately, the 
infrastructure of the United States where the grid has evolved 
differently and whether you are in a competitive market region 
in the United States or in a noncompetitive market, you know, a 
bilateral-agreement part of the United States grid. It is part 
of a structure we have that is making grid modernization very 
challenging, and it is making the urgency of having the 
conversation at a national level even more important so we can 
make sure that States such as Ohio interface very well with 
Pennsylvania, and we look at the seams issues that are 
occurring between grid operators.
    So it is imperative that we look at grid modernization 
holistically as a national effort. And then, as the States make 
decisions--New York is doing their revitalization of the 
energy, a vision in New York, how all those pieces fit 
together.
    Ms. Kaptur. Well, I would think--I can't make you do 
anything, but I would urge you to think about how one would 
measure State performance so we could make a judgment as 
Members. That would be very helpful to Members like myself.
    Mr. Chairman, you concur there?
    Mr. Simpson. You can make them do that, yeah.
    Ms. Kaptur. All right. I like that idea. It gives us policy 
direction, and that is very helpful to us.
    So I thank you. I thank you for answering that question.
    I had another question on weatherization money, and that 
is--perhaps, Dr. Danielson, you can answer this. Do you know if 
all that money is disbursed to the States? Or is a percentage 
of it able to be awarded to consortia eligible to 
operationalize the funding? Is it all to the States?
    Mr. Danielson. Yes, we have about 56 State-like entities 
that then distribute it to about 8,000 sub-entities all around 
the country that are already well defined today.
    Ms. Kaptur. All right.
    I was going to move to Under Secretary Orr next.
    On March 4, the Department issued a $12.5 million funding 
opportunity announcement for a new technical track under the 
U.S.-China Clean Energy Research Center and to promote 
collaborative efforts to help ensure energy, water, and 
environmental security.
    My question really is, if that whole effort exists with 
China but I wanted a similar effort for Europe, Ukraine, would 
new legislative authority be required for that, to get the 
Department to put as heavy a focus on Europe and Ukraine as it 
is currently on China? Do you know if new legislative authority 
is required for that, or do you have it under existing 
authority?
    Mr. Orr. I do not know the answer to that question, and I 
will be happy to take it for the record and get back to you.
    Ms. Kaptur. All right. I thank you very much.
    I wanted to ask follow-on questions on solar manufacturing.
    Dr. Danielson, you could tell us how we are doing in the 
area of solar? And what led manufacturing of solar to shift so 
dramatically overseas? And what is your plan for increasing 
manufacturing efforts here in the United States?
    Mr. Danielson. Thank you for that question.
    As you know, I think it was maybe 20 years ago, when the 
solar market was relatively small, we had the majority of the 
cell and module manufacturing here in the United States, but 
over the last 5 or 6 years, especially a couple years ago, 
significant government investments in China, both from the 
Federal level and from the regional level, provided subsidies 
for the industry to scale there. That drove a lot of cost 
reduction, but it also made for a difficult environment for 
U.S. manufacturers. There have been trade cases that Commerce 
has put forward that were informed by some of our analysis 
around the basic cost structure of U.S. manufacturing versus 
Chinese manufacturing.
    In addition to that, the growth of the market here which 
has occurred in recent years has begun to drive--that in 
addition to the advanced technologies we have been funding over 
the last 10, 15 years is resulting in a solar comeback that I 
mentioned earlier, with a doubling of capacity expected by 
2017. That is cell and module capacity.
    That includes First Solar expanding in Ohio, a company that 
we funded the basic technology at the National Renewable Energy 
Lab decades ago----
    Ms. Kaptur. 1987 forward.
    Mr. Danielson. That is right.
    Ms. Kaptur. I was here--I was there.
    Mr. Danielson. It is a truly differentiated technology and 
a great American success story.
    And then, in upstate New York, SolarCity has acquired a 
company that had advanced silicon solar high-efficiency 
technology called Silevo that we had supported in its early 
days of research and development to put a gigawatt-scale 
factory.
    And we are also seeing--I mentioned the expansion of 
Suniva, which is a high-efficiency solar company that spun out 
of a lot of our early R&D at Georgia Tech, is now expanding its 
new plant, 250 megawatts, in Michigan, creating more than 300 
jobs.
    And then SolarWorld in Oregon is expanding its production, 
as well.
    One thing I want to point out is that just looking at the 
cell and module manufacturing market share doesn't show the 
whole picture. And so what you find is that, even when a very 
large fracture of modules are being made in--cell and modules--
in China, oftentimes the really high-value component materials 
like films that can prevent water from getting in or other 
high-value components like micro-inverters are being 
manufactured in the United States. And so, if you look at the 
full value chain, which is something we are beginning to track 
much more carefully, the United States has been doing a lot 
better than the cell and module numbers would indicate.
    And so I would say that we are seeing a strong comeback in 
the United States because of advanced technology innovation and 
growing market demand here in the United States.
    Ms. Kaptur. I wanted to say to the chairman, I don't know 
if you represent one of these companies, but it is so 
unbelievable to, in one's lifetime, see a technology come 
forward and to be a part of the founding, meeting the founders 
and scientists that are involved locally, who are reaching for 
something that is--they can't see exactly where it is going. 
And to actually be part of the invention process and then to 
see a company created and then, all of a sudden, hundreds of 
jobs and then thousands of jobs, it is unbelievable. I am 
just--I feel very fortunate--and to see a new technology.
    And I want to do everything I can as a Member to continue 
helping them grow. Obviously, I support the budget in this 
regard. It doesn't seem like enough, with all the trade 
problems and the counterfeiting and the intellectual property 
and all the others pieces. But I just--it is unbelievable what 
this is providing the world with. So, obviously, I support your 
efforts here and always look for ideas for how to be more 
supportive. And I thank you for your leadership.
    Just to put on the record, one of the companies that Dr. 
Danielson mentioned is hiring several hundred more people in 
the State of Ohio, where, of course, we need more jobs, but 
they are hiring three times that many in Malaysia. And I am 
glad--I am glad that they are expanding globally, but I say to 
myself, how do I get more of those jobs in Ohio? If you were 
elected by constituents in Ohio, you would ask yourself the 
same question. And I see this happening, and I want more of 
that production to be in the United States.
    How is it, Doctor, that Buffalo--I guess they are getting a 
utility-size field built in the State of New York? Is that 
true?
    Mr. Danielson. They are actually building a gigawatt-scale-
per-year manufacturing facility.
    Ms. Kaptur. Oh, a manufacturing facility.
    Mr. Danielson. It is about the number of solar modules that 
will be produced a year.
    Ms. Kaptur. Okay. So that is manufacturing. All right.
    I want to completely change direction here for a second. On 
coal, I was very happy to see the President's budget include 
investing in coal communities. And those that are heavily 
impacted by what is happening in that industry--I know the 
chairman of our full committee in interested in this.
    Does this also include a focus on communities and places 
where coal-fired utilities have closed down, or just where coal 
is mined?
    Because I have to believe Ohio would be at the top of the 
list of States where coal-fired utilities have shut down. And 
in my own area, for example, the loss of coal-fired utility 
production has borne down very heavily on school systems that 
can't adjust that quickly.
    And I am wondering if the program will include technical 
assistance to help these kinds of communities adjust more 
quickly to new energy production or if you will just let them 
languish out at sea.
    Mr. Smith. Well, thank you for the question. So you are 
referring to the POWER Plus plan----
    Ms. Kaptur. Yes.
    Mr. Smith [continuing]. Which, actually, is not part of the 
Office of Fossil Energy. It is not----
    Ms. Kaptur. Oh.
    Mr. Smith [continuing]. A plan that is managed by our 
department, but it is part of this budget that was released by 
the President. That does have a focus on both communities in 
which coal is produced and also communities where coal is being 
utilized in power plants.
    So there is a number of factors to that program. I would be 
happy to answer for the record or provide more information on 
the POWER Plus plan, but that isn't part of my research and 
development budget.
    Ms. Kaptur. Do you think you have nothing to offer them, 
then? I notice they have the Appalachian Regional Commission as 
a part of it, the Department of Labor. But, technically 
speaking, your division doesn't really have anything to 
contribute to that?
    Mr. Smith. We don't manage the budget. We certainly have a 
lot to contribute in terms of understanding the playing field, 
understanding what technologies are being developed, 
understanding the future of ensuring that all parts of 
domestically produced energy are part of the clean energy 
economy of the future.
    So we do work with all those agencies that are working at 
rolling out those plans, but, again, that is not part of our 
appropriated budget.
    Ms. Kaptur. Does anyone else on the panel wish to comment 
on this? No?
    Okay. Let me switch to biofuels for a second from algae.
    Dr. Danielson, a new focus was charged to the Algae and 
Advanced Feedstocks Program after major barriers to algal 
biofuel commercialization were identified in public workshops 
held by your office in 2014. Can you briefly explain what those 
barriers are and how this affected the program's focus? And, 
also, what is the future viability of algal biofuel 
commercialization?
    I come from Lake Erie, where algal blooms were the reason 
for the shutdown of a major water system at Toledo for 3 days 
to people. Over a half a million people were impacted. Algal 
blooms, lots of algae is a problem for us. Can we turn it into 
a opportunity?
    Mr. Danielson. Algae is an important part of our long-term 
biofuels roadmap. Our research, development, and demonstration 
focus in our biofuels program is on converting sustainably 
produced biomass into drop-in hydrocarbons--bio gasoline, bio 
jet, biodiesel, actual diesel fuel. And we are looking at a 
number of different pathways today. Some of them will work; 
some of them ultimately won't get to market.
    However, because of the variety of feedstocks we have in 
the country, we also are going to need a number of pathways in 
the end, regardless, to get to the kind of production goals 
that will make a difference. We have biochemical, using biology 
or organisms to convert material into fuels. And we also have 
thermochemical approaches, which basically borrow from the oil 
and gas industry and the gasification industry to burn and then 
break down and reconstitute fuels.
    The 2017-to-2022 timeframe is when we expect those fuels to 
begin to be cost-competitive. But we see algae as potentially 
being a much greater scale, because you can grow algae in a lot 
of different places.
    Ms. Kaptur. Well, Lake Erie knows how to do that real well.
    Mr. Danielson. Right. It is a longer-term pathway, but it 
could scale much larger in terms of its volume. 2025-plus is 
the timeframe.
    The big challenge we have seen is it is costly to grow the 
algae in ponds or in photobioreactors, and so there is a lot of 
research being put into making that more productive, increasing 
the amount of the conversion efficiency of algae, essentially, 
of sunlight and CO2 into oil in their bodies. 
Secondly, you have to actually dry them, which costs you 
energy. And then you have to basically cut open the algae body 
and get the oil out, and you have to process the oil.
    We have been, over the last few years, tackling many of 
those challenges. One thing I am excited to let you know about 
is that the Pacific Northwest National Laboratory has developed 
a new approach called hydrothermal liquefaction, just in the 
last couple of years, where you use catalysts to take the whole 
wet algae soup or bodies and convert that into hydrocarbon-like 
material, which could be much more cost-effective much more 
quickly. That is being commercialized by a company called 
Genifuel at the pilot scale today.
