    [Senate Hearing 117-473]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 117-473

                              PENDING LEGISLATION

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

    		     S. 3145                 S. 3856
    		     S. 3543                 S. 4038
    		     S. 3719                 S. 4061
    		     S. 3740                 S. 4066
    		     S. 3769                 S. 4280
                                    __________

                                 JULY 28, 2022
                                   __________

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

            Available via the World Wide Web: http://www.govinfo.gov
                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    48-298                     WASHINGTON : 2024

                   COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    JOE MANCHIN III, West Virginia, Chairman
    RON WYDEN, Oregon                    JOHN BARRASSO, Wyoming
    MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
    BERNARD SANDERS, Vermont             MIKE LEE, Utah
    MARTIN HEINRICH, New Mexico          STEVE DAINES, Montana
    MAZIE K. HIRONO, Hawaii              LISA MURKOWSKI, Alaska
    ANGUS S. KING, JR., Maine            JOHN HOEVEN, North Dakota
    CATHERINE CORTEZ MASTO, Nevada       JAMES LANKFORD, Oklahoma
    MARK KELLY, Arizona                  BILL CASSIDY, Louisiana
    JOHN W. HICKENLOOPER, Colorado       CINDY HYDE-SMITH, Mississippi
                                         ROGER MARSHALL, Kansas

                          Renae Black, Staff Director
                          Sam E. Fowler, Chief Counsel
                     Brie Van Cleve, Senior Energy Advisor
                 Richard M. Russell, Republican Staff Director
                  Matthew H. Leggett, Republican Chief Counsel
          Justin Memmott, Republican Deputy Staff Director for Energy

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Heinrich, Hon. Martin, a U.S. Senator from New Mexico............     1
    Barrasso, Hon. John, Ranking Member and a U.S. Senator from
      Wyoming........................................................     6

                                   WITNESSES

    Huff, Hon. Kathryn, Assistant Secretary for Nuclear Energy, U.S.
      Department of Energy...........................................     8
    Speakes-Backman, Kelly, Principal Deputy Assistant Secretary,
      Office of Energy Efficiency and Renewable Energy, U.S.
      Department of Energy...........................................     9
    Wech, Mike, Administrator and Chief Executive Officer,
      Southwestern Power Administration, U.S. Department of Energy...    19
    Navin, Jeff, Director of External Affairs, TerraPower............    22
    Leuck, Matt, Technical Services Manager, Neste, U.S..............    36

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    Air-Conditioning, Heating, and Refrigeration Institute et al.:
        Letter for the Record........................................    55
    Alpha Tech Research Corp. et al.:
        Letter for the Record........................................    60
    American Association for Laboratory Accreditation:
        Letter for the Record........................................    89
    American Fuel and Petrochemical Manufacturers:
        Letter for the Record........................................    91
    American Nuclear Society:
        Letter for the Record........................................    62
    American Public Power Association and National Rural Electric
      Cooperative Association:
        Statement for the Record.....................................    96
    American Trucking Associations et al.:
        Letter for the Record........................................    93
    Barrasso, Hon. John:
        Opening Statement............................................     6
    Bradley, David:
        Statement for the Record.....................................   101
    California Air Resources Board and California Energy Commission:
        Letter for the Record........................................    47
    Centrus Energy:
        Letter for the Record........................................    64
    Clean Fuels Alliance America:
        Letter for the Record........................................    99
    Feinstein, Hon. Dianne:
        Statement for the Record.....................................     2
    Heinrich, Hon. Martin:
        Opening Statement............................................     1
    Huff, Hon. Kathryn:
        Opening Statement............................................     8
        Written Testimony............................................    11
        Responses to Questions for the Record........................    81
    Leuck, Matt:
        Opening Statement............................................    36
        Written Testimony............................................    38
        Responses to Questions for the Record........................    88
    Navin, Jeff:
        Opening Statement............................................    22
        Written Testimony............................................    24
        Responses to Questions for the Record........................    87
    Nuclear Energy Institute:
        Letter for the Record........................................    65
    Nuclear Innovation Alliance:
        Letter for the Record........................................    67
    Orano USA LLC:
        Letter for the Record........................................    69
    Speakes-Backman, Kelly:
        Opening Statement............................................     9
        Written Testimony............................................    11
        Responses to Questions for the Record........................    85
    TerraPower:
        Letter for the Record........................................    71
    Uranium Producers of America:
        Letter for the Record........................................    73
    Wech, Mike:
        Opening Statement............................................    19
        Written Testimony............................................    20
    Western States Petroleum Association and Oregon Fuels
      Association:
        Letter for the Record........................................   106
    X-energy
        Letter for the Record........................................    75

    ----------
    The text for each of the bills that were addressed in this hearing can
    be found at: https://www.energy.senate.gov/hearings/2022/7/full-
    committee-hearing-to-consider-pending-legislation

                              PENDING LEGISLATION

                                  ----------

                            THURSDAY, JULY 28, 2022

                                           U.S. Senate,
                     Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:05 a.m. in
    Room SD-366, Dirksen Senate Office Building, Hon. Martin
    Heinrich, presiding.

              OPENING STATEMENT OF HON. MARTIN HEINRICH,
                      U.S. SENATOR FROM NEW MEXICO

        Senator Heinrich. The Committee will come to order. Today,
    our Committee will hear testimony on ten bills. The bills on
    the agenda today address a range of topics of concern to this
    Committee, including energy efficiency, advancing alternative
    fuel vehicles and renewable fuels, exports of LNG and imports
    of Russian uranium, and research and development at the
    Department of Energy into carbon dioxide removal,
    microelectronics, and fuel for advanced nuclear reactors.
        I have a statement of support from Senator Feinstein for
    the bill that she has co-sponsored with Senator Barrasso, the
    Renewable Diesel and Sustainable Aviation Fuel Parity Act, that
    she would like entered into the record, assuming there are no
    objections.
        [Letter of support from Senator Feinstein follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Heinrich. I would like to highlight two bills in
    particular that will create new opportunities for families to
    save substantial money on their household heating and cooling
    bills, in addition to making a small technical change to the
    definition of water heaters. S. 4061, introduced by Senators
    Stabenow, Blackburn, and Hirono, authorizes the Department of
    Energy to consider doing a rulemaking to set a demand response
    capability standard for residential electric resistance and
    heat pump water heaters at the point of manufacture. Demand
    response is a great tool to enable grid operators and utilities
    to manage loads to enhance grid security and reliability during
    high demand periods. According to a recent DOE study on load
    shifting and the energy efficiency potential of heat pump water
    heaters in residential buildings, grid-connected heat pumps can
    reduce evening peak load by as much as 90 percent, relative to
    electric resistance. This translates to dollars saved for
    consumers. In fact, converting all electric resistance water
    heaters to heat pump water heaters would save American
    consumers $7.8 billion annually, or about $182 per household in
    water heating bills.
        The second bill, the Weatherization Assistance Program
    Improvements Act of 2022, introduced by Senators Reed, Collins,
    Coons, and Shaheen would authorize funding to ensure that
    people have the resources they need to make their homes
    weatherization-ready. As successful as the Weatherization
    Assistance Program has been, there are significant challenges
    preventing many households from receiving the weatherization
    assistance they need, including things like unremediated mold
    and structural deficiencies. I think it is also worth
    highlighting the increase in the per-dwelling unit cap from
    $6,500 to $12,000 per household. The higher limit would make it
    so that homeowners are able to fully weatherize rather than
    having to pick and choose upgrades. It could also make it
    easier for people to get their homes ready for things like
    electrification. I think these reforms have real potential to
    save families money by lowering their home heating and energy
    bills, and I look forward to learning more about them from our
    witnesses today.
        With that, I will turn things over to our Ranking Member,
    Senator Barrasso, for his opening remarks.

