[Senate Hearing 115-337]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 115-337

                     WALKER AND WINBERG NOMINATIONS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                                   TO

    CONSIDER THE NOMINATIONS OF BRUCE J. WALKER TO BE AN ASSISTANT 
 SECRETARY OF ENERGY (ELECTRICITY DELIVERY AND ENERGY RELIABILITY) AND 
   STEVEN E. WINBERG TO BE AN ASSISTANT SECRETARY OF ENERGY (FOSSIL 
                                ENERGY)

                               __________

                           SEPTEMBER 26, 2017
                           
                           
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
STEVE DAINES, Montana                AL FRANKEN, Minnesota
CORY GARDNER, Colorado               JOE MANCHIN III, West Virginia
LAMAR ALEXANDER, Tennessee           MARTIN HEINRICH, New Mexico
JOHN HOEVEN, North Dakota            MAZIE K. HIRONO, Hawaii
BILL CASSIDY, Louisiana              ANGUS S. KING, JR., Maine
ROB PORTMAN, Ohio                    TAMMY DUCKWORTH, Illinois
LUTHER STRANGE, Alabama              CATHERINE CORTEZ MASTO, Nevada

                      Colin Hayes, Staff Director
                Patrick J. McCormick III, Chief Counsel
                 Kellie Donnelly, Deputy Chief Counsel
           Angela Becker-Dippmann, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                            
                            
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska....     1
Cantwell, Hon. Maria, Ranking Member and a U.S. Senator from 
  Washington.....................................................     3

                               WITNESSES

Walker, Bruce J., nominated to be an Assistant Secretary of 
  Energy (Electricity Delivery and Energy Reliability)...........     5
Winberg, Steven E., nominated to be an Assistant Secretary of 
  Energy (Fossil Energy).........................................    10

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Cantwell, Hon. Maria:
    Opening Statement............................................     3
Murkowski, Hon. Lisa:
    Opening Statement............................................     1
Walker, Bruce J.:
    Opening Statement............................................     5
    Written Testimony............................................     7
    Responses to Questions for the Record........................    40
Winberg, Steven E.:
    Opening Statement............................................    10
    Written Testimony............................................    12
    Responses to Questions for the Record........................    51

 
                     WALKER AND WINBERG NOMINATIONS

                              ----------                              


                      TUESDAY, SEPTEMBER 26, 2017

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:13 a.m. in 
Room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski, Chairman of the Committee, presiding.

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

    The Chairman. Good morning and welcome everyone. I 
apologize for being a few minutes late here this morning.
    We have the opportunity this morning to continue our 
hearing on nominations. We have two nominees before us today 
for the Department of Energy (DOE).
    Before I introduce the nominees, I want to take a quick 
moment this morning and reiterate that the people of the U.S. 
Virgin Islands and Puerto Rico, all who were affected by 
Hurricanes Irma and Maria, certainly remain in our thoughts and 
in our prayers.
    I do hope that we will have an opportunity to visit the 
islands in the next several weeks to get a better assessment to 
determine how we, here in Congress, can help with their 
recoveries.
    I also intend to hold a hearing on the situation in Puerto 
Rico and the U.S. Virgin Islands as they recover. I think we 
are all very cognizant of the fact that we do not need to be 
pulling FEMA or the governors out right now to come to 
Washington, DC, for a hearing. I think it is important to allow 
them to focus on their recovery efforts. So the timing of that 
is not yet locked in, but I think it is important to allow the 
situation on the ground to stabilize and ensure that the 
islands' leaders can be participating in it.
    As an appropriator, I certainly will look forward to being 
there to be of assistance to make sure that these islands 
receive the help that they need in the time that they need it. 
I think we all recognize this is a very bad and difficult 
situation. I want the people of U.S. Virgin Islands and Puerto 
Rico, just like the people of Florida and Texas and the Gulf 
Coast, to know that they are not forgotten and that we stand in 
unity with them, and we will be working with them to help them 
get back on their feet.
    Today we are here to consider two nominees for the 
Department of Energy: Mr. Bruce Walker, to be the Assistant 
Secretary of Energy for Electricity Delivery and Energy 
Reliability; and Steven Winberg, to be the Assistant Secretary 
of Energy for Fossil Energy. These are critical leadership 
positions at the Department. I want to thank both of our 
nominees for their willingness to serve.
    Here on the Committee we certainly recognize the importance 
of the Department of Energy. DOE has helped make our nation a 
global technology leader by supporting basic research, 
encouraging scientific exploration and fostering innovation. 
The Department is also meant to be our chief advocate for 
energy supply which affects everything from our national 
security to market stability and prices. I encourage both 
nominees to work with the Administration and with Congress to 
increase access to energy, to make it more affordable and to 
continue to improve its environmental performance.
    One of my top priorities is finding ways to address our 
high energy prices for those who live in our rural areas and, 
certainly in Alaska, we know what we are talking about here. We 
have so many of our communities that still rely on diesel as 
their primary energy source, a fuel that has to be brought in, 
oftentimes flown in, costing as much as $9, $10 a gallon. To 
say it is a burden on our villages is an understatement.
    I did enjoy having Deputy Secretary Brouillette in Alaska 
in August. We discussed this issue at length during his trip. 
What he saw is that there is a genuine need for help in Alaska. 
He also saw that in Alaska we can be the perfect proving 
ground, if you will. If a new technology makes sense anywhere 
it should make sense in a high-cost state like Alaska.
    So what we are looking for, going forward, is for the 
Department to take the next step--to look at both our 
challenges and our opportunities and to form meaningful 
partnerships with communities and organizations in Alaska that 
will lead to lower energy costs.
    I also want to see the Department work with our state to 
help us bring more of our resources to market and that includes 
renewables which we have in great abundance from hydropower to 
wind to biomass. It also includes our stranded gas and 
resources with significant potential, like methane hydrates.
    The Office of Fossil Energy has focused almost exclusively 
on the environmental aspects of fuels in recent years, but its 
mission is considerably broader than that. So I will be looking 
for greater balance in this area.
    For members who have questions for our nominees, I am going 
to be here for as long as we need to process these questions 
today. If any members have additional questions after the 
hearing, questions for the record will be due at the close of 
business today, as usual. It is my intent to report these 
nominees as soon as possible.
    I note to colleagues that we now have a total of nine 
nominees who have already been favorably reported from our 
Committee. They are awaiting confirmation by the full Senate--
that includes three nominees for the Department of Energy, four 
for the Department of the Interior and two for the Federal 
Energy Regulatory Commission (FERC). We do need to get moving 
on these nominations. Secretary Zinke and Secretary Perry need 
their teams in place, whether it is to help with hurricane 
recovery or a variety of other tasks. After months without a 
quorum, FERC needs a full complement of its five commissioners. 
I would encourage members to recognize the importance of 
confirming these individuals, and we will certainly be working 
to secure their approval this week and for as long as it takes.
    With that, I will turn to you, Senator Cantwell, for your 
opening remarks and then we will swear in our witnesses and 
proceed with their statements.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Madam Chair, I will be brief 
this morning, but I, too, want to start with mentioning the 
crisis in Puerto Rico and how much we need to continue to be 
vigilant on the help and assistance in Puerto Rico.
    As an oversight committee of our Interior Department and 
the fact that Puerto Rico is a U.S. territory, we need to make 
sure that they get every bit of assistance and focus from the 
Federal Government possible.
    I have called on the Administration to create a position of 
special counsel at the White House to make sure that every 
agency, not just FEMA, but every agency, is working to help us 
coordinate what will be a very long response for Puerto Rico.
    So, thank you for your statement this morning and your 
focus on this as well. You are always reminding people you were 
born in a territory.
    The Chairman. Yes.
    Senator Cantwell. And that you remember that that is such 
an important aspect of our responsibilities as a nation. Thank 
you for your willingness to be very, very focused on Puerto 
Rico.
    I have encouraged Senator Hatch to do the same thing, given 
that there are so many things in the Finance Committee as it 
relates to health care for Puerto Ricans and where we were 
already going to be in this situation. Hopefully we can all 
unite behind what will be support for American citizens who are 
in a very desperate situation.
    This morning's hearing is about critically important jobs 
at DOE.
    The Assistant Secretary for Electricity Delivery and 
Reliability is responsible for the Department's efforts to 
modernize the electricity grid, to improve the security and 
reliability of the energy infrastructure and to facilitate 
recovery from supply disruptions. This is a critically 
important job as we call upon the 20th century electricity grid 
to adapt to the growing demands of the 21st century. At the 
same time, we must work to protect the grid and energy 
infrastructure from an ever-growing threat of cyberattack. So I 
will have some questions about that.
    I had an opportunity to meet with Mr. Walker last week and 
was very favorably impressed with his extensive knowledge and 
experience, particularly as it relates to helping develop a 
workforce for tomorrow because we have, as the Quadrennial 
Energy Review stated, a need for 1.5 million new energy jobs. I 
think that he can help us in catalyzing the efforts of DOE to 
help us get those energy jobs and the focus that we need to 
make them a reality so we can move forward on the grid.
    The job of the Assistant Secretary for Fossil Energy is 
also important. He will be responsible, not only for the fossil 
fuel energy research and development at a time of shrinking 
budgets for energy and R&D, but also for licensing national gas 
exports and managing the Strategic Petroleum Reserve.
    You might have noticed the Strategic Petroleum Reserve has 
been debated a lot lately on its use and its strategy and focus 
for the future. We have tried to continue to focus our 
colleagues' efforts on the fact that it, too, needed 
infrastructure improvement and were successful in getting it 
some of the resources that it needs.
    I have not had a chance to meet with Mr. Winberg yet, but I 
note he has extensive experience with a variety of issues: 
clean coal, carbon capture, storage and R&D.
    I welcome both of the nominees to the Committee this 
morning. I look forward to hearing their testimony and asking 
them questions. Again, thank you for your willingness to serve, 
to both of you.
    The Chairman. Thank you, Senator Cantwell.
    The rules of the Committee which apply to all nominees 
require that they be sworn-in in connection with their 
testimony. I ask that you both rise and raise your right hand.
    Do you solemnly swear that the testimony you are about to 
give to the Senate Committee on Energy and Natural Resources 
shall be the truth, the whole truth and nothing but the truth?
    [Nominees respond, I do.]
    The Chairman. You may go ahead and be seated. Thank you.
    Before you begin your statements, I will ask three 
questions addressed to each nominee before this Committee.
    Will you be available to appear before the Committee and 
other Congressional committees to represent departmental 
positions and respond to issues of concern to the Congress?
    [Nominees respond, yes.]
    The Chairman. Are you aware of any personal holdings, 
investments or interests that could constitute a conflict, or 
create an appearance of such a conflict, should you be 
confirmed and assume the office to which you have been 
nominated by the President?
    Mr. Walker. Having worked with the Office of Government 
Ethics, I have developed and signed an agreement that in the 
event I have the opportunity and honor to be confirmed, I have 
to effectuate that agreement within 90 days of the 
confirmation.
    The Chairman. Are either of you involved or do you have any 
assets held in blind trusts?
    [Nominees respond, no.]
    The Chairman. Okay. Thank you both.
    As I mentioned, Mr. Walker has been nominated to be the 
Assistant Secretary of Energy for Electricity Delivery and 
Energy Reliability, and Mr. Steven Winberg has been nominated 
to be the Assistant Secretary of Energy for Fossil Energy.
    Gentlemen, this morning I ask that you introduce yourselves 
to the Committee. We would be delighted to be introduced, as 
well, to any family members that you may have. You have five 
minutes. Your full statement will be included as part of the 
record and then we will have an opportunity for questions.
    Mr. Walker, if you would like to begin, please?

