[Senate Hearing 108-448]
[From the U.S. Government Publishing Office]
S. Hrg. 108-448
PROPOSED FISCAL YEAR 2005 BUDGET REQUEST FOR THE DEPARTMENT OF ENERGY
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
TO CONSIDER THE PRESIDENT'S PROPOSED FISCAL YEAR 2005 BUDGET
FOR THE DEPARTMENT OF ENERGY
__________
FEBRUARY 10, 2004
Printed for the use of the
Committee on Energy and Natural Resources
______
93-641 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON ENERGY AND NATURAL RESOURCES
PETE V. DOMENICI, New Mexico, Chairman
DON NICKLES, Oklahoma JEFF BINGAMAN, New Mexico
LARRY E. CRAIG, Idaho DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
CRAIG THOMAS, Wyoming BOB GRAHAM, Florida
LAMAR ALEXANDER, Tennessee RON WYDEN, Oregon
LISA MURKOWSKI, Alaska TIM JOHNSON, South Dakota
JAMES M. TALENT, Missouri MARY L. LANDRIEU, Louisiana
CONRAD BURNS, Montana EVAN BAYH, Indiana
GORDON SMITH, Oregon DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky CHARLES E. SCHUMER, New York
JON KYL, Arizona MARIA CANTWELL, Washington
Alex Flint, Staff Director
Judith K. Pensabene, Chief Counsel
Robert M. Simon, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Pete Lyons, Professional Staff Member
C O N T E N T S
----------
STATEMENTS
Page
Akaka, Hon. Daniel K., U.S. Senator from Hawaii.................. 6
Alexander, Hon. Lamar, U.S. Senator from Tennessee............... 7
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................ 1
Domenici, Hon. Pete V., U.S. Senator from New Mexico............. 1
Dorgan, Hon. Byron, U.S. Senator from North Dakota............... 4
McSlarrow, Kyle E., Deputy Secretary, Department of Energy....... 9
Murkowski, Hon. Lisa, U.S. Senator from Alaska................... 8
Smith, Hon. Gordon, U.S. Senator from Oregon..................... 4
Thomas, Hon. Craig, U.S. Senator from Wyoming.................... 3
APPENDIX
Responses to additional questions................................ 39
PROPOSED FISCAL YEAR 2005 BUDGET REQUEST FOR THE DEPARTMENT OF ENERGY
----------
TUESDAY, FEBRUARY 10, 2004
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 10:08 a.m., in
room SD-366, Dirksen Senate Office Building, Hon. Pete V.
Domenici, chairman, presiding.
OPENING STATEMENT OF HON. PETE V. DOMENICI,
U.S. SENATOR FROM NEW MEXICO
The Chairman. The hearing will please come to order.
There are a lot of Senators who want to participate. I do
not know how long each one wants, but I am going to give it a
trial run anyway, assuming that everybody will be reasonably
fair knowing that there are many Senators. I am going to let
Senator Bingaman start since we are late and he has been
waiting.
Senator Bingaman.
STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR
FROM NEW MEXICO
Senator Bingaman. Thank you very much, Mr. Chairman, for
having the hearing.
I welcome the Deputy Secretary, Kyle McSlarrow. I know he
has a very busy schedule and we appreciate him spending time
with us.
The Department budget, as I understand it--and this is all
to be clarified, I am sure, by Secretary McSlarrow, but the
budget is proposed overall to increase 1.2 percent. I am
concerned about some of the priorities reflected in that
budget, though. As I understand it, the Office of Science,
which is the premier funding source for the physical sciences,
is slated for a decline of 2 percent.
I see an unfortunate trend in basic research across the
executive branch. When you take out the funding for NIH, the
basic research budget of the Federal Government is decreasing
by 2.5 percent, as I understand the proposal of the
administration. This is obviously our investment in the future
and it is important in maintaining our competitive position in
the world.
The administration is aggressively pursuing hydrogen
research, but the hydrogen economy's growth is at the expense
of other energy R&D programs, as I see the budget, particularly
DOE's conservation research with most of the energy-intensive
industries. This program which has been designated the
Industries of the Future program is scheduled for a 37 percent
decline from the 2004 level. If you compare the 2005 proposed
budget to the 2003 budget, it is a 60 percent decline. This
Industries of the Future program is to develop partnerships
between industry and Government, to enable the steel industry,
the glass industry, paper, chemicals to be energy efficient and
competitive in order to retain manufacturing jobs in this
country. As I understand it, there is a major, major lack of
focus on that by the administration.