               OPENING STATEMENT OF HON. JOHN BARRASSO,
                       U.S. SENATOR FROM WYOMING

        Senator Barrasso. Well, thanks so much. Thank you, Mr.
    Chairman. Thanks for holding today's legislative hearing. I am
    going to limit my comments to the three bills which I have
    introduced.
        The first is S. 3856, a bill to ban imports of Russian
    uranium. Earlier this year, Congress signaled its support for
    banning imports of Russian energy fuels. Our efforts
    effectively forced President Biden's hand. In March, the
    President announced that he would ban imports of Russian oil,
    natural gas, and coal. But President Biden chose not to ban
    imports of Russian uranium. Russia is currently our fourth
    largest uranium supplier. Russia's sole nuclear company also
    accounts for about half of the world's uranium enrichment, and
    it was founded by President Vladimir Putin. So let's be clear
    about what this means. By purchasing Russian uranium, we
    continue to fund Russia's war in Ukraine. If we are serious
    about choking off funds to the Russian state and helping the
    people of Ukraine, then we need to ban imports of Russian
    uranium. The time for sitting on our hands is over.
        The second bill, S. 4066, is a bill to promote the domestic
    production of high-assay low-enriched uranium. This is a
    specific type of uranium that will fuel America's advanced
    reactors. That includes TerraPower's Natrium reactor, which
    will be built in my home State of Wyoming. It also includes X-
    energy's reactor, which will be built in Senator Cantwell's
    home State of Washington. Currently, there are only two sources
    of high-assay low-enriched uranium. One is Russia. The other is
    the Department of Energy. My bill would ensure that the
    companies like TerraPower and X-energy have a domestic source
    of high-assay low-enriched uranium. Specifically, it would
    require the Secretary of Energy to produce this fuel from its
    excess inventories of highly enriched uranium. It would also
    require the Secretary to make sufficient quantities of high-
    assay low-enriched uranium available for the initial needs of
    our advanced reactors. At the same time, the bill would
    accelerate the commercial availability of this fuel here in the
    United States. If our advanced reactors are to succeed, we must
    help them secure the fuel they need here at home in America.
        The last bill, Senate bill 4038, is a bill to promote the
    production and use of renewable diesel and sustainable aviation
    fuel. Renewable diesel offers among the most promising means to
    reduce carbon emissions for heavy duty trucks. Likewise,
    sustainable aviation fuel offers among the most promising means
    to reduce carbon emission from aircraft. Unlike conventional
    biodiesel, renewable diesel can meet the same technical
    specifications as petroleum-based diesel. That means that there
    are no physical limits to how much renewable diesel can be used
    in today's engines, fuel pumps, storage tanks, and pipelines.
    This bill would require the Secretary of Energy to report on
    the domestic production and foreign imports of renewable diesel
    and sustainable aviation fuel. That includes the type, volume,
    and origin of the feedstocks. This bill would also exempt
    renewable diesel, from outdated and unnecessary labeling
    requirements. My home State of Wyoming is a leading producer of
    renewable diesel, and that renewable diesel is used in
    California. Last year, the California Air Resources Board wrote
    me explaining that existing labeling requirements are
    inhibiting the greater use and production of renewable diesel,
    and this is specifically related to California. The bill that
    Senator Feinstein and I have introduced would solve that
    problem and allow California and other states to use much
    larger volumes of that fuel.
        So I want to thank the witnesses for joining us today, and
    I look forward to the testimony of all of you.
        Thank you, Mr. Chairman.
        Senator Heinrich. Thank you, Senator Barrasso.
        Now, we will turn to our witnesses for today's hearing.
        Dr. Kathryn Huff, Assistant Secretary for Nuclear Energy,
    U.S. Department of Energy.
        Kelly Speakes-Backman, Principal Deputy Assistant Secretary
    for Energy Efficiency and Renewable Energy, U.S. Department of
    Energy.
        Mike Wech, Administrator and Chief Executive Officer of the
    Southwestern Power Administration.
        Jeff Navin, Director of External Affairs, TerraPower.
        Matt Leuck, Technical Services Manager at Neste, U.S.
        We will start with Dr. Huff. Please proceed.

    OPENING STATEMENT OF HON. KATHRYN HUFF, ASSISTANT SECRETARY FOR
               NUCLEAR ENERGY, U.S. DEPARTMENT OF ENERGY

        Dr. Huff. Thank you, Chairman Heinrich, Ranking Member
    Barrasso, and members of the Committee. It is an honor to
    appear before you representing the Department of Energy, along
    with my colleagues, to discuss the various energy bills under
    your consideration. I look forward to your questions and will
    begin my testimony on the legislation relevant to nuclear
    energy. To meet our ambitious carbon reduction goals and to
    rebuild U.S. leadership globally, the Biden Administration is
    prioritizing activities that keep the existing fleet of nuclear
    power plants operating, deploy advanced reactors, secure and
    sustain the nuclear fuel cycle, and expand international
    nuclear energy cooperation.
        The Russian Federation's invasion of Ukraine has
    demonstrated the grave threat to global energy security posed
    by dependence on Russian-supplied fuels. Russia, the largest
    global enricher of uranium, currently supplies a significant
    fraction of the nuclear fuel used by the United States, as well
    as our international allies and partners. In particular,
    conversion and enrichment services from trusted sources are not
    sufficient to replace current imports from Russia. Without
    expansion of this domestic fuel cycle capacity, the United
    States cannot securely support the low-enriched uranium needs
    of today's reactor fleet, or make high-assay LEU (HALEU)
    available for advanced reactors, research reactors, and medical
    isotope production. The Department is working to address these
    energy security challenges in the face of ongoing global
    events. I want to thank this Committee for your leadership in
    the development of proposed legislation at tackling this very
    important issue facing our nation and the world.
        S. 3856 bans uranium imports from the Russian Federation.
    American dependence on Russian uranium threatens our energy
    security. Untrustworthy state-sponsored programs have no place
    in our energy policy. However, any uranium import ban must be
    accompanied by strategic investments that strengthen our
    domestic nuclear fuel supply chain. Additionally, our nation's
    current nuclear power operators will need some time to wean
    ourselves off of this Russian supply.
        S. 4066, the Fueling our Nuclear Future Act, would direct
    the Department to accelerate the commercial availability of
    HALEU produced in the United States. The Department shares the
    Committee's concern about HALEU availability. Prior to Russia's
    invasion of Ukraine, DOE was already working to address HALEU
    needs for commercial deployment and uranium needs for its other
    missions. However, given global events, a new and more urgent
    path is needed. My office is actively addressing this topic in
    coordination with the National Nuclear Security Administration
    (NNSA).
        On behalf of my colleagues across the Department, I would
    also like to briefly touch on the other legislation considered
    today. S. 3740, the Micro Act of 2022, would expand DOE's
    capacity for early stage research pursing transformative
    technologies to advance the micro-electronics industry and
    reinforce DOE's position as a leader in this field.
    Microelectronics are essential to the execution of DOE missions
    in science and engineering, clean energy, energy security,
    national security, and stewardship of the nation's nuclear
    stockpile. DOE looks forward to working with the Committee on
    this legislation.
        S. 4280, the Federal Carbon Dioxide Removal Leadership Act,
    would complement the Regional Direct Air Capture Hubs and other
    programs included in the Bipartisan Infrastructure Law. The
    technologies developed and matured by this legislation may
    eventually be located in one of the four Direct Air Capture
    Hubs. Furthermore, they likely would leverage geological
    storage sites that will be developed from BIL provision 40305,
    Carbon Storage Validation and Testing.
        Finally, S. 3145, the Small Scale LNG Access Act of 2021,
    appears to codify into law a Department of Energy rule that
    expedites the approval process for facilities that export small
    scale shipments of LNG. While the Department does not have a
    position on this particular bill, DOE is ready to provide
    technical support as needed.
        Thank you for the opportunity to appear before the
    Committee today. I am happy to take your questions.
        [The written testimony of Dr. Huff and Ms. Speakes-Backman
    was submitted as one document. It appears following Ms.
    Speakes-Backman's opening statement on page 11.]
        Senator Heinrich. Thank you.
        We will go to Ms. Speakes-Backman next.

     OPENING STATEMENT OF KELLY SPEAKES-BACKMAN, PRINCIPAL DEPUTY
    ASSISTANT SECRETARY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE
                   ENERGY, U.S. DEPARTMENT OF ENERGY

        Ms. Speakes-Backman. Thank you, Chairman Heinrich, Ranking
    Member Barrasso, and members of the Committee. Thank you for
    the opportunity to testify today. Today, I am going to be
    testifying on four bills that will address a range of important
    energy issues across the transportation and building sectors,
    which are two of the five largest sources of greenhouse gas
    emissions in our nation. My written testimony provides
    additional detail of the bills as the Administration continues
    to examine them.
        Senate bill 3543, the Vehicle Innovation Act, would
    reauthorize and complement the critical work already underway
    in the EERE's Vehicles Technology and Hydrogen Fuel Cells
    Offices, to increase innovation efficiency of the
    transportation sector across road, rail, sea, and air.
    Reauthorization of this bill is critical due to the role that
    transportation plays in decarbonizing our economy, which is now
    the largest share since 2016 of greenhouse gas emissions,
    according to the EPA. This bill also allows EERE to continue
    the work that will drive down costs, will improve
    accessibility, and decrease emissions.
        Senate bill 3769, the Weatherization Assistance Program
    Improvements Act, would assist in making more homes ready to
    weatherize while increasing the amount of work that can be done
    on homes receiving assistance from the Weatherization
    Assistance Program, both of which are consistent with the DOE
    goals of a more energy-efficient and equitable future.
        Senate bill 4061, the water heater bill, aligns the
    Department's goals of encouraging cost-effective resource
    conservation and consumer utility bill savings while
    maintaining product utility, a level playing field for
    manufacturers, and encouraging grid benefits for utilities.
        And finally, Senate bill 4038, the Renewable Diesel and
    Sustainable Aviation Fuel bill, complements our priorities on
    sustainable aviation fuels, and DOE supports the updated
    definitions of sustainable aviation fuels and renewable diesel,
    as well as the labeling requirements, DOE authorizations, and
    EIA data collection and reporting requirements. We have really
    ambitious but achievable SAF goals that require flexibility to
    work across all feedstocks. So accordingly, we recommend that
    this bill strike the language excluding municipal solid waste
    and gas derived from the biodegradation of municipal solid
    waste from the definition of biomass.
        So EERE looks forward to working with the Committee on this
    legislation and other important issues as the U.S. transitions
    to a clean energy economy. I appreciate the ongoing, bipartisan
    efforts to address our nation's energy challenges, and I look
    forward to your questions.
        [The jointly prepared statement of Dr. Huff and Ms.
    Speakes-Backman follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Heinrich. All right.
        Administrator Wech.