 STATEMENT OF BRUCE J. WALKER, TO BE AN ASSISTANT SECRETARY OF 
      ENERGY (ELECTRICITY DELIVERY AND ENERGY RELIABILITY)

    Mr. Walker. Thank you, Chairwoman.
    Chairman Murkowski, Ranking Member Cantwell, members of the 
Committee and professional Committee staff, thank you for the 
opportunity to appear before you as the President's nominee to 
be the Assistant Secretary of Energy for the Office of 
Electricity Delivery and Energy Reliability at the Department 
of Energy.
    It is truly an honor to be before this Committee, and I 
would like to thank President Trump and Secretary Perry for 
displaying their confidence in me by nominating me to this 
important position. If I have the distinct honor of being 
confirmed by the United States Senate, I look forward to 
working with each of you and your respective staffs to address 
the energy issues and opportunities within my role at the 
Department.
    I would like to introduce my family to the Committee. With 
me today are my wife of twenty-five years, Lisa; our three 
children, Bryce, Lahra and Greyson; my parents, Joseph and 
Dorothy; my brother, who was able to fly in from Eielson Air 
Force Base in Alaska; Emily Dickinson, Bryce's girlfriend, whom 
I've known since she was five years old and I have coached in 
soccer. I would like to also welcome my friends and family who 
could not be here but are watching on TV. And last, I would 
like to thank my friends and mentors who have enabled me to sit 
here today, especially the professional tradesmen and women, 
men and women who taught me their trade, providing me with a 
hands-on understanding of the complexities and intricacies of 
the electric system.
    Though I am a lawyer, my career in the electric industry 
began as a junior at Manhattan College where I was studying 
electrical engineering. I began an internship with the local 
utility, Consolidated Edison, where I also worked upon 
graduation in continuing levels of responsibility for 18 years.
    Throughout this time, I was primarily focused on the 
electric power system. As a Field Engineer, I worked designing, 
inspecting and integrating the largest customers in 
Consolidated Edison's service territory. I was also part of the 
Environmental Response Team and the Biological Weapons Response 
Team which prepared for and responded to significant events in 
New York City.
    In addition to gaining hands-on experience in the field, I 
was a key contributor in the merger of Consolidated Edison and 
Orange and Rockland Utilities with the responsibility of the 
organizational restructuring for several departments including 
Gas Operations, Electric Operations and Research and 
Development.
    Upon completion of the merger, I assumed the role of the 
Control Center Manager where I had the opportunity to operate a 
gas and electric system. In this capacity I developed and 
implemented modernization and resiliency strategies including 
the use of software programs to improve the reliability and 
response to system emergencies. As I was the Control Center 
Manager during the 9/11 World Trade Center Attack and the 2003 
Blackout, I am keenly aware of the need for preparedness and 
response plans as well as the cybersecurity and resiliency of 
the electric power system.
    After five years managing the control center, I was 
selected to lead the operation for the first rate case since 
New York's de-regulation of the electric industry. In this 
capacity I acted as a subject matter expert and attorney for 
the regulatory team regarding capital investments necessary for 
the reliability of the electric power system.
    Following the rate case, I developed the Corporate Coastal 
Storm Plan based upon the disasters realized during Hurricane 
Katrina. This detailed and complex plan was successfully 
utilized by Con Edison during the response to Hurricane Sandy. 
This plan established industry-leading practices such as pre-
emptively shutting down lower portions of Manhattan and asset 
specific evaluations and remediation strategies for critical 
infrastructure necessary to maintain the grid.
    As a result of the failure of the Long Island City network, 
underground secondary network, which at the time was one of the 
largest and most logistically critical in the world, I was 
placed in charge of interim operations of the network and 
developed a comprehensive recovery and reconstruction plan.
    Coincident with managing this recovery, I was made the 
Director of Con Edison's Corporate Emergency Management. In 
this position, I developed and implemented regulatory approval 
for the Corporate Emergency Management Strategy.
    Following my career with Con Edison, I became the Vice 
President of Asset Strategy and Policy for National Grid. In 
that capacity, I oversaw the investment strategies for a $3 
billion, five-year program focused on improving and making 
investments to modernize the grid. Accordingly, I was also 
responsible for the research development and demonstration 
projects necessary to achieve these strategies.
    As we have recently witnessed, events like Hurricanes Irma, 
Harvey and Maria are indiscriminate regarding whom they impact. 
And it is in the preparation and response to these types of 
events that we can identify opportunities to address the 
security and resiliency of the electric grid for the safety and 
the health of the American public.
    The Department, specifically the Office of Electricity, is 
uniquely positioned to facilitate emergency preparedness and 
response plans throughout the nation. Moreover, the Department 
can further its efforts to facilitate the advancement and 
modernization, in every form, working with the states and their 
respective utilities and energy partners. If confirmed, I will 
effectively lead the Office of Electricity by leveraging my 
twenty-five years of electric power industry experience to 
improve the reliability, security, both physical and cyber, and 
modernization of the nation's electric delivery system.
    Chairman Murkowski, Ranking Member Cantwell, and members of 
the Committee, thank you for the opportunity to appear before 
you as the President's nominee as Assistant Secretary of the 
Department of Energy.
    I look forward to answering your questions as you consider 
my nomination.
    Thank you.
    [The prepared statement of Mr. Walker follows:] 
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Walker.
    Mr. Winberg, welcome to the Committee.

STATEMENT OF STEVEN E. WINBERG, TO BE AN ASSISTANT SECRETARY OF 
                     ENERGY (FOSSIL ENERGY)