Because of OMB's cap on discretionary spending, the
Department is proposing to take off budget $749 million from
the nuclear waste fund. This is money that nuclear utilities
paid in to help license Yucca Mountain, and I think we need to
inquire about that as well.
The overall management issue in the Department I think is
one we need to ask a few questions about. OMB has their program
assessment rating, and they have given the Environmental
Management program a score of 26 out of 100. That is obviously
a cause for concern. The Office of Science got a similar rating
of 82 to 93 percent, which is extremely impressive, but they
are the ones scheduled for the cut in budget. So there are
various issues there I think that need to be addressed.
I am concerned about the holding back of funds in the
environmental management effort for our State. As I understand
it, the Department has held back $69.5 million, or 33 percent,
of the cleanup budget for fiscal years 2003 and 2004 because of
the failure to reach an enforceable agreement with New Mexico
on some of these issues, and there is an additional $47 million
scheduled to be withheld in this budget until that agreement is
reached.
Let me mention one other issue that I would like to ask Mr.
McSlarrow about and that is the whole issue of processing
claims by the atomic workers in the DOE. This is an issue that
I continue to hear great concern about.
One example. We have a State representative, Ray Ruiz, in
New Mexico who was diagnosed with mesothelioma sarcoma, which
is an illness that you contract from working with asbestos. He
contracted the disease as an iron worker at Los Alamos. He has
been in touch with me about his frustration about the slowness
of the review of workers compensation claims. He has followed
these hearings. I think we need to find a way to get these
claims processed. Clearly that has not been happening. I hope
we will find some way to solve that problem, and when we get to
the questions, I will ask Mr. McSlarrow about that.
Thank you again, Mr. Chairman.
The Chairman. Thank you very much, Senator Bingaman.
Let me first say good morning to you, Mr. Deputy Secretary.
I would welcome you here and thank you for the job you do with
reference to the Department. You have worked diligently. It is
a very hard Department to manage and I do not know what they
would do without you.
I am pleased to be joined by the ranking member, Senator
Bingaman.
The Department of Energy has a significant presence in our
State, New Mexico, and we will both have questions either
orally or in writing with reference to the impact of this
budget, Mr. Deputy Secretary.
As we start this hearing, I would like to congratulate the
Department on their ranking as first among all cabinet agencies
in a recent review of the implementation of the President's
Management Agenda. That is an impressive achievement and a
major turnaround for the Department.
The President requested $24.3 billion for the Department
which represents a $1 billion, or 4.5 percent, increase. While
this appears to be good news, in a budget that is significantly
constrained for non-defense, non-homeland security spending, a
closer look reveals that $749 million, Senator Bingaman, of
that increase is associated with the reclassification of
mandatory fees associated with Yucca Mountain, a high-level
nuclear waste repository, to discretionary spending. That does
not sound like much to anybody, but it is a very, very
important thing as we attempt to find the money for what we
think we need. This is a dramatically different story from the
DOE budget that is first portrayed.
I realize in wartime budgets domestic agencies and programs
have to prioritize within overall budget limitations. Energy
programs under the Office of Science, Fossil Energy, et cetera
are all concerns, as indicated by the ranking member, of his
and mine, and I would venture every member of the committee.
Perhaps if we do not talk about them all today, you will get
the questions in writing.
We keep hearing from outside evaluators that the DOE
laboratories have to be the best research institutions in the
world, and they probably are. But they are not going to stay
that way if we continue to underfund science at the
laboratories and fund only the defense work at high dollars.
So having said that, I am going to yield, starting on this
side with the first Senator who was here. Senator Campbell.
Senator Campbell. I have no opening statement, Mr.
Chairman.
The Chairman. All right.
The Senator from Wyoming, would you like to ask some
questions?
STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR
FROM WYOMING
Senator Thomas. Thank you, Mr. Chairman.
Well, I am anxious to hear more about the budget, of
course.
The Chairman. Strike that. I did not mean ask questions.