        OPENING STATEMENT OF MIKE WECH, ADMINISTRATOR AND CHIEF
      EXECUTIVE OFFICER, SOUTHWESTERN POWER ADMINISTRATION, U.S.
                          DEPARTMENT OF ENERGY

        Mr. Wech. Good morning, Chairman Heinrich, Ranking Member
    Barrasso, and distinguished members of the Committee. Thank you
    for the opportunity to appear before you today to represent
    Southwestern Power Administration and the Department of Energy
    regarding legislation to establish the Southwestern Power
    Administration Fund, currently under consideration as S. 3719
    by your Committee.
        By way of introduction, Southwestern is a power marketing
    administration that serves over ten million end-users in the
    heartland of the nation. As a federal utility, we have a
    statutory mission to market and deliver electricity from 24
    federal hydroelectric generating plants operated by the U.S.
    Army Corps of Engineers. In our nearly 80 years in business, we
    have done just that and more in meeting our statutory and
    contractual obligations while also providing grid stability and
    voltage support for both the regional--and ultimately, the
    national--bulk electric system when severe weather events and
    other disasters strike. We take great pride in providing the
    sustainable hydropower product we market and deliver. Our
    stewardship of the reservoirs and river systems within our
    marketing areas is carefully balanced with flood risk
    mitigation and other uses so that we can meet the power needs
    of our customers. However, because these projects we market
    from are almost entirely dependent upon rainfall, extended dry
    periods mean that we must purchase replacement power and energy
    to meet our contractual obligations. With market conditions
    being tight, this replacement power can get very expensive.
        S. 3719 authorizes a change specific to the funding
    structure of Southwestern which supports end-users in Arkansas,
    Kansas, Louisiana, Missouri, Oklahoma, and Texas. The bill
    establishes the Southwestern Power Administration Fund, a
    permanent self-financing revolving fund supplied through
    Southwestern's power sales receipts, with no annual
    appropriations. The intent of the Southwestern Power
    Administration Fund will provide for continued infrastructure
    investment for maintenance and operations of our transmission
    assets without appropriations, will perform full cost recovery
    for the government, and it is a proactive, proven model of good
    financial stewardship, fully supported by Southwestern's
    customers. No mission or function changes to Southwestern's
    program are proposed. All program costs would continue to be
    recovered in our power rates to our customers.
        I do want to note, however, while Congressional Budget
    Office rules will result in a score for this fund, there is no
    taxpayer burden, as our customers will continue to repay costs
    associated with Southwestern's program. Mr. Chairman, this
    concludes my testimony. I would be pleased to address any
    questions that you or the Committee members may have.
        [The prepared statement of Mr. Wech follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Heinrich. Thank you very much.
        Mr. Navin.

                   OPENING STATEMENT OF JEFF NAVIN,
                DIRECTOR OF EXTERNAL AFFAIRS, TERRAPOWER

        Mr. Navin. Thank you, Chairman Heinrich, Ranking Member
    Barrasso, and members of the Committee. My name is Jeff Navin,
    and I am the Director of External Affairs for TerraPower.
    TerraPower is an advanced nuclear company based in Bellevue,
    Washington. We were founded by Bill Gates and others in 2008 to
    solve the dual challenges of global energy poverty and climate
    change. We are building the Natrium project at the site of a
    coal plant slated to be retired, just outside of Kemmerer,
    Wyoming, as part of the DOE's Advanced Reactor Demonstration
    Program. Per the terms of the ARDP, we plan to bring our
    reactor online in 2028 at a 50/50 federal/private cost share.
        Natrium differs from conventional reactors in three
    important ways. First, is the way that we cool our reactor.
    Conventional nuclear reactors are cooled by water, which has a
    relatively low boiling point. This requires a combination of
    pressurization and redundant pumps to ensure that the hot water
    is removed from the core to avoid a loss of coolant. Natrium
    uses sodium as a coolant. Sodium's boiling point is 882 degrees
    Celsius, far above our reactors' operating temperature. So our
    system is inherently safe through the use of physics and
    natural convection, which allows Natrium's design to be less
    complex and less expensive, with higher levels of safety.
        Secondly, the Natrium reactor is much smaller. Our
    reactor's baseload capacity is 345 megawatts, roughly a third
    of the size of a conventional plant, making it cheaper to buy
    and ideally sized to replace generation at fossil fuel plants
    that are slated to be retired, just like we are doing in
    Kemmerer. And finally, instead of directly producing power by
    generating steam from the reactor core, the Natrium plant uses
    the heat from our reactor to power a molten salt energy storage
    system that allows us to store 500 megawatts of electricity for
    up to five and a half hours. That is a gigawatt-scale energy
    storage--much larger than any lithium-ion battery storage
    system currently operating in the world, and a game changer for
    grids with high penetrations of wind and solar.
        So Natrium can provide carbon-free, reliable baseload power
    and can store more energy than any lithium-ion battery storage
    project in the world, and we are seeing states like West
    Virginia repeal their bans on new nuclear plants and now,
    especially, countries in Central and Eastern Europe are looking
    for alternatives to Russian natural gas, and Natrium can meet
    that need. But all nuclear reactors need fuel. And Natrium,
    like most of the advanced reactors designed, as Dr. Huff
    mentioned, requires a special fuel called high-assay low-
    enriched uranium, or HALEU. Today, the only source of
    commercially available HALEU is Russia. With DOE's blessing, we
    initially planned to use HALEU from Russia for our initial core
    load while the Department stood up the Advanced Nuclear Fuel
    Availability Program to establish domestic HALEU enrichment
    capabilities. And while we are still waiting for the Advanced
    Nuclear Fuel Availability Program to be launched, and you know,
    timing-wise, the ARDP awards were actually made ten months
    after that was signed into law--the law that authorized that.
    Today is actually the 18-month anniversary of the Advanced
    Nuclear Fuels Act being signed into law, and we are still
    waiting for the RFP to come from the Department to make that
    program available. But even if that program were launched
    today, it will take years to get to the point where we are
    manufacturing the volumes of HALEU that we will need to fuel
    our reactors.
        And so, we are looking for the alternatives. And the only
    alternative to non-Russian HALEU is, as Senator Barrasso
    mentioned, is to down-blend highly enriched uranium from the
    Department of Energy stockpile. So the DOE and the NNSA are
    earnestly looking for excess HEU that can be down-blended into
    HALEU. To date, the volumes that they have identified are below
    what is needed to fuel the two ARDP projects' initial cores,
    and they also have some capacity issues in their ability to
    down-blend. But to be clear, HEU down-blending may be the only
    way we can get our initial cores, but we will also need a fully
    functional, fully funded Advanced Fuel Availability Program for
    our subsequent cores, and the bills being considered today
    directly address these concerns.
        First, S. 4066, the Fueling the Nuclear Future Act of 2022,
    recognizes the critical and urgent need for domestic HALEU
    enrichment capabilities, and looks to down-blending of HEU from
    the DOE stockpile to meet the needs of the ARDP initial cores,
    and it addresses all of the issues that I have mentioned in my
    testimony. Secondly, S. 3856 prohibits the importation of
    Russian uranium. TerraPower will not use Russian HALEU, but
    that means we will need a domestic source. So it is appropriate
    that the Committee is considering both S. 3856 and S. 4066
    together.
        So finally, just let me express my sincere appreciation for
    all the Committee has done to support advanced nuclear power--
    the Advanced Reactor Demonstration Program and the Advanced
    Nuclear Fuel Availability Program exist because of the
    bipartisan work of this Committee. And so, I thank you again
    for the invitation and I look forward to your questions.
        [The prepared statement of Mr. Navin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Heinrich. Thank you.
        Mr. Leuck.

                   OPENING STATEMENT OF MATT LEUCK,
                TECHNICAL SERVICES MANAGER, NESTE, U.S.