    Mr. Winberg. Chairman Murkowski, Ranking Member Cantwell, 
members of the Committee and staff, thank you for the 
opportunity to be part of this nominations hearing.
    I am extremely honored to appear before you as President 
Trump's nominee to be the Department of Energy's Assistant 
Secretary for Fossil Energy.
    Also, thank you for the opportunity to meet prior to this 
hearing in order for me to better understand your interests and 
priorities at the Department of Energy. Your thoughtful 
insights and counsel on energy needs in the United States and 
in the states you represent were informative and helpful. I 
learned a great deal and will carry these lessons with me if I 
am confirmed.
    I would also like to thank President Trump and Secretary 
Perry for displaying their confidence in me by nominating me 
and supporting me. This is both a humbling and an exciting time 
for me and, if I have the honor to serve, I look forward to 
working closely with all of you and the knowledgeable, hard-
working people at the Department.
    In order to address the numerous challenges and 
opportunities that face our domestic fossil energy resources, 
it will require consistent collaboration between multiple 
levels of government and private industry. I believe that, if 
I'm confirmed, my past experiences have prepared me well for 
this position.
    I have both friends and family here today, and I want to 
take a minute to introduce you to my family. First, my wife, 
Anne, sitting directly behind me. I am blessed to have her with 
me and for her strong support. My sister, Christina Gutwein, 
and her husband Dan; my brother, David Winberg; Anne's brother, 
Mike Nolan; and friends and colleagues. Thank you all for being 
with me today. My daughters, Lauren Winberg and Anna Winberg, 
are in Denver preparing for my daughter, Anna's, wedding. And 
Anne's children, Rebecca Burns and Christopher Burns, are 
watching from Pittsburgh.
    I am especially grateful to have my parents, Harry and Mary 
Winberg, here today. My mother has been the rock in our family, 
quietly and resolutely holding our family together. My father 
served for 29 years in the Air Force. He served in both Korea 
and Vietnam and was awarded the Purple Heart when his plane was 
shot down over North Korea and he was wounded during the 
extraction effort. That close call makes me feel very happy to 
be here today but is also a reminder to me that, if confirmed, 
this is my opportunity to serve my country.
    I spent my entire career in the private fossil energy 
sector developing and demonstrating emerging coal, oil and 
natural gas technologies for both the production and use of 
these fuels.
    I have also been involved in a variety of policy issues 
affecting fossil energy, and I recognize the critical 
importance of the interface between policy and technology 
development. Sometimes policy drives technology and sometimes 
technology drives policy. Our goal must be to develop 
technologies that allow us to use our abundant domestic 
resources in a sustainable, efficient and environmentally-sound 
manner.
    I've been directly involved in developing fossil energy 
technologies that improve combustion efficiency and reduce 
emissions. Early in my career, I focused on criteria pollutants 
such as SOx, NOx and particulates. To that end, I have two 
patents for innovations that reduce NOx emissions from coal-
fueled boilers.
    Over my 39-year career, great progress has been made on 
both efficiency and emissions reduction. Progress has also been 
made developing technologies applied to the production of 
fossil energy, thus lowering the cost, reducing the 
environmental footprint and improving safety. The steady 
technology advancements in both the production and use of 
fossil energy have resulted in low-cost, reliable, abundant and 
sustainable energy for the United States and I am proud to have 
been associated with these advancements.
    DOE has been at the forefront of developing the vast 
majority of fossil energy technologies that are employed both 
here in the United States and around the world. I am excited 
about what can be further accomplished at the Department as 
fossil energy continues to play an important role in our 
nation's energy mix.
    If confirmed, I will work hard to keep the United States in 
the lead in developing the next generation of coal, oil and 
natural gas technologies. The Department's leadership and 
expertise, when coupled with private industry, can serve as a 
catalyst for the development of transformational energy 
technologies.
    If confirmed, I look forward to serving as the Assistant 
Secretary for Fossil Energy and to working in close cooperation 
with the members of this Committee and your staff, Secretary 
Perry and the talented and dedicated staff at DOE. I will put 
my private sector experience to work to augment the fine work 
being done at DOE to maintain the affordable, reliable energy 
that adds so much value to our daily lives and to our nation's 
prosperity.
    I look forward to your questions.
    [The prepared statement of Mr. Winberg follows:]
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    The Chairman. Gentlemen, thank you both. I appreciate your 
comments and your willingness to serve. And to the families 
that sit behind them, stand behind them, thank you for being 
here and thank you for your support of these individuals as 
they stand before the Committee today.
    Mr. Walker, let me begin with you.
    I talk a lot about microgrids here in the Committee and the 
promise that I think they hold in places like Alaska that are 
remote where we do not have a connected grid. So many of our 
remote regions really do rely on our microgrids.
    We have been doing some pioneering. Senator Cantwell had an 
opportunity to join me in Cordova where we had a field hearing 
last year to look at what one small community is doing to make 
a difference to increase the reliability and the resiliency of 
the traditional grid by really working to incorporate so many 
different opportunities. So flexibility has been a key for us.
    A question for you this morning is regarding the current 
definition that DOE has of a microgrid. It states that, ``a 
microgrid can connect and disconnect from the grid to enable it 
to operate in both grid-connected or island mode.''
    The question is, if you are confirmed as Assistant 
Secretary, will you work with us to modify the definition of 
microgrids to ensure that microgrid projects in remote areas 
where a larger grid does not exist are more expressly included 
because right now we are being bound by a definition?
    We are not part of anybody else's grid and so we cannot 
disconnect. Just your thoughts, if you would, on microgrids, 
what you might be able to do to prioritize the research, the 
development, the demonstration, but also how we deal with that 
definition.
    Mr. Walker. Sure. Thank you for the question, Senator 
Murkowski.
    And I'd like to acknowledge some of the work that both you 
and Senator Cantwell sponsored from this Committee and thank 
this Committee for S. 1460 which, I would note, Senator 
Murkowski, I noticed a new term, hybrid microgrid.
    The Chairman. Yes.
    Mr. Walker. And when I saw that I had to chuckle a little 
bit to myself because within the industry we're still debating 
exactly what a microgrid actually is.
    So I am open to a discussion as to what a microgrid or a 
hybrid microgrid is and it's fundamentally driven by a number 
of changes in the industry that have happened throughout the 
last 10 years. And that is the integration of renewables as 
well as the physical and cybersecurity aspects regarding grids.
    So I think we need to take another look at this within the 
industry to incorporate where we are today, focusing in on a 
variety of different things, essential services, reliability 
that will improve and allow us to deal with security aspects, 
both physical and cyber.
    The Chairman. Well, I appreciate that and would certainly 
invite you to come up North to see some of the innovation and 
the pioneering that is going on. It is exciting and it will 
give new definition to what we are talking about when we are 
talking about hybrids.
    Mr. Walker. Absolutely. I'm looking forward to coming up 
and seeing the $6.2 million project at Cordova.
    The Chairman. That is right. Good deal.
    Mr. Walker. And timing it with my brother, next time he 
flies up.
    The Chairman. Fishing is always good.
    Mr. Walker. Exactly.
    The Chairman. Let me ask you, Mr. Winberg. You mentioned 
that technology can drive policy and policy can drive 
technology.
    There is a lot of focus on the Arctic right now as we are 
seeing increased shipping opportunities as ice is moving away. 
We are seeing more travel, whether it is tourism or commercial, 
there is a much more keen interest in what is happening in the 
Arctic right now.
    The Department of Energy used to operate an Office of 
Arctic Energy to do some review and understand what fuels would 
work best in a harsh, Arctic climate because what works down 
here does not necessarily work up there.
    As we are seeing increased attention on the Arctic for a 
whole host of different reasons, what do you think about this 
Office of Arctic Energy that has been suggested that they just 
shut it down and close it off? How important do you think this 
kind of technology is that can help drive an Arctic policy?
    Mr. Winberg. Senator, thank you for the question.
    Clearly Alaska is one of our most prolific energy states. A 
lot of energy is coming out of there, potential for more energy 
to come out as well.
    I have not been briefed on the activities that took place 
in the past or currently with the Arctic Energy Office. But 
what I commit to you is that, if I'm confirmed, I will make it 
one of my high priorities to understand what activities have 
taken place and what activities could take place in the future 
with respect to a variety of energy opportunities and needs in 
Alaska.
    You mentioned some of the villages that are paying quite 
high prices for energy and there are some technologies, modular 
technologies, that might be able to be brought to bear that I 
know the DOE is working on.
    And so, I look forward to working with you and your staff 
and this Committee on some of those opportunities for an Arctic 
Energy Office.
    The Chairman. I appreciate that and I remind my colleagues 
a lot that we are an Arctic nation, even in Nevada we are still 
an Arctic nation. And so, understanding and working with other 
Arctic nations about those technologies that allow us to be 
more efficient operators in, again, a pretty tough environment 
is important, advancing those technologies.
    Senator Cantwell.
    Senator Cantwell. Thank you, Madam Chair.
    I wanted to ask Mr. Walker--thank you for bringing up the 
issues of energy efficiency and the work of our legislation. 
Obviously, we tried to focus on the more than 130 million 
buildings, which consume 40 percent of our energy, the most of 
any sector. And that is why we have been big supporters of 
taking it to the next level.
    The Chairman mentioned we got to go to Alaska and look at 
microgrids. We also got to go to Seattle and look at the 
Bullitt Center, which is one of the cleanest, smartest 
buildings in the world, managing its energy resource.
    Will you support ongoing participation of the Office of 
Electricity in this important work on building modernization 
and energy electricity grid efficiency?
    Mr. Walker. Thank you for the question, Senator Cantwell.
    Indeed, my entire career has been spent in the energy 
industry in the electrical power systems in modernizing the 
systems, improving the resiliency as well as reliability.
    As my opening statement included, having run control 
centers and understanding what the impact is of a system 
failure and understanding what the modernization opportunities 
are is very important.
    My intent in this position, if I'm confirmed, is to 
continue my work and continue to strive to push and work with 
the industry for increased modernization, resiliency and 
reliability, as well as focusing on the cybersecurity aspects.
    Senator Cantwell. Thank you.
    What steps do you think we need to take to ensure that we 
have the trained workforce that we need in both this and 
cybersecurity?
    Mr. Walker. That's a great question, and I thank you for 
the opportunity to meet with you and twice with your staff.
    You know, this industry has evolved from one that was done 
with paper and pencils and it was developed without the 
existence of computers. One hundred thirty years ago, when the 
system was introduced there was no such thing as a computer. 
And so the system relied on basic physics to make it operate.
    And as we've evolved the system, it's grown in complexity, 
particularly as it relates to the introduction of integrated 
circuitry, the internet, computer programs and unfortunately, I 
think, that the people who are in the industry haven't--while 