Would you have some observations?
Senator Thomas. That is what we are here for.
I guess as I look at this overall sheet, I find the State
that probably has more potential for energy production than any
other State with a substantial reduction in the budget. I find
that sort of interesting. Particularly when we are talking
about hydrogen and FutureGen and so on. We are the largest
producer of coal by any means. So I want to talk a little bit
about that later and some of these things.
It is kind of interesting to see this State by State sheet
and be the State that is the biggest producer of energy and
find that our involvement here--and much of it is with WAPA and
other kinds of government programs--is down substantially from
where it has been in the last 2 years. So I am hopeful that you
will give me some insight into that and maybe we can talk a
little bit about what the purpose of this budget is.
Thank you.
The Chairman. Senator Dorgan.
STATEMENT OF HON. BYRON DORGAN, U.S. SENATOR
FROM NORTH DAKOTA
Senator Dorgan. Mr. Chairman, thank you very much.
There is much, of course, to consider in these budget
requests, and my colleagues have mentioned several issues of
concern. Let me mention two.
One is the purchase power issue with respect to the PMA's.
I thought we had solved that problem. We had a little problem
in the previous administration on this. But the budget
recommendation here is just fundamentally wrong and would
injure, in my judgment, the PMA's, and I hope that we can
resolve that. I do not know that I will be here to ask Mr.
McSlarrow questions, but we need to get that fixed. The
recommendation I think is wrong-headed.
Mr. Chairman, the other issue that is of great concern to
me, among many, is the clean coal power initiative. That is cut
from $170 million to $50 million, but it is combined with
FutureGen, so it makes it look like there are not the deep cuts
that do exist really. The President, when he campaigned, said
his goal was $2 billion over 10 years for clean coal
technology. We are going to continue to use coal, and the
research, it seems to me, to be able to use that coal in a way
that is not destructive to our environment, is critically
important. I do not understand, given the President's
statements, beginning when he campaigned for this job, of his
support for clean coal initiatives, why we would have a very
substantial cut in that request because I think that is not in
our interest, not in our energy interest and certainly not in
our environmental interest.
So those are two areas that I will ask about, Mr. Chairman,
if I have the opportunity today, and there are many other areas
that we need to talk about dealing with renewable energy
especially.
The Chairman. Thank you very much.
Who is next on our side?
Senator Smith.
STATEMENT OF HON. GORDON SMITH, U.S. SENATOR
FROM OREGON
Senator Smith. Thank you, Mr. Chairman. Kyle, welcome to
the committee. It is nice to see you.
I note two things in the budget proposal of concern to me
and I just want to raise them with you. The first has to do
with the Bonneville Power Administration and the second has to
do with the cleanup at the Hanford site in Washington State.
You probably are aware that the Northwest continues to
suffer real volatility and the effects from the power problems
there over the last few years. Our area of the country has been
hurt economically, perhaps disproportionately, because of that.
We currently suffer the highest unemployment rate in America.
But the specific concern I have is that the proposal of
possible legislation to treat long-term lease-purchase
transactions as debt would count them against BPA's statutory
debt limit. I believe that would have severe negative
implications for needed infrastructure investments and would
certainly draw my opposition if that were a part of this
budget.
Finally, I do not think we need to hamper our recovery
because the Pacific Northwest will recover economically, and we
need to have better transmission capabilities. So any limits on
that would hamper, I think, third party financing that needs to
occur, and that would not occur if this happens.
As to Hanford in Washington State, we are down-river from
that and we are very concerned that there is a proposal to cut
funding for cleanup at the site. Even of greater concern is the
proposal to reclassify residual tank waste, remaining after
certain cleanup operations at Hanford, Idaho, and Savannah
River, as waste incidental to reprocessing rather than high-
level waste. My concern is that anything less than full cleanup
of the Hanford site and dealing with all of this fully is going
to be unacceptable in an area that's very concerned about the
continued nuclear waste in that area.
So with that I will put my entire statement in the record,
Mr. Chairman, if I may, and abbreviate those comments.
[The prepared statement of Senator Smith follows:]
Prepared Statement of Hon. Gordon Smith, U.S. Senator From Oregon
Mr. Chairman, I appreciate your willingness to schedule this
hearing today on the Department of Energy's budget request for fiscal
year 2005. I would also like to thank Deputy Secretary McSlarrow for
appearing before the Committee today.