        Mr. Leuck. Thank you, Senator Heinrich, Senator Barrasso,
    and members of the Committee. My name is Matt Leuck. I am the
    Technical Services Manager at Neste, U.S., based in Houston,
    Texas. I definitely appreciate the opportunity to come discuss
    S. 4038, the Renewable Diesel and Sustainable Aviation Fuel
    Parity Act, and more importantly, why this legislation is
    important to expanding the availability of low-carbon fuels
    both for long distance and heavy-duty vehicles.
        Neste is a leading producer of low-carbon fuels. We are
    currently the world's largest producer of renewable diesel and
    sustainable aviation fuel, with a current production capacity
    of over one billion gallons annually, and with ongoing
    expansions of refineries and a soon-to-be finalized joint
    venture in California that will bring us to over 1.8 billion
    gallons a year by the end of 2023. Currently, one-third of
    Neste's annual volume is sold into California, which is helping
    actual groups here in the U.S. make meaningful climate impact.
    Last year alone, 3.3 million tons of GHG were abated in
    California alone.
        What is renewable diesel? There is a much longer and much
    more technical explanation in my written testimony, but I will
    touch on a few things here. This is important because the
    chemical composition of these fuels is what determines their
    level of access to existing infrastructure, whether that be
    storage tanks, pipelines, or fueling stations. Renewable diesel
    is a fuel made of pure hydrocarbons. Just like a fossil diesel,
    it is pure hydrocarbons. So when you have a blend of these
    fuels, the only way to determine what that ratio is, is
    actually using carbon-14 dating, which is what archeologists
    may use for artifacts. Biodiesel, on the other hand, is not a
    hydrocarbon. It is an ester molecule that happens to run a
    diesel engine, but again, not a hydrocarbon. So while renewable
    diesel can provide quicker cold starts, lower emissions, and
    also reduce maintenance costs for owners and consumers,
    biodiesel can suffer issues like cold flow properties, storage
    concerns, and other things.
        The big question is, why not electricity? So in some
    applications, renewable diesel is as environmentally friendly,
    if not more so, than electrifying those same pieces of
    equipment. Stillwater Associates recently released a report
    showing that fueling with 100 percent renewable diesel resulted
    in three times larger cumulative GHG reductions by 2032 than
    equivalent EV conversion scenarios, and also doing it at one-
    third of the cost of converting those things to EV.
        So why does labeling actually matter? The relatively small
    policy change would allow renewable diesel significantly more
    access to existing infrastructure, and it can help expand the
    availability of low-carbon fuels across the nation. Diesel does
    reach the market via multiple sources, including pipelines that
    are accessed by many refiners at the same time. So from a
    technical perspective, renewable diesel, because it is
    chemically diesel fuel, can utilize that same network. But
    unfortunately, the labeling required by the Independence and
    Energy Security Act of 2007, the precise percent of renewable
    diesel must be tracked all the way to point of sale of
    customer. That is only required for biomass-based diesel
    though, not coal-to-liquid diesel fuel or gas-to-liquid diesel
    fuel or other technologies. So by treating this as something
    non-fungible, the labeling is actually effectively capping the
    market to five percent blends of renewable diesel. To move to a
    higher concentration, refiners, pipelines, and terminals must
    all agree on a fixed percentage, and that does require
    segregated storage and separate transportation, rail cars,
    trucks, and other modes of transportation that actually do have
    their own carbon footprints. So by not allowing it in the
    pipeline, you are putting more carbon into the atmosphere.
        Also, consumers are not required to take any action based
    on the percent of renewable diesel blended into their fuel. So
    by applying these labeling requirements that are unnecessary
    and arbitrary, we are actually not providing any actionable
    information that gets into the consumer protection. The
    labeling requirements serve as a barrier to entry that can also
    discourage construction of new renewable diesel production
    capacity, again, because that segregated storage creates
    logistics concerns near the refineries, but also getting it to
    market and creating that higher carbon footprint. So the bottom
    line is that there is neither a technical reason, nor a
    consumer benefit to maintaining the current labeling
    requirements for any renewable diesel that meets the ASTM D975
    standard. While heavy-duty and long-distance vehicles are more
    difficult to decarbonize, they are harder to electrify.
    Significant opportunities to decarbonize those areas do exist
    right now at no additional cost. So with appropriate policy
    support, the labeling reform included in S. 4038, these sectors
    can meet science-based decarbonization goals today without
    waiting for time in the future.
        So waiting for your questions later. Thank you.
        [The prepared statement of Mr. Leuck follows:]