    And so I think we are making a lot of progress on algae, 
and we have had some recent breakthroughs that might even pull 
that roadmap up a little bit.
    Ms. Kaptur. How do I get some of that expertise or at least 
have a briefing of what is happening in the algal markets and 
focus it on the Great Lakes and all of our challenges with 
algae, which are significant? How do we find the experts to 
kind of home in on what is happening there?
    Mr. Danielson. Within my office and within the national 
laboratories, we have a tremendous set of expertise. And we 
would be happy to come and brief you at any time.
    Ms. Kaptur. All right.
    Thank you, Mr. Chairman. Thank you.
    Mr. Simpson. If we could, Mr. Valadao has arrived, and I 
would like to give him a chance.
    Mr. Valadao.
    Mr. Valadao. Thank you, Mr. Chairman.
    And I apologize for being a little late. They like to 
schedule all these committees at the same time. Appreciate all 
of you taking some time for me today, or for us today.
    But I wanted to touch a little bit on cybersecurity, and my 
question is for Ms. Hoffman.
    The energy sector's critical infrastructure has been 
subjected to a dramatic increase in focused cyber attacks in 
recent years. Your office has the responsibility of protecting 
the electricity grid and other energy infrastructure against 
the ever-present threats of a cyber attack.
    Can you talk us through the state of the energy sector's 
cybersecurity? What are the existing capabilities? Who are the 
bad actors? And how do energy control systems differ from 
normal IT systems in the event of a cyber incident?
    I have some more questions after that, so----
    Ms. Hoffman. Thank you. There were a lot of questions 
involved in that. I appreciate it. Cybersecurity is an 
important topic, and I think we all need to engage in that 
topic in a very transparent way.
    For cybersecurity, we have developed a strategy with 
industry that includes, first of all, engagement with the CEOs. 
We know we need to make a change and a difference, whether we 
are talking grid modernization or cybersecurity, but it takes 
leadership within the industry to make that change. So we have 
been engaging directly with the CEOs to understand, number one, 
where the cybersecurity issues are, where the threats are, and 
where the opportunities are for mitigation and response.
    In our strategy, we have been working with the Electricity 
Sector Information Sharing and Analysis Center we created in 
partnership with NERC, an information-sharing center, because, 
first of all, you need to figure out what is happening on the 
system and to be able to share that information with the grid 
operators. So they have over 1,900 NERC members of that system, 
of that information-sharing collaboration, and now they are 
also bringing forth other entities that participate in the 
electric grid as part of that information-sharing and analysis 
center.
    What we have also been doing is developing tools. These 
tools identify where some of the vulnerabilities are on the 
system but also what is actually happening on the system. 
Everybody said, oh, I am concerned about cybersecurity. But the 
unknown was really driving some frustration, I would say, from 
Congress and from other folks on exactly how secure are we. So 
now what we have developed is a set of tools where the grid 
operators are taking a harder look at their system and being 
able to understand in greater detail what is happening from 
that perspective.
    With respect to the actors, they are all over the place. 
Utility operators get probes every day. They get probes on 
their IT and their OT systems. And, really, the difference is 
information technology is what runs your business systems. It 
is what is in your computer as you look at your computer that 
is sitting on your desktop. The operational, or OT systems are 
really looking at controls of devices within the electric grid. 
So things that take action are what OT system are.
    And there is a greater concern over a bad actor being able 
to get into the operational technology system and being able to 
have it take action. Our research program, which is $52 
million, is really focused on how do we develop technologies to 
protect the operational environment within the electric grid.
    Mr. Valadao. Is our infrastructure currently capable of 
surviving a major cyber incident while sustaining critical 
functions?
    And, again, I know this is back to that same question of 
who are the bad actors, but what are the tools that we see bad 
actors using here in the future to come after our 
infrastructure?
    Ms. Hoffman. Our goal is to have the electric grid survive 
an attack while it is going on within this sector. The tools 
and most of the common technologies or capabilities that the 
bad actors are using are malware that is for sale on the 
Internet. They are looking at spear phishing and whale 
phishing, going after passwords and codes.
    And so it is everything that you are seeing in other 
sectors, you are seeing the same thing that is occurring in the 
electric sector. And so we need to continue to develop solution 
sets to mitigate that.
    Mr. Valadao. As far as developing technology at speed of 
computers--I mean, we are always talking about the next fastest 
computer--how much of a role does the speed of a computer play 
on a person's ability to hack our system?
    Ms. Hoffman. I think it is the networking and speed of the 
computer, its accessibility, that is in addition to how fast.
    So, from a speed-of-a-computer point of view, the electric 
grid has fixed communication, so in some ways there is an 
advantage within the electric grid compared to other sectors, 
because we actually can look at what is being asked from one 
point to another point, what action is being taken, so we 
understand that a little better.
    But timeliness of sharing of the information, for machine-
to-machine sharing of information, is absolutely critical if we 
are going to stay ahead of the bad actors.
    Mr. Valadao. All right.
    And how can this committee be helpful in providing you the 
resources you need to develop and implement new technologies to 
keep our energy infrastructure secure?
    Ms. Hoffman. Support of the 2016 request would be first and 
foremost what I would ask, but also to continue to support the 
strategy which we are developing.
    And the strategy really has several components to it. It is 
understanding what is happening on the system. It is building 
the information-sharing capabilities, the ability to protect 
the information but be able to share the information between 
the Federal Government and grid operators; then the ability to 
develop mitigating solutions, new technologies.
    And what we are requesting in the 2016 budget includes 
forensics capabilities, where as a new piece of malware is 
discovered--and there is always some new, attack vector that is 
coming out--we want to be able to analyze it quickly, have the 
industry be the first to be able to say, this is how we are 
going to respond to it.
    Mr. Valadao. All right. Well, thank you.
    Thank you, Mr. Chair.
    Mr. Simpson. Thank you.
    Ms. Kaptur, did you have anything else?
    Ms. Kaptur. I do.
    Mr. Simpson. Okay. Go ahead.
    Ms. Kaptur. Thank you, Mr. Chairman.
    I wanted to ask Under Secretary Orr or Dr. Danielson, the 
national labs are a tremendous asset, particularly to those 
regions of the country lucky enough to have one. How do we 
leverage the labs to provide benefit to those areas of our 
country where that expertise is not on site, particularly those 
areas like my own where over half of the manufacturing jobs 
have been lost for various reasons--to outsourcing, to 
technology--and they have no labs on site?
    What can be done to adjust and identify those regions that 
have had serious economic dislocation?
    Mr. Orr. Well, it is obviously an important question. The 
labs are national labs because their focus is national. So, for 
example, you are not so far from Argonne National Lab, which 
has very wide-ranging capabilities across the energy space and 
has expertise that applies every bit as much in Ohio as it does 
in Illinois. And our goal really is to try to make sure that we 
make available the expertise that exists in the national labs, 
really to work on problems across the whole country.
    The Secretary has taken action in recent times to build a 
much more strategic relationship amongst the national labs. At 
a meeting recently of the national labs' directors commission, 
there was a long discussion of how do we take the abilities of 
these national labs to do emergency response in their own areas 
and surrounding States and make that capability available to 
folks that might need it, that it is really an opportunity to 
use that expertise across the area.
    In the technology transition, technology transfer area, all 
of these labs work with companies that can be anywhere in the 
country. So we try very hard not to make them only be of 
parochial interest in a particular area but to supply their 
expertise to the Nation as a whole.
    Ms. Kaptur. I am glad to hear that, Under Secretary.
    I am going to send you a map of where in our country we 
have had this job washout. Maybe it already exists at the 
Department of Energy. And then I think it would be very 
interesting for you then to see where the labs are located and 
to think about connectivity----
    Mr. Orr. Uh-huh.
    Ms. Kaptur [continuing]. In a more direct way.
    I wanted to ask a question. Mr. Smith, in the last several 
budget requests, the administration has reduced funding for 
technologies that increase the efficiency of coal-powered 
plants. Could you please tell us what your office is doing to 
increase coal utilization and the efficiency of our existing 
power plants?
    Mr. Smith. Thank you very much for the question.
    So, indeed, as we have looked at prioritization for the 
budget for the Office of Clean Coal, we prioritized on two 
lines, which has been R&D on capture technologies to capture 
CO2 and technologies for long-term safe storage, 
either in saline aquifers or in enhanced oil recovery 
applications. So those are the two areas in which we have 
focused in terms of our budget request.
    We do still have requests in the areas of efficiency, of 
control systems, of materials for supercritical processes. So 
we do still do research and development, and we still have, as 
part of this request, lines that look at efficiencies of 
plants, using less fuel in plants, which also has the benefit 
of making them more efficient, more effective, more cost-
effective, and reducing emissions.
    But, again, you know, as we look at our prioritization, we 
have focused most of our efforts on the challenge of reducing 
the cost of capturing CO2 and understanding issues around long-
term storage, either in saline aquifers or in enhanced oil 
recovery applications.
    Ms. Kaptur. Thank you.
    I will look forward to your reply, also, on the letter I 
requested on three energy options for Europe and Ukraine and 
the role of coal in all of that.
    Mr. Smith. Indeed, we will have some thoughts on that.
    Ms. Kaptur. Thank you.
    Dr. Orr and Dr. Danielson, I wanted to ask you about clean 
energy manufacturing. And as part of the White House's 
initiative on manufacturing, there were the first CEMI 
institutes funded in 2012, and I am wondering if you have had 
time to assess their progress.
    How has the program enhanced U.S. competitiveness in clean 
energy? And do you think that their goal of being self-
sustaining within 5 years is realistic?
    Mr. Orr. So let me say a word, too, and then Dave can 
follow up.
    But there is always a bit of an induction period as you get 
these things going. And so the earliest ones have only been in 
action for a pretty short time, so I think it is too early to 
have a quantitative, you know, impact kind of assessment.
    But we can already see that there is substantial potential 
for impact. The additive manufacturing work that we talked 
about, the--Dave will say more in a moment about the new Wide 
Band Gap Semiconductor Institute. All of those have potential 
for really very large impact. And we are committed to making 
sure that they are managed well to do exactly that.
    Dave.
    Mr. Danielson. Yes.
    As Under Secretary Orr said earlier, we have done a few 
experiments in these new consortium models in recent years, and 
I think we have learned a lot as an organization. And Under 
Secretary Orr pointed out some of the key things around a very 
strong, well-qualified leader, very well-defined goals, active 
project management with empowerment. Those kinds of principles 
have really permeated into the way we are structuring our 
consortia going forward.
    And in terms of the manufacturing innovation institutes, 
the first one that we funded directly out of appropriations on 
our own is led by North Carolina State University on next-
generation power electronics. It just got up and running at the 
very beginning of the year. We have a great leader in place, 
General Nick Justice, who was the head of Army Research, 
Development, and Engineering Command prior to joining us in 
this leadership role.