they're able to utilize it, we've lost sight of some of the 
basic aspects of, let's say, doing a load flow by hand. And, in 
fact, I'm not sure there's too many people around that can do 
that. I don't know too many that can do that.
    And the point is, as we rely upon computers, I think we've 
lost sight of some of the underlying, basic physics. And I 
think that as we look to, you know, train the next workforce 
that we focus back on the simplicity and the basics of the 
system and allow people to understand how the system actually 
comes together.
    Senator Cantwell. Thank you, thank you for that.
    Mr. Winberg, your responsibilities will include licensing 
for natural gas exports. How much natural gas do you believe we 
can export without raising natural gas prices domestically for 
consumers or threatening our energy here at home?
    Mr. Winberg. Thank you, Senator, for the question.
    The unconventional oil and gas drilling that we have seen 
in this country, often referred to as the shale plays, is 
unprecedented. And I think that there is a lot of room for both 
domestic, increased domestic consumption, as well as export.
    We've got numerous rigs, drilling rigs, that are sitting 
idle and we've got drilling rig crews that are also sitting 
idle.
    So I think there's quite a bit of head room. Specifically, 
how much? I think the market will, by and large, determine 
that. And as we move forward in looking at opportunities to 
export LNG, the market will sort out the total export versus 
what we're going to use here in the United States.
    Senator Cantwell. You are not worried about being in a 
situation where the Midwest, for example, sees a spike in 
prices right where we have manufacturing jobs and yet, it takes 
a while for the market to adjust?
    As somebody who lived through the electricity crisis, I can 
tell you the markets do not always function the way you want 
them to. Are you worried about that?
    Mr. Winberg. I think the fact that we've got unconventional 
oil and gas spread across the United States, there's pretty 
prolific opportunities there in the Midwest, a year and a half 
ago, we were at $1.00, $1.20 at the well head. So, I think 
there's a lot of head room left in the oil and gas market, 
especially in the unconventional oil and gas.
    Senator Cantwell. Okay. I will have more questions on this, 
but thank you.
    My time is expired, Madam Chair.
    The Chairman. Senator Gardner.
    Senator Gardner. Thank you, Madam Chair.
    Thank you, Mr. Walker, Mr. Winberg, for being here today, 
and welcome to your families as well and thank you for your 
willingness to serve our country in these capacities.
    I also want to thank the Chairman for her leadership in 
Puerto Rico. I know at the beginning of this hearing she talked 
about a series of hearings and continued work to make sure that 
we provide what I believe we have to, when it comes to Puerto 
Rico, and that is a massive surge of involvement from Congress 
to make sure that we are providing the policy guidance, those 
resources necessary to rebuild Puerto Rico. This is critically 
important that we get this right. It presents both a great 
challenge and unique opportunities before this country.
    I think there are some ways that we can work with the 
Department of Energy. For instance, perhaps dealing with mutual 
assistance opportunities for Puerto Rico to rebuild the grid in 
Puerto Rico, but also opportunities when it comes to 
technologies from NIST and other agencies that could provide 
assistance with telecommunications capabilities.
    And certainly, we had a conversation, Mr. Walker, when we 
had the chance to meet about how we could pursue reliability in 
a new way, a new way of thinking when it comes to Puerto Rico 
and its electricity systems.
    I would just like to talk about the challenge that we face 
here, but hear from you as well what you might be thinking and 
looking at when it comes to opportunities with Puerto Rico in 
the future?
    Mr. Walker. Thank you, Senator Gardner, for that question. 
Thank you for allowing me to meet with you and your staff to 
talk about some of these things.
    So one of the things I think we have tremendous 
opportunity, particularly with Puerto Rico and other areas that 
have been adversely impacted by the hurricanes, is to utilize 
the R&D projects that are the result of investments made by 
Congress and into the national labs, to use a territory like 
Puerto Rico as a test bed to introduce new concepts, perhaps 
new architectural construction.
    One of the things we talked about real quickly in your 
office was the ability to build, let's say, a collapsible 
system as opposed to one that was, you know, meant to stand 30- 
or 40-mile-an-hour winds. Build something that's a little bit 
more resilient from the standpoint of, you know, it can come 
down but it can actually be restored very quickly.
    I think that plus, you know, some of the newer innovations, 
particularly with the newer technologies, would allow a 
redevelopment and a reconstruction of the actual overall system 
in Puerto Rico.
    Senator Gardner. Thank you, Mr. Walker.
    Your testimony talks about your experience, and we had the 
opportunity to talk about it in my office as well, developing 
and executing plans for the utility industry.
    We, in Congress, passed legislation that designated the 
Department of Energy in a leadership role on developing and 
executing a Cyber Emergency Response Plan. Your experience with 
that--what are the essential elements that we have to be 
talking about, including to make sure we have a strong, secure, 
resilient electric grid and energy networks that can defend 
themselves from and respond to future nation-state attacks?
    Mr. Walker. Thank you for the question, Senator.
    I think that's a very challenging question, but there are 
some fundamentals that are absolutely critical as we move 
forward in the cyberspace.
    Number one, I would say the situational awareness within 
the utility industry is critically important and I know there's 
a program at the Department of Energy called CRISP that 
involves that two-way communication with utilities to give them 
situational awareness. And along with that there's some 
opportunities to do machine learning with regard to 
establishing and identifying certain threats and being able to 
communicate them within the industry.
    Secondly, I think there's the opportunity to work within 
the industry, Department of Energy, to develop coordinated 
plans for the actual response in the event that we, you know, 
do realize one and that we know how to disaggregate the system 
similar to what was done in the Ukraine and then rebuild it in 
a very expedited way.
    And lastly, I think there's some very specific R&D projects 
that could be undertaken, specifically, as they relate to 
things like monitoring, correlation modeling, again, with that 
machine-to-machine learning and the identification that allows 
you to take a look at the overall architecture.
    I think in that R&D component there's a very important 
aspect. We're taking a look at the actual architecture of the 
grid and recognizing that the SCADA systems that basically 
enable the opportunity because of the use of the remote 
terminal units and some of the other integrated circuitry in 
these devices.
    I think people have to take a step back within the industry 
and take a look and say, you know, the system existed well 
before these technologies that created the vulnerability it did 
and they are nothing more than add-ons to the system. And so, 
inherently some of the basic components that actually run the 
system don't have the logic and intelligence to operate the 
system.
    And so, I think the R&D component would be focused on a 
look at the architecture and have it disaggregate the existing 
SCADA systems that create the vulnerability to enable the 
intelligence to actually be in the components that operate 
under basic physics of the law.
    Senator Gardner. Great, thank you.
    Just quickly, in conversations I have had with utilities in 
Colorado, they talk about the need on security clearances. 
Would an improved security clearance process be helpful in the 
work we are doing in cyber? Yes or no?
    Mr. Walker?
    Mr. Walker. Sure, thank you, Senator.
    That's another component with the situational awareness.
    Today, within the industry many major utilities, some of 
them I'm familiar with, have very few people that have 
clearance within the company. And so, the ability for a 
department, like the Department of Energy, to communicate what 
would be classified information, is hampered.
    And so, there's been a bit of discussion with regard to 
expediting the process for clearances to allow that 
communication and therefore increase the situational awareness 
or create a different level of clearance to be able to ensure 
that communication is made.
    Because that situational awareness, and having been a 
control center manager, you know, when you're operating and 
flying the plane blind, it's a little harder.
    So, if you have some information and knowledge that would 
make your awareness level that much higher, it would be very 
helpful.
    Senator Gardner. Thank you, Madam Chair.
    The Chairman. Thank you, Senator Gardner.
    Senator Franken.
    Senator Franken. Thank you, Madam Chair.
    The Chairwoman mentioned the Arctic and the Arctic ice, the 
word our same Chair used, was moving. In many cases, it is not 
so much moving as it is changing state from a solid state to a 
liquid state.
    Mr. Walker, do you believe that human activity accounts for 
the majority of climate change since the industrial revolution?
    Mr. Walker. Thank you for the question, Senator.
    I believe the climate has been changing and will continue 
to change as long as we're on the planet. I think there is a 
contribution from man. I couldn't quantify exactly what that 
is.
    Senator Franken. Okay.
    Do you know that there is a consensus among climate 
scientists though? You are aware of that, right?
    Mr. Walker. Yes, I am.
    Senator Franken. Okay, good, good.
    Now with a changing climate, climate scientists tell us 
that we are going to see more extreme weather events, and in 
the last few weeks Hurricanes Harvey, Irma and Maria have 
reminded us of the risks the electric grid faces from extreme 
weather.
    We have been mentioning, and I am glad the Chair brought up 
Texas and Florida and Puerto Rico and U.S. Virgin Islands and 
they, especially Puerto Rico and the Virgin Islands, are all 
facing dire situations with widespread blackouts that may last 
not just weeks but months.
    The Chair also brought up microgrids. I think they are--
when we saw Sandy happen we saw some good things happen in 
terms of electric systems that were working in isolation and 
did not go down, that increased resilience.
    And since we have this urgent need for federal assistance, 
and you were asked by Senator Gardner about taking the 
situation and you started to talk about building a more 
resilient grid or more resilient buildings. And I did think 
this is an opportunity, actually, to take what new things that 
we know and to build a more resilient grid.
    How do you think the Department of Energy can help Puerto 
Rico and the Virgin Islands get the grid up and running again, 
and do you see this as an opportunity to use what we have known 
or learned? You said that, so I applaud you for that.
    To use that to build to see what works, I mean, to use what 
we know works and to build a more resilient, more efficient 
grid and, kind of, to take this terrible catastrophe and use it 
as an opportunity.
    Mr. Walker. Thank you for the question, Senator.
    I strongly agree that we do have the opportunity to utilize 
resources within the Department of Energy to bring to bear much 
of the research and development that is done within the 
Department as well as that which is done at our national labs 
and to utilize places like Puerto Rico, and maybe Puerto Rico 
is exactly the one to do that, to use it as a test bed to 
demonstrate the integration of the renewables and what impact 
it has on the resiliency and reliability of the grid.
    Senator Franken. And I think the Virgin Islands as well, 
because----
    Mr. Walker. Sure.
    Senator Franken. In a way, if you are doing these 
experiments you may want to use a smaller platform. St. John 
and St. Thomas got hit by Irma and then St. Croix got hit by 
Maria and all three are pretty leveled.
    We saw, like Texas Medical Center which is the largest 
medical complex in the world, because they had an island mode 
electric system with combined heat and power plant, they kept 
going.
    I just think that this is actually an exciting opportunity, 
taking it out of a disaster, to create a more efficient, more 
resilient, modern grid for all four islands, Puerto Rico and 
the three Virgin Islands, and I would hope that you would do 
that.
    Mr. Walker. Absolutely.
    Senator Franken. In this job--and by the way, I wanted to 
say hi to both families and I can tell all your children are 