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        Senator Heinrich. Thank you, all. I will recognize myself
    for five minutes and then we will go with the Ranking Member
    and just go down the dais in the order that folks showed up.
        So Ms. Speakes-Backman, I wanted to ask you a little bit
    about the microelectronics research centers, and particularly,
    how would they be implemented at labs that already have a
    substantial existing microelectronics R&D presence?
        Ms. Speakes-Backman. Thank you for the question and thank
    you for your leadership.
        We are excited about the potential for the bipartisan chips
    bill that can help foster energy innovation. DOE has and
    continues to play a really vital role in reducing the energy
    that is required to produce and utilize microelectronics and to
    create more sustainable technology systems to help our energy
    system. The Office of Science at the Department of Energy has a
    unique position to play in this role, and it is critical for
    advancing microelectronics over the coming decades. We are very
    excited about the coordination that has expanded between the
    Office of Energy Efficiency and Renewable Energy and the Office
    of Science, and also with the labs. And so, a closely
    coordinated effort will be undertaken to make sure that this
    gets----
        Senator Heinrich. Yes, I guess one of the things I am
    trying to understand is, if you take a lab like Sandia and they
    already have something like the Mesa Complex that is very much
    in this lane, are we going to rearrange the pieces on the
    board, or are we going to coordinate that so that we are not
    moving things that we have already invested heavily in?
        Ms. Speakes-Backman. Thank you for the clarification on the
    question. We have no intent of moving the deck chairs around.
    We really have the intent to coordinate what is already
    existing, taking stock of the progress that has already been
    made to advance that and accelerate it.
        Senator Heinrich. Moving to weatherization, under the
    current legislation, would weatherization extend the things
    like electrical panels and breaker boxes that are oftentimes
    sort of the precursors to be able to do meaningful
    weatherization?
        Ms. Speakes-Backman. So in this current legislation, if the
    wiring, for example, is defective, then this would authorize
    the installation of weatherization measures by first using the
    readiness funds and then being able to weatherize.
        Senator Heinrich. So if something is defective, it would
    apply. If it just simply needs an upgrade for capacity, it
    would not apply.
        Ms. Speakes-Backman. It would not. I think there is some
    funding, though, in the Enhancement and Innovation program, as
    a part of this. There is about $48 million available to
    organizers across the country to help support preparing homes
    for electrification and decarbonization.
        Senator Heinrich. Great.
        Dr. Huff, do U.S. nuclear power plants have sufficient
    uranium fuel reserves to operate in the near-term and longer
    term if we cut off imports from Russia, and how are we going to
    manage that change?
        Dr. Huff. Thank you, Senator.
        Our analysis in DOE has indicated that yes, there is a
    limited time in which the existing nuclear power plants can be
    sustained on their existing inventory, but that time is quite
    limited. They will need some years to wean themselves off of
    Russian imports. So it is an important feature of any proposed
    import policy restrictions.
        Senator Heinrich. What do we need to do to send the
    appropriate investment signals that this is going to be a long-
    term play, that we are not going--you know, it costs enormous
    amounts of money, obviously, to change the flow and create
    additional domestic capacity. So we have to send a signal that
    we are in this for the long-term. So can you talk a little bit
    about that?
        Dr. Huff. Thank you, Senator.
        The Department of Energy, in response to Russia's
    unprovoked invasion of Ukraine, has stood up a uranium tiger
    team which developed a uranium strategy that suggests a
    procurement of fuel, LEU, low enriched uranium, including high-
    assay low-enriched uranium, which would support, from new
    capacity of conversion and enrichment services in the United
    States, the standing up of additional capacity for that fuel
    supply chain. That signal would have to be a sustained contract
    with awardees responding to a request for proposals and would
    have to be paired with stable import policies for the long-
    term.
        Senator Heinrich. Senator Barrasso.
        Senator Barrasso. Thanks so much, Mr. Chairman.
        Mr. Navin, why did TerraPower make the decision to not use
    Russian uranium?
        Mr. Navin. Well, I think for many of the same reasons that
    probably drove you to draft S. 3856, you know. We only planned
    to use Russian HALEU for our initial core load while the
    Department of Energy stood up the Advanced Nuclear Fuels
    Availability Act, which this Committee proposed and passed. You
    know, we were always a little hesitant about that, but we
    thought, you know, Russia had provided and does provide LEU to
    reactors and we thought we could maybe count on them to get the
    first core load, but obviously, when Vladimir Putin's tanks
    rolled into Ukraine, that calculus changed dramatically. And
    so, we are happy that you are addressing that part of the
    supply chain.
        Senator Barrasso. So America's nuclear industry, I think,
    is ready to make the transition away from Russian uranium, you
    know, Russia is the fourth largest supplier of uranium, but I
    think our nuclear industry in the United States needs some
    certainty, market certainty, specifically. So will banning
    Russian uranium provide the market certainty that industry
    needs to invest in domestic uranium supply chain?
        Mr. Navin. Certainly, I mean, we have seen Russia engage
    in, you know, non-competitive acts to sort of price American
    companies out of business. We have more than enough, as you
    know, we have more than enough uranium in the United States to
    meet this need. Where the gap is, is on the enrichment side.
    And Senator Heinrich, you know, you have the Urenco facility in
    Eunice, but it is not licensed currently to produce HALEU. So
    for our needs, we need new enrichment capability to produce
    high-assay low-enriched uranium. And that investment will come
    as a combination of the Fuel Availability Act that you passed,
    a Senate demand signal, but also certainty that we are not
    going to let outsiders come in and undercut those prices after
    those investments are made.
        Senator Barrasso. Mr. Leuck, I wanted to spend a little bit
    of time talking about the renewable diesel. You know, it is
    among the most promising ways, I think, to reduce carbon
    emissions from heavy-duty trucks and other engines that use
    diesel. Can you explain why that is?
        Mr. Leuck. Sure. So renewable diesel is made from waste and
    residues. It is existing carbon that was already in the
    atmosphere. So we are taking biogenic carbon rather than fossil
    carbon that has been sequestered for hundreds of millions of
    years and just reusing it. So we are operating the same
    equipment, getting the same power, doing the same work, but you
    are not actually adding carbon, you know, to the atmospheric
    load. Also, because it is a much cleaner fuel in the
    properties--the physical properties of it--they do allow for
    reduced maintenance costs for fleet owners and other things. So
    when you combine operational, environmental, it kind of does
    come out to be one of the best.
        Senator Barrasso. Now, anything different in terms of the
    aviation fuel and what we are trying to do there too?
        Mr. Leuck. I am actually not an expert on aviation, so I am
    not going to get too into that, sorry.
        Senator Barrasso. All right. Let me then move to labeling
    requirements, if I could, to you, Mr. Leuck. So nearly all
    renewable diesel production in the United States or anything
    imported comes through California, which is why Senator
    Feinstein and I worked on this legislation. So last year, the
    California Air Resources Board and the California Energy
    Commission specifically wrote to us and wrote to me. They
    explained that renewable diesel is fungible, fully
    interchangeable with petroleum-based diesel, in terms of its
    ability to be used. They also explain that there are no
    performance concerns with renewable diesel, that part of your
    testimony. The two regulators said that the Federal
    Government's ``current labeling requirements serve as an
    artificial barrier to using higher levels of renewable
    diesel.'' And for that reason, they explained in their letter
    to me that we are losing an opportunity, an opportunity to
    deliver needed public health and climate benefits associated
    with using higher levels of renewable diesel.
        So do you agree with the State of California's assessment
    of our Federal Government's current labeling requirement?
        Mr. Leuck. I do. I think the letter that Ms. Randolph and
    Mr. Hochschild wrote is exactly spot-on.
        Senator Barrasso. So then, Mr. Chairman, I ask unanimous
    consent to enter that letter into the record.
        Senator Heinrich. Without objection.
        [The letter referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. And then, Mr. Navin, the Department's two
    advanced reactor demonstration projects, which will be sited in
    Wyoming and Washington State, they need about 20 tons of high-
    assay low-enriched uranium. Commercial enrichment is not going
    to be available in time for the initial fuel loads. The
    Department has sufficient supplies of excess uranium to meet
    these initial needs. Significant investment will be needed to
    make this uranium available. Why is access to the Department's
    stockpiles of this uranium so very important?
        Mr. Navin. Well, as you know, Senator, the Advanced Reactor
    Demonstration Program requires us to bring the X-energy reactor
    and the TerraPower reactor online by 2028, within seven years,
    and that time frame is aggressive, but very much appropriate as
    we are trying to bring these technologies to the marketplace.
    Without having the ability to down-blend HEU, we will not have
    the fuel available to turn those reactors on in time.
        So it is a stopgap measure. No one is proposing that we use
    down-blended HEU to run these reactors in perpetuity, but to
    get those initial core loads on to fill that gap while the fuel
    availability program gets stood up, it is the only way that we
    can meet the deadline and bring these products to market.
        Senator Barrasso. Yes, thank you.
        Thank you, Mr. Chairman.
        Senator Heinrich. You bet.
        Senator Marshall.
        Senator Marshall. Thank you, Mr. Chairman.
        My first question will be for Mr. Wech. I want to talk just
    a second about Senate bill 3719, the Southwestern Power
    Administration Fund Establishment Act, authored by Senator
    Moran, my Senior Senator. Senator Moran is always locked in on
    helping Kansans and helping drive down affordable clean energy
    cost down for Kansans. It is my understanding this legislation
    would give the Southwestern Power Pool more certainty, and when
    it would give you more certainty, it allows you to be more
    efficient and eventually, hopefully, will make the price of
    clean fuels more affordable in Kansas. Can you just speak to
    that for a second? How does that work, and how would it impact
    Kansans?
        Mr. Wech. Senator Marshall, thank you for your question. I
    appreciate it and thank you for allowing me to be here today.
        With respect to how it would help Kansans, under our
    current authorities we have use of receipts, or the power of
    sales receipts that come in, but many times there are
    constraints there due to budget scoring or other issues. Going
    forward, by establishing a revolving fund, that would allow us
    to establish both an operating and a forward-looking fund that,
    when emergencies occur--triple digit temperatures like we are
    seeing right now across the country, high power prices due to
    constraints on the bulk power system--we are prepared and have
    the funding certainty to be able to make replacement power
    purchases, respond to those emergencies, respond to that
    diversity that we may see in power prices. Having that funding
    certainty that we do not have today, because in today's world
    we have to go back and request emergency funding and emergency
    funding has to be paid back in a very, very short time period,
    within one year. So that is immediate rate volatility to
    Kansans and many of our other ten million end-users.
        So the intent of this fund is to pre-plan, have the funds
    available, and when we have these kinds of emergencies, respond
    without large rate spikes and volatility to customers.
        Senator Marshall. That is great. It sounds like it would
    make you more efficient.
        Mr. Wech. Yes, sir.
        Senator Marshall. I am so excited about today's hearing.
    This is why I came to the Senate, to solve problems like this,
    to think about how innovation can impact American citizens. And
    I think that the bills we are considering today will do just
    that, and that it is going to be innovation that drives clean,
    affordable energies, not heavy-handed government taxes and
    regulations.
        So Dr. Huff, we have work to do. And I just want to spend a
    few moments educating the Senators and their staff as well. I
    want to talk about recycling uranium for a minute. So just walk
    us through, right now, what happens to the uranium waste from
    our current nuclear energy plants? What are the opportunities
