[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
SPENDING ON EMPTY: HOW THE BIDEN
ADMINISTRATION'S UNPRECEDENTED
SPENDING INCREASED RISK OF
WASTE, FRAUD, AND ABUSE AT
THE DEPARTMENT OF ENERGY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, ENERGY
POLICY, AND REGULATORY AFFAIRS
OF THE
COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
APRIL 18, 2023
__________
Serial No. 118-21
__________
Printed for the use of the Committee on Oversight and Accountability
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov,
oversight.house.gov or
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
51-893 PDF WASHINGTON : 2023
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COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Jamie Raskin, Maryland, Ranking
Mike Turner, Ohio Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama Gerald E. Connolly, Virginia
Clay Higgins, Louisiana Raja Krishnamoorthi, Illinois
Pete Sessions, Texas Ro Khanna, California
Andy Biggs, Arizona Kweisi Mfume, Maryland
Nancy Mace, South Carolina Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas Katie Porter, California
Pat Fallon, Texas Cori Bush, Missouri
Byron Donalds, Florida Shontel Brown, Ohio
Kelly Armstrong, North Dakota Jimmy Gomez, California
Scott Perry, Pennsylvania Melanie Stansbury, New Mexico
William Timmons, South Carolina Robert Garcia, California
Tim Burchett, Tennessee Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia Becca Balint, Vermont
Lisa McClain, Michigan Summer Lee, Pennsylvania
Lauren Boebert, Colorado Greg Casar, Texas
Russell Fry, South Carolina Jasmine Crockett, Texas
Anna Paulina Luna, Florida Dan Goldman, New York
Chuck Edwards, North Carolina Jared Moskowitz, Florida
Nick Langworthy, New York
Eric Burlison, Missouri
Mark Marin, Staff Director
Jessica Donlon, Deputy Staff Director and General Counsel
David Ehmen, Counsel
Jeanne Kuehl, Senior Professional Staff
Mallory Cogar, Deputy Director of Operations and Chief Clerk
Contact Number: 202-225-5074
Julie Tagen, Minority Staff Director
Contact Number: 202-225-5051
Subcommittee On Economic Growth, Energy Policy, And Regulatory Affairs
Pat Fallon, Texas, Chairman
Byron Donalds, Florida Cori Bush, Missouri, Ranking
Scott Perry, Pennsylvania Minority Member
Lisa McClain, Michigan Shontel Brown, Ohio
Lauren Boebert, Colorado Melanie Stansbury, New Mexico
Russell Fry, South Carolina Eleanor Holmes Norton, District of
Anna Paulina Luna, Florida Columbia
Chuck Edwards, North Carolina Raja Krishnamoorthi, Illinois
Nick Langworthy, New York Ro Khanna, California
C O N T E N T S
----------
Page
Hearing held on April 18, 2023................................... 1
Witnesses
----------
The Honorable Teri L. Donaldson, Inspector General, Department of
Energy
Oral Statement................................................... 5
Dr. Kathleen Hogan, Principal Deputy Under Secretary for
Infrastructure, Department of Energy
Oral Statement................................................... 6
Opening statements and the prepared statements for the witnesses
are available in the U.S. House of Representatives Repository
at: docs.house.gov.
Index of Documents
----------
* Questions for the Record: to Dr. Hogan; submitted by Rep.
Perry.
* Questions for the Record: to Dr. Hogan; submitted by Rep.
Donalds.
* Questions for the Record: to Hon. Donaldson; submitted by
Rep. Perry.
The documents listed above are available at: docs.house.gov.
SPENDING ON EMPTY: HOW THE BIDEN
ADMINISTRATION'S UNPRECEDENTED
SPENDING INCREASED RISK OF
WASTE, FRAUD, AND ABUSE AT
THE DEPARTMENT OF ENERGY
----------
Tuesday, April 18, 2023
House of Representatives
Committee on Oversight and Accountability
Subcommittee on Economic Growth, Energy
Policy, and Regulatory Affairs
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2:22 p.m., in
room 2154, Rayburn House Office Building, Hon. Pat Fallon
[Chairman of the Subcommittee] presiding.
Present: Representatives Fallon, Donalds, Perry, Fry, Luna,
Edwards, Langworthy, Brown, Stansbury, and Norton.
Mr. Fallon. This hearing on the Subcommittee on Economic
Growth, Energy Policy, and Regulatory Affairs will come to
order. We want to welcome everyone.
Without objection, the Chair may declare a recess at any
time.
I recognize myself for the purpose of making an opening
statement.
The Biden Administration's rampant spending spree has put
American taxpayer dollars at even greater risk of waste, fraud,
and abuse, which obviously none of us want. We just have to
take a look at the alleged COVID relief spending, hundreds of
billions of dollars just shoved out the door into the hands of,
on too many occasions, criminals and fraudsters. This Committee
has and will continue to conduct oversight over that money.
That is our job, and that is what we were all elected to do.
Today's Subcommittee hearing will examine the Department of
Energy's budget and spending. According to the DOE's Inspector
General, the Inflation Reduction Act, the Infrastructure
Investment and Jobs Act, and the CHIPS and Science Act have
created enormous challenges at the Department. In fact, the
Inspector General said that these are ``historic and
unprecedented times'' at the Department in light of the massive
spending.
President Biden and congressional Democrats' spending spree
grew the Department's budget--get this--from $45 billion in
2022, exactly 45.3 billion, to over $100 billion in just one
year in 2023. You know, it has doubled, historic and
unprecedented times, absolutely. Under the Inflation Reduction
Act, the Infrastructure Investment and Jobs Act alone,
Democrats directed the Department to distribute $336 billion in
loans on extremely tight deadlines, and that is critical. Under
one program alone, the Department will need to distribute
approximately $32 million per day on average in loans to meet
the September 30, 2026 deadline. The speed and complexity of
the review process raises concerns about whether the Department
can successfully oversee these funds.
The IG also identified several common risks within the
Department programs, which will get worse under the new
spending and loan programs. These risks include, but aren't
limited to, the inefficient oversight of projects at the
transaction level, inadequate internal controls at both the
Federal and recipient levels, potential conflicts of interest
and undue influence and compliance problems with contract and
grant terms and conditions. Given these serious challenges,
Congress must evaluate the safeguards in place at the
Department to prevent fraud, waste, and abuse of American
taxpayer dollars.
In a series of reports, the Inspector General highlighted
the need to address waste, fraud, and abuse in the Agency's
Financial Assistance Awards, Clean Energy Demonstration
Projects, the Loan Programs Office, and the Weatherization
Assistance Program. Across these programs, the Inspector
General highlighted insufficient staffing as a chief concern.
The Department apparently needed to go on a hiring blitz to
fill vacancies, and new rules are raising questions about the
qualifications and technical skills of the new hires who are
brand new to the Department. Some of these programs receiving
billions of dollars have not been used in decades, meaning
their oversight personnel are simply not existent. Yet even
while the Department has been filling these vacancies, it has
also been distributing funds. Combine this with the hiring
blitz, with ongoing vacancies and positions intended to oversee
these funds, and we are looking at high risk of disaster.
If that wasn't enough cause for concern, reports already
indicate funds from the Infrastructure Investment and Jobs Act
are going to, of all places, China. The Department awarded
Microvast, a lithium battery company, $200 million of taxpayer
money despite the company's primary operations taking place not
the United States, not an allied nation, but in China, placing
it at serious risk by influence of the Chinese Communist Party.
Congress and the American people must be assured that taxpayer
dollars are not going to entities, of course, owned, operated,
or susceptible to control or influence of the CCP.
Today, we welcome our witnesses from the Department as well
as the Inspector General and look forward to their testimony
about how their offices will ensure that the Department of
Energy can and will be good stewards of taxpayer dollars.
I now recognize the Ranking Member Stansbury for the
purpose of making an opening statement.