    But what gives me confidence that these are going to be 
successful is what I have seen with our prototype manufacturing 
innovation institutes the Manufacturing Demonstration Facility 
at Oak Ridge National Lab and, in some sense, the Critical 
Materials Institute out of Ames, Iowa. And we have seen great 
results in both of those consortia.
    In the Manufacturing Demonstration Facility, we mentioned 
that we saw partnership between Cincinnati Inc. in Ohio, an 
equipment manufacturer, and Local Motors, an innovative company 
in Arizona, resulting in within 6 months start to finish the 
first-ever 3D-printed car, so a pioneering innovation result.
    And, at the same time, we are seeing that Manufacturing 
Demonstration Facility around 3D printing is a magnet for new 
manufacturing and jobs. A Canadian company called CVMR that 
produces advanced metal powders moved its headquarters--they 
announced just last week they are moving their headquarters 
from Toronto to Oak Ridge, Tennessee, where they are investing 
more than $300 million in manufacturing, and they are going to 
create more than 600 jobs.
    We have seen similar commercially relevant innovation in 
the Critical Materials Institute, as well, with three 
technologies already in the first year and a half getting into 
the hands of industry for testing.
    I think that we have learned a lot about how to run these 
things and how to structure them. Although we are just 
beginning with the manufacturing innovation institutes, I think 
if we are going to achieve what we have done with the MDF and 
with the Critical Materials Institute, we are going to see some 
tremendous impacts for the Nation.
    Ms. Kaptur. Do those critical materials include strategic 
metals?
    Mr. Danielson. Absolutely.
    The major issue with the Critical Materials Institute, 
which is one of the energy innovation hubs, is to diversify 
supply of critical materials to replace or eliminate the need 
for them, and to recycle them better. We have already developed 
a new technology that can separate out rare earths from each 
other twice as efficiently as has been done historically, which 
could reduce the size and cost of a separations plant by more 
than a factor of two.
    We have also seen major innovations in efficient lighting 
phosphors that have rare earths in them. We have developed 
technologies through the institute that virtually eliminate 
those rare earths while providing the same performance. And 
those are in the hands of industry, going through rigorous 
testing, just a year and a half into that institute.
    Ms. Kaptur. My last questions relate to vehicle 
technologies, especially natural gas and the potential for 
natural gas vehicles. Are there major barriers to deployment, 
Dr. Danielson?
    And then the SuperTruck program, any update you can provide 
us on that?
    And then, in terms of offshore wind, your sense of the 
technological landscape of offshore wind projects in the 
country? How do we stack up compared to our global competition?
    Mr. Danielson. Thank you for those questions.
    On the natural gas vehicles front, we are putting forward 
in fiscal year 2015, dual-fuel engine research, including 
heavy-duty vehicles that could be powered by both diesel and 
natural gas, and the innovation that is required to make those 
more cost-competitive.
    There is a lot of interest in the industry to move to 
natural gas because of the cost benefits, of course. But this 
year, for the first time, we are putting forward a research 
agenda topic on natural gas storage, which is one of the major 
long poles in the tent in terms of making compressed natural 
gas vehicles directly cost-competitive.
    That is an area where RPE had made some pioneering 
investments about 3 years ago. And we are putting forward a $10 
million program to try to take some of those technologies to 
the point where they can be put out into the market.
    SuperTruck, as you know, is a very successful program. It 
was actually a $130 million program that invested in four 
integrated teams with the goal of developing Class 8 
demonstration semi trucks that would achieve 50 percent 
improvements in fuel economy, through engine innovation, 
aerodynamics and all kinds of different innovations. And one of 
our teams has already achieved a more than 70 percent 
improvement in efficiency through the SuperTruck program.
    Because of the success of the program, we are putting 
forward in this budget a $40 million SuperTruck 2 program that 
would be able to fund two integrated teams to go to a 100 
percent or a doubling of efficiency versus the 2009 baseline.
    And on offshore wind, one thing that is very interesting 
about the United States is we have a very different resource 
base than they have in Europe, where most of the deployment has 
been to date, in addition to Japan and other countries. We have 
quite a bit of deepwater. So we actually have about 4,000 
gigawatts of resource within 50 miles of the coast, which is 
four times the peak power utilization of the country. About 60 
percent of that is in deepwater, however, where you can't 
actually fix the offshore wind to the bottom, so you have to do 
floating wind turbine technologies.
    Also, on the East Coast, where you are faced with hurricane 
conditions that aren't present in Europe and other places, we 
need innovation to allow us to have stronger, more robust 
technology.
    And, as you know, in the Great Lakes, which present another 
interesting resource base for offshore wind, we have unique 
issues around ice formation, and we need technologies that can 
break the ice and can shed ice from the blades and also deal 
with ice creeping into the base of the technology.
    And so we have a huge resource base, a great opportunity, 
but there are some unique technology challenges that we are 
addressing and that need to be overcome in order to establish a 
cost-competitive U.S.-based offshore wind industry.
    Ms. Kaptur. Thank you all very much. A tremendous panel 
this morning.
    Thank you, Mr. Chairman.
    Mr. Simpson. Thank you.
    And thank you all for the work you do. Thank you for being 
here today.
    We will see you, I guess, this afternoon, Dr. Orr.
    Mr. Orr. You will.
    Mr. Simpson. But thank you for your testimony. And the 
offices that you run are very, very important to the future of 
this country, so I appreciate it. Thank you.
    Hearing adjourned.
    
    
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                                           Tuesday, March 17, 2015.

                DEPARTMENT OF ENERGY, OFFICE OF SCIENCE


                               WITNESSES

FRANKLIN ORR, UNDER SECRETARY, SCIENCE AND ENERGY, DEPARTMENT OF ENERGY
PATRICIA H. DEHMER, ACTING DIRECTOR, OFFICE OF SCIENCE, DEPARTMENT OF 
    ENERGY
    Mr. Simpson. The hearing will come to order. I would like 
to welcome our witnesses, Dr. Franklin Orr, Under Secretary for 
Science and Energy.
    Welcome back this afternoon.
    And Dr. Pat Dehmer, the Acting Director for the Department 
of Energy's Office of Science.
    Dr. Orr and Dr. Dehmer, the budget request provides $5.3 
billion for the Office of Science, a 5 percent increase over 
last year's level. The Office of Science is the single largest 
supporter of basic research in the United States and its 
activities have resulted in some of the important scientific 
breakthroughs of the 20th century. In the past, these 
breakthroughs occurred almost entirely at facilities in the 
United States. However, as the scale and complexity of the 
experiments increased, so did the costs of building new 
facilities.
    Cutting-edge science, now more than ever, is reliant on 
multibillion-dollar facilities that few, if any, countries are 
willing to support alone. Ensuring that our taxpayer dollars 
are contributed to the breakthroughs that enhance American 
competitiveness within this international context is just one 
of the challenges you need to address. The balance between 
optimal operation of our current facilities and constructing 
new ones is another.
    While the budget request avoids choosing between these 
activities by providing increases for both, the reality is that 
the current fiscal climate does require some tough decisions. I 
look forward to discussing with you both how the Office of 
Science will make these hard choices and continue to ensure our 
country's leadership in the scientific community.
    Dr. Dehmer, please ensure that the hearing record, 
questions for the record and any supporting information 
requested by the subcommittee are delivered in final form to us 
no later than 4 weeks from the time you receive them.
    Mr. Simpson. Members who have additional questions for the 
record will have until close of business tomorrow to provide 
them to the subcommittee's office.
    Mr. Simpson. With that, I will turn to my ranking member, 
Ms. Kaptur, for her opening statement.
    Ms. Kaptur. Thank you, Mr. Chairman very much.
    Good afternoon again, Dr. Orr and Dr. Dehmer. Thank you so 
much for being here today. Your work represents America's 
intelligence at work and inventing a better future for us all. 
The budget that you manage represents the largest federal 
sponsor of research in the physical sciences. That is an 
incredible responsibility.
    The United States is known and respected around the world 
as a leader in innovation, and scientific research continues to 
yield important discoveries that change the way we live and 
work, from cell phones to high-yield crops to biotech 
medicines. We look forward to your thoughts today on some of 
the discoveries that you see on the horizon, as well as how we 
can support innovation in the public sphere. How can America 
harness the work of our best and brightest to drive domestic 
growth and make American energy science the best in the world, 
including assuring our high-productivity manufacturing sector 
remains globally competitive?
    While the value of funding scientific and other research is 
well established, federal resources remain limited and the 
return to sequestration levels will limit budgets even further. 
Research especially in science can provide enormous value, but 
it is a long-term and sometimes indirect investment, just like 
raising a child, that is too easily sacrificed for short-term 
concerns.
    It would also be helpful to hear from you about the long-
term consequences of this kind of underinvesting in science and 
research. The American people should understand the tradeoffs 
that our Nation is faced with in the name of budgetary 
scarcity. Scientific exploration can sometimes provide 
opportunities for immediate benefit. In certain cases, tools 
and equipment designed for research can be applied to 
manufacturing processes to increase efficiency or improve 
product quality. Advanced devices and computers can help 
advance our understanding of basic science and can help 
companies find solutions to challenging technological hurdles 
when they are locked in fierce competition with global 
competitors.
    With this in mind, I want to touch briefly on the national 
labs, which are rightly viewed as a national asset. Coming from 
an area without a national lab, as most members do, I continue 
to wrestle with how the labs can play a transformational role 
for organizations beyond their boundaries and help jump-start 
innovation and opportunity in several sectors of our economy, 
including American manufacturing. Please share your thoughts on 
this and other topics. And I look forward to your insight, as 
do we all.
    Thank you so much for the time, Mr. Chairman.
    Mr. Simpson. Thank you.
    Dr. Orr, I believe you are going to give the opening 
statement, right?
    Mr. Orr. I am, and then Dr. Dehmer will follow with some 
more details.
    Mr. Simpson. Okay.
    Mr. Orr. So I would like to thank you, Mr. Chairman, and 
Ranking Member Kaptur and members of the subcommittee. It is a 
pleasure to be back with you today. I would like to compliment 
the committee on its energy efficiency with requiring only one 
trip over here all the way from DOE, so I saved some fuel 
there.
    It is good to have the opportunity to appear here today to 
talk about the Office of Science budget request for Fiscal Year 
2016. As you heard me say earlier this morning, DOE is charged 
with advancing an all-of-the-above energy strategy to enable 
the transition to a low-carbon economy, and the fundamental 
science effort that we will talk about today underpins every 
aspect of that. It permeates all of what we do.
    As Under Secretary for Science and Energy, my job is to 
coordinate the Department of Energy's scientific research 
efforts with the applied energy research and development 
efforts and to work on enhancing the productive links among the 
various programs, recognizing that they each bring something to 
the party that is unique to them and we need to support both 
the links and the fundamental parts as well.