    for recycling? What are we spending right now just to protect
    that waste? And is it a national security issue? Just walk us
    down that for a second.
        Dr. Huff. Thank you, Senator.
        We in the Office of Nuclear Energy agree that there are a
    variety of options for the future of our spent nuclear fuel.
    The current situation is that once reactor fuel is removed from
    the core, after it has spent some years in that core, this
    solid material, the rods are removed from the core and kept in
    a cooling pool where it cools down for a few more years. Once
    it is quite cool, it is removed and dried and placed in a dry
    cask which is held at the facility where it was generated until
    the Federal Government takes on that responsibility, takes
    title to the fuel and removes it from site.
        The Nuclear Waste Policy Act dictated that we in DOE should
    be removing that fuel by 1998. As that has not happened, we now
    pay the utilities, through the Judgment Fund, some fees which
    now total quite a bit--$9 billion--I believe.
        Senator Marshall. Annually.
        Dr. Huff. Total since 2013.
        Senator Marshall. Okay.
        Dr. Huff. Yes.
        And so, until the Department of Energy begins to remove
    that fuel, we will continue paying from that Judgment Fund, but
    eventually, once our consent-based siting process identifies a
    site for interim storage, we should be able to remove it from
    that site, put it in an interim storage facility, stop paying
    from the Judgment Fund, and explore options for permanent
    disposal.
        Your question on recycling----
        Senator Marshall. Wait a second, what about--isn't there
    lots of security involved to keep that safe from people who
    could use that in bad ways?
        Dr. Huff. Yes, currently the largest part of the cost of
    that kind of thing is, you know, it is stored onsite at the
    reactors behind gates and guards with guns.
        Senator Marshall. Right, and in the near future, we don't
    see any place where this is going?
        Dr. Huff. Well, our plan is to establish a location for an
    interim storage----
        Senator Marshall. Which nobody wants.
        [Laughter.]
        Senator Marshall. Okay, let's talk about the opportunities.
    Here are the opportunities. What are the recycling
    opportunities, please?
        Dr. Huff. I will say it is possible to, as the French
    currently do, remove that fuel from the, you know, casks, split
    it chemically and reform it into new fuel which can be put back
    into reactors. Here in the United States, we do not currently
    reprocess spent nuclear fuel, largely because of the economic
    challenges of that endeavor. However, in the Office of Nuclear
    Energy, we pursue fuel cycle research to lower the cost of that
    kind of process in the hopes that someday it could be an
    option.
        Senator Marshall. But it goes way beyond that. We could use
    Uranium-235 for the light water reactors. There is plutonium,
    strontium, a whole lot of other issues we could use that for as
    well, medically, lots of opportunities for that waste.
        Dr. Huff. Every nuclide in the table of the nuclides--3,000
    nuclides are produced in a reactor available in that fuel.
        Senator Marshall. What an opportunity. Thank you so much.
        Oh, and by the way, I am going to invite you to come do a
    staff meeting, really, for the staff members of this Committee.
    I would love for you to sit down and just talk about nuclear
    recycling with them a little bit. It is just an incredible
    opportunity.
        Thank you, Mr. Chairman.
        Senator Heinrich. Thank you for your interest, and I would
    point out that we are talking about a temporary facility to
    store some of that, but we have no long-term geologic
    repository. So what temporary means is very much up in the air.
        Senator King.
        Senator King. Thank you, Mr. Chairman.
        Mr. Leuck, in your written testimony you mentioned briefly
    forestry waste as a feedstock, and I wish you would expand on
    that. We are doing research on that at the University of Maine,
    and of course, as the most forested state in the nation and the
    most oil-dependent state in the nation for heating, this is of
    great interest to us. Talk about forestry waste and biomass as
    a heat source.
        Mr. Leuck. Sure. So for renewable diesel right now we are
    using waste and residues as a feedstock. That is the current
    technology, bio to liquid. The next generation of technologies
    will likely be lignocellulosic and municipal solid waste.
        Senator King. Lignocellulosic is a big word for wood waste.
        Mr. Leuck. It is. So yes, exactly. So forestry waste or
    crop waste. So treetops, bark, branches, things that do not go
    to the timber industry and do not really have a useful life
    once a tree is cut down. We are working on technology to take
    that and actually turn it into usable, renewable diesel fuels.
        Senator King. And the other side of that is, it is pretty
    good to get all this junk out of the forest because of the
    forest fire danger.
        Mr. Leuck. I am sure it would be, yes.
        Senator King. So this is, you think, a viable path for this
    material?
        Mr. Leuck. You know, our company invests a lot of money
    into research and development and innovation and technology,
    and this is very much on the forefront of our work, you know,
    globally we are based in Finland, which is like Maine, it is a
    very forested country, right? There is a lot of opportunity
    there for the ligno feedstock. So yes, I think there is very
    good opportunity.
        Senator King. Thank you.
        Ms. Speakes-Backman, in terms of energy and renewable
    energy, to me, the golden opportunity is energy storage. If we
    can crack cost-efficient, effective energy storage, we can move
    to an entirely fossil-free energy grid, because wind and solar,
    we know, can supply the power, but the question is, what
    happens when the wind does not blow and it is not sunny. So I
    hope storage--and storage is part of the bill that we will be
    discussing next week. We have passed several bills, but I hope
    that is a high priority. I cannot think of something that could
    make a bigger difference in a shorter period of time than the
    development of grid-scale, economically viable storage.
        Ms. Speakes-Backman. Thank you for your thoughts on that
    subject. I could not agree with you more. The Department is
    spending----
        Senator King. Can we be sure that is in the record, that--
    --
        [Laughter.]
        Senator King. Go ahead.
        Senator Heinrich. Twice.
        Ms. Speakes-Backman. The Department is focused very much on
    not only the clean energy technologies that can produce the
    power, but how can we get our entire system more efficient in
    terms of grid, and for energy storage, including batteries, how
    can we get the carbon out of our transportation sector. So----
        Senator King. But that--if we can develop the storage
    capacity and the clean grid and electrify transportation and
    electrify with heat pumps, that is probably 75 percent of the
    carbon budget.
        Ms. Speakes-Backman. Absolutely. Currently, the
    transportation sector is the highest of the five major sectors
    contributing to greenhouse gases. But buildings are not far
    behind, as is the power grid.
        Senator King. But the cleanliness, if you will, of electric
    vehicles depends on how the electricity is made that goes into
    them.
        Ms. Speakes-Backman. 100 percent----
        Senator King. You are not gaining a lot if it is oil-
    produced power. If it is nuclear or renewable, then you are in
    a fossil-free future.
        Ms. Speakes-Backman. Yes, sir. And thank you for that
    observation. I think working across the entire Department of
    Energy, and actually, a whole-of-government approach, is really
    how we have taken a look at how we can impact the sectors and
    how the sectors interact. I think that is the name of the game,
    not just a technology specific, but really figuring out how
    they interact and how we can accelerate it.
        Senator King. Well, there will be a necessity for
    additional transmission. I think that is clear as part of--
    anybody that looks at this problem.
        The other issue on storage, I hope we do not put all of our
    eggs into the battery basket. There are older technologies,
    100-year-old pumped storage of water or weights and there is
    all kinds of research. So that kind of thing, because batteries
    have their own set of problems in terms of rare earths and
    importing minerals and mining. So I hope that the research is
    not confined to just batteries.
        Ms. Speakes-Backman. Yes, sir, and thank you for the
    question. I think there are various levels of commercial
    viability of different technologies of energy storage. So when
    you think about lithium-ion batteries, it is terrific for the
    two-and-a-half to four-hour storage that is necessary on the
    grid today, but when we think about a higher penetration of
    renewables onto the grid, we are going to need longer and
    longer duration. And actually, we have this already when you
    think about hydropower and pumped hydropower storage
    opportunities. So what we are working on in the Department of
    Energy, from our Water Power Technologies Office, is really
    ways to make sure that we can produce hydropower and to store
    energy through hydropower storage technologies more
    efficiently, more effectively, and be more integrated with the
    grid.
        Senator King. Well, one of the models is Norway and
    Denmark. Denmark, very heavily wind. Norway, very highly
    hydropower, and they swap power back and forth as needed and
    true-up at the end of the year. Hydro-Quebec could be the
    battery for all of the Northeast.
        Thank you, Mr. Chairman.
        Senator Heinrich. Thank you, Senator.
        Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        I have a question for, is it Ms. Speakes-Backman? Am I
    pronouncing your name correctly?
        Ms. Speakes-Backman. Yes, Senator.
        Senator Hirono. Close enough?
        [Laughter.]
        Ms. Speakes-Backman. It was perfect.
        Senator Hirono. Thank you so much. This has to do with the
    water heater efficiency standards. I am co-sponsor with
    Senators Stabenow and Blackburn of S. 4061, to update
    definitions of the water heating equipment and more clearly
    define residential and commercial water heaters because they
    are, I think, regulated differently. So I know there has been
    some debate on the House side about how the bill's direction
    for DOE to consider requiring electric storage water heaters to
    be capable of demand response could push other non-electric,
    non-DR water heaters out of the marketplace. That is not the
    intent. Is there anything in S. 4061 that would impact DOE's
    ability to regulate standards for appliances in a fuel and a
    technology-neutral way or otherwise restrict or be a
    disincentive to the availability of non-electric water heaters
    in the market?
        Ms. Speakes-Backman. Thank you very much for your question.
    We agree with you that there is terrific potential for
    impacting markets, especially for folks who are suffering from
    high energy bills with this----
        Senator Hirono. That would be people in Hawaii.
        Ms. Speakes-Backman. We are very excited about the
    potential. To answer your question more directly, there is
    nothing in this bill that changes the efficiency standards in a
    fuel and technology-neutral way. This bill does allow, however,
    DOE to consider demand response of electric water heaters
    specifically, so as to increase the efficiency of grid
    interactivity of buildings.
        Senator Hirono. Again, for you--one of the updated
    definitions in S. 4061 is for solar thermal assisted electric
    water heaters, and using the sun's free energy to heat and
    store water is important to Hawaii's transition to renewable
    energy and will help people to lower their energy bill. As of
    April 2019, Hawaii requires all new single-family homes built
    in the state to have a solar water heater. My understanding of
    the definition of solar water heaters contained in the bill is
    that it will finally provide certainty to manufacturers and
    consumers of solar water heaters and allow for the continued
    availability in Hawaii and other parts of the United States. Is
    that correct?
        Ms. Speakes-Backman. Yes, it is correct, Senator.
        Senator Hirono. Do you agree that the bill will help
    residential and commercial consumers have a water heater that
    is equipped appropriately to their needs and the intended use
    of the water heaters?
        Ms. Speakes-Backman. Yes, Senator. We think that the
    definitions in this bill really allow us at the Department of
    Energy to consider the unique benefits of solar thermal water
    heaters.
        Senator Hirono. I think that Hawaii has the greatest
    penetration of solar--use of solar--of any of the states, but
    we started off being totally the most oil-dependent state in
    the country, paying the highest bills, and we are now at the
    forefront and moving to clean energy, 100 percent, by 2045. So
    I think we lead the country in that effort. And of course,
    water heaters--that is a big part of energy consumption.
        So much of the nation has been suffering from--again, for
    you--from intense heat waves and such severe weather consistent
    with climate change, it increases people's demand for
    electricity and threatens the reliability of the grid. The
    Natural Resources Defense Council, the American Council for an
    Energy-Efficient Economy, the Appliances Standards Awareness
    Project, and the Air-Conditioning, Heating and Refrigeration
    Institute have submitted for the record a letter of support for
    S. 4061.
        [Letter of support for S. 4061 follows:]