Ms. Stansbury. Thank you, Mr. Chairman, and I want to
welcome our witnesses who are here with us today. This last
Congress, our congressional Democrats made landmark and
generational investments in infrastructure, clean energy, and
domestic manufacturing when they enacted the Infrastructure
Investment and Jobs Act, the Inflation Reduction Act, and the
CHIPS and Science Act. Our extreme colleagues on the right want
to cast these laws as wasteful, despite the extraordinary
benefits they will provide for the American people and the
planet, in order to curry brownie points with special interests
and climate deniers. Let me be clear. The investments that we
are making through these bills will lower costs, create jobs
for millions of Americans, increase domestic manufacturing and
energy production, and combat climate change.
As Democrats, we are committed to championing positive
investments in domestic energy and manufacturing as well as
providing good, well-paying jobs for all Americans. In fact,
the Inflation Reduction Act has already catalyzed more than
100,000 clean energy jobs and led to increased investment by
businesses and manufacturing across the United States. This
includes in the West, in Colorado, where private sector
company, CS Wind, plans to expand the largest wind turbine
factory in the world.
In North Carolina, Toyota has invested $2.5 billion in an
electric vehicle battery facility, and Wolfspeed has committed
to building the world's largest carbide materials factory. In
South Carolina, BMW has announced $1.7 billion to shift to
electric vehicle manufacturing, and Bosch has announced $260
million in investment in the production of electric motors. And
in Texas, where SK Signet announced plans to build an electric
vehicle charger manufacturing facility, Tesla is investing $770
million to expand its vehicle factory, and Air Products and AES
announced a combined $4 billion investment in the future of our
energy economy.
As this hearing gavels in just days away from Earth Day, it
is important for us to talk about why these historic
investments are so critical to combating climate change and
moving our economy toward a clean energy future. It is
absolutely vital that we shift to clean energy sources. Such
efforts are our best chance at avoiding the most devastating
impacts of climate change. That is why Democrats' investments
in the Bipartisan Infrastructure Law and the Inflation
Reduction Act are so significant in helping to pave the way for
the future.
I would also like to point out that investing in our
communities is not a waste. The communities that most need
these investments are the ones that are most likely to suffer
from the impacts of climate change. Roughly $1.8 billion out of
$4.5 billion that is slated for clean energy initiatives in the
Inflation Reduction Act will go to low-income American homes.
In addition, the Administration's Justice40 Initiative aims to
ensure that 40 percent of the benefits achieved through these
investments in climate action and clean energy will flow to our
under-served communities.
We know that the Department of Energy is committed to
responsibly stewarding these funds and ensuring that these
historic investments are put to work for the American people
and help to serve our most vulnerable communities. But as we
sit here today, Republicans' concerns seem to stem from special
reports that go back over a decade when the Department of
Energy has already worked tirelessly to address concerns and to
administer these investments that are so crucial for our
climate and clean energy future and our national labs in
science and technology programs. Our President is committed to
ensuring that these funds are used appropriately. And, in fact,
the President's budget for this year includes almost a 55-
percent increase for the Inspector General at DOE.
When Republicans claim that they are conducting real
oversight, they are focused on programs and agencies that have
worked specifically to fortify against fraud, waste, and abuse
with talking points that literally have very little
relationship to reality. The Administration has prioritized
preventing fraud, waste, and abuse across the Federal
Government and ensuring that the benefits of the Infrastructure
Law, the Inflation Reduction Act, and the CHIPS Act are no
exception. And I look very much forward to hearing from our
witnesses today. And with that, Mr. Chair, I yield back.
Mr. Fallon. Thank you. I am pleased to introduce our two
witnesses today. Teri Donaldson served as an Inspector General
of the United States Department of Energy, and Dr. Kathleen
Hogan is the Principal Deputy Under Secretary and Acting Under
Secretary for Infrastructure at the Department of Energy. I
look forward to hearing from each of you this morning, or this
afternoon rather, on this important topic.
Pursuant to Committee Rule 9(g), the witnesses will please
stand and raise your right hands.
Do you solemnly swear or affirm that the testimony that you
are about to give is the truth, the whole truth, and nothing
but the truth, so help you God?
[A chorus of ayes.]
Mr. Fallon. Let the record show that the witnesses all
answered in the affirmative. We appreciate you both being here
today and look forward to your testimony. Let me remind the
witnesses that we have read your written statements and they
will appear in full in the hearing record. Please limit your
oral statements to five minutes.
As a reminder, please press the button on the microphone in
front of you so that it is on, and the Members can hear you.
When you begin to speak, the light in front of you will turn
green. After four minutes, the light will turn yellow, and then
the red light will come on, and that is that time and cue, as
you may suspect, to wrap it up.
I recognize Inspector General Donaldson to please begin her
opening statement.
STATEMENT OF HONORABLE TERI DONALDSON
INSPECTOR GENERAL
U.S. DEPARTMENT OF ENERGY
Ms. Donaldson. Thank you, Chairman Fallon and Ranking
Member Stansbury, for inviting me to testify today and talk a
little bit about the types of fraud, waste, and abuse that we
might encounter given some of the risk factors within the
landscape at the Department of Energy.
The Chairman mentioned probably the most significant risk
factor, which is sheer volume of dollars. So, in Fiscal Year
2022, the budget for the Department was a little over $44
billion. Underneath IIJA, IRA, CHIPS Act, and the legislation
giving a billion dollars to Puerto Rico for solar, that number
is now at $478 billion when you include the loan-related
dollars, so from $44 to $478 is a really big hop. Also, these
statutes created 71 brand new programs, which is a staggering
number.
This is, by the way, the largest amount of money under all
of these bills did, in fact, go collectively to the Department
of Energy, and this is the largest number of new programs
collectively, so there is a lot going on in Dr. Hogan's world
right now just with this huge volume of very important issues
being worked on. New programs do bring particular risks as the
Chairman mentioned. By definition, you are utilizing newly
designed and untested internal controls, so that is a big risk
factor. Also, a lot of the money in this situation will go to
states, local governments, and tribes, and it is not at all
clear whether states, local governments, and tribes are ready
to take it.
So, there are readiness assessments being done, and there
are issues associated with that. One of their questions is how
much of the money are they allowed to use to conduct oversight.
So, there are many questions being asked there and those are
very important. You do not, by virtue of granting money to
others, remove the Federal nature of the money, so the risks
just travel right along with it.
I will also comment briefly on the lack of funding for
Department oversight, you know. As all of you know, the
Department is the front line of defense. IIJA awarded only
three percent for administrative costs, a little more
flexibility under IRA, which I think was really good news but
administrative costs focused primarily on moving the money out
the door to its intended use. Oversight is a small part of
that. Oversight is making sure that the dollars actually landed
where Congress wanted them to land, some of the important
projects mentioned by Congresswoman Stansbury, so it is really
important. It is that look in the rearview mirror to make sure
the dollars were delivered where they were supposed to go.
I will also quickly point out one of the most, sort of
obvious, risk factors in this package was that my shop, the
Office of the Inspector General, was woefully under-funded in
all four bills. So, in the CHIPS Act, the Office of the
Inspector General received zero. The $1 billion appropriation
for solar in Puerto Rico, my office received zero. In IRA and
IIJA, we did receive some amount of money, but compared to the
other inspectors general whose agencies received money, ours
was the tiniest fraction of that, and this is really important.
And I appreciate that the President has included a bump up,
you know, in his proposed budget in recognition of this. It is
still going to leave a shortfall that is enormous in terms of
my budget, which allows me to conduct audits, inspections, and
evaluations. So, I always say there is no substitute. You can
do a lot of planning, a lot of coordinating with others, but
there is no substitute for having the people and the technology
to do those targeted projects that allow you to find where the
system is breaking or broken, and allow you to work on those
big fraud cases that we all know are coming just because this
is a lot of money moving fast. But we are trying to work as
hard as we can on the front end to minimize that.