    The Office of Science delivers important scientific 
discoveries and tools that transform our understanding of 
nature and advance the energy, economic, and national security 
of the United States, and it does this through two principal 
thrusts. One is the direct support for scientific research, and 
then there is also direct support for the development, 
construction, and operation of unique open-access scientific 
user facilities.
    I will give you a brief overview of the budget, and then 
the person with real knowledge, sitting to my left, will 
provide more details, and then together we will try to answer 
your questions.
    The Department's total science and energy budget request 
for fiscal year 2016 is $10.7 billion. That is $1.4 billion 
above the fiscal year 2015 enacted level. And this includes 
$5.34 billion for the Office of Science, and that is $272 
million above the fiscal year 2015 enacted level. And it is 
aimed at continuing to lead basic research in the physical 
sciences and to develop and operate cutting-edge scientific 
user facilities, while strengthening the connection between 
advances in fundamental science and technology innovation.
    In addition to maintaining the operation of 10 national 
labs, the request includes increased funding for our Advanced 
Scientific Computing Research program, the operation of the 
Department's user facilities and support to design and build 
new facilities, and additional funds to create new Energy 
Frontier Research Centers, while continuing to support the 32 
centers funded last June.
    So those of you who were here this morning heard me say 
that a key way of increasing productive links amongst the 
various programs is through budget crosscuts. So the science 
programs are very much involved in these crosscuts as well. You 
may recall that the crosscut request is $1.2 billion across six 
initiatives, and four of those are ones in which the Office of 
Science participates actively. So let me talk a little bit 
about those in this setting.
    I will start with the exascale computing crosscut. 
Investments in exascale computing are critical to maintain U.S. 
competitiveness and leadership in science, national defense, 
and energy innovation. The Exascale Initiative puts us on a 
path to achieve computing speeds 100 to 1,000 times faster than 
today's leading supercomputers. But it is much more than just 
speed, and I am almost certain we will come back to this in the 
discussion period afterwards, because it really is an 
absolutely fundamental underpinning to what we want to 
accomplish in almost every area.
    Second is the cybersecurity crosscut, for which DOE 
requests $306 million. We talked about that a fair amount in 
the previous discussion and we will again, because it is 
absolutely important. It is increasingly important in today's 
modern age, and DOE is working to protect its cyber assets, and 
in particular Science's laboratory infrastructure. The national 
labs are crown jewels, and we want them to be safe and secure, 
even as they carry on the good science for which they are so 
well known.
    The subsurface technology and engineering crosscut is 
focused on a fundamental objective, mastery of the subsurface 
through adaptive control technologies, and Science supports 
this effort through its fundamental research and expertise in 
areas such as subsurface chemistry and complex fluid flows.
    And finally, I will mention the energy-water nexus 
crosscut, again a topic of discussion this morning. This is new 
in the fiscal year 2016 budget request. Water use is 
fundamental to electric power generation, and the Office of 
Science provides the key underpinning for this crosscut through 
an $11.8 million investment in data modeling and analysis of 
complex energy-water system dynamics. Coupled with targeted 
technology development by the energy programs, this new 
initiative positions DOE to support the Nation's transition to 
more resilient energy-water systems.
    And before I close and turn things over to Dr. Dehmer, I 
will say a word about one more initiative, and that is the 
Quadrennial Technology Review, which involves the Applied 
Programs as well as the Office of Science. The urpose of that 
review is to inform the future of our science and applied 
research, at least as far as it deals with energy applications. 
It examines the state of existing and emerging energy 
technologies and identifies the most promising research and 
development opportunities across those technologies. And the 
science of course is a fundamental enabling activity across 
that, so it is an important component of the report. It is due 
this summer, and I will look forward to coming back to talk 
about that when the opportunity arises.
    So as several have observed, DOE's science program is the 
largest federal sponsor of basic research in the physical 
sciences, and therefore it plays a key role in advancing our 
understanding of nature and advancing the energy, economic, and 
national security of the United States. And it is something 
that I can say that, as a relative newcomer, that we should all 
be very proud of what has been accomplished in the past and 
what we can do in the future.
    And I would be pleased to answer your questions when the 
turn for that comes. So thank you very much.
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    Mr. Simpson. Dr. Dehmer.
    Mr. Dehmer. Thank you. Thank you, Chairman Simpson, Ranking 
Member Kaptur and members of the committee. I am very pleased 
to be here today to talk about the Office of Science budget for 
2016. I first want to thank you for your continued support and 
for your support in 2015.
    Our 2016 budget request will support about 22,000 people at 
more than 300 U.S. academic institutions and all 17 of our DOE 
laboratories. Our 30 user facilities will support about 31,000 
researchers from all around the country. We actually touch more 
people at our scientific user facilities than we do by direct 
support.
    I think you well know our six programs that support 
research in high energy nuclear and plasma physics, materials 
and chemistry, biology and environmental sciences, and 
mathematics and computing. Our request invests in discovery 
science in all of those, and also supports a portfolio of basic 
research that addresses unresolved questions in energy 
production, conversion, efficiency, and use.
    This morning I would like to have my opening remarks do 
something a little different than I have done in the past. I 
would like to tell you a personal story that has affected the 
way I view investments in the Office of Science today.
    Only infrequently in a science career does one see advances 
that are transformational, that drive a change in the way we 
think about the world around us. I was fortunate to be working 
in atomic and molecular physics in the 1970s and the 1980s when 
that field was transformed, it was revolutionized really, by 
the discovery and widespread application of infrared and 
invisible light lasers. These lasers certainly allowed us to do 
ongoing research better, and in fact that is how we started 
using them. But soon, and more importantly, entire new worlds 
of science exploration were opened because of the power and 
coherence of the laser beam. We could study phenomena that were 
inconceivable and sometimes unknowable before the laser was 
developed. Multiple Nobel Prizes came from such studies, 
including one to our former Secretary of Energy, Steve Chu.
    Today we are living through two transformations of this 
magnitude. Among our highest priorities is the robust support 
of investment in these research areas. The first area is high-
performance computing. We are well along the path to developing 
a capable exascale computer by early the next decade. For a 
decade now, computational science using terascale and petascale 
computers was recognized as a partner, first a small partner 
and now an ever-growing partner to theory and experiment. More 
recently, big data has emerged, tempting us with the promise of 
insights from previously unimagined volumes of data produced by 
experiment and computation.
    The potential impact of the next generation of computing, 
that is exascale computing, coupled with aggressive analyses of 
massive amounts of data cannot be overstated. From materials 
discovery without synthesis to engineering without prototyping, 
we will gain new awareness of the world around us and we will 
see transformational, not merely incremental improvements in 
our understanding and our predictive capabilities.
    The second example that I want to talk to you about is the 
X-ray laser, the first of which worldwide was the Linac 
Coherent Light Source at SLAC National Accelerator Laboratory. 
In the late 1990s, by the time I was here already, and in the 
early 2000s initiating construction of the LCLS was viewed as 
bold and quite risky. But in less than a decade the LCLS was 
lasing and it was a stunning success. Immediately after the 
demonstration of X-ray lasing in April of 2009--and, by the 
way, even that morning there were some people who said it 
wouldn't work, but it did, on the first try----
    Mr. Orr. Including one of my colleagues from my university.
    Mr. Dehmer. Including one of your colleagues, yes.
    Immediately after that demonstration the world raced to 
catch up.
    Just as visible light lasers revolutionized atomic and 
molecular physics 30 to 40 years ago, the LCLS X-ray laser 
promises similar revolutions. The ability to watch, actually 
watch in real time molecular mechanisms of photosynthesis, 
biological transformations and catalysis will change how we 
think about chemistry, biology, and material sciences. Just as 
we didn't appreciate the impact of lasers in the 1970s and 
1980s, I don't think we have yet begun to imagine the potential 
of this new tool.
    If history is a guide, when we look back in 5 to 10 years 
at the impacts of high-performance computing and X-ray lasers, 
we will be embarrassed to admit how little we predicted. With 
apologies to ``Star Trek'' and grammarians everywhere, the 
history of the Office of Science is one in which we boldly go 
into new territories.
    The two examples I discussed today are those with the 
greatest budget increases in 2016 and therefore I highlighted 
them, but there are other equally exciting stories in our six 
research programs.
    In summary, I believe that this budget will propel science, 
will deliver remarkable new 21st century tools, and will make 
the U.S. the leader in key areas of science important to 
competitiveness. I thank you, and I look forward to your 
questions.
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    Mr. Simpson. I thank you for your testimony. And we are 
going to be, unfortunately, having votes before too long. In 
fact, I think they started, but would like to get on with a 
couple of questions here before we do that and have to have you 
sit around for a little bit while we go over and do those 
votes.
    I am going to turn first to my colleague from New Jersey, 
the former chairman of this committee, Mr. Frelinghuysen.
    Mr. Frelinghuysen. Mr. Chairman, thank you for yielding me 
just a couple of minutes.
    Mr. Secretary, in your prepared comments you say, ``As 
Under Secretary, my job is to coordinate our scientific 
research efforts with the applied energy research and 
development that will lead the Nation to a low carbon future.'' 
I have served on this committee for 20 years, I have had a 
chance to read your statement, and I can't believe that we have 
such an inherently political statement put into the record. 
This is a very bipartisan committee, not a political committee, 
and I think it is unfortunate that I am reading this here, 
``with an end to mindless austerity and manufactured crises.''
    I mean, I think the federal debt does represent a crisis. I 
work--and you mentioned the Joint Chiefs of Staff--I work with 
the Joint Chiefs of Staff every day, and our best military 
minds and leaders never invoke the fact that Congress is 
mindless and manufacturing crises. So I would just attribute 
this to the fact that maybe somebody gave you this statement to 
read. I should hope, coming from your position at Stanford, 
that you wouldn't be associated with such a political 
statement.
    Would you like to explain the origin of this statement?
    Mr. Orr. I think that the statement deals with the budget 
issues that we have going forward, and the attempt is to argue 
that the science and energy investments that we are proposing 
are in the national interest and ones that----
    Mr. Frelinghuysen. Well, you should know this committee 
works in a nonpartisan, bipartisan way to make those 
investments. We always have. I would just say I think in my 20 
years I have never read such a statement given to a committee. 
It is a matter of public record. I think it is unfortunate. And 
I don't think it reflects the purpose of the Department or the 
sector which you are responsible for. I just want to register 
my strong feelings.
    Mr. Chairman, thank you very much.
    Mr. Simpson. Thank you.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary and Dr. Dehmer, for your 
testimony today.
    I wonder if, in terms of the priorities that you have 
outlined for additional research and are seeking additional 
funding, could you give us a bigger frame about the global 
context in which we are pursuing these objectives? Who are our 
major competitors for the science in those fields? And what are 
you seeing internationally? And why is this so important to our 
country?
    Mr. Orr. Well, let me start, and then Pat can add the tail.