just fascinated by electric grids.
    [Laughter.]
    Mr. Walker. You'd be surprised. I used to take them 
reporting to emergencies with them.
    Senator Franken. Okay.
    [Laughter.]
    Well, good.
    [Laughter.]
    That doesn't mean they----
    Mr. Walker. Brought them to splice.
    [Laughter.]
    Give them a little workout every once in a while.
    [Laughter.]
    Senator Franken. Thank you.
    The Chairman. Thank you, Senator Franken.
    Senator Manchin.
    Senator Manchin. Let me thank both of you for being willing 
to serve and your families for coming up and for your support.
    I will start with you, Mr. Winberg.
    You have a great deal of experience managing technology 
development throughout your time in the energy industry, 
particularly at the tail. I would like for you to elaborate a 
little bit and give me an idea of how you manage technology 
development throughout the highs and lows of budget and fiscal 
environments because I know that can be quite challenging.
    Mr. Winberg. Thank you for the question, Senator.
    It is challenging and it's a very appropriate question 
because I spent 30 of my 39 years in the commodity business--
coal, oil and natural gas, oftentimes referred to as a boom-or-
bust business.
    And especially when I was at Consol Energy, when budgets 
were tight, we hunkered down with our research budget and we 
focused on basic, fundamental research and we made some pretty 
significant progress.
    I think the most notable basic research being done by the 
Department of Energy that's talked a lot about now is the basic 
research for unconventional oil and gas which then was taken by 
private industry and, clearly, commercialized; however, when 
times were a little bit better in the commodity industry, there 
was more free cash available and we were able to do pilot 
plants and demonstration projects.
    So, if I'm confirmed to be the Assistant Secretary, I look 
forward to working with all of you and whatever money is 
appropriated by Congress. I will commit to you that I will 
spend that as wisely as I possibly can to move our domestic 
energy effort forward across all three fossil fuels--coal, oil 
and natural gas.
    Senator Manchin. Mr. Walker, while on the topic of grid 
study, I know we have been talking about reliability and grid 
study, I would like to get your opinion on a couple of 
conclusions the Department of Energy came to regarding the 
extent to which regulatory burdens, as well as certain federal 
policies, have forced a premature retirement of baseload power 
plants, including the biggest contributor to coal and nuclear 
plant retirement which has been the economics of natural gas-
fired generation and, basically, FERC is going to low cost.
    Dispatch of variable renewable energy has negatively 
impacted the economics of baseload plants and investments 
required for regulatory compliance have also negatively 
impacted baseload plant economics.
    The Department then recommends developing a comprehensive 
strategy for long-term reliability and resiliency. They just 
went through that. I am sure you have probably looked at that.
    Mr. Walker. Yes, sir, I did.
    Senator Manchin. Okay.
    So do you agree with their assumptions or are you concerned 
about reliability? Are we getting ourselves into a precarious 
position?
    Mr. Walker. I'm always concerned by reliability. It's part 
of just being an electrical operations person.
    That study, you know, there were a number of things that 
were in there regarding the baseload concept specific to what 
you're speaking to. I think there was a very important 
component that was spoken about in there that is very important 
as we've discussed baseload. And that is the essential 
reliability services that are part of the baseload, 
traditionally, and those involve things like frequency control, 
inertial control, reactive power flow control and, 
traditionally, within the industry those were realized through 
coal and nuclear as, you know, a number of things like 
regulatory impacts, the day rules, low prices of gas, that have 
changed the diversity or the utilization or the stack, if you 
will, the economic stack of the dispatch of energy.
    And, accordingly, what's happened is there's been a large 
amount of natural gas combined cycle that has displaced the 
coal and nuclear components of what was usually the diversity.
    I think, as was noted by the NERC Chairman in a May letter 
to the Secretary of Energy, there is a concern with reliability 
if we forgo the recognition of the essential reliability 
services that were provided, traditionally, by the nuclear and 
coal aspects.
    So I think as we move forward the ERS component is 
something that needs to be noted.
    Senator Manchin. You are going to be in a unique position 
to either change that direction or make sure that this country 
has reliability.
    The PJM system is a big system distributing a lot of power.
    Mr. Walker. Sure, absolutely. I was part of PJM when I was 
running a control center.
    Senator Manchin. I thought so.
    But with that being said, they almost had, during the Polar 
Vortex, a complete shutdown and they have taken 10,000 
megawatts, I think, offline since then.
    Mr. Walker. Right. And again, you know, that fuel assurance 
component is another component with regard to what was 
traditional baseload, the nuclear and the coal aspects. And the 
Polar Vortex is where we realized, through the freezing 
temperatures, the inability or unavailability of the gas 
necessary for the combined-cycle components.
    Senator Manchin. But what I think--and I will finish up 
with it, I know I am over my time. A lot of the coal plants 
were converted or new ones haven't been built----
    Mr. Walker. Right.
    Senator Manchin. ----but they have been converted into 
having all of the environmental compliance scrubbers, low NOx 
boilers, bag houses for mercury, and on and on. And they have 
some life left in their cycles.
    If they shut down because they cannot compete with the 
lower prices, they are not going to come back up and they will 
be dismantled.
    Someone has got to step up to the plate and say, listen, we 
have to keep some of these in that rate base so that we have 
the reliability. Right now, we are concerned no one is stepping 
up to the plate. I know there are quite a few of them in my 
state that are going to be going down. They are really good 
plants that should not go down for the reliability that we 
need.
    I don't know how you feel about that and if you feel that 
you all can weigh in concerning the reliability to the system 
that we have.
    Mr. Walker. The one thing I will add to what you just noted 
and I think it's something that's being realized throughout the 
United States and the grid report doesn't go deeply into it, 
but you know, after deregulation the number of plants went into 
merchant hands as well as----
    Senator Manchin. Yes.
    Mr. Walker. And so, merchant plants make economic decisions 
and they don't necessarily have the responsibility for the 
reliability of a once very clearly integrated utility.
    And I think that's something that the Department of Energy, 
working with the respective states, has an opportunity to do 
that may very well stave the results of these retirements.
    Senator Manchin. Thank you, sir.
    The Chairman. Thank you, Senator Manchin.
    Senator Barrasso.
    Senator Barrasso. Thank you, Senator Murkowski.
    Congratulations to both of you on your nominations.
    Mr. Winberg, in Wyoming we have tremendous coal, tremendous 
natural gas, tremendous oil resources. These resources fuel our 
state's economy and are responsible for billions in state and 
local revenues.
    Carbon capture, utilization, sequestration technology, or 
CCUS, supports the production of these abundant energy sources 
while also advancing environmental aims. We have had hearings 
about that in the Environment and Public Works Committee and 
continue to discuss those things. I believe wider deployment of 
this technology is supported by a diverse coalition of energy, 
of labor and environmental interests.
    How are you going to prioritize the resources of the Office 
of Fossil Energy to maximize the deployment of CCUS 
technologies?
    Mr. Winberg. Senator, thank you for the question.
    The prioritization--and it gets a little bit to Senator 
Manchin's question, whatever dollars Congress appropriates for 
the Fossil Energy Office, I will make sure that those dollars 
are put to the best use.
    Clearly, carbon capture, sequestration utilization is an 
important part of what the Department of Energy has been doing 
for the last decade or so.
    There's a lot of work that still remains to be done. If the 
budgets are small, there's work that can be done on basic 
fundamental research to get the cost of capturing carbon down, 
CO2. If there are funds available for pilot plants and 
demonstration projects, there's certainly no question that 
there's a need to do that type of work too.
    And so, I would commit to you that I would manage the 
budget according to whatever Congress appropriates for Fossil 
Energy.
    Senator Barrasso. In August the Department announced about 
a $50 million funding opportunity through the Office of Fossil 
Energy for a public/private partnership to design and construct 
and operate transformational coal technologies. So I am 
encouraged by this announcement, because I have seen the 
success that results from these partnerships.
    In our State of Wyoming, several electric utilities have 
come together to construct the Wyoming Integrated Test Center. 
Once operational this center is going to be one of the only 
facilities in the world that provides research space to promote 
the development of useful products for carbon emissions.
    Under your leadership will the Department pursue public/
private partnerships that drive the development of emerging 
coal technologies?
    Mr. Winberg. Thank you for the question.
    And yes, Senator, if I'm confirmed we will indeed move 
forward on private/public partnerships.
    I am familiar with the test center in Wyoming, although I 
have not visited and I look forward to that opportunity, but it 
is of a size that will allow us to do a lot of what I would 
call applied research in pilot-scale demonstration. So it's a 
great facility and a great asset that, I believe, we'll be able 
to use.
    Senator Barrasso. Well we appreciate your comments and look 
forward to having you visit us in Wyoming.
    Thank you, Mr. Winberg.
    Mr. Walker, in your testimony you explain that you have 
been involved with the efforts of two large Northeast electric 
utilities to invest in reliability, resiliency and security of 
the electric power system.
    In Wyoming and throughout the West, power systems face 
unique challenges. Many Western communities are in sparsely 
populated areas where electric power infrastructure really has 
to navigate some difficult terrain.
    How will you prioritize the Department's resources to 
develop technologies that ensure safe, affordable, reliable 
service to power customers in the West?
    Mr. Walker. Thank you for the question, Senator.
    The prioritization work is primarily done on a risk-based 
analysis. Working throughout the United States and recognizing 
the diversity of geography and the different challenges each 
part of the United States has, we prioritize the work according 
to their impact on reliability and resiliency component. And 
now also, we've got the cyber and physical security to focus 
on.
    So, the prioritization components we use are typical. We 
use DHS standards, which is similar to the international 
standard of 33,000 which is risk-based, to prioritize work.
    The R&D work that is done cuts across the United States 
from the standpoint of the technologies that are actually 
there. It doesn't necessarily get so much into the actual 
physical geography components, but there are aspects that we 
are starting to look at. And as I mentioned earlier, the 
resiliency components, particularly in places like Puerto Rico, 
where we have the opportunity to change the standards by which 
things are built. So, for instance, in the situation like 
Puerto Rico or hurricane areas, you look at a system that might 
be collapsible, similar to the way that a shear pin might be 
used on something as simple as a rototiller, right?
    So the redesign or reconstruct are also things that we look 
at for areas in the country where we've got different 
opportunities and challenges. We modify the programs to adapt 
to them.
    Senator Barrasso. Thank you, Madam Chairman.
    The Chairman. Senator Heinrich.
    Senator Heinrich. Thank you, Madam Chairman.
    One of the things I continue to be incredibly excited about 
is the potential for energy storage to improve the efficiency, 
the reliability and the resiliency of our system that generates 
and delivers electric power to homes and businesses.
    Widespread use of energy storage could help integrate 