So, quickly, I will mention what I think is the most
important tool in the tool bag. In addition to people, I
mentioned technology. Data analytics is a gift to the world of
inspectors general and a gift to Federal agencies, that if they
properly utilize it, can be on the front end of oversight and
prevent a lot of the fraud, waste, and abuse. So, data
analytics is something that Congress has been heavily endorsing
since 2015 with the Fraud Reduction and Data Analytics Act;
again, in 2018, Foundations of Evidence Based Policymaking Act;
Payment Integrity Act 2019. Those are all very important pieces
of legislation where the Federal Government has recognized you
have to acquire and scrub quality data in order to have data
analytics really work for you.
I am looking forward to your questions. Thank you very
much.
Mr. Fallon. Thank you. The Chair now recognizes Dr. Hogan,
and please begin your opening statement.
STATEMENT OF KATHLEEN HOGAN
PRINCIPAL DEPUTY UNDER SECRETARY AND
ACTING UNDER SECRETARY FOR INFRASTRUCTURE
U.S. DEPARTMENT OF ENERGY
Ms. Hogan. Chairman Fallon and distinguished Members of the
Subcommittee, thank you for this opportunity to provide an
update on the Department of Energy's efforts to safeguard
taxpayer dollars in the implementation of the Infrastructure
Investment and Jobs Act and the Inflation Reduction Act, known
as IIJA and IRA.
So, IIJA and IRA really are truly historic investments in
renewing American infrastructure and supporting American energy
security for decades to come. And we at the Department are
working hard to swiftly implement these laws so we can get
these resources out to communities, in your districts, and in
every corner of the country as quickly as possible. We also
acknowledge and respect that when Congress appropriated these
resources, you entrusted the Department with investments using
taxpayer dollars, and we take this responsibility incredibly
seriously. And every day, our team of experts and professionals
are working hard to ensure that taxpayer dollars provided to us
by Congress are being spent effectively, efficiently, and
responsibly.
Through the implementation of IIJA and IRA, we are striving
to lower energy bills for American households, improve energy
reliability and security, and ensure that America is positioned
to lead the world in manufacturing the energy technologies of
the future. And the Department appreciates the passion and
interest of Members on both sides of the aisle in your efforts
to make sure these investments reach your districts. We at the
Department are happy to continue to work with Congress and
provide information and updates as we continue to implement
these laws thoughtfully and responsibly.
You know, beginning in January 2022, very shortly after the
IIJA was signed into law, our team began engaging with the DOE
Office of Inspector General on behalf of and in coordination
with the program offices responsible for implementing IIJA. We
sought then, as we do now, to better understand how DOE can
proactively improve its oversight of this funding. And over the
past 15 months, the Office of the Under Secretary has
coordinated 27 meetings with the OIG and DOE program officials
to discuss program design and implementation. These meetings
are designed to provide the opportunity for an engaged, open,
and transparent conversation about program design, risk
mitigation strategies, best practices, and lessons learned.
And, you know, the topics of discussion have ranged from DOE's
approach to Build America Buy America requirements to how
specific provisions are being implemented.
From the very start, the Office of the Under Secretary for
Infrastructure and program officials across the Department have
demonstrated a thorough transparency with our Inspector General
with regard to our plans and activities. In turn, the Office of
the Under Secretary has really gained substantial insights from
our OIG on what trends are now being seen with respect to
recent investigations and reports, the latest scams and methods
that criminals are using to defraud the Government, and common
mistakes that funding recipients make. And with this knowledge,
we are better positioned to maximize the impact of this funding
and reduce fraud, waste, and abuse. We have also shared with
the OIG the critical process improvements the Department has
made over the last decade across multiple program offices to
strengthen our protections and mitigate risks associated with
our financial assistance and loan guarantee programs.
The Department truly appreciates the OIG's perspective
considerations for the implementation of the IIJA, which did
come in the form of a number of special reports last year.
While these are not the end products of the typical audit
process, they contain and collect helpful historical context
and guidance on best practices. You know, one example, one key
concern the Inspector General has highlighted in the 2022
reports is about adequate staffing at the Department and the
need to provide the necessary oversight of funding programs and
projects. You know, we have been focused on hiring a sufficient
staff from day one with a particular focus on project and
program oversight specialists, grant management and contracting
specialists, and financial and audit oversight staff to
responsibly oversee the significant investment Congress has
made. And as we continue to do this work, we remain steadfast
in our commitment to be responsible stewards of taxpayer
dollars and will continue to take proactive steps as necessary
to prevent fraud, waste, and abuse as we really work to deliver
the benefits that this money can do for the future of the
country.
And we really look forward to continue our work with you
and thank you for the opportunity to be here, and we look
forward to your questions.
Mr. Fallon. Thank you. I now recognize myself for five
minutes of questions.
IG Donaldson, in your report titled, ``Management
Challenges at the Department of Energy, Fiscal Year 2023,'' you
warned about a greatly increased risk of fraud, waste, and
mismanagement given the massive spending flowing through the
Department. So, you posed critical questions in your report,
one of which you asked `do these spending bills allow the
Department to create an appropriately sized oversight
infrastructure to ensure that these funds are delivered as
Congress intended.' Can you expound on that?
Ms. Donaldson. I can. So, historically, the Department--
well, it has always been probably the leanest Federal agency.
So, over 90 percent of its dollars historically pass through
and end up with its contractors. So, when I came on board in
this position, now four years and change ago, I inherited a lot
of reports noting that there were problems during the audits,
and the Department would even acknowledge they were under-
resourced for oversight. So, there would be a set of
requirements. Only some of them were being met or followed.
They simply didn't have the people, so that was a real theme
that I inherited in this job.
So, when the new bills came along, that was, I think, the
very first question we had talked to the Department of Energy
about is, are you going to be able to make up some of that
shortfall with the allocations in those earmarks for
administrative cost? What amount of that will you actually be
able to use for auditors and oversight? And I think they are
still working through those issues.
Mr. Fallon. So, what you are saying is even when they were
at a budget of $46 billion, there were concerns about their
oversight capability?
Ms. Donaldson. Noted by my predecessors----
Mr. Fallon. OK.
Ms. Donaldson [continuing]. And GAO.
Mr. Fallon. Now, with double that kind of budget that now
explodes, fair enough to say that that concern would be greatly
increased?
Ms. Donaldson. They will need to dedicate a lot more
resources to oversight. That is correct, sir.
Mr. Fallon. Dr. Hogan, what has the Agency's response been
to this critical question? Are you satisfied with the response?
Ms. Hogan. I mean, we are working hard to bring the staff
on that can provide the necessary oversight for these projects.
I think, as we have talked about, many of these programs are
new. That is interesting in that it gives us the opportunity to
bring people on to participate in the design of these programs
really before we get into the project management with the
dollars on the street, which means we can be hiring for where
we need to be sort of six months ahead and bring people on and
train them up, which is something we have been focused on----
Mr. Fallon. OK.
Ms. Hogan [continuing]. Across the board.
Mr. Fallon. And a second question was asked in the report,
do these massive spending bills allow the Department's OIG to
execute its statutory obligations to protect these funds. And
can you expound on that, IG Donaldson?
Ms. Donaldson. Yes, I can. The funding issues I mentioned a
moment ago are really quite remarkable. As I said, without
funding, you simply can't cover that portfolio. So, even now,
we are shifting some from our existing portfolio, which is
hugely important work--environmental liabilities, pit
production--and trying to sort of squeeze in some resources to
have all of these meetings with Dr. Hogan's shop and prepare.
But that doesn't mean that we automatically will have the
resources to do audits, inspections, and investigations. We
won't, right? So, we are trying to do the planning to where
when additional money arrives, we will be able to do that. But
right now, we are in a bad situation funding-wise.