    For a long time the United States had more of a, monopoly 
is not the right word, but we had a strong concentration of 
scientific leadership. But as the rest of the world has 
developed and as they have put their own efforts into it, there 
are lots more competitors out there. In many of the science 
arenas this is a perfectly good result. There are so many 
fundamental and important questions about understanding nature 
that we need all the players we can get on the field and should 
take advantage of them. And as was noted, there are 
international endeavors that really bring countries together to 
work on some of the most important fundamental questions.
    Ms. Kaptur. Who are the chief competitors, Doctor?
    Mr. Orr. Well, Europe is a place of great strength. China 
is building hard and working to develop its capabilities. And 
then there are other smaller efforts around the world.
    I don't know what you would say, Pat, in terms of the 
competitors?
    Mr. Dehmer. So I think about two areas. I think about high-
performance computing, and for years we were the undisputed 
leader. China now has the number one computer in terms of speed 
and has had for a couple of years. We have 4 in the Department 
of Energy in the top 10, in the top 500 list, but Japan and 
Europe and China are coming on strong. That is one area where I 
don't think we want to cede leadership.
    Another area where I don't think we want to cede leadership 
is in characterization at the atomic level, and I think 
typically of the light sources. For years we were the 
undisputed leader in light sources, and now many, many 
countries have capabilities that equal or rival ours.
    As Dr. Orr said, there are areas where we do want to 
cooperate. For example, in particle physics, in accelerators, 
where you will find only one mega-facility in the world. But 
there are also areas where we want to be the leader or among 
the leaders and we don't want to cede leadership, and I think 
sometimes in those areas I am worried.
    Ms. Kaptur. Do you have hacking of any of your sensitive 
information?
    Mr. Dehmer. Not that I am aware of.
    Mr. Orr. But constant attempts.
    Mr. Dehmer. Constant attempts, constant, constant attempts.
    Ms. Kaptur. Would Russia be one of the countries that is 
doing that or not?
    Mr. Orr. I don't have any direct knowledge to answer the 
question, but I would be surprised if there is not an element 
of that in there.
    Ms. Kaptur. I wanted to ask, following on that line of 
questioning, where does the United States rank worldwide in 
terms of investment in science, high science? What would your 
guess be?
    Mr. Dehmer. In terms of dollars or GDP?
    Mr. Orr. We are discussing how to frame the question.
    So the truth is that I don't know either the dollars or 
GDP, fraction of GDP number, off the top of my head, but we 
would be happy to go figure that out and get back to you on 
that.
    Ms. Kaptur. I want to allow my colleagues to ask questions.
    Mr. Dehmer. I know that in terms of GDP we are not number 
one and we are far from number one. In terms of dollar amount, 
because we are so big, we may be very high there.
    Ms. Kaptur. That would be most interesting to look at and 
provide to the record. Thank you.
    [The information follows:]

    Mr. Dehmer.K. In terms of overall R&D spending, which includes both 
industry and government, the United States ranked first in the world, 
at $492 billion, in 2011, the most recent year for which international 
comparative data is available. However, the U.S. share of global R&D 
has been steadily declining, from 37 percent of total global R&D 
spending in 2001 to 30 percent in 2011. China is the second-ranked 
performer and by far the single biggest competitor, with $208 billion 
in R&D expenditures in 2011. China's annual growth rate in R&D averaged 
over 20 percent during the last decade, while the U.S. growth rate was 
just over 4 percent. Largely as a result, the Organization for Economic 
Cooperation and Development (OECD) has projected that China will 
surpass the U.S. in R&D spending by the end of the decade. In terms of 
R&D spending as a percentage of GDP, in 2011 the United States ranked 
tenth worldwide, at 2.8 percent, behind such nations as Israel, South 
Korea, Finland, Japan, Sweden, Denmark, Germany, and Switzerland, all 
of which devote a larger portion at their GDP to R&D investments.

    Ms. Kaptur. And I will allow the others to ask questions, 
Mr. Chairman.
    Mr. Simpson. Dr. Dehmer, the ITER project is an incredibly 
complex endeavor involving seven international partners 
contributing the equivalent of roughly $20 billion. A recent 
internal report of ITER's project management team found this 
group to be overly bureaucratic, inefficiently run, and 
unacceptably slow, and made a series of recommendations to fix 
these problems. This committee took steps to ensure that these 
management reforms were implemented before the U.S. made 
further cash contributions to the ITER organization.
    Can you provide us with an update on how implementation of 
those management reforms is going? Is the organization making 
the necessary management reforms to your satisfaction? And is 
there anything this committee can do to be constructive in our 
approach to support ITER while ensuring that our tax dollars 
are wisely spent?
    Mr. Dehmer. I think the top management recommendation in 
that report, the Management Assessment report of 2013, was to 
change the top management of the ITER organization quickly. And 
as you know, that has just been done. At the March 5 council 
meeting they installed a new director-general, Bernard Bigot. 
We are very pleased with that switch and we are looking forward 
to seeing what Director-General Bigot will do in the coming 
months and year.
    Mr. Simpson. Because there are going to be efforts to 
defund it essentially in this appropriations cycle, I am pretty 
sure. Would that be a mistake?
    Mr. Dehmer. Right now I am just going to speak to the 2016 
budget. We are investing what we think is the appropriate 
amount.
    Lynn, you want to talk?
    Mr. Orr. As you know, the United States has made 
commitments to participate in the project. Most of those 
commitments are actually construction of magnets and other 
elements of facilities. So the spending that will take place as 
part of the ITER project is actually devoted to at least 
partially to supporting the fusion energy enterprise in the 
United States, even as we contribute to the broader project.
    The pace of that has been set to provide balanced funding 
with the domestic programs and the international effort, and 
each of those complements the other. So we believe that it is 
in our interest to continue to participate, but we recognize 
the concerns that you mentioned in your initial question.
    Dr. Bigot, as he has taken charge, he was just confirmed in 
the position as of March 5, so he has put together an 
aggressive 200-day plan to take a hard look at every aspect of 
how they are operating. And we think the right thing to do is 
to watch that carefully and pay close attention and make that 
judgment as we go forward and see how they perform.
    Mr. Simpson. I guess one of my concerns is last year during 
the budget negotiation or the appropriation negotiations on 
this bill my argument was now is not the time to drop out of 
this and withdraw our funding from it and we need to see how 
these reforms come about. Is that going to have to be my same 
argument again this year?
    Mr. Orr. Well, I think it is the right argument, that it is 
in process. The changes that we and others thought were 
required in order to get the project on track have started. 
They have a very capable and respected new leader with more 
authority, I think, to do what needs to be done. But there is a 
lot to do and it will require the cooperation of all the 
participants.
    Mr. Simpson. If the United States somehow decided not to 
participate in the ITER project any further, how would that 
affect the fusion research that is done at our universities 
now?
    Mr. Orr. Well, Pat can respond as well, but I would say 
that partially it would remove support for some of the design 
and equipment activities. So because all of the people that are 
involved in this participate in those, it would remove part of 
the support for those activities in our own research program. 
So I think to do it in the short term would have a negative 
impact on those programs.
    Mr. Simpson. Same thing.
    Mr. Dehmer. We are in the process right now of looking at a 
strategic plan for the domestic fusion program. It is actually 
going to turn out to be a very robust plan, with half a dozen 
elements or so. I think if something as you described would 
happen to the ITER project we would immediately revisit that to 
see how we could strengthen the domestic program.
    Mr. Frelinghuysen. Would the chairman yield?
    Mr. Simpson. Sure.
    Mr. Frelinghuysen. So I get some degree of equivocation 
here? I mean, when the administration first took a look at ITER 
and domestic side you were highly supportive. Is there some 
equivocation here? I mean, this is sort of like stranded 
investments here. We have been making investments in this 
committee in the ITER project, sort of like the Joint Strike 
Fighter if we are talking about the military. We back off, what 
does that mean?
    Mr. Orr. Well, then----
    Mr. Frelinghuysen. Are you agreeing with the contention 
that we shouldn't be supporting this international endeavor 
which we have been supporting for how many years now?
    Mr. Orr. No, I am sorry if I gave that impression. I think 
that we should support it, and that is with the budget 
requests.
    Mr. Frelinghuysen. Ultimately it is the science that we 
would benefit from.
    Mr. Orr. Indeed, yeah, absolutely.
    Mr. Frelinghuysen. Isn't that what your purpose in life, is 
to provide for that?
    Mr. Orr. Yes, indeed. On the other hand, we also understand 
that it is a complicated project that has had some management 
challenges that need to be addressed.
    Mr. Frelinghuysen. Okay. Thank you, Mr. Chairman.
    Mr. Simpson. There are only 2 minutes left during this 
vote, so I would suggest that we recess the hearing and go 
vote. And we will be back. We have got a series of 3 votes, 
shouldn't take more than 6 hours. Not really. It won't take 
that long. We will be right back.
    Mr. Orr. We will be here.
    [Recess].
    Mr. Simpson. Hearing will be back in order.
    Mr. Honda.
    Mr. Honda. Thank you, Mr. Chairman.
    And I want to welcome both Dr. Orr and Dr. Dehmer. We were 
talking a little bit about light sources. And I have had 
pleasure on several occasions to tour the great light sources 
at Berkeley Lab and at SLAC, and I always leave impressed at 
the power of these amazing scientific user facilities. In fact, 
when I started to understand light sources it shed a different 
light, I guess, on everything that I understood in terms of how 
precise some of the photos that before it was very difficult to 
produce images.
    Unfortunately, other countries are catching up or passing 
us up on light source capabilities and capacity. So I was 
wondering if this worries you and if we are doing enough across 
the full X-ray spectrum to stay competitive and ensure that the 
U.S. doesn't fall behind in light source technology. Could you 
describe what more we should be doing?
    Mr. Dehmer. I think the roadmap for light sources was 
produced by the Basic Energy Sciences Advisory Committee in 
mid-2013, and the recommendations that came out of that report 
were very aggressive. Basically it said that the U.S. will not 
be number one if we don't take certain actions.
    And those actions include the completion of the National 
Synchrotron Light Source II at Brookhaven, and that was just 
completed in December. Upgrade of the Linac Coherent Light 
Source at SLAC, which we are doing, and upgrade of the storage 
ring light sources, and that is the Advanced Photon Source at 
Argonne and the Advanced Light Source at Berkeley.
    We are already going forward with the Advanced Photon 
Source Upgrade, and we are talking with Berkeley Lab now about 
possibilities for going forward with the upgrade of the 
Advanced Light Source.
    Mr. Honda. Okay, great. So I sense that since we are on 
task than the concern is minimal.
    Mr. Dehmer. I think my concern would have been much greater 
if we hadn't impaneled the Basic Energy Sciences Advisory 
Committee to do this study, come up with some very aggressive 
recommendations, and we followed those recommendations.
    Mr. Honda. Thank you.
    Mr. Orr. But if I could just add to that, that the hard 
work that Pat and her team have done to keep us in the 
forefront here is very important, but there is no reason to be 
complacent. We will need to continue to make investments in the 
science user facilities over time. And, fortunately, Pat and 
her colleagues have put together a very disciplined process for 
evaluating the needs and then figuring out how to do it in an 
efficient way.