renewable energy resources into our grid, support more robust 
microgrids, like we heard about in Alaska, and optimize the 
operation of all types of power generating sources.
    Increasingly battery technologies at the utility scale and 
in homes and businesses are already helping to shave peak 
periods, provide valuable ancillary services and displace new 
investment in generation substations and transmission and 
distribution lines.
    That is why I will soon be reintroducing the bill, the 
Energy Storage Tax Incentive and Deployment Act, that 
establishes a new investment tax credit for energy storage 
technologies. Currently, there are no direct tax incentives 
available for energy storage and the bill would provide an 
investment credit of 30 percent for both grid and residential 
applications that would phase down over a period of five years.
    As storage technologies improve and state and federal 
regulations continue to evolve to remove barriers to energy 
storage in all applications, my bill will help stimulate 
integration of energy storage into the nation's grid. I am 
pleased that a number of my colleagues on this Committee have 
chosen to be original co-sponsors of that legislation.
    That leads me to my first question for you, Mr. Walker.
    I have to say I was disappointed that energy storage did 
not appear more prominently in the recommendations of Secretary 
Perry's recent staff report on reliability and resiliency of 
the power grid. I wanted to ask you what your thoughts are on 
the state of energy storage and DOE's role in supporting 
innovative storage technologies and for that matter, their 
deployment.
    Mr. Walker. Thank you for the question, Senator.
    I am a huge proponent of storage. Storage within the 
industry has always been considered the holy grail of the 
technology leaps that we could possibly make.
    So when you talk about storage, and the reliability report 
does not specifically spend a significant amount of time 
regarding storage, but there is one component that is spoken 
about in that report wherein the reference is meant to be 
storage, even though I'm not sure it articulates it that way, 
and that deals with the flexibility of the system. So when 
discussing the reliability and the resiliency of the system, 
particularly with the integration of renewables, the 
flexibility component is the component that enables the peak 
power, the utilization of some of those renewables against the 
baseload.
    So, you know, based on work that I've done at GridWise 
Alliance, advocating for modernization, storage was a big 
component of that. And when I sat on the Electricity Advisory 
Committee (EAC) about 10 years ago for the Department of 
Energy, we spent a great deal of time dealing with storage and, 
in fact, the president of the largest storage consortium was on 
that EAC Committee with me as well.
    So it is something that we're very much focused on. There's 
existing R&D projects presently at multiple of the national 
labs----
    Senator Heinrich. Right.
    Mr. Walker. ----sponsored by the Department of, the Office 
of Electricity.
    Senator Heinrich. I would suggest that storage is no longer 
the holy grail of the power system. It's more like the bacon of 
the power system, a little bit makes everything better.
    [Laughter.]
    Mr. Walker. Point taken.
    Senator Heinrich. I want to ask you a little bit about--you 
mentioned the Polar Vortex and the impact that had on our power 
grid based on the impacts on combined-cycle natural gas. Are 
you also familiar with the role that demand response played in 
that episode, because I think that was one of the unsung heroes 
of resiliency in the midst of the Polar Vortex?
    Mr. Walker. I don't have all the details of the Polar 
Vortex and the use of demand response, but I'm intimately 
familiar with the use of demand response. It was something at 
Con Edison when we would go into, you know, into the heat waves 
in the summer and I was the emergency management director we 
would utilize demand response as one of the methodologies to 
control the 30 plus, independent secondary networks within 
Manhattan.
    Senator Heinrich. I would urge you to take a look at that 
because I think it played a very important role in that episode 
and one that was not necessarily appreciated at the time 
because it went unseen, as many things in the power sector do.
    Mr. Walker. I will.
    Senator Heinrich. Thank you, Mr. Walker, and I will come 
back for a second round, if I have time.
    Thanks.
    The Chairman. Thank you, Senator Heinrich.
    Senator Cassidy.
    Senator Cassidy. Hello, Mr. Walker, I am from Louisiana so 
I look at the people of Puerto Rico, Florida and Texas with 
great empathy because that was our state 10 years ago.
    You look at the grid in Puerto Rico, just smashed, and I 
gather all the plants are on the southside of the island, but 
the wires have to go over the mountains and now you have to 
rebuild over the mountainous terrain. It is an awful situation. 
It seems like if ever there were a place for both distributed 
energy and distributed storage, that would be Puerto Rico.
    What is the possibility of taking this opportunity to 
reshape their grid with more distributed, say solar or 
whatever, it is Puerto Rico, with some distributed storage to 
make them less reliant on those wires coming over the mountain, 
but also ideally standing something up very quickly?
    Mr. Walker. Thank you, Senator, for your question.
    As I mentioned earlier with regard to Puerto Rico 
specifically, I think there's a present opportunity to utilize 
it as a test bed to integrate all sorts of renewables and some 
of the work that has been done at the Department of Energy. 
Things like solar, wind, battery storage, to rebuild the system 
to make it more resilient, establish it as a test bed that can 
be utilized and replicated throughout the United States.
    Senator Cassidy. Let me ask because I went to California a 
few years ago and they were having such a hard time with high 
electricity rates. There was some group that was getting 
natural gas and having a micro generator, if you will, right on 
their ground, going off the grid, just using the gas to power 
up and, kind of, circumventing all the kinds of high rates that 
Californians have to endure.
    What is the possibility of doing that? Obviously, you would 
have to get some sort of big supply of natural gas there, but 
that is doable.
    What is the possibility of distributed natural gas? Just 
because for, obviously, industrial use, renewables are not 
going to cut the mustard. So the degree to which they have 
large-scale industrial use you are going to need something more 
powerful, more 24/7.
    Mr. Walker. Yes, sir. That is a possibility to utilize the 
different technologies that are available on the gas side. With 
Louisiana being a gas producer, that would be a good product 
for them to export to Puerto Rico. But that definitely is an 
opportunity particularly for the industrial customers, as you 
noted.
    Again, part of that, part of the strategy to rebuild it, I 
think, would--and not being 100 percent familiar with the 
intricacies of their infrastructure, I am aware that the two 
power plants that basically supply the whole island are on one 
side which requires them to use a significant amount of 
transmission lines and distribution lines to get the power 
throughout the entire island.
    So there's clearly an opportunity to integrate different 
types of generation to reduce the necessary transmission wires 
and distribution, as we know them today, to bring the power.
    And when things like hurricanes are realized they'll have 
less of an impact if there's less transmission----
    Senator Cassidy. Easier to put up solar panels than to 
rebuild lines across the mountain.
    Mr. Walker. Sure.
    Senator Cassidy. Mr. Winberg, the office for which you have 
been nominated to lead recently announced $36 million in 
financial assistance for design and testing of advanced carbon 
capture technologies.
    Now, obviously, Kemper has had a hard time doing this in 
Mississippi even though they were ideally situated: here is the 
coal, here is the plant and here is the place we are going to 
put the carbon capture in. On the other hand, I gather NRG has 
been able to do it successfully out in Texas.
    In your opinion, what do we need to do in order to 
implement carbon capture and storage on a large scale and to do 
it economically? Does it always take a special geologic, sort 
of, the production and the storage is right next to each other? 
I am told it is like $1million a mile for the pipeline to ship 
the gas.
    Your thoughts?
    Mr. Winberg. Thank you for the question, Senator.
    As I talked about earlier, there are opportunities, work 
that needs to be done to reduce the cost of CO2 capture and 
there's ongoing work and part of this funding is to do just 
that.
    You asked about the sequestration. There is also 
opportunities to use this CO2, to think of it more as a 
commodity and use it in things such as enhanced oil recovery.
    So we're capturing the CO2 from an anthropogenic source. We 
are piping it, but we're piping it into an existing oil field 
and we can----
    Senator Cassidy. No, I get that it does seem to take 
proximity for that to work. I think they are doing that in West 
Texas, maybe New Mexico, but again, if you are going to take 
something off of a too-far field, the expense seems to be an 
obstacle. Is that a fair statement?
    Mr. Winberg. I think the expense, primarily, is in the 
capture component. Pipelines are not inexpensive, I don't want 
to give that indication, but the primary expense right now that 
we need to work on is in the capture part.
    There's also been some discussion that if we get to the 
point where we can capture that CO2 at a lower cost than what 
it takes to pull natural occurring CO2 out of the ground, we 
could set up a pipeline infrastructure to move the commodity 
CO2 into those fields where we can use them for enhanced oil 
recovery.
    Senator Cassidy. Okay, thank you.
    I yield back.
    The Chairman. Thank you, Senator Cassidy.
    Senator Daines.
    Senator Daines. Thank you, Chair Murkowski.
    I want to thank the two nominees for your willingness to 
serve in these very important capacities.
    I just returned from Taiwan and Korea Saturday night. Of 
course, Korea is focused right now on what is going on with the 
North Korean threat, but I stopped in Taipei and met with 
President Tsai and her team.
    I was struck by what happened there just last month where 
they had a six-hour blackout in Taiwan as they were not able to 
take care of peak load. There was doubling down on 
decommissioning their nuclear power capabilities and it left 
them without enough power to keep the grid going there for six 
hours in August during peak demand.
    These issues we are talking about here today, and with the 
expertise you both respectively bring to the job, are I think 
of utmost importance as we have seen mistakes made around the 
world--Australia, Germany, I think I would add Taiwan to that 
list now--I mean, not thinking through really a diverse 
portfolio and balance capabilities, not just to meet baseload 
and how critically important that is, but also peak.
    In my home State of Montana our baseload largely comes from 
coal-fired generation, about 50 to 60 percent. I remember a 
couple of years ago when I was out at Colstrip where the power 
plant is and chatting with the manager there. It was a hot July 
day and they were doing some maintenance on part of the plant. 
They were off the grid for a period of time.
    Well, when a high-pressure system moves into the Northwest 
in July and August, the temperature goes up and, of course, the 
wind stops blowing.
    I support renewable energy and we are very excited about 
what we are seeing in Montana with our renewable portfolio, but 
it is also a reminder that we have a diverse portfolio here to 
ensure that we keep baseload and, importantly, peak load as 
well going forward.
    Our largest coal-fired plant in Montana at Colstrip has 
been under a threat from the litany of heavy-handed regulations 
as well as litigation from the prior Administration.
    That plant employs 350 people, the mine about 400 people. 
It is one of the largest taxpayers in our state. It is a heavy 
economic contributor, particularly at a time right now in 
Montana where we are facing a fiscal train wreck where at the 
moment we are having to cut across the board 10 percent, it 
looks like, across state agencies because revenues are not 
coming in as anticipated.
    If we lost this huge economic driver in Montana that pays a 
lot of taxes to keep our teachers and our schools, our 
infrastructure funded, not to mention reliable and low-cost 
energy, it would be a catastrophe in my state. We are very 
concerned about the future of Colstrip right now in Montana.
    I very much understand the importance of a diverse energy 
portfolio. I am the only chemical engineer serving on the Hill 
so I know what it is like to get in and, kind of, geek out on 