Mr. Fallon. Yes. Dr. Hogan, on March 22d, Chairman Comer
and myself wrote to Secretary Granholm seeking documents and
information related to IG Donaldson's report and the DOE
funding announcements. Yesterday, DOE submitted some of these
documents. In one email from May 9, 2022, a staff member in the
OIG's office stated, ``We believe administrative remedies, such
as suspension and debarment, should be considered by the loan
programs offices and instances, such as Solyndra, where company
officials provide misleading information or provide false
statements.'' Has the DOE implemented this recommendation?
Ms. Hogan. We implement a full set of mitigation strategies
across the portfolios that we run.
Mr. Fallon. But respectfully, have you implemented this
particular recommendation?
Ms. Hogan. The Federal Government and DOE have disbarred
entities from being able to participate in Federal business if
they cross certain lines, yes.
Mr. Fallon. So, you are implementing this recommendation?
That is what you are saying? Yes? Yes?
Ms. Hogan. Yes.
Mr. Fallon. OK. Great. OK. So, you know, as we all know,
Solyndra is the same company that in 2009 received half a
billion dollars from the Energy Department, despite having
submitted a misleading application, laid off its employees,
shutdown, and filed bankruptcy two years after receiving the
funds. The last question, can the Department commit to
producing the rest of the documents that we requested by the
end of this week?
Ms. Hogan. We are working through the document requests
that you have, and we will----
Mr. Fallon. Can you commit to it, though?
Ms. Hogan. We will get to you as many documents as we can
get as quickly as we can.
Mr. Fallon. We would really appreciate that. It is a pretty
simple request, and that is it. Considering the money involved,
I think it would help us do our oversight job. Thank you very
much. The Chair recognizes the gentlelady from Ohio, Ms. Brown.
Ms. Brown. Thank you very much. The 117th Congress was one
of the most productive in our Nation's history. Congressional
Democrats, with the help of some Senate Republicans, sent
groundbreaking legislation to President Biden's desk, like the
Bipartisan Infrastructure Law and the CHIPS and Science Act. In
addition, Democrats unilaterally passed what will go down as
one of the most important pieces of legislation in American
history: the Inflation Reduction Act.
These bills make up part of the most expansive, forward
thinking, and restorative agendas in modern history. Democrats
are taking steps to propel our Nation's infrastructure decades
into the future, promoting our strategic and national security
interests, as well as passing the largest-ever investment in
our climate. That means clean jobs and investment. The
Inflation Reduction Act has already led to the creation of
100,000 jobs and, as my colleague pointed out, billions of
dollars in investment by domestic manufacturing companies since
its passage last year. Meanwhile, the plan from my colleagues
on the other side includes proposing the cut from the
lifesaving programs, like Medicaid, while holding the payment
of our Nation's debt hostage. That right there is backward,
catastrophic, and the Republican agenda.
Now, let us talk about how the Biden Administration is
responsibly stewarding taxpayer dollars. In June 2022, the
Department of Energy's Office of Inspector General issued a
report on preventing fraud, waste, and abuse in the Loan
Programs Office. Dr. Hogan, can you tell us how much of the
Department's budget has actually increased per year because of
IIJA and the IRA?
Ms. Hogan. Yes. I mean, our budget is substantially larger
because of the IIJA and the Inflation Reduction Act, with $68
billion coming in through the IIJA and additional $30-plus
million coming in through the Inflation Reduction Act. At the
same time, we know that this is a historic investment in our
future for the purpose of, you know, improving the economic
opportunity for our communities and building jobs. And we don't
view this as a one-year appropriation-type opportunity. It
really is a many, many year effort to move out and help our
communities improve their economic opportunity.
So, you know, say it is a 10-year-ish-type opportunity. You
can take the $100 billion that is coming into the Department of
Energy divided by 10. So, it is sort of like a $10 billion
average increase in the budget to the Department. That is not a
perfect way to do it because there are different timelines
associated with different provisions. But that is what we are
looking to do, is build the capacity to work with our
applicants and with our communities over the next decade to
truly make the difference that these dollars can make that
Congress has trusted us with.
Ms. Brown. Thank you so much. Back to the report. Dr.
Hogan, has the Loan Programs Office taken steps to remedy the
areas identified in the special report, and if so when were
those reforms implemented?
Ms. Hogan. Yes, the Loan Programs Office is a very
different office today than what it was so many years ago. It
has been able to stand up a number--expanded staff, but not
just expand its headcount. It has been able to invest and build
out new capabilities to assess, in a due diligence way,
technical risk and business risk or the program for the
projects that it is reviewing, as well as we have been able to
build out any number of additional review capabilities within
the Agency and across agencies, bringing in the capabilities of
our Treasury Department, as an example. So, it is a very
different program today.
Ms. Brown. And, Dr. Hogan, what are the most significant
changes that you anticipate at the Department of Energy as a
result of the Bipartisan Infrastructure Law and Inflation
Reduction Act?
Ms. Hogan. I am sorry. What is that?
Ms. Brown. Most significant changes you anticipate at the
Department of Energy?
Ms. Hogan. You know, the Bipartisan Infrastructure Law and
IRA really have brought to the Department the opportunity to
work with our communities and build out manufacturing, and help
just capitalize on what is going to be a major opportunity to
build jobs and be global leaders in the manufacturing that will
go with a clean energy economy. So, I think----
Mr. Fallon. The gentlelady's time has expired.
Ms. Brown. Thank you.
Mr. Fallon. Thank you. The Chair now recognizes gentleman
from South Carolina, Mr. Fry.
Mr. Fry. Thank you, Mr. Chairman, for having this hearing
today, and thank you to both of our witnesses for being here.
Thanks to President Biden's tremendous spending spree, the
DOE has seen a massive budget growth just this year alone. I
think my biggest concern and what we echoed, Inspector General,
is that, is the Department ready to handle that? The
Infrastructure Investment and Jobs Act and the Inflation
Reduction Act gave the Department of Energy $100 billion in
appropriated funds, $336 billion in loan authorizations, and
$30 billion from the CHIPS and Sciences Act. Let us take a
closer look at what these chunks of money do.
And the Inflation Reduction Act included $9 billion for
home energy rebates and appliance upgrades, meaning the Federal
Government will pay you $840 just to install an electric stove
and up to $14,000 for high efficiency electric home rebates.
The Infrastructure Investments and Jobs Act sets up an
additional, as we talked about, dozens of programs. The CHIPS
Act includes $250 million for a new carbon material science.
This money doesn't grow on trees. It is coming straight from
the pockets of hardworking Americans.
So, Dr. Hogan, I want to turn to you. Given the speed at
which this was passed and given the OIG report, do DOE
employees face significant pressure from this Administration to
exhaust the funds now available under the IIJA and the IRA?
Ms. Hogan. We are working hard to balance the urgency that
we think it is important to get these resources out on the
street and benefit people. At the same time, we are balancing
that with what we think we need to do to do it right. So, do we
feel urgency? Yes, but we are doing it, we believe, with a
balance to think through effective design, think through
effective controls, and to engage many of the so-called co-
implementers for these provisions in what it will take to do it
well.
Mr. Fry. Again, I want to turn to permitting real quick.
How does slowdowns in permitting affect your ability to
properly distribute the funds that expires in just a few short
years?
Ms. Hogan. As you know, permitting is a huge issue, and
figuring out how to make permitting happen as efficiently and
as effectively and smoothly is something that we are all
interested in doing. At the same time, what we have been doing
at the Department is engaging with our sister agencies to
streamline whatever it is we have the opportunity to do. And
Congress did give us some additional dollars in the Inflation
Reduction Act to bring more resources to bear, so there don't
have to be bottlenecks where we can just move things through it
quickly.