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        Senator Hirono. Mr. Chairman, you can see that I am really
    pushing for S. 4061. So there you go.
        [Laughter.]
        Senator Heinrich. Duly noted.
        Senator Hirono. I am on a roll here.
        And the letter states, ``grid flexibility technology that
    enables storage water heaters to respond to grid conditions and
    variable electricity prices can help reduce peak demand and
    consumer cost by heating water when power is cheap, clean, and
    plentiful.''
        Do you agree with their assessment that water heaters
    equipped to respond to the demands on the electric grid can
    help people save on their electric bill?
        Ms. Speakes-Backman. Absolutely.
        Senator Hirono. Thank you.
        Okay, I think I have made my point.
        [Laughter.]
        Senator Hirono. Thank you.
        Senator Heinrich. Thank you, Senator.
        Ms. Speakes-Backman. Thank you.
        Senator Heinrich. Senator Kelly, would you like to go next?
        Senator Kelly. I would, thank you. Thank you, Mr. Chairman.
        Ms. Speakes-Backman, and good morning and thank you,
    everybody, for being here today, all of you.
        But I want to take a few minutes to talk about
    microelectronics and microchips. As you know, semiconductor
    chips are in everything from cars, fighter jets, satellites,
    advanced missile systems, most of our weapon systems, and the
    U.S. faces two serious challenges when it comes to microchips.
    First, we do not make nearly enough of them here in the United
    States, and the bipartisan plan to fund the CHIPS Act and enact
    the FABS Act, which we passed just yesterday, is going to help
    to reverse that trend and hopefully the House passes this. They
    have a critical vote coming up here, probably early this
    afternoon, to get this finally across the finish line. And we
    are hopeful that that is successful. But secondly, we also have
    to maintain U.S. leadership in microchip innovation.
        So last week, it was publicly reported for the first time
    that a Chinese chip maker had successfully produced chips
    smaller than ten nanometers. And this represents a serious
    threat to American leadership in technology and innovation, and
    we invented semiconductor chips. But it also makes it more
    critical that we redouble our efforts to out-innovate the rest
    of the world. That is why I am glad that the Committee is today
    considering the bipartisan bill which I introduced earlier this
    year with Senator Blackburn called the Microchips Research and
    Energy Innovation Act, or the Micro Act for short. And our bill
    will establish the first-ever research program within the
    Department of Energy's Office of Science specifically focused
    on microelectronics, which will have the ability to coordinate
    and facilitate breakthrough research in chip technologies. So
    thanks to the leadership and support from Chairman Manchin and
    Ranking Member Barrasso, our bipartisan bill was included in
    the CHIPS Act of 2022, which, again, we passed yesterday and
    the House should pass today.
        So Ms. Speakes-Backman, a few logistical questions for you.
    If the Micro Act is signed into law, as expected, will you
    commit to ensuring that the Department submits a request to the
    Appropriations Committee and our offices to explain what
    resources the Department needs to stand up these programs in
    Fiscal Year 2023?
        Ms. Speakes-Backman. First of all, thank you, sir, for your
    question. Thank you for your leadership and yes.
        Senator Kelly. Thank you.
        And will you commit to ensuring that your office and the
    entire Department will work to quickly stand up these critical
    programs as soon as the funding is available?
        Ms. Speakes-Backman. Yes.
        Senator Kelly. As you know, much of the CHIPS Act funding,
    including for R&D, goes to support efforts at the Department of
    Commerce. Could you explain what special research capabilities
    the Department of Energy possesses which will help discover the
    next generation of microelectronics?
        Ms. Speakes-Backman. Thank you for the question and yes, we
    agree with you that domestic manufacturing and innovation needs
    to come back home, and I will say that the Office of Science at
    the Department of Energy has a particularly unique position to
    help to support the advancement of microelectronic technologies
    over the coming decades. And we look forward, within the Office
    of Energy Efficiency and Renewable Energy, to supporting and
    coordinating with the Office of Science and the other offices
    with equities in microelectronic technologies to bring those to
    bear.
        Senator Kelly. Well, thank you.
        This is so critical we get this done. I mean, our national
    security is at risk. There is no question about that. And this
    vote that is going to take place this afternoon in the House,
    you know, it is unclear which way this is going to go. But I am
    hopeful that it is successful. If we do not lead on
    microelectronics, another country will. China is attempting to
    become a leader in microelectronics. Note the ten-nanometer
    chip they can currently make. Their capacity to make a lot of
    them will continue to increase. We are the best innovators in
    the world. We have to continue to innovate in this space. These
    things go in all of our weapon systems and consumer
    electronics. This is critical that we bring down costs.
        So I know this is not, you know, your issue. This is for
    the House of Representatives right now to get this across the
    finish line. But thank you.
        Senator Heinrich. Thank you, Senator.
        Ranking Member Barrasso.
        Senator Barrasso. Thanks, Mr. Chairman. Just a couple quick
    questions.
        So Mr. Navin, the Advanced Reactor Demonstration Program is
    an example of how the Federal Government can move ahead quickly
    and efficiently to execute new programs. So what can be learned
    from this experience with this program to ensure a domestic
    fuel supply for advanced nuclear reactors?
        Mr. Navin. Thank you for the question, Senator.
        Yes, you are absolutely right, the Advanced Reactor
    Demonstration Program really was a game changer in nuclear
    energy policy and it represented, I think, a great example of
    collaboration between the Congress, between the department, the
    Office of Management and Budget, and all of the stakeholders
    that had opinions about this program. ARDP was launched in
    December 2019. The funding opportunity announcement was made in
    May 2020 and the awards were made in October 2020. So 10 months
    after it was signed into law, they got the FOA together, they
    collaborated with their colleagues at OMB, made sure Congress
    was comfortable with it, moved forward, solicited the
    responses, had a public-sector review process, a private-sector
    review process, and made those awards in 10 months.
        Today is the 18-month anniversary of the Advanced Nuclear
    Fuels Availability Act being signed into law, and we are still
    waiting on the FOA. And it does not actually take--people who
    follow this issue, you can look at the budget justifications,
    you can look at the Congressional, or the Appropriations report
    language. You can see that there is some tension and
    disagreement between various stakeholders within the
    government. And I understand that process. I spent more than a
    decade and a half in government. But what we really need is
    leadership, because for industry's point of view, I don't
    really care if it is this person's fault, this agency's fault,
    you know, this Committee's fault, it is a failure of the
    Federal Government. And what we really need is leadership--
    somebody to pull those stakeholders together and say, we are
    facing a crisis, we need to get this thing out as quickly as
    possible.
        So I appreciate the Committee's leadership to pass that
    bill. We do need to see leadership to get everybody together to
    get the program launched.
        Senator Barrasso. Thank you.
        Mr. Leuck, Neste is the world's largest producer of
    renewable diesel and sustainable aviation fuel. Currently,
    Neste takes renewable diesel from Singapore to the United
    States while the facilities in Singapore use feedstocks from
    the United States, and I understand that Neste is interested,
    actually, in bringing jobs here. Would you discuss the interest
    in investing in renewable diesel production here in the United
    States?
        Mr. Leuck. You know, I think the biggest thing right now is
    the pending establishment of a joint venture in California to
    take what was a petroleum refinery and convert it to renewable
    diesel. So right there, there is a large investment on our part
    to bring that production here, stateside, which will also
    create jobs there. And then on the feedstock side you
    mentioned, through acquisitions of other companies, like
    Mahoney Environmental or Agri Trading, we can take our
    resources and help grow them and expand them much more quickly
    than they could on their own. So growing the footprint on both
    the production and feedstock side is big for us.
        Senator Barrasso. Great.
        And Mr. Chairman, just finally, I have nine letters of
    support from a total of 42 different organizations expressing
    their support for my nuclear legislation. They recognize the
    importance of ensuring advanced reactors have a domestic supply
    of high-assay low-enriched uranium. I ask unanimous consent to
    enter all nine letters.
        Senator Heinrich. Without objection.
        Senator Barrasso. Thank you.
        [The letters referred to follow:]

