[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
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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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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.]
APPENDIX MATERIAL SUBMITTED
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