Mr. Fry. Do you anticipate permitting delays because of
existing laws? Is that correct?
Ms. Hogan. Permitting is an important part of what we need
to do, again, to do project review. So, absolutely, permitting
is something that is part of many of the projects that we will
be undertaking.
Mr. Fry. Real quick, Dr. Hogan--I am crunched for time a
little bit--but how do permitting delays impact the U.S.
ability to utilize energy sources in general?
Ms. Hogan. I mean, that is a complex problem, and we would
be happy to engage with you. I mean, there are certain
provisions and ways to move forward on Federal lands, and there
are certain provisions, you know, on other properties. So, we
are doing what we can to streamline and move efficiently where
we can. And again, we would really appreciate a fulsome
conversation about how to do permitting effectively so that we
can get the benefits for what these dollars offer this country
around manufacturing jobs, et cetera.
Mr. Fry. Dr. Hogan, which DOE programs are most vulnerable
to those permitting delays?
Ms. Hogan. You know, there are a number of demonstration
projects. There are transmission projects. And the way
permitting intersects with these projects will be different
based on where they are and where they will be constructed.
Mr. Fry. In a briefing with Committee staff, DOE mentioned
interagency conversations with the Department of Interior, as
an example, to address these permitting issues. In your
opinion, which areas of the permitting process are in most need
of reform, and has DOI been receptive to DOE's permitting
concerns?
Ms. Hogan. We are having very good conversations with our
sister agencies about what it is we can do to streamline
permitting, and, again, we would love to come up and talk with
you further about where we see opportunities to improve these.
Mr. Fry. In your opinion, just right now, what do you think
is in most need of reform from a permitting perspective?
Ms. Hogan. It is a deeper conversation, so again, we would
love the opportunity to come up and have a deep conversation
with you.
Mr. Fry. Thank you, Mr. Chairman. I yield back.
Mr. Fallon. Thank you. The Chair recognizes the gentlelady
from Washington, D.C., Ms. Holmes Norton.
Ms. Norton. Thank you, Mr. Chairman. Dr. Hogan, in 2022,
the Department of Energy Office of Inspector General issued
four special reports. These were prospective reports
anticipating potential areas of risk rather than identifying
new risk areas. They serve to highlight for the Agency and for
Congress various areas identified in previous DOE OIG reports.
So, Dr. Hogan, how did the Department engage with OIG on these
reports?
Ms. Hogan. Yes. So, as you stated, these are reports that
our Inspector General wrote from really pulling together a lot
of information from past audits that had been developed. So, we
did not participate in the same way we would with a deep audit
where they would be engaging with us and getting information
because the information body more or less existed.
But what I will say is, we are just so appreciative of the
Inspector General producing these reports for us, and engaging
in conversations around the findings that they have, and the
trends and patterns that they pulled out from these reports.
They are really so helpful to help us get organized around
where to look as a sort of foundational approach to the
controls and systems that we will be building into our work
going forward.
Ms. Norton. Well, Dr. Hogan, three of four special reports
identified insufficient staffing as a risk to the
administration of funds and performance of oversight functions.
What steps has the DOE taken to address this concern and
increase staffing?
Ms. Hogan. So, we are working hard right now to buildup the
staff that we need to deploy so that we can manage the funding
through these two laws and minimize fraud, waste, and abuse.
You know, again, many of the programs that were provided to the
Department by Congress are new programs, which means they need
a fair amount of design work up front, stakeholder engagement
work through requests for information. So, we are bringing the
teams on to do that work, and then simultaneously hiring for
the project management staff we will ultimately need when we
get to the point of project management. So, really, we are
moving out on all fronts from a hiring perspective.
Ms. Norton. Well, Dr. Hogan, how is the DOE addressing
cybersecurity threats related to implementation of the
Infrastructure Investment and Jobs Act and the Inflation
Reduction Act?
Ms. Hogan. Another really important question. That is
something that is also part and parcel of our daily work. I
mean, we have gone through the bill and IRA provision so that
we understand where we believe the greatest cyber risks are.
And then we are engaging in the design of these programs and
what will be required by the applicants to develop
cybersecurity plans, that will be again necessary as part of
the whole project. We call that sort of designing cybersecurity
in from the get-go as opposed to trying to bolt it in at the
back end.
Again, we are bringing forth our cyber experts through our
Office of Cybersecurity, Energy Security, and Emergency
Response, as well as our cyber capabilities from our
information officer, our chief information officer, and are
working to bring the best of what we can to these projects.
Ms. Norton. Well, is it true, Dr. Hogan, that DOE was aware
of these risks described in the special reports prior to their
issuance in 2022 and had already been instituting the OIG's
recommended reforms in a proactive manner?
Ms. Hogan. Yes. What is nice about what the OIG brought
forth, is really going back and looking at the many types of
issues that have happened over time and pulling them together
in one place. But some of the, you know, information that was
there, like around the weatherization program, as an example,
was from the era of 2012 and from the Loan Programs Office, you
know, maybe up to 2015, 2016. So, the Department was aware of
these things, and the Department has been actively putting
controls in place or building out capabilities as necessary to
address these issues for many years. But, so, from those
programs perspective----
Mr. Fallon. The gentlelady's time has expired.
Ms. Hogan. Sorry.
Mr. Fallon. The Chair recognizes gentleman from North
Carolina, Mr. Edwards.
Mr. Edwards. Thank you, Mr. Chair. On October 19, 2022, the
Department of Energy announced the availability of $2.8 billion
under the law for manufacturing of batteries for electric
vehicles and the electric grid. Reports later indicated that
the Department of Energy awarded Microvast, a lithium battery
company, $200 million of American taxpayer dollars despite the
company's primary operations taking place in China. I have a
bit of an interest in China this afternoon. Dr. Hogan, are you
aware of funds under the Infrastructure Investment and Jobs
Act, the Inflation Reduction Act, or the CHIPS and Science Act
going to China, Chinese companies, or companies susceptible to
control or influence by the Chinese Communist Party?
Ms. Hogan. We are not aware of any dollars going to
companies as you describe.
Mr. Edwards. What are you doing to prevent the transfer of
funds to other adversarial companies, entities, or nations?
Ms. Hogan. We at the Department have a history of doing due
diligence around any potential applicant for these types of
solicitations. We do vetting, leveraging information we get
through our intelligence and counterintelligence experts at the
Department. We, based on the times that we now have and the
magnitude of dollars that we are now talking about, are amping
up the efforts that we have had to date. We have established a
new vetting center to coalesce this type of information and
expertise so that we can double down on the types of
assessments you are discussing, you are bringing up.
Mr. Edwards. And, so, are you assuring this Committee that
these dollars could not and will not be distributed to Chinese
entities?
Ms. Hogan. These dollars will not go to Chinese entities.
Mr. Edwards. Is that in policy or in law? What would be the
prohibitive source to ensure that those dollars don't go to
Chinese entities?
Ms. Hogan. I think it is both, but I will find that answer
for you.
Mr. Edwards. All right. Inspector General Donaldson, does
the OIG recommends safeguards to prevent American taxpayer
dollars from going to entities owned, operated, or susceptible
to control or influenced by the Chinese Communist Party?
Ms. Donaldson. Yes, sir, without a doubt.
Mr. Edwards. What about other adversarial entities or
nations?
Ms. Donaldson. We feel exactly the same about all the
nations of concern.
Mr. Edwards. And what are those safeguards?
Ms. Donaldson. Well, the Department has been working on
this for years, and thankfully working with involving the
Office of the Inspector General on the area that we refer to as
research security. So, there are several ways that you can try
to combat this. I think the U.S. General Accounting Office is
about to launch an audit of the Department on technology
transfers. But when technology is leaving our facilities,
technology that the taxpayers have paid for, that is a very
important issue, and we all know that a lot has already flown
the coop.