While we all recognize that these are times in which the Congress
must exercise fiscal constraint, there are a number of policy issues in
this budget that are of deep concern to me and to my constituents. The
two main concerns which I would like to focus on today deal with the
Bonneville Power Administration, and with the clean-up of nuclear waste
at the Hanford site in Washington.
The Pacific Northwest continues to struggle economically, although
there have been some encouraging economic indicators in recent months.
We also continue to bear huge costs resulting from the volatile West
Coast electricity market of late 2000 and 2001.
Most ratepayers in the Pacific Northwest have seen their power
rates go up by at least 40 percent. BPA raised its rates again last
October, and is scheduled to impose two more rate increases between now
and October 2004. Meanwhile, our energy intensive industries are
shuttered, and Oregon continues to have one of the highest unemployment
rates in the country.
I realize that BPA has tried, unsuccessfully, to negotiate a
settlement to outstanding litigation. That settlement, had it been
agreed to by all parties, would have reduced rates for BPA's customers
this year. I would urge all of the parties to that litigation to try
again to find some resolution to the issues that will provide rate
relief to the ratepayers of the Northwest. Within the Department's
budget proposal is discussion of possible legislation that would treat
certain long-term lease-purchase transactions as debt, and would count
them against BPA's statutory debt limit. I must tell you, Mr.
Secretary, that this proposal would have severe negative implications
for needed infrastructure investment, particularly in transmission, in
the Pacific Northwest. Before you spend time developing and vetting
such a proposal with BPA's stakeholders, I must inform you that--based
on my current understanding of this concept--I would have to oppose
such legislation.
Our region will recover economically. When it does, the Pacific
Northwest will once again have a shortage of electricity generation. We
do not need to hamper our recovery by restricting needed third-party
financing of infrastructure.
Turning now to the Hanford site, I am troubled by a proposed cut in
funding for the office of river protection, and for security at the
site. Of greater concern, however, is a proposal to reclassify residual
tank wastes, remaining after certain clean-up operations at Hanford,
Idaho, and Savannah River, as ``waste incidental to reprocessing,''
rather than as High Level Waste. This is on top of the Department's
announcement that it will not to build a second vitrification plant to
handle tank waste at the Hanford site, but will use ``supplemental
technologies'' to treat almost two-thirds of the tank waste.
Let me make it clear to the Department that anything less than the
full clean-up of the Hanford site is unacceptable to the Pacific
Northwest. The Hanford site is only miles from the Columbia River, the
greatest since natural resource in our entire region. The Department
cannot expect that those of us who represent the Pacific Northwest will
allow the Department to lower the bar for clean-up, and leave our
region with untreated waste stored at the Hanford site for 10,000
years.
Mr. Chairman, this issue is vitally important to Oregon. I would
like to work with you, my Northwest colleagues and the Department
during this session--before the fiscal year 2005 budget is enacted--to
get this clean-up program back on a track that is acceptable to the
region.
Again, thank you, Mr. Chairman, for convening this oversight
hearing. I look forward to hearing from Deputy Secretary McSlarrow, and
I will have questions for the Department.
The Chairman. Thank you very much.
Senator Akaka.
STATEMENT OF HON. DANIEL K. AKAKA, U.S. SENATOR
FROM HAWAII
Senator Akaka. Thank you very much, Mr. Chairman. I want to
thank you for holding this hearing so promptly.
I also want to add my welcome to Deputy Secretary
McSlarrow. It is nice to see you again.
Mr. Chairman, I would like to submit my remarks for the
record, and I have a few questions later for Mr. McSlarrow.
[The prepared statement of Senator Akaka follows:]
Prepared Statement of Hon. Daniel K. Akaka, U.S. Senator From Hawaii
The budgets of federal agencies, and especially those funded in the
discretionary part of the budget, are very important. The federal
budget is a template by which priorities are drawn. This year, all the
programs for agencies in the discretionary part of the budget will
receive only one-sixth of the President's $2.4 trillion budget.
Essentially, the agencies are level-funded, and will not be able to
keep up with inflation or cost-of-living.
The budget of the Department of Energy is particularly significant.