    Mr. Honda. In terms of investments, in the area of 
nanotechnology, I remember in 2003 I was one of the lead 
coauthors of the National Technology Research and Development 
Act that paved the way for the Federal Government's increased 
investments in nanotech, and had the pleasure of attending the 
groundbreaking and the dedication of the Molecular Foundry at 
Berkeley Lab. That was a lot of fun. I just didn't understand 
how that building stayed stable, it had a slope.
    But it looks like nano research centers have made pretty 
good progress in producing world-leading science. I was just 
wondering if you could describe the benefits of these national 
scientific user facilities and what the future looks like for 
these centers and for nanoscale science at the DOE generally.
    Mr. Dehmer. Thank you for the question. I am happy to do 
that. You were the distinguished speaker at the groundbreaking 
for the Molecular Foundry. I was there too. And I remember that 
day well. They were worried that it was going to be inclement 
weather and so the groundbreaking was inside, in a giant kitty 
litter box with dirt in it.
    All five of our nanoscale science research centers, 
including the Molecular Foundry, are now done and operating. 
And basically they have exceeded expectations. We expected 
maybe 250 to 300 users a year. There are more than 500 or 600 
users a year. The science is magnificent. The permanent staff 
at those institutions have really embraced the idea of working 
with the users to get the most out of the facilities. We are 
very, very pleased with that program.
    Mr. Honda. With the $3.7 billion initial grant that was 
signed out by President Bush in 2003.
    Mr. Simpson. That was hard coming out, wasn't it? President 
Bush.
    Mr. Honda. I couldn't remember whether it was Reagan or 
Bush. I had to start thinking about my age.
    Mr. Simpson. I am just kidding.
    Mr. Honda. The need for another infusion, could you talk a 
little bit about the necessity of a continuous infusion of 
grants for research?
    Mr. Dehmer. Yes, I am happy to do that. The National 
Nanotechnology Initiative and the bill that you referred to I 
think are the most dramatic basic research investments that I 
can remember. The National Nanotechnology Initiative (NNI) and 
all of the things that surrounded it made an enormous 
difference in research in this country. The NNI, as it is 
called, has continued, continues today, with new and vital 
directions.
    But I definitely agree with your statement that we need to 
continue to invest in material sciences, nanoscale science, 
mesoscale, which continues at slightly larger dimensions. And 
we need to use the knowledge that we have learned over the last 
decade of the NNI to begin to design material from first 
principles and synthesize materials to exactly the 
specifications that we want.
    This was not a onetime thing. Material sciences is 
incredibly important to this country. In fact, the Department 
of Energy is the largest investor in material science in the 
government because of the needs in energy.
    Mr. Orr. Well, I was going to add, but Pat stole my thunder 
on the very last line there, that this is an example where the 
fundamental science of nanostructured materials is now finding 
its way through a whole variety of energy applications, many of 
which we didn't exactly foresee when we started that out. So it 
just illustrates the idea that good fundamentals will find 
applications and that we can use research needs on the 
application side to pick out good science problems to do.
    And an example of that would be in the fundamental area of 
catalysis. Catalysts are used everywhere across industry. But 
we would love to be able to say, gosh, we need a catalyst that 
can do this. Once you have a really fundamental understanding 
of the properties of the materials you can come back and 
answer, here is a material that might actually do the job that 
you want by so-called materials by design. So there is a 
crosstalk there that is absolutely essential to our energy 
future.
    Mr. Honda. If I may, Mr. Chairman, last question.
    Regarding health and health concerns at the nanoscale 
level, any activities or thoughts or comments you want to make 
in that area?
    Mr. Dehmer. Well, we have actually taken a hard look at 
that right from the beginning, and our philosophy has been, if 
the material is uncharacterized, if we don't know the health 
effects, we treat it as though it could be dangerous. And so we 
are very, very conservative with nanoparticles that are 
uncharacterized, and, in fact, over the years the Department 
has put out secretarial directives to that effect.
    Mr. Honda. Thank you, Mr. Chairman.
    Mr. Simpson. Mr. Fleischmann.
    Mr. Fleischmann. Thank you, Mr. Chairman.
    And to Dr. Orr and Dr. Dehmer, thank you for your patience. 
We had our votes and we are back now.
    I would like to start my comments by thanking both Dr. Orr 
and Dr. Dehmer for their support of the nuclear facilities 
operating funds at Oak Ridge National Lab in the Fiscal Year 
2016 budget. I appreciate the Office of Science and the Office 
of Nuclear Energy for understanding the investment needed to 
maintain these facilities that support the various Department 
of Energy missions.
    I would like now, though, to switch over to high-
performance computing. I know we have discussed some of these 
things. But this is another one of the hallmarks of the Oak 
Ridge National Laboratory.
    For a long time now I have been a supporter of the Advanced 
Scientific Computing Research program. I was very pleased to 
see the Fiscal Year 2016 budget request for this program and 
specifically the new investments to advanced exascale 
computing.
    Mr. Chairman, I am pleased to support DOE's request in this 
area, but I wanted to raise one issue within the ASCR budget 
that I hope we can address, and that is Leadership Computing 
Facilities funding is down from fiscal 2015.
    Dr. Orr and Dr. Dehmer, I think you would agree that to 
have a successful exascale program we need to continue our 
investment in our Leadership Computing Facilities.
    I have got a four-part question. I asked the Secretary, but 
I would like to ask you also to speak to the value of the LCF 
program and how it relates to the broader exascale program.
    Mr. Dehmer. The Leadership Computing Facility Program was 
begun in about 2007 in response to international competition in 
computing. It has catapulted the U.S. into a leadership 
position in high-performance computing. The two leadership 
computing facilities at Oak Ridge and Argonne are stunning 
examples of what can be done when you combine leading-edge 
hardware with a large investment in software capabilities.
    Mr. Fleischmann. Dr. Dehmer, can you explain how exascale 
differs from how today's supercomputers function?
    Mr. Dehmer. Well, first, it is faster, but I think there is 
more to it than that. I think in going from where we are now at 
tens of petaflops, to exaflop computing, or exascale computing, 
it is no longer a linear transition. We have to invest in 
hardware that is far more energy efficient, and that requires 
significant investments in component technology. We have to 
invest in software, everything from the operating systems for 
these computers to middle-ware to disciplinary software, and 
that requires an enormous investment in talent and people.
    And there are things about computing at the exascale that 
are different than computing at the petascale. There can be 
more errors in the output, and we have to figure out how to 
know when there are errors and correct for them. Because you 
can have not thousands or tens of thousands, but hundreds of 
thousands and a billion computers operating simultaneously.
    So in moving from where we are now, from where Oak Ridge is 
now, from the next generation at Oak Ridge to the exascale 
requires a step function change in how we do business.
    Mr. Fleischmann. I think you have addressed the major 
technical hurdles and I appreciate that.
    Dr. Orr, what does the Nation gain from a large investment 
in exascale computing? And what will we be able to do that we 
can't do now as a Nation?
    Mr. Orr. Well, I said earlier and I will say it again now 
because it is so important that the ability to do this very 
large-scale computing underlies almost everything we do in the 
energy space. I will give you one example. We are entering a 
world with the grid where we will have many, many more sensors 
to tell us what is going on in the grid. We will have 
microgrids connected, we will have the ability to control which 
way power goes, and we will have a much more capable grid 
system to allow us to go forward.
    But that also means we will have much more data, we will 
need to be able to compute the state of that system in real 
time, we can't quite do that today, and then we will need to be 
able to make management and operating decisions on a time scale 
that will require both intelligent operators, but intelligent 
tools around them. Those kinds of challenges are ones that will 
demand computing power that this approach will allow.
    In other areas, we talked a few minutes ago about the idea 
of materials by design, but the ability to compute the 
properties of materials from the very most fundamental 
descriptions of how they work, those are very demanding 
calculations. And if you are going to do them in the kind of 
design space that you would like to use, that will require them 
as well. And as I said before, well, even interpreting the 
experiments that come from something like the detectors at CERN 
in Europe or the Long-Baseline Neutrino Facility, those are big 
computational tasks as well.
    So the ability to do absolutely high-performance computing 
is enabling across the entire space in which we they work.
    Mr. Honda. Would my friend yield for just a real quick 
comment?
    Mr. Fleischmann. Absolutely.
    Mr. Honda. This subcommittee has worked on this issue of 
increasing the size of wafers from 300 to 450 millimeters. And 
that kind of technology, is that the kind of technology that 
you are also talking about when you said hardware, increasing 
research in chip design and making them smaller, faster, more 
efficient, more efficient in terms of not creating heat, but 
being able to produce the heat consumptions, is that the kind 
of technology that you are looking at, that would be 
piggybacking on my friend's question?
    Mr. Dehmer. Chip design is absolutely part of it. I don't 
know if wafer size is. I just don't know the answer to the 
wafer size question.
    Mr. Honda. Wafer size would be more competition, I guess.
    Mr. Orr. But it is true that the energy-efficiency aspect 
is very important, as Dr. Dehmer said. If you just went to 
linear increases in power consumption, then it is untenable. We 
really have to redesign how we think about these massively, 
massively, massively parallel machines that use energy more 
efficiently. And then of course what gets developed there will 
find its way into all kinds of other stuff, you can be 
absolutely guaranteed.
    Mr. Honda. Thank you.
    Mr. Fleischmann. Thank you.
    I have one final question that I would like to address to 
both of you. Dr. Orr and Dr. Dehmer, how do the major science 
facilities, such as the light and neutron sources, support 
American manufacturing, and how can we increase support for 
industry when building such projects? As a follow-up to that, 
the construction of large science facilities has often driven 
cutting-edge manufacturing. What science projects will require 
major construction, such as ITER or SNS, and will they help 
develop American manufacturing, either now or in the future?
    Mr. Orr. So let me start in a general way and then Pat can 
fill in some specific examples.
    While I was waiting for the Senate to vote on my 
confirmation I went to visit, well, as it happened, all 17 of 
the national labs. I had lots of time. And in doing that, I 
went to all the user facilities, and I was surprised to learn 
how many of the experimental stations were actually funded by 
industry or actually used by energy industries or other 
industries because it gave them the capability to do 
measurements that were applicable to their business.
    So I realized in that process that there is actually quite 
a lot of industry interaction at the light sources and that we 
can expect that to continue. There are two models. If it is all 
published information, then they can compete for time for 
machines like anybody else, any other scientist, but if they 
want to do proprietary stuff then they pay the full freight.
    So there is already a good mechanism for including them, 
and I think we have seen lots of benefits from those 
relationships already.
    If you want to then correct any lies and distortions in 
what I just said, it would be good to do that.
    Mr. Dehmer. No. I will add, though, that I was involved in 
a lot of construction when I was heading the Basic Energy 
Sciences program, and that construction definitely uses U.S. 
labor and U.S. industry, conventional construction very 
significantly, but also high tech, magnets, superconducting 
cavities, and so forth. So there is a sizable involvement of 
industry.