So, you do that through a series of careful disclosures in
connection with grants and other sorts of financial assistance
tools, and then if those disclosures are inaccurate, you have
to prosecute those people. It is very important that you have a
strong message of deterrence in connection with those
disclosures. That is your basic grant fraud.
Mr. Edwards. And, so, for either of you, I started my
comment with some background information that $200 million of
American taxpayer dollars were used for companies doing
operations in China. In spite of the safeguards, how did that
happen?
Ms. Hogan. Well, let me first sort of correct the record
there. So, the company that was selected for negotiation for an
award, Microvast, is a U.S. company. That said, that company
has not yet received any money. It was selected for a
negotiation and is in that process where we are continuing to
do the type of due diligence we are discussing.
Mr. Edwards. Thank you, Mr. Chair. I see my time has
expired.
Mr. Fallon. Thank you. The Chair now recognizes the
gentlelady from New Mexico, Ms. Stansbury.
Ms. Stansbury. All right. Thank you, Mr. Chairman, and
again, welcome to our witnesses today. It is a pleasure to have
you here, and we appreciate the work that you do.
You know, I want to just say at the outset here that I have
been proud to be part of one of the most productive Congresses
ever in the history of the United States. In fact, this last
Congress, we passed more generational legislation than has
passed in decades in this country that includes the Bipartisan
Infrastructure Bill. It includes the Inflation Reduction Act,
which not only makes the largest investment in Department of
Energy Programs, it makes the largest investment in clean
energy and climate programs ever in the history of this country
and in the history of any country on the planet ever. It is
massive. It is a huge investment. And the reason why we made
that investment is to tackle the global climate crisis so that
our planet does not cross a global tipping point as we are
pursuing a clean energy future.
And in addition to that, we passed the CHIPS Act to address
our national security issues around the manufacturing of CHIPS
to help modernize our national labs, which the Department of
Energy oversees, to update our science and innovation around
all of our clean energy issues, and to ensure that we are
repatriating technologies that actually make us vulnerable to
these foreign influences that actually we have been discussing
here today.
So, taken as a collective, these pieces of legislation,
which this Congress passed with the support of our President,
were really designed to tackle three crises that the United
States was facing: rebuilding our economy in the wake of
disastrous manufacturing policies for decades, which off-shored
millions of American jobs to other countries, and which, of
course, made our country vulnerable in the wake of a global
pandemic and affected us with global supply chain shortages and
inflation, which we are still experiencing today. It threatened
our national security as so much of our actual infrastructure
and technologies that we use for our national security are now
manufactured overseas, and, of course, the global climate
challenge.
And of course, the Department of Energy, Dr. Hogan and
Honorable Donaldson, are really at the forefront of tackling
these challenges across all three of those crises. So, I am
delighted to have the opportunity to talk to you about them
here today. And for me, these really touch close to home
because I represent New Mexico's 1st congressional District,
which is also home to Sandia National Laboratories, whose core
mission is actually to address all three of those crises--the
global climate crisis, our energy security, our national
security--and to help stimulate manufacturing and repatriate
American manufacturing back home.
So, we have heard a lot of strange claims today about the
purpose of these bills and how the funds will be used. But I
just want to make sure that we are completely clear on this one
piece, which I think keeps coming up over and over here, which
is about the national security implications of these bills.
So, Dr. Hogan, you know, let us turn to the CHIPS Act
first. Is not the reason that we passed the CHIPS Act
primarily, the big push this last year in addition to all of
the science and technology and labs, things that we included,
was actually to address our national security risks from China
and chip manufacturing overseas?
Ms. Hogan. I believe that is why we passed that,
absolutely.
Ms. Stansbury. And, in fact, in addition to that, these
investments that we are making in major energy infrastructure,
you know, the kinds of investments that we are talking about,
these private sector companies and these public private
partnerships, will help to build that clean energy
infrastructure that will make us not only energy secure in this
country, but more competitive internationally. Is that true?
Ms. Hogan. Yes. There is a huge investment wave ahead of us
as we seek to have a global clean energy economy and a huge
opportunity for new manufacturing and quality jobs that go with
that.
Ms. Stansbury. And, you know, I want to just end on this
note, which is that I know, Dr. Hogan, you have been involved
with the IPCC for many years and, in fact, have been honored
nationally, including in association with the Nobel Prize in
the IPCC's work. We know that global climate change is already
happening. The impacts are already being felt here at home. Is
it not true that the reason we passed the Inflation Reduction
Act is that it will help us reduce our climate emissions if we
are effective in implementing it by 30 percent or 40 percent by
2030?
Ms. Hogan. Yes. These two laws together are really powerful
in bringing together the climate protection that you are
speaking to as well as the economic opportunity and, really,
economic opportunities for communities in every corner of every
state.
Ms. Stansbury. Thank you, Ms. Hogan, and that is exactly
why we passed these bills, and we are grateful for your
implementation and vision.
Mr. Fallon. The Chair now recognizes the gentleman from
Pennsylvania, Mr. Perry.
Mr. Perry. I thank the Chairman. Thank you, ladies for
being here. I am going to start right with what I would
consider kind of the fox guarding the hen house. As you know,
many of us know Secretary Granholm sat on the board of
Proterra, which is an electric vehicle company, from 2017 to
2021. Now, she sold her shares in Proterra, but we know that
she also promoted, in November 2021 at the JFK Airport, where
she stood in front of Proterra-made business buses, Proterra-
connected vehicles to advertise the SuperTruck 3, and for other
government funding programs. Just to give you some numbers in
case you are not aware, over $76 million of the $200 million in
funding announced in the event went to heavy vehicle
manufacturers associated with Proterra, including Daimler
Trucks, Ford Motor Company, and General Motors.
My concern is there is a trend at the Department of Energy
of money going to politically favored entities. As you know,
during the Obama Administration that was Solyndra, A123
systems, Fisker, et cetera, and ironically, Secretary Granholm
provided funding to A123 and Fisker, both having operations in
Michigan, as the Governor of Michigan. And as you are likely
aware, these two entities were sold for pennies on the dollar
to the Chinese.
To both our witnesses, in your respective roles, how are
you going to safeguard the hundreds of billions of dollars
literally at your fingertips when the head of the Agency
continues to promote projects for her former employer? Ms.
Donaldson?
Ms. Donaldson. Well, as you know, Congressman, there are a
set of laws that control conflicts of interest. That is a
project that is of great interest to me and probably one of the
projects we will be launching in the next few weeks in
connection with the new funds. So, it is very important that
you gather information about those conflicts, that there be
prohibitions, those sorts of things. It is a challenging area,
especially when you realize how all the new staffing you are
ramping up and you are hiring all these people, it presents an
opportunity for people to sort of sneak in that, candidly,
might intend to go back to----
Mr. Perry. And we are going to get into that, and I
appreciate your response. Dr. Hogan, anything from your end on
this?
Ms. Hogan. You know, we are putting solicitations on the
street, we are getting applications in, and we are reviewing
those applications with subject matter experts from within the
Department and externally in a way that is totally separate
from the political core in the Department, so----
Mr. Perry. So, we are making sure that the application
process, that the money just doesn't end up in the pockets to
Democrat donors and Chinese Communist Party-backed entities.
The application process is what we are relying on. I just want
to confirm what you just said.
Ms. Hogan. Yes.
Mr. Perry. OK.
Ms. Hogan. It is a merit-based, risk-based application
process.
Mr. Perry. All right. And to the IG, Ms. Donaldson, do all
the FERC Commissioners honor the ethics commitments, since we
are on the subject? I mean, do you feel that they do?
Ms. Donaldson. Well, the commissioners are bound by those--
--
Mr. Perry. Well, yes, I know we are bound by--we take an
oath around here, but I wonder if half the people have read the
Constitution. Have there been any concerns raised to your
office about the independence, integrity, or conflicts of FERC
commissioners?