some of these issues as it relates to energy and so forth.
    But we are very concerned. We need a diverse portfolio. We 
need to provide our operators with a suite of options to keep 
the grid secure. I do not think we can remove baseload power, 
specifically coal generation, from our nation's energy mix.
    By the way, Montana has the largest coal reserves in the 
United States. You think of Montana as the state that is famous 
for Yellowstone National Park and Glacier Park and fly fishing, 
``The River Runs Through It'' and Brad Pitt with a fly rod in 
his hand. That is all true. And we have more recoverable coal 
than any state in the United States. The responsible use of 
this natural resource, in my opinion, is certainly in my 
state's and, I think, our nation's best interest.
    Mr. Walker, I greatly appreciate the operations background 
that you have. I was an operations guy when I worked for 
Proctor & Gamble. Operations guys are not dealing in theory, 
they deal with reality every day, and I appreciate that 
background you will bring to the job.
    I understand you touched on this with Senator Manchin when 
he asked questions about the importance of coal generation to 
reliability of the grid, but I want to move into the national 
security implications.
    What is your perspective on the importance of baseload 
generation, specifically coal generation, to our national 
security?
    Mr. Walker. Thank you for the question, Senator Daines, and 
I appreciated meeting with your staff last week to learn a 
little bit about some of the details of the projects you have 
going on.
    Specifically to the question you asked me, I am a strong 
supporter of a diverse portfolio. I'm a strong supporter of 
traditional baseload, particularly as it relates to the 
essential reliability services aspect that often go unspoken 
when people talk about generation, and that component is what 
provides the national security benefit that you're alluding to.
    When you run an electricity system from an operations 
perspective there's some fundamental practicalities that are 
driven by fundamental physics. And the reason that coal and 
nuclear were utilized as traditional baseload were to control 
those essential reliability services, more specifically, things 
like controlling the frequency of the system, the inertial 
energy of the system and the reactive power flow of the system. 
And so, those components are the underpinnings of what allow 
all of the other renewables and other type of technologies to 
ride on top of it, if you will, to provide and meet the demands 
of the load profile that's there.
    So I revert back to the basic reasons that the traditional 
load was made up of, of coal and nuclear, which was really to 
facilitate the rest of the load portfolio. So I'm a strong 
supporter of traditional baseload.
    Senator Daines. Mr. Walker, thank you.
    I am out of time, but thank you for the term ``fundamental 
physics'' as we talk about this. I would like to get your 
commitment if you would come out to Montana, visit Colstrip, 
and I would like to get your assessment on grid security once 
you are confirmed.
    Mr. Walker. If confirmed, even if I'm not confirmed, I'd 
love to come out to Montana. You just have to promise me I 
don't have to bring my skiing son who is trying to get to 
Montana anyway he can.
    [Laughter.]
    Senator Daines. Montana State is a great place to go to 
school and you can ski a lot, if you want. Just to let you know 
that.
    [Laughter.]
    Mr. Walker. He's studying chemical engineering.
    Senator Daines. God bless you. Good work.
    [Laughter.]
    Thank you.
    The Chairman. Fundamental physics, too geeky.
    [Laughter.]
    Let's go to Senator Cortez Masto.
    [Laughter.]
    Senator Cortez Masto. Thank you, Madam Chair.
    You are always welcome to come to Nevada and Tahoe skiing, 
and you can go to the University of Nevada-Reno.
    [Laughter.]
    We will welcome you there.
    Thank you, gentlemen, for your willingness to serve and 
thank you and welcome to the family members. And thank you, Mr. 
Winberg, for your service to our country. I really appreciate 
that and what an honor it is to have you here. Thank you.
    This is an important topic for Nevada, as you well know. 
Renewables and clean energy are very important to Nevada and 
many of us, and we are trying to find that right balance for 
the portfolio that we need.
    And so, Mr. Walker, I want to talk with you and I 
apologize, I think you have already talked about this but I am 
juggling two Committees at the same time, so I just ran back 
from Banking so I can ask a few questions.
    I am interested with your background. Can you talk a little 
bit about your thoughts when it comes to the intersection of 
the grid modernization and cybersecurity and how you see those 
fitting together and your role in both of those?
    Mr. Walker. Thank you, Senator, for the question.
    That's a fantastic question because that is the nexus point 
where cybersecurity, particularly on the OT side, the 
operational technology side, really begins.
    I mentioned earlier, the utility industry when it was 
developed 130 years ago, there were no computers. When the 
advent of integrated technology or ICE, integrated components, 
came into play and computer technology came into play, the 
SCADA systems and the components that have susceptibility from 
the cyber perspective, fundamentally became add-ons to the 
existing architecture, if you will, of the electric grid. The 
fundamental architecture of the grid never changed, and it's 
these add-ons that created the vulnerability and the 
susceptibilities with regard to the cybersecurity risks that we 
have.
    And one of the components, one of the three areas that I 
believe we need to focus on in cybersecurity is the R&D 
component with taking a look at the actual operational 
technologies and the architecture of the system so that as we 
move forward with modernization, things that facilitate 
efficiencies and better logic schemes and correlation modeling 
for predictive analysis, that that's done so in a way that 
doesn't create the susceptibilities that we realize today by 
virtue of the way the system is developed independently.
    Senator Cortez Masto. Thank you and I could not agree more. 
I think, oftentimes, cybersecurity is an afterthought and we do 
not think about it as part of the infrastructure, the 
architecture when we are moving forward.
    So I appreciate those comments, thank you.
    Mr. Walker. Thank you.
    Senator Cortez Masto. Mr. Winberg, welcome.
    In June 2016, the Secretary of Energy Advisory Board 
reported that there currently is no large-scale R&D programs in 
direct air capture of carbon dioxide from the atmosphere that 
are sponsored by the Department of Energy. Several recent 
studies referenced in the task force report have estimated the 
cost to be approximately $600 per ton of CO2, if not higher.
    But in that same report, it notes that developing novel, 
liquid absorbents and solid absorbents, membranes and hybrid 
systems would contribute to developing low-cost, direct air 
capture and are being addressed through current Office of 
Science and Fossil Energy sponsored research.
    Do you believe that continued investments in these types of 
direct air capture technologies are worthy of future 
investment?
    Mr. Winberg. Thank you for the question, Senator.
    Many of the capture technologies, whether it's solvents or 
membranes that would be used in direct air capture would be 
very similar to those used in more concentrated levels of CO2 
coming out of power plant stacks or industrial facilities.
    So, I think, to the extent we're looking at basic or even 
applied research in evaluating those absorbents or membranes, 
using them or testing them on a higher concentration levels 
probably makes more economic sense, at least in the early stage 
of the research. As we get out into pilot-scale and larger-
scale demonstrations, that's a different matter because now 
you're getting into integration of large equipment.
    But where we are right now on the R&D timeline, if you 
will, I think the best use of funds is probably in those more 
concentrated streams.
    Senator Cortez Masto. Okay.
    As Assistant Secretary would you consider supporting 
investments in carbon capture research on natural gas power 
plants?
    Mr. Winberg. Thank you for the question.
    Again, in general, yes, but again, natural gas CO2 is about 
50 percent of what you have on coal-fired or some industrial 
sources. So again, it's a matter of using the most concentrated 
sources.
    But yes, as we continue down the development timeline and 
we start to look at equipment and integrating that into 
existing sources, then yes, we need to look at natural gas as 
well.
    Senator Cortez Masto. Thank you. I appreciate your 
comments, gentlemen. Thank you very much.
    The Chairman. Thank you, Senator.
    Gentlemen, I have a few more questions but I also have a 
commitment that I am already late to. We are juggling a lot of 
things here this morning. I am sure you can appreciate that. So 
I will submit them as questions for the record. One, Mr. 
Winberg, is specific to the Strategic Petroleum Reserve.
    Senator Cassidy has a follow-on question I will allow him 
to ask and then he will close the Committee out.
    But again, I want to thank you for stepping up. I want to 
thank your families for backing you and my hope is that we will 
be able to move these nominations expeditiously through the 
Committee.
    You certainly have my support, and I think your knowledge 
of the issues and your desire to learn more than you already 
have done and provided is greatly appreciated. So we thank you 
for that.
    With that, Senator Cassidy, if you would like to ask your 
questions and then close this out, I would appreciate it. Thank 
you.
    Senator Cassidy [presiding]. Thank you, Madam Chair.
    Mr. Winberg, you are going to know the details better than 
I can describe it, but by reference, that project in Texas 
where they are taking CO2, using it to directly drive a 
turbine. Are you familiar with that?
    Mr. Winberg. Yes, Senator, I am.
    Senator Cassidy. I saw something recently building upon 
that concept. They take natural gas and/or gasified coal, mix 
it with oxygen, spark it and the CO2 that results is used to 
drive a turbine, capturing some of it to recycle back into the 
process of driving the turbine and perhaps capturing and 
storing another part. Are you familiar with that technology and 
conceptually does it make sense?
    Mr. Winberg. Yes, Senator, I am familiar with the 
technology, super critical CO2.
    Senator Cassidy. Define super critical CO2 because that is 
a technical term, I gather?
    Mr. Winberg. I'm sorry, yes.
    High pressure, high temperature CO2. So rather than using 
steam which or hot gases to drive a turbine, you use the high 
pressure, high temperature CO2. And it creates a closed loop, 
recycling that CO2 and then eventually it can be sequestered or 
used for enhanced oil recovery.
    I think that the technology is one of those 
transformational technologies, quite frankly. There are a 
couple of others and they are probably from large-scale, 
commercial development. They're probably 5 to 10 years out, but 
they hold a lot of promise for not only capturing CO2 but 
perhaps more importantly, significantly increasing the 
efficiency of coal-fired and natural gas-fired generation in 
the United States.
    Senator Cassidy. So you can see that it is almost as an 
ancillary where you would have it as an add-on to your standard 
plant producing the CO2 or know you can take your gasified coal 
and then directly feed it in.
    Put it this way. Do we have to replace the plants we have 
or is this something that can be an adjunct?
    Mr. Winberg. Good question.
    I think we would have to replace parts of the plant for 
sure. So it could either be a greenfield site or a brownfield 
site or retrofit, if you will. But the majority of the 
equipment, probably at the end of the day would be replaced. 
Things like----
    Senator Cassidy. Let me stop you just because I have 
limited time.
    Mr. Winberg. Sure.
    Senator Cassidy. You say it is 5 to 10 years out, but there 
is already this prototype based upon this concept being built 
in Texas right now. Why 5 to 10 years out because it sounds 
like this is incredibly promising?
    Mr. Winberg. It is incredibly promising, but I'm talking 
about getting to commercial-scale and wide-reaching deployment.
    Senator Cassidy. Now, there are two things about that.
    There are technical problems of getting it to commercial 
scale and then there is a second, well, we do not replace power 
plants that often--so that is a separate issue.
    Mr. Winberg. Yes, sir.
    Senator Cassidy. So which of those two or is it both?
    Mr. Winberg. I think it's a little bit of both, but 
probably more the former than the latter.
    Senator Cassidy. So that is just getting the experience 
with it--the technical experience?