    The Leadership Computing Facilities have deliberately 
reached out to industry and are working very closely with them 
in all areas, in turbines, airplanes, combustion, and so forth. 
So I think we recognize the responsibility to reach out to 
industry and we are doing it.
    Can I just get back to your original statement about the 
funding for the Leadership Computing Facilities in 2015 and 
2016?
    Mr. Fleischmann. Please.
    Mr. Dehmer. The reason for the decrease is that we invested 
heavily in 2015 to prepare those facilities to receive the next 
generation of computers. And so that funding was finished in 
2015 to upgrade the facilities so they could receive the next 
computers.
    Mr. Fleischmann. Thank you, thank you.
    Mr. Chairman, I yield back.
    Mr. Simpson. Ms. Roybal-Allard.
    Ms. Roybal-Allard. I would like to go back to a topic that 
we were discussing just before we had votes, and that has to do 
with ITER. In your comments you mentioned that Dr. Bigot had an 
action plan and that that action plan was endorsed by the ITER 
council.
    My question is if you could elaborate on how the director-
general's action plan addresses the ITER Management Plan 
recommendations and what specific improvements will you be 
looking for in 2015 and 2016? Also, if you could also comment 
if you share the concern that has been expressed by some U.S. 
policymakers and fusion research of the impact of ITER's 
funding on the availability of DOE resources for the domestic 
fusion program.
    Mr. Orr. I imagine that both of us can respond to various 
parts of this question.
    The plan that is in place so far that was proposed by Dr. 
Bigot lays out a series of additional steps to alter the way 
they do the management of the project and to work on sort of 
reconstituting the time line of the construction and taking a 
hard look at all the budget questions. That takes place over 
time, so the remainder of this year, those pieces come into 
place as they really assemble a team that takes a very hard 
look at kind of every aspect of managing this extremely 
complicated construction project. And so the kinds of things 
that we will pay attention to are exactly those that were 
raised in the external review of the management issues there 
and of course all these timing and budget issues going forward.
    Now, with regard to the balance of the program, Pat and her 
troops have done a very careful job of figuring out how to 
allocate resources across the various research areas and 
projects. And the budget we are recommending this year we think 
is a balanced approach to meeting both the international 
objectives and the domestic program.
    And I would note also that there is not a hard distinction 
between the international and the domestic, because 80 percent 
of the contribution toward ITER is actually design and 
construction of components of the reactor that are done here in 
the United States, using the United States fusion teams. So 
there is sort of synergy amongst those and contributions 
across, and we think the budget recommendation this year is a 
good balance of those.
    Mr. Dehmer. I don't have anything more to add.
    Ms. Roybal-Allard. The President's budget, Director Dehmer, 
requests a funding increase of 5.1 percent for Workforce 
Development for Teachers and Scientists. As you know, in recent 
budget cycles there have been several changes to the federal 
science, technology, engineering, and mathematics education 
effort. What role can we expect the Department of Energy to 
play in STEM education and workforce development in future 
years, and how will the Department of Energy uniquely 
contribute to the federal STEM education portfolio?
    Mr. Orr. Well, so I have to admit that I am too new to have 
a really detailed knowledge of that, so I can either take that 
for the record or perhaps Pat can comment in a way that can 
help us along that path.
    Ms. Roybal-Allard. And any additional information you can 
submit for the record.
    Mr. Dehmer. Okay. I am happy to talk a little bit about 
this, because about 4 years ago, when the director of the 
Workforce Development for Teachers and Scientists program left 
to take a different job I actually took the program over, so I 
have been managing it for 4 years.
    We have structured that program in a way that is actually 
quite unique in the Federal Government. We put about 1,000 
people a year at the DOE laboratories for summers, for 
semesters, or for longer. We have undergraduates who go to the 
laboratories as interns. We have graduate students at 
universities who spend from 3 to 12 months at the laboratory 
doing part of their thesis research. We have visiting faculty 
come to the laboratories for summers or for longer periods of 
time, many of whom come from minority-serving institutions.
    And we believe that the Department of Energy laboratories 
are a unique way to increase the workforce for Department of 
Energy missions by bringing these people to the laboratories 
and introducing them to DOE labs and DOE science.
    Ms. Roybal-Allard. Mr. Chairman, I have no further 
questions.
    Mr. Simpson. Thank you.
    I am always kind of fascinated by the Office of Science 
because it is a lot of stuff I don't understand.
    Mr. Orr. Me too.
    Mr. Simpson. Yeah. It is kind of baffling, isn't it?
    I am going to ask you just a general question because I get 
asked this question all the time, and I will guarantee there 
will be amendments that are offered on the floor and all this 
kind of stuff. And it is not just what we do in the Office of 
Science, it is also you could say NIH, the National Science 
Foundation, all this other kind of stuff. And that is, why do 
we do it? Why does the government need to do it? Why isn't 
private industry doing it? Isn't this corporate cronyism or 
whatever you want to call it and all that kind of stuff? I 
mean, I have my answer.
    I would like to hear your answer why we invest in these 
things. And if you talk to some of these people they will say, 
well, of course, if the government is going to do it why would 
private industry invest in it? But if we don't do it, then they 
will have to do it, because that is how they advance. Edison 
didn't need the Federal Government to invent the light bulb.
    Mr. Orr. Yeah. So let me take a crack, with your permission 
of course.
    Mr. Simpson. Sure.
    Mr. Orr. And then I will ask Pat to chime in.
    So the science and energy enterprise for the Nation should 
be based on a portfolio. And that portfolio certainly involves 
industrial applications. We have very capable energy industries 
that will do that. But it also should have the full spectrum 
that goes from the fundamental science, which we know from long 
history that investments in fundamental science will pay off 
eventually down the road a ways. But as you are doing the 
individual things you don't know which bits of the portfolio 
yet will be the ones that turn out to be most important. And in 
fact they will get woven together in interesting ways that it 
is very hard to foresee.
    What is appropriate for the Federal Government is the 
fundamental research, the early stage investments in ideas that 
then eventually will find their way, compete their way into the 
energy marketplaces. So we really need all the players. We need 
the support that the Federal Government provides, but we also 
are going to need all the commercial and industrial actors at 
the other end. They typically have a focus, a time focus that 
sort of might be in the next 5 to perhaps 10 years, sometimes 
longer. But we really tend to focus on the things that will get 
applied over a spectrum of time.
    Mr. Orr. So I think that you really need all those parts.
    Mr. Simpson. So we are not trying to pick winners and 
losers?
    Mr. Orr. No, in fact, we are trying to--you can kind of 
think about this is a--I don't know----
    Mr. Simpson. You are trying to pick winners and losers in 
terms of technology?
    Mr. Orr. Well, you can think of it as a--it may be a funnel 
is the right----
    Mr. Simpson. Yeah.
    Mr. Orr.  [continuing]. That at the wide end of the funnel, 
you want as many ideas as competing as possible. And even as 
you transition into potential technologies, they will develop 
at different rates. So sometimes, you know, something might be 
ready now for a big explosion in application, but others need 
some more development that involves--maybe you need another 
piece of invention that hasn't quite gotten there yet to put it 
all together, and then those will march through.
    So this is anything but a linear process. It involves lots 
of looping and iteration and designers and thinking, but 
eventually, through that complicated process, we will get 
things that make it into the marketplace and contribute in a 
very big way. So, taken together, that portfolio aspect of it 
is important to a diverse and successful, stable energy system 
going forward.
    Mr. Dehmer. Part of the portfolio aspect that was just 
described, has to do with the time horizon.
    When I started, many of the industries had very robust 
basic research programs. Those are largely gone, save for a 
short term, and that means 5-ish years, maybe a little bit 
more. We have seen the demise of Bell laboratories, we have 
seen pharmaceutical companies change over their research so 
that they are investing in things that may come to fruition 
relatively soon.
    So, the portfolio also has a time component to it. And 
industry just simply doesn't invest in things with very long-
time horizons. And there is another component to the Office of 
Science, high-energy physics, nuclear physics, fusion energy 
sciences. There would be no one that would invest in that if it 
weren't for the Federal Government.
    Mr. Simpson. And thank you for that answer.
    How do I explain to--I mean, you are talking to people in 
this room that agree with what we are doing and know that we 
need to do more and that research and development is very 
important and what the Federal Government does is very 
important and so forth. Well, let's say I am an auto mechanic 
out in Idaho, or better yet, I am a dentist out in Idaho, since 
I was one of those, and I go to work and every morning and I 
drill and fill and bill and I pay my Federal taxes and 
everything. Why does it matter to me whether we have exascale 
computing? How do I explain that to your everyday taxpayer that 
is paying for all of this?
    What does it mean to me? What do I get from this?
    Mr. Orr. I would love to have a simple, straightforward 
answer for your question, but I don't. But I think we can say 
that we live in a complicated modern society, with energy woven 
through every aspect of it. The fact that we take it sort of 
for granted is partially the success of the enterprise that has 
taken the fundamentals of electricity and magnetism and turned 
it into a grid and motors and transportation and all those 
kinds of things. All of those are built on scientific 
underpinnings that were done, in those examples, sort of in as 
early as 20th century.
    Mr. Simpson. Before there was a Department of Energy.
    Mr. Orr. Before there was a Department of Energy, but with 
a world that was much smaller scale and much less 
sophisticated. And what we are doing now is preparing for all 
the kinds of advances that will make life still better and more 
secure and economically productive in the future. And that 
needs to be built on the science that we will do now and we 
will continue to do in the future.
    Mr. Simpson. What do you say to those people who say that 
we ought to do away with the Department of Education, the 
Department of Energy, and the other one I can't think of? 
Whoever that is.
    Mr. Orr. I would say that, I do not think that would be in 
the national interest, that we will be better off if we can 
apply the science that we do for the betterment of mankind.
    Mr. Simpson. Okay. Dr. Dehmer, the nuclear physics program 
in your office will likely face some difficult tradeoffs 
between major facilities in the near future. There are 
currently two construction projects within this program, the 
upgrades for the accelerator facility at Thomas Jefferson Lab 
in Virginia, and the construction of the facility for rare 
isotope beams at Michigan State University.
    While these two construction projects continue, operations 
continue at Brookhaven National Lab to run Relativistic Heavy 
Ion Collider (RHIC). A flat or shrinking budget within the 
nuclear physics program simply may not be able to support all 
of the activities at their desired levels. While this year's 
request increases the nuclear physics program by $29 million, 
we have to think about priorities under a flat scenario.
    Previous long-range plans have identified the upgrades at 
Jefferson Lab and the construction of the facilities for rare 
isotope beams as the highest priorities within nuclear physics. 
Under a flat-budget scenario, the long-range plans recommended 
shutting down RHIC. In a flat-budget scenario, does this 
prioritization remain the same?
    Mr. Dehmer. No, I don't think so. This is absolutely the 
wrong time to close the RHIC. It is producing world-leading 
results. And, you know, I talked in my opening remarks about 
surprises; RHIC is producing surprises that we had never 
anticipated before. The quark-gluon plasma is a perfect fluid. 