Ms. Donaldson. We have had allegations in the past
pertaining to FERC. I don't think we have any open matters
pending to----
Mr. Perry. So, for example, is there one on the FERC
Commissioner Allison Clements regarding outstanding ethics
issues because she has not updated her ethics agreement to
account for her husband's work in the industry, the very
industry that she regulates? Moreover, there are reports that
the commissioner has briefed funders of far-left organizations
on FERC priorities. Are you aware of these things? Can you
enlighten us on these occurrences?
Ms. Donaldson. I don't believe we have an open matter
fitting that description, sir.
Mr. Perry. So, are you saying that the matter has been
resolved?
Ms. Donaldson. I don't think we have ever opened one. If
you give me one moment, I will confirm that, but I don't think
we have ever opened a matter of fitting that description. Yes,
I don't think so.
Mr. Perry. So, are you saying that there is no matter open
and at this point you are unaware? Are you unaware of this
circumstance where a husband works for the industry?
Ms. Donaldson. I will say that I am unaware of it. It is
possible. We have a pretty, you know, big apparatus for taking
in new matters. It is possible it is coming through, and I just
haven't been briefed on it yet.
Mr. Perry. Could you----
Ms. Donaldson. But I could get back to you on that, sir.
Mr. Perry. I would appreciate that.
Mr. Perry. I would appreciate your report to the Committee
regarding any information in that regard, and I thank the
Chairman. I yield.
Ms. Donaldson. Sure.
Mr. Fallon. Thank you. The Chair now recognizes the
gentlelady from Florida, Mrs. Luna.
Mrs. Luna. To follow up on some questions asked by Mr.
Edwards earlier, what is the DOE's process to catch the
taxpayer dollars that were going to Chinese-affiliated
companies? Like, do you have an oversight that looks into
people before you award contracts? The reason I ask that is
because, obviously, the CCP has been known for corporate
espionage. And obviously, with you guys, I am sure that there
needs to be probably a bigger set of oversight and security for
that before you guys are awarding government contracts.
Ms. Hogan. Yes, and again, thanks for this question. We
know it is a big issue, a big concern to you and to us. So, you
know, we do due diligence on every applicant that we are
thinking is in the zone of being meritorious for an award. So,
we do due diligence around ownership issues with countries of
greatest concern, and we are doubling down on our capability to
do that. So, we have always done that in what we call a pre-
selection phase, and by ``selection,'' I mean it is a
meritorious project. And we would like to select and then
actually enter into a deeper negotiation to get to the point
where you actually award money, a lot of standard terms and
conditions that companies need to agree to, to get a government
award. And during that whole post-selection process, we do even
more due diligence around these types of foreign concerns.
Mrs. Luna. Are you guys doing anything currently to promote
domestic energy production?
Ms. Hogan. We are doing a lot to promote domestic energy
production and utilization of domestic supply chain.
Mrs. Luna. So, one of the biggest issues that I am
currently seeing exists in Congress is a lot of people will
talk about clean energy, but it is not really clean,
especially, when it is tied to China or Chinese productions,
for example, windmill manufacturers, right? So, I guess what I
am trying to say is, instead of facing a global climate crisis,
we are facing the global China crisis. And I am that you would
agree--kind of ``yes'' or ``no'' real quickly, do you agree
that China is one of the biggest threats to our climate as a
whole?
Ms. Hogan. China is a big emitter of greenhouse gases,
correct.
Mrs. Luna. And those greenhouse gases do not stay contained
in the China region, correct?
Ms. Hogan. Right. It is a global----
Mrs. Luna. OK.
Ms. Hogan [continuing]. Pollutant, right.
Mrs. Luna. Yes. How about you, Honorable Donaldson?
Ms. Donaldson. That is a little out of the lane for an
inspector general.
Mrs. Luna. No, I mean, it is just your opinion. I would
like to know because you guys are obviously in important
positions, and I want to see your view and perspective on that.
Ms. Donaldson. That is certainly what is reported.
Mrs. Luna. OK. So, I think that if there is any way that
you guys can help kind of tailor that and make sure that we are
not doing anything to really enable these companies and
corporations, I think that that would be the best thing.
I guess my last question for you would be, we are currently
seeing that China has an insanely big monopoly on critical
minerals that we need to produce some of these things for
electric vehicles. What would you say would be the best way
that we here in the United States could handle that instead of
outsourcing some of these operations to other countries like
China, for example, the domestic harvesting production?
Ms. Hogan. We are very interested in building out the
critical mineral material supply chain in the United States to
the extent that the United States will embrace this in
different ways. You know, it is in many parts of that
landscape. In addition, I think we are very engaged with a
number of international allies so that we can have strategic
alliances----
Mrs. Luna. Real quickly. Sorry.
Ms. Hogan [continuing]. Where we can work together.
Mrs. Luna. What allies are those, just so I know?
Ms. Hogan. Like Canada, Australia. There is a list of
countries that also have resources that we work with around
opportunities for critical minerals and materials.
Mrs. Luna. Do you know if anyone has ties to BRICS, any of
the BRICS countries?
Ms. Hogan. We can get back to you on that.
Mrs. Luna. OK. The reason I ask is because BRICS is
currently working to undermine the U.S. dollar as a whole by
forming an alliance in their debt with China, so I just want to
make sure. Thank you very much. Mr. Chairman, I yield my time.
Mr. Fallon. Thank you. The Chair now recognizes the
gentleman from Florida, Mr. Donalds.
Mr. Donalds. Thank you, Chairman. Inspector General, hello.
How are you? Dr. Hogan, hi. A couple of things. Quick question.
The Department of Energy has considered TRISO fuel--T-r-i-s-o--
as the most robust nuclear fuel on Earth. However, the United
States does not have a domestic supply of Halo or other small
amounts at DOE and must currently rely on Russia to fuel our
Nation's innovative advanced reactors. In your opinion, what
level of investments should Congress provide to establish and
build out America's Halo-producing capability?
Ms. Hogan. We are very interested in the United States
having a strong nuclear industry. We are very happy to come
back and talk with you about what that takes. As you know, it
is complicated, and the war in Ukraine and the position that
Ukraine and Russia are now in has made something that we need a
different strategy on.
Mr. Donalds. Dr. Hogan, do you think the American people
understand that we get most of our uranium from Russia?
Ms. Hogan. Yes. I don't know what the average citizen
thinks about that, but certainly we are at a point now with the
war in Ukraine and with Russia that we need another strategy in
this country.
Mr. Donalds. Let me ask you this question. The Nuclear
Regulatory Commission, do you think they have the capability
and the wherewithal to actually permit new commercial reactors
in the United States for use, not for study?
Ms. Hogan. I think they have the capability to permit
reactors, yes.
Mr. Donalds. So, what is the problem? What is the holdup?
They haven't created a new one. All right. Let me rephrase
that. They have not allowed a commercial reactor for use since
they were created. So, what is the holdup?
Ms. Hogan. I don't know, but again, I am happy to have a
broader conversation with you. We have got amazing nuclear
energy experts at the Department of Energy and happy to come up
and talk with you about what we see as the strategies for this
country for the future.
Mr. Donalds. When you say the strategies for the future, I
mean, you got to help me understand. Is the Department of
Energy even processing this stuff right now? Like, do not get
me wrong--I get it. The line of question on nuclear fuels and
nuclear reactors is probably not something you guys prepped for
over at DOE coming over here today. I understand that. But is
there any discussion going on at the Department of Energy for
actually creating sustainable base-load power for America
because if it is the position of the Biden Administration and,
frankly, Secretary Granholm that every American should buy an
electric vehicle to the tune of $61,000 a year when most
Americans can't afford spending $61,000 for the car, they can't
afford to buy that.