    Mr. Winberg. Yes, sir.
    Senator Cassidy. Anything else you would add to that before 
I turn it over to Governor Hoeven?
    Mr. Winberg. I'm sorry, I didn't hear the question.
    Senator Cassidy. Is there anything else you would add to 
that? I am interested in this because it does seem a way to 
find a use for this instead of having to pipe all this natural 
gas far away for EOR, to ship it down the street, to run it in 
this, sort of, turbine and/or to use this coal that Senator 
Daines is talking about in a way which captures the CO2 and, 
ideally, all these other countries that are using so much coal 
could deploy the technology and decrease their greenhouse gas 
emissions. All that make sense?
    Mr. Winberg. Yes, it does, sir.
    Senator Cassidy. And so, the technical aspect of it, you 
have $36 million to, kind of, further this. Would this be one 
of those things you would further or is this different than the 
approach you would take?
    Mr. Winberg. I believe this is one of the things that we 
could further with that $36 million. Yes, sir.
    Senator Cassidy. Okay.
    Gentlemen, thank you very much. I will now turn to Senator 
Hoeven.
    Senator Hoeven. Doc, you must be in charge looking around 
the room here.
    Senator Cassidy. You are in charge now, buddy.
    [Laughter.]
    Senator Hoeven [presiding]. Thank you.
    First, welcome to both of you and it looks like you have 
family here, so welcome to your family as well. And 
congratulations on being nominated for these important 
positions.
    I would like to start with Mr. Winberg.
    First, I want to thank you for coming by and visiting with 
me in my office. I am going to go right to what we talked about 
and that is supporting fossil research and developing clean 
coal technology.
    To do that we need industry out there doing new, 
innovative, creative things which they are doing. I gave you an 
example in North Dakota where our companies are using the 
latest, greatest technology to already, not only capture CO2, 
but compress it, condense it, pipe it out to the oil fields and 
put it down a hole for tertiary oil recovery.
    Now we are working on new projects, plants that are coal-
fired electric plants, both to capture CO2 in the back end, 
that is called Project Tundra, and to build a new plant with 
very low CO2 emissions which is the LM cycle.
    The partnership between our industry, between our state, 
and we really need the DOE and the Fossil Energy Research 
Program to partner with us to make this happen. So we take this 
technology from technically-viable to commercially-viable and 
really then, you will see it adopted across the country and in 
other countries as well.
    So please, obviously that is a huge concern in terms of 
your support for that kind of research and development. I would 
like you to tell me your thoughts and your commitment to it. 
And then also, willingness on your part to come see what we are 
doing and work to partner with us.
    Mr. Winberg. Thank you for the question, Senator Hoeven.
    Absolutely, I support this type of research. I've spent 39 
years doing exactly this type of research.
    And so, if confirmed, I look forward to continuing that.
    I also look forward to coming out to your state and meeting 
with some of the people that are doing this fine work. I have 
worked off and on with the ERC, so I'm very familiar with those 
folks and the fine work that they do.
    But absolutely, Senator, I am very supportive of this type 
of work that is going on in North Dakota as well as other 
states around the country.
    So, thank you.
    Senator Hoeven. That is an excellent answer, and I 
certainly look forward to supporting you in the nomination 
process.
    Mr. Walker, I would turn to you and just ask about electric 
grid reliability and touch briefly on your approach, but then 
also on baseload because one of the challenges we have is both 
baseload and variable energy going into that grid.
    We need both but we have to make sure that we preserve that 
baseload, and if it gets pushed out because some of the 
variable players come in at a preferential rate, that could 
create a long-term issue for us.
    So how do you handle that and make sure that we continue to 
promote the development of all industry, but whether it is 
baseload electric or these other baseload energy providers that 
we keep them in place, which we very much need for long-term 
safety and security of our energy supply?
    Mr. Walker. Sure, thank you. Thank you for the question.
    I spoke earlier about this and it was focused on the 
essential reliability services that are provided by the 
traditional baseload. And, while I support a diverse portfolio, 
I revert back to the fundamental physics that drive the 
operations of the utility generation business.
    Traditional baseload was put into place at the time it was 
very cost-effective based on the operation and maintenance 
aspects and the low number of forced outages on both the 
nuclear and the coal components.
    But there was another component that doesn't get talked 
about often which is referred to as the ERS component, which is 
the Essential Reliability Services, and by those I mean things 
like controlling the frequency, inertial capabilities, reactive 
power flow and traditional baseload generation does those three 
things and those are critically important for the rest of the 
fleet, if you will, of generation to operate properly.
    So, as we add things in, some of the renewable technologies 
that still relies on the basic fundamental physics that require 
reactive power flows and magnetization that are created by the 
traditional baseload.
    So I'm a fan of traditional baseload and, more importantly 
I think, the fundamental physics that drive the system.
    Senator Hoeven. Thank you, I appreciate your answer as 
well.
    Thanks again to both of you for your willingness to serve 
in these important positions. We appreciate it very much.
    And with that, I will turn to Governor King.
    Senator King. Governor Hoeven, thank you.
    [Laughter.]
    It looks like we are in charge here.
    Senator Hoeven. Yes, sir.
    Senator King. No telling what good we could be up to.
    Senator Hoeven. Exactly.
    Senator King. Gentlemen, I apologize for being late. There 
is no effort in the Senate to coordinate schedules of hearings, 
and I have been at an Armed Services Committee hearing this 
morning.
    I guess I would start with Mr. Walker.
    You are walking into an agency that, I think, is critically 
important and your Administration is proposing an $85 million, 
40 percent, cut in your budget. Does that make sense to you?
    Mr. Walker. Well, thank you for the question, Senator King.
    Unfortunately, I wasn't here during the development of the 
budget. I am aware of the cuts. I'm also aware that the 
Appropriation Committee and Congress, you know, made up of the 
House and the Senate, fundamentally drives and establishes the 
budget at the end of the day. And I know there's been quite a 
bit of talk with regard to the cuts for this Department.
    Senator King. Will you commit to expending the funds 
efficiently and effectively that are appropriated by the 
Congress, regardless of what the proposed budget was of the 
Administration?
    Mr. Walker. I will spend the funds that are appropriated by 
Congress efficiently and effectively.
    Again, I haven't had the opportunity to be at the 
Department so I don't have all the information that went into 
developing the budget but, if confirmed, I commit to review it. 
I work on a risk-based approach with expenditures and I will 
absolutely spend the money efficiently and effectively, as 
determined by the risk components and what drives the industry 
at the Department.
    Senator King. But you will execute the budget as passed by 
Congress? That is what I want to hear you say.
    Mr. Walker. I will execute the budget as executed by 
Congress.
    Senator King. Thank you.
    On this issue of baseload, I am concerned that there is--I 
have never heard the word ``baseload'' so often as in the past 
three or four months. It seems to be becoming a magic term that 
says we do not want any more renewables.
    Denmark, for example, I remember hearing--I have been in 
the renewable business for over 30 years before coming into 
this job, and I remember hearing that you could only penetrate 
into the market so far, 10 percent of renewables, 10 percent, 
20 percent.
    But aren't there places in the world, Denmark, for example, 
where a much higher percentage of that is based upon wind power 
coupled with hydro?
    Mr. Walker. As I am familiar with Denmark's baseload 
generation component, it is higher than the 10 percent figure 
you're speaking about, yes.
    Senator King. Significantly higher, 30, 40 and some days 
50, 60, 70 percent. Isn't that correct?
    Mr. Walker. I'm not sure exactly what Denmark's actual 
baseload component is, Senator.
    Senator King. Then I guess the point I would make is that 
renewables plus storage, and hydro can be storage, can equal 
baseload. Can it not?
    Mr. Walker. Well, absolutely.
    You know, you weren't here earlier, Senator, so I am a huge 
fan of renewable energy, but I believe in a portfolio approach 
to be able to do that----
    Senator King. I do too. There has got to be a diversity. I 
fully agree.
    Mr. Walker. Absolutely and you know, pump storage hydro, 
which is the greatest amount of storage technology today, is 
highly reliable and has been utilized as baseload throughout 
the United States.
    Senator King. And can be used to offset when the sun 
doesn't shine or the wind doesn't blow?
    Mr. Walker. As long as gravity works, we're okay.
    [Laughter.]
    Senator King. Even Congress cannot repeal that law.
    [Laughter.]
    Mr. Walker. Can't legislate physics.
    [Laughter.]
    Senator King. Although in Maine one year we tried to repeal 
February. It was a----
    [Laughter.]
    Let's turn to a different question about threats to the 
grid because your role includes reliability.
    I consider cyber, probably, one of our greatest national 
vulnerabilities. Do you agree?
    Mr. Walker. Absolutely.
    Senator King. And do you feel that we are adequately 
protected now, in terms of a potential cyberattack on our grid?
    Mr. Walker. I believe there's quite a bit of work being 
done in the cyberspace. I think there's opportunity to do more.
    Earlier I articulated three different components to address 
cyber. The first has to do with the situational awareness with 
regard to the information that's communicated through the 
Federal Government back to the utilities throughout the United 
States regarding threats and the information, you know, 
backflow between both the utilities and the industry. There's 
an existing program called CRISP that has to do with the 
information sharing between utilities that's already being done 
by the Department of Energy that I think could be further 
expanded. The second component involves the preparing for the 
actual event--so an incident response component. And then the 
third component involves specific R&D, particularly as it 
relates to the architecture of the grid.
    I spoke earlier about the architecture of the grid that we 
have today was developed 130 years ago, independent of any of 
the technologies that enable the cybersecurity risk that we 
realize today.
    So the SCADA systems and the RTUs and all of those did not 
exist when the original systems were put in and developed. 
They're effectively add-ons. And when they were added on they, 
in fact, created the vulnerability for cybersecurity on the 
grid.
    The R&D component would be focused on taking a look at the 
architecture and perhaps building some of the logic into, or 
building logic simultaneously into, the components that 
actually operate under the basic physics that drive the system.
    Senator King. My time is expired but I would suggest that 
one strategy that we need to be thinking about, and the 
destruction of the grid in Puerto Rico, it seems to me, gives 
us a chance to think about it and perhaps execute this, is more 
distributed generation so that if when you knock out the 
central generating plant, you do not knock out the whole 
system. And more in terms of demand response distributed 
generation that, in itself, can create a more self-healing grid 
and a more resistant to a central point of attack.
    Would you agree?
    Mr. Walker. I would agree.
    Senator King. Thank you.
    Thank you, Mr. Chairman
    Senator Hoeven. Did you have any other questions? If so, 
you can go ahead and ask them.
    Senator King. No, I think I am fine, thank you.
    Senator Hoeven. Okay.
    Again, thanks to both of the witnesses.
    If any members do have questions for the record they need 
to submit them by close of business today.
    With that, we are adjourned.
    Thanks very much.
    [Whereupon, at 11:53 a.m. the hearing was adjourned.]

                      APPENDIX MATERIAL SUBMITTED

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