The availability of secure, reasonably-priced energy for the American
people is a critical need. Long-term solutions to our energy problems
require strong investments in science and research and development,
firmly based in American ingenuity and technology, in order to solve
our energy problems. Our investment in and commitment to the science
and technology behind alternative and clean sources for energy security
in the future must be greater than ever. Unfortunately, again this
year, a strong commitment is not evident from the budget request.
As you know, I have been a strong supporter of the DOE science and
energy programs. I am disturbed that the FY 2005 request for the
important programs in Energy Efficiency and Renewable Energy, Energy
Conservation, and Fossil Energy are all level or less than what was
requested for FY 2004. The notable bright spots are increases for
Hydrogen technology in Energy Production and Vehicle Technologies in
the Energy Conservation account.
I have long monitored and supported Gas Hydrates Research. Gas
hydrates represent a vast potential source of clean energy and warrant
a serious research and development effort. The Administration's request
has scaled back enacted levels consistently since FY 2002. These
cutbacks continue to hinder progress significantly, with minimal
associated savings. The nation's capabilities in science and technology
would not have been realized without the investments made in the past.
The country needs increased investment in basic research and resource
assessment if we are to maintain our leadership in energy sciences and
technology. The budget decreases in the Administration's proposal for
the Natural Gas Technologies program will not help us improve our
capabilities.
I am pleased to see funding increases for the Hydrogen program.
However, these increases are lower than what I, and many on this
Committee and in the Senate, would consider to be adequate. There are
many unanswered questions about the production and storage of hydrogen.
These questions need to be answered prior to undertaking a
comprehensive initiative to produce consumer goods such as automobiles,
rather than a public good such as electricity. However, I am pleased to
see that with respect to energy supply, there is an increase of $2.7
million for research to lower the cost of renewable production of
hydrogen. This is an important priority for my State. It is more
important than the need to produce hydrogen-fueled cars, but it
receives only secondary attention compared to fuel cells for cars and
the infrastructure to support them.
The National Academy of Sciences, in their pre-publication report
on The Hydrogen Economy, recommends investing in ``targeted fundamental
and exploratory research on hydrogen production by photobiological,
photochemical, and thin-film solar processes.'' The production of
hydrogen from renewables, whether for transportation or for stationary
sources, is a quest for energy sources for the people of the U.S. We
must provide adequate funds for these critical Hydrogen R&D programs. I
am optimistic that a robust Hydrogen program can make positive and
long-lasting adjustments for quality of life of people across the
nation, whether or not we drive cars with hydrogen fuel cells.
The Chairman. Thank you very much.
The Senator from Tennessee.
STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR
FROM TENNESSEE
Senator Alexander. Thank you very much, Mr. Chairman.
Mr. Secretary, thank you for coming. Thank you for your
hard work and your attention to these very important issues.
There are three areas that I would like to concentrate on
in my questions.
One, I salute the President's priorities in his budget on
focusing on defense and homeland security and then education,
but I would note that half our new jobs, according to the
National Academy of Sciences, since World War II were created
by the physical sciences, and as we think about how to compete
in the world marketplace, we need those new investments in
technology.
I would congratulate the Secretary for his excellent 20-
year plan, his path to the future, on science and technology,
and I would hope, as Senator Bingaman mentioned a little
earlier, that as we move along, we could begin to fund that
plan. We have done a great job in doubling funding for NIH and
increasing funding for the health sciences and life sciences,
but we need to put a new focus on making the same kind of
investment in the physical sciences. Within our tight budget, I
hope that has a strong priority, and the administration I
believe would find in this committee and in the Congress wide
bipartisan support for such a budget priority. That would be
the full funding of the 20-year plan that the Secretary so well
outlined. That is the first thing.
The second thing is that last year the Office of Science
received an additional $30 million above the President's
request to start the development of a leadership class
computational facility. That is consistent with the
recommendations made by the High End Computing Revitalization
Task Force. I hope to hear from you as we get into questions
and answers as to what plans the DOE has to accomplish this. I
especially hope that we focus that money on a single effort as
much as possible to be a world leader and do not just spread it
out and make mediocre progress. So that is the second area.
The final area that I hope to explore has to do with
infrastructure. In States, we have capital budgets, and I