And we never anticipated that we would see that. So no, this is 
the wrong time to close RHIC.
    I am fighting very hard to dispel the recommendations of 
the previous NSAC report. In fact, we have another NSAC, long-
range plan coming out in the fall of this year, and that will 
speak again to priorities in different budget scenarios. But 
the answer is, is it the right time to close RHIC? It is 
absolutely not the right time to close RHIC.
    Mr. Simpson. Well, if you have to live within existing or 
shrinking budgets for nuclear physics, what do you think 
strikes the right balance in order to fund the priorities 
within the program?
    Mr. Dehmer. So at this point we put in a request for the 
2016 budget that we believe is the right request.
    Mr. Simpson. But it is not a flat priority.
    Mr. Dehmer. No.
    Mr. Simpson. So you are saying you have no alternative if 
it ends up being flat?
    Mr. Dehmer. I am saying, I am going to support that budget 
for nuclear physics.
    Mr. Simpson. You support the President's budget, right?
    Mr. Dehmer. I do.
    Mr. Simpson. Oh, okay. I have heard that before. Thank you.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    I am going to take a little different tack here just for a 
second. We all look at life through prisms; sometimes they are 
from heredity, sometimes from geography, sometimes from 
opportunity, education, and our employment experiences. So we 
don't come here without these prisms that we look through.
    When I was on the NSF Committee, I was amazed coming from 
my part of the country looking at the top ten universities 
around the country, over my entire career that have always 
gotten the bulk of money from the Federal Government. And so 
the prism I come from is one that--and a perspective I come 
from is that over the years, the Federal Government has made 
certain decisions and they kind of keep going the way that they 
started, for whatever reason, the history.
    Recently, a Harvard scholar named Robert Putnam has written 
another book called ``Our Kids.'' And his last book, ``Bowling 
Alone,'' he became very famous. But his perspective is that, 
America really is dividing much more than in prior years, by 
class. But he defines class in a little bit of a different way: 
Those who have been highly educated and are able to manage in 
this very difficult economy; and those who simply have no hope, 
they just simply won't get there. And that divide is growing.
    And the reason I mention that is, that the prospects of 
those of the majority of children being born will never have 
the opportunity to do what we are doing here today. I worry 
about that. It is one of the reasons that motivates me to 
office because I think this is a country created for all not 
just for some.
    So as I look at the geographic location of the labs, I 
think to myself, what divide does that create and how do I get 
some of those resources to be directed to the places that are 
part of the other America? And I believe, and I have 
experienced living in our part of the country, you know, no 
labs--not that if they had been present we wouldn't have gone 
through what we have, but the tremendous loss of manufacturing 
jobs in the industrial heartland, to a point that our 
productivity has been seriously harmed and the average income 
of citizens going down about $7,000 over the last 15 to 20 
years. That is a huge hit. And some have had a more severe hit.
    So, my prism is, if I view the world that way, then I want 
to use every single asset I have to help lift the places that 
have endured the most harm. And how do I get the special 
preserves that exist in our country, to find those places and 
begin to ask the question how can we apply some of what we 
know, to help lift those places?
    So one of my questions is, someone mentioned earlier today, 
and it might have been the other panel, but when this car was 
made by 3D manufacturing, additive manufacturing, where was 
that done?
    Mr. Orr. Well, one of the companies, I believe, was 
actually located in Ohio, in Youngstown, although I might be 
mixing it up with the other--there is another advance 
composites outfit that I might not have that straight. But I 
know that there was an Ohio connection in one of those, and I 
think it was the 3D printing car.
    Ms. Kaptur. There is a Youngstown 3D additive manufacturing 
center.
    Mr. Orr. Yeah, a manufacturing one yeah.
    Ms. Kaptur. I know that. But I am very interested in how 
the labs look at the universities that are out there in this 
sea of places that stretch all the way from Gary, Indiana, up 
to Buffalo, through the industrial heartland corridor that have 
been through--I just talked to the member from Rochester--hell. 
And how do we as a country provide more balance to the ship?
    And so I am asking you, how does your budget advance the 
cause of these places, particularly those that have endured 
two-thirds of job loss, two-thirds, in the manufacturing 
sector? And I guarantee you, most of the universities that 
exist in that corridor probably aren't in receipt of big 
dollars from the Department of Energy nor from the NSF. I think 
there is a real opportunity for a prism to look through here 
and to use the rigor, the intellectual rigor you have to figure 
out ways to begin to reconnect and identify platforms for 
innovation in those places because they are so needed.
    And I will say this also, if you look at those places, they 
are not centers of government. If you look in most of our 
States now, the places that are growing are the capital cities. 
The capital cities to me, just like Washington, are false 
creations. They are just there because of the productivity of 
the rest of the country. And so they are lucky. And you can 
sort of take comfort by fleeing there and living there, but 
really the productive wealth of the country is in these other 
places and we have to pay more attention there.
    And so I am just asking you, in your budget, think about 
what kinds of effort you could make to better connect and 
thread through those places. It is hard for you, because you 
are segmented in so many different research centers, but there 
are nodes of opportunity there, but they don't have the sunk 
investment of these incredible minds and assets.
    And it is likely, if you look at your budget, you are still 
building what is already there. You are not necessarily 
ferrying out to a new region that so desperately needs to be 
lifted economically, where you could really--you could make a 
major difference.
    Mr. Orr. Well, I have a couple of reactions. Though I grant 
you that these are complicated problems and that it is unlikely 
that we will fix them entirely. One is that when we talk about 
things like the user facilities, those serve, I don't know, 
well it depends on who you count, but typically 22,000 science 
researchers and then maybe 31,000 including all the other 
actors, so those folks come from everywhere.
    The reason we have these big-user facilities is so that not 
every university will ever afford them--you know, some of 
these--not any university will afford them, but they provide 
access to these machines. That is all done through proposal 
competitions. And Pat, I am sure, can give you plenty of 
statistics that these folks come from every kind of university. 
So, access and the ability to compete for time on those 
machines is one thing that we can and do provide.
    Second of all, if we do our jobs correctly, then in the 
longer term, energy will be less expensive and everybody's--
they will have an opportunity to use what resources they have 
in ways that can provide at least more of the access to the 
benefits that so many of us enjoy. And so the work that we do, 
even if not everybody can participate in doing the science 
work, we can provide benefits that do apply to everybody in the 
society.
    And then we should work hard to make the communities in 
which we work much more inclusive, that is the educational side 
is something that Pat just addressed. And, you know, we have an 
assortment of programs that we hope will increase participation 
of minorities in energy work. And so here again, we need a 
portfolio of things that can help work on these problems.
    Ms. Kaptur. Doctor, you know, I just want to tell a story, 
okay. This is my moment to vent, but we learn by doing this. We 
mentioned earlier that for solar, the leading solar firm in our 
country was birthed in, of all places, Toledo, Ohio, at the 
University of Toledo. Not a major NSF grant recipient, nor a 
major DOE grant recipient. That is an amazing story. It is two 
Chinese companies and then first solar.
    So I am out at Berkeley and visiting the lab, and as I am 
leaving the campus somebody says, see that site there? I said, 
yeah. They said, well, we are going to build $100 million solar 
facility there. I said, oh, what leading company comes out of 
here that even comes close to the one that I represent? And 
nobody answered. And I sort of left the campus saying, hmm, 
well, they have a lot here. And I am not against what they 
have, but I live in a place where we have had great innovation 
without the recognition of that kind of investment in a place 
that really needs it, the Detroit, Gary, Toledo, Cleveland, 
Pittsburgh, all the way to Buffalo, Rochester corridor.
    I look at that and I go, what is wrong with us? Why doesn't 
the Federal Government see us? Why--you know, why do we have to 
go to California when, in fact, the innovation happened here 
and the manufacturing happened here?
    So, I am interested in a more specific answer to the 
question on 3D manufacturing, even though Youngstown was 
involved, because I defy any Member of Congress to represent as 
many automotive companies as I do. There might be one 
somewhere.
    But I say to myself: This matters, the manufacturing 
sector. I don't live in a capital city. I don't live where, you 
know, I don't have Harvard or Berkeley in my district, but I 
have got the Cruze, I have got the Jeep Wrangler. I mean all 
this stuff is happening in our region. I have got the Ford 
EcoBoost engine in our district. I look at all this and I am 
going, what is wrong with us? Why don't we get this kind of 
attention? What do we have to do to the Federal Government to 
say, hey, pay more attention here?
    Because as you see those jobs come online, if we just had a 
little bit more help, do you realize what would happen for this 
country, with the manufacturing capability and the private 
sector, I call it the free enterprise zones of America, with 
just a little more attention? In regions that are not water 
short. But we don't somehow have the patina of some of these 
other places. And I am not jealous of the other places, but I 
am saying pay attention.
    So, that is my message today to the Department of Energy. 
And I support your budget. I fight for your budget. I do it for 
the country. But then I say, what is wrong with us? We have 
tried hard. We matter. Our people matter in this corridor. But 
we don't get the attention.
    I can put on the record we have the smallest NASA center in 
the country. This isn't your fault. Right? But we have John 
Glenn and Neil Armstrong. Shouldn't we have the largest? We 
have the smallest. But we gave the country--they gave the 
country their lives. And I say to myself, what is going on 
here?
    So the playing field is tipped, and I am just trying to 
make a very vivid point for you. Take your needle and start 
threading it through these places. I will send you a map and 
you can take a look at it and just think about it in terms of 
where latent productivity could happen based on the assets that 
are there, but we don't have some of your academic fire power.
    And there is a way to do that and make it more easily 
available, and you will get more--you will get more bang for 
the buck there, if you just figure out a way to engage it. So 
that is my--you know, and I support the labs. Don't take this 
message the wrong way. But let's look at some of the places 
that can help solve the class divide that Dr. Putnam so ably 
describes in his book. And this is one way to do so it. Thank 
you.
    Mr. Simpson. Thank you.
    Thank you both for being here today. Some interesting stuff 
you guys work on. It is very important to the country. And I 
didn't mean by my questions to say I don't support it or 
anything. I just like to be able to answer the questions that 
come to me all the time. And you will see some of them on the 
floor during debate and during amendment debate. But thank you 
for what you do.
    Thank you, Pat, for coming out to Idaho earlier.
    Mr. Dehmer. My pleasure.
    Mr. Simpson. Enjoyed our tour out there. And look forward 
to seeing you back out there. Thank you. Hearing adjourned.


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Baran, Jeff......................................................   101
Burns, Stephen...................................................   101
Danielson, David.................................................   153
Dehmer, P. H.....................................................   300
Hoffman, Patricia................................................   153
Klaus, David.....................................................     1
Kotek, John......................................................   153
Orr, Franklin..................................................153, 300
Ostendorff, William..............................................   101
Smith, Christopher...............................................   153
Svinicki, Kristine...............................................   101
Whitney, Mark....................................................     1

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