If that is her position, is she aware that by doubling the
size of the electric vehicle market in the United States, we
don't have enough electricity on the grid? Does she realize
this? And what is the plan in the DOE to prevent the grid from
going essentially dark?
Ms. Hogan. There are a few questions in there. One, we are
very supportive of a nuclear industry in this country. The
Department of Energy has had a nuclear energy research program
for a number of years. We are advancing a number of
demonstration reactors, and those are linked, as you probably
know, to the need for the Halo fuel supply. So, we are very
interested in figuring out that roadmap going forward. At the
same time, we understand that electric vehicles take more
electricity than the alternative. And there has been a lot of
work to figure out what a modernized grid should look like and
what we can do to invest in the electric grid in this country
to serve the needs of electric vehicles while also maintaining
reliable resilient electricity supply.
Mr. Donalds. Well, I will say for the record, I am not
sitting here in favor of mass expansion of electric vehicles in
the United States because the component pieces actually are
dirtier than the internal combustion engine if you take into
account the mining of cobalt, lithium, rare earth, et cetera,
and then when you have to actually dispose of the batteries.
But in that interim piece when Americans have to use it, if
what the EPA has done, which is basically going to force
Americans to buy electric cars even though they do not want
them, it is not really clear to me that Secretary Granholm and
the Biden Administration have a plan for actually putting
enough electricity on the grid to support America's needs. I am
out of time. I will yield back to the Chairman.
Mr. Fallon. Thank you. All right. The Chair now recognizes
the gentlelady from New Mexico, Ms. Stansbury, for a closing
statement.
Ms. Stansbury. All right. Well, thank you, Mr. Chairman,
and, again, thank you to our wonderful witnesses. I want to
just say, Mr. Chairman, what a difference leadership makes. I
think we see before us two women leaders who are serving our
Nation in the Department of Energy and serving under a female
Secretary of Energy. And in a world that has long been
dominated for countless generations by men, I am personally, as
a woman in STEM, very grateful to have you here and for your
leadership in the Agency.
You know, my thoughts on this hearing as I was sitting here
listening to my friends across the aisle sort of beat the same
drum over and over again about foreign influence, it actually
made me think of the movie Mean Girls and the quote ``stop
trying to make fetch happen,'' sort of as if we just say and
will this narrative into being and say it over and over again,
somehow it will be what is actually occurring.
I think we have heard here today, the Department has been
clear, the Administration has been clear. The Department has
undertaken significant reforms to ensure that there are
appropriate controls, that there is appropriate due diligence
whenever contracting and grant making occurs, to ensure that we
are standing up programs in a way that not only meets the
requirements of the law, but is informed by the communities
that will be impacted by them. And these new programs will be
stood up quickly with appropriate staffing to get the dollars
on the ground to make the impact that they were designed to.
And, you know, I think sometimes we get lost in the
arguments about why these bills were actually passed. So, I
just want to take a moment to return to that, which is that we
passed these three bills that we are talking about here today:
one, to make a huge generational investment in the crumbling
infrastructure this Nation, to repatriate our manufacturing
back to American shores to create American jobs, and rebuild
our economy and our supply chains; two, to address the
significant national security risk that was faced by our
country, that is faced by our country in the manufacturing of
CHIPS overseas; and three, and probably most significantly, to
address our national security and global environmental security
issues around the global climate crisis.
And together, the Bipartisan Infrastructure Law, the CHIPS
Act, and the Inflation Reduction Act literally represent the
largest investment ever in the history of this country in clean
energy and climate change. And I am proud to stand with the
Administration, to stand with our President and my Democratic
colleagues, who helped to make it possible to pass these bills.
And I will note my friends across the aisle, who voted against
all of these bills that will lower costs, that will create
millions of jobs over the coming decades, that will rebuild our
economy and make sure that it is a clean energy economy, and
that will help our families.
And I want to say on a personal note, I grew up in a low-
income family. The weatherization programs that we are talking
about here today, these are not just, you know, putting in new
windows, which they are for families. We are talking about
people who are living in trailers and in rural areas and tribal
communities across our country, who are going to have the
opportunity to get new appliances, to get new windows, and to
significantly lower their monthly costs. And all of that money
that they will be saving through that will be able to be put
toward putting food on the table, a roof over their head, and
helping their kids go to school. That is what these bills are
all about.
And, so, when we talk about the administration of these
funds, when we talk about what DOE and the amazing staff who
are standing behind you, sitting behind you, in the Department
do every day, they are going to be administering these funds so
that we can put our country on a clean energy path. We can put
our planet on a global climate resilient path, and we can put
our families on a path to economic security.
So, Mr. Chairman, I appreciate you holding this hearing. I
appreciate our witnesses for being here today, and I appreciate
the service of every single one of our Federal employees who is
out there working every day to get these dollars on the ground.
Thank you, Mr. Chair.
Mr. Fallon. Thank you. You know, the purpose of the hearing
was not to re-debate the need or lack thereof of legislation
that was passed last year. The purpose of this hearing was to
talk about the oversight mechanisms when massive amounts of
money is being spent and are loaned out and to prevent fraud,
waste, and abuse, which should be an absolutely bipartisan
mission because not one person is helped when there is a
fraudster taking money away, when that money is abused, or it
is wasted.
And I, you know, heard terms like ``climate deniers'' and
``fluoride'' and ``don't do anything to combat climate change''
in the 117th Congress. Well, one thing that they did was create
historic deficits, and that is something that we are going to
have to talk about when our entire budget will be gobbled up by
interest payments on our debt.
And I like what one of my colleagues said from Florida
about talking about global climate crisis. What about the China
crisis? Let's be very clear here that the United States, and I
am very proud of the fact, that we have reduced our emissions
in this country because we are responsible. And we have reduced
them, I believe, by about 20 percent over the last 20 years.
But let us look at China. They have increased their carbon
footprint by 300 percent over the last 20 years.
And I would love to see the American left talking more
about that because if you really do care about the climate, the
No. 1 thing we should be talking about is China's emissions and
having them follow the EU and the United States lead and being
responsible global partners. The United States is not a planet.
We all live and share on this one little blue marble, so
talking about fraud, waste, and abuse and trying to be
preventative is healthy.
I was actually thinking about this this morning about what
my Democratic friends would talk about because I thought this
was going to be rather bipartisan hearing because this is just
about ensuring that money that has already been allocated,
whether you voted ``yes'' or ``no'' on it, is the Inspector
General, do they have the mechanisms in place to ensure that it
is spent properly. Because, you know, to use the IG's words and
not mine, there are an increased risks with new programs. Well,
there are 71 new programs, which mean there is a lot more
increased risk, and when an Agency goes from $45 billion to
$100 billion in one year, that is a dramatic increase. And,
again, using the IG's words, that is a lot of money moving
fast, and I think that, you know, nobody wants another
Solyndra.
I think that we can all agree on that, because not one
person that was in need got any help from that $500 million.
Not one environmentalist would say that was money well spent,
because it didn't work. And it was, you know, we were
defrauded. And I also was--I grew up in a home that cost my
parents $13,000, so I would say by any definition that was
humble beginnings. And that is why we live in the greatest
country history has ever known because with a lot of effort and
work, you can improve your lot in life. In a lot of countries,
unfortunately, you don't have that opportunity.
And that is why, again, I just wanted to be real focused on
why we had this hearing was to just prevent that fraud, waste,
and abuse. It did seem like while they say that they are going
to undertake reforms, some of them have not been made yet, but
money is going out the door. That is a dangerous cocktail.
So, in closing, I would like to thank our panelists once
again for their important insightful testimony, and with that
and without objection, all Members will have five legislative
days within which to submit materials and to submit additional
written questions for the witnesses, which will be forwarded to
the witnesses for their response.
Mr. Fallon. If there is no further business, without
objection, the Subcommittee stands adjourned.
[Whereupon, at 3:39 p.m., the Subcommittee was adjourned.]
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