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        Senator Heinrich. Mr. Leuck, can you walk us through,
    again, what the current feedstocks that your technology uses
    are?
        Mr. Leuck. Sure. So waste and residues, basically. Things
    that have reached the end of their first useful life.
        Senator Heinrich. But more specifically?
        Mr. Leuck. Yes, primarily used cooking oil, tallow, fish
    oil, technical corn oil, which is a byproduct of ethanol
    production. Those are the current pathways we are using in the
    United States.
        Senator Heinrich. And how do those scale to demand? For
    feedstocks like that, if you had unlimited ability to produce,
    would you have the feedstocks to be able to produce at scale?
        Mr. Leuck. At some point, there is only so much waste and
    residue in the fats, oils, and greases world, right?
        Senator Heinrich. And so, then you transition to what
    feedstock?
        Mr. Leuck. Yes, but we are not there yet.
        Senator Heinrich. Okay.
        Mr. Leuck. But then after that, the technologies I
    mentioned to Senator King would be lignocellulosic and useful
    solid waste. That is kind of the next generation, and beyond
    that, there is even algae or e-fuels, or carbon capture fuel
    production. So there is a long runway of technology that is not
    just limited to what we are using now.
        Senator Heinrich. I got you.
        Mr. Navin, I know, you know, you are still relatively early
    in this process, but is there a target price for your
    technology in terms of price per kilowatt-hour that you think
    you can achieve once you are standing up multiple small modular
    reactors?
        Mr. Navin. Yes, so our nth-of-a-kind target price, so I am
    going to answer that in two ways, if I can. So we think that
    our plant, 345-megawatt baseload with the ability to store 500
    megawatts of electricity for up to five and a half hours, is
    going to be at about a billion dollars, which is obviously a
    lot of money, but for utilities, that is not something that
    they would blink at. And given that energy storage component
    being baked into it, we think that that is a really attractive
    value proposition to our customers and utilities.
        With the LCOE, you know, which is, kind of, an imperfect--
    --
        Senator Heinrich. Levelized cost.
        Mr. Navin. Of these things, but the levelized cost of
    electricity, we think, will be in the low $50 per megawatt
    range, between $50 and $60, but on the lower end, closer to
    $50. That includes----
        Senator Heinrich. Kilowatt-hour?
        Mr. Navin. Correct.
        And that includes the integrated energy storage piece as
    well. So it is not just the production of the electricity, but
    that includes the----
        Senator Heinrich. So, including storage?
        Mr. Navin. Correct, sir.
        Senator Heinrich. Well, I want to thank all our witnesses
    for joining----
        Senator King. Mr. Chairman.
        Senator Heinrich. Yes.
        Oh, sorry. Senator King, go right ahead.
        Senator King. Well, I wanted to follow up on those
    questions. My father used to say the Pentagon was the only
    building in the world where as you drove straight toward it, it
    kept getting further away. And that is sort of the way I feel
    about modular nuclear power. We have been driving toward it for
    a long time. When? How close are we? I will ask both Ms. Huff
    and you, Mr. Navin. Are we three years away, five years away,
    ten years away? Because clearly, this could be a huge part of
    our energy future if--and the cost has been the principal
    barrier in the past. How close are we?
        Mr. Navin. So our project is being built as part of the
    Department of Energy's Advanced Reactor Demonstration program,
    which came out of this Committee. It requires us to build our
    reactor within seven years of assigning our agreement with DOE,
    which happened in May 2021. So our plan is to bring that plant
    online by 2028 just outside of Kemmerer, Wyoming. We are
    working on the site today. And as I mentioned in my testimony,
    the long pole in the tent, the thing that could prevent us from
    getting there is fuel. We do not currently have a pathway to
    that fuel because of the Russian invasion of Ukraine and our
    decision to not purchase our first core load of fuel from
    Russia.
        So the bills that are being considered today to expedite
    the fuel availability program and to make HALEU available, our
    fuel available from excess stockpiles of HEU could help solve
    that problem. But our in-service date is planned on 2028 at
    which point we will turn the power plant over to our customer
    at Rocky Mountain Power/PacificCorp and they will own and
    operate that plant. It has a licensed life of 60 years with the
    ability to extend that for another 20.
        Senator King. What do you expect cost per kilowatt-hour?
        Mr. Navin. As we just talked about, in the low $50--$50 to
    $60, but we think we can get below $55 a megawatt-hour, but
    that includes a massive amount of integrated energy storage on
    top of that price.
        Senator King. Thank you.
        Ms. Speakes-Backman, your title is Energy Efficiency and
    Renewable Energy. The cheapest and least polluting kilowatt-
    hour is the one we do not use. So I hope you do not lose sight
    of the efficiency side of your job. Weatherization, to me, is
    so important. We do LIHEAP in New England. It is critical to
    controlling people's heating bills, but it would be really nice
    to do something that is not an annual subsidy that will allow
    them to reduce their heating bills through weatherization
    programs. So I hope you will give some emphasis to energy
    efficiency and weatherization.
        Ms. Speakes-Backman. Thank you for your sentiment, sir, and
    thank you for the question. I could not, again, could not agree
    with you more in that efficiency is the least expensive energy
    that we can procure--by not using it in the first place, and
    part of that is yes, through technologies that can work more
    efficiently to heat and cool our buildings and to provide
    water. But the other part is insulation, and we are working
    on----
        Senator King. Pretty mundane stuff, but it makes a huge
    difference.
        Ms. Speakes-Backman. Really mundane stuff.
        Senator King. Storm windows.
        Ms. Speakes-Backman. Yes, absolutely. I was just speaking
    with some folks about tips on how to save energy and there are
    programs that are available to folks, like LIHEAP, like the
    Weatherization Assistance Program, but there are also just
    really inexpensive ways that we can save money like, for
    example, close your shades in the afternoon. And I think that
    is an important message that we need to make sure that we are
    taking to the American people, that there are programs that we
    can provide and there are things that we can do to help. We can
    make it easier for folks to access. We can help improve their
    homes so that they can access these programs. But there is also
    a responsibility, I believe, that the Federal Government has,
    frankly, to make sure that we are helping people understand the
    everyday things that they can do.
        Senator King. Well, one barrier though is the initial
    capital cost for the homeowner, and there have been programs
    around the country where the utility company, for example,
    provides the financing and then it is paid back in the electric
    bill. We have to be creative about that because people may say,
    well, that is great, but I really can't spend $4,000. I don't
    have it. So we need to figure out how to creatively finance
    that investment, which will pay back rather rapidly, but the
    initial capital investment is tough.
        Ms. Speakes-Backman. This is part of what I am so excited
    about, about this Weatherization Act that is being proposed, is
    that it helps not only to get people ready for weatherization,
    but also to be able to take advantage of other programs, where
    it is a step toward, really, coordinating across agencies of
    how people can more easily access these funding programs
    across, you know, across various programs, not having to----
        Senator King. And working with utilities because they
    already have a relationship with the customer.
        Ms. Speakes-Backman. Absolutely.
        Senator King. And the financial wherewithal.
        Mr. Wech, I just wanted to ask one quick question.
    Transmission. Transmission in the future, it seems to me, is
    going to be a real issue and a necessity. Describe how tough it
    is or easy it is for you to build a major transmission line in
    your service area.
        Mr. Wech. Thank you for the question, Senator.
        Specifically, it is, I am going to be very brutal here. It
    is a challenge. There is, you know, there is the ``not in my
    backyard'' syndrome that we are up against for many folks and
    we have to work really----
        Senator King. They want the power in their backyard, but
    they do not want the lines to get it there.
        Mr. Wech. Understood, yes, yes, I agree.
        And so, what we continually are doing is, we are, you know,
    one of the best ways we can make forward progress on this is to
    continue to educate the consumers, educate the public on the
    value of the benefits of new transmission. New transmission
    brings a wealth of opportunities that you have already
    mentioned in renewable energy, which gets us, you know, further
    toward a carbon-free environment. We take advantage of the
    efficiencies that we are going to see with transmission moving
    renewables to various areas of the country where there is dire
    need. It is going to relieve transmission congestion, which in
    turn, the congestion relief alone will lower market prices,
    which in the end, help the consumer.
        So we are working all the time to educate and inform the
    public on the benefits of this, but I will tell you, it is an
    uphill challenge, but I think education and continued effort on
    our part gets us to the finish line.
        Senator King. Well, it would be helpful to us if you could
    supply us information about the challenge and suggestions you
    might have for streamlining permitting, for example, not
    ignoring environmental impacts, but for example, one-stop
    shopping on permitting so that you do not have to go from
    agency to agency. Your thoughts could be helpful to us. I hope
    you would supply them to the Committee.
        Mr. Wech. I appreciate that comment, sir and yes, we would
    be happy to participate in that and provide information.
        Senator King. Thank you.
        Thank you, Mr. Chairman.
        Senator Heinrich. Thanks to all our witnesses for joining
    us here today.
        Members will have until close of business tomorrow to
    submit additional questions for the record.
        This Committee stands adjourned.
        [Whereupon, at 11:18 a.m., the Committee was adjourned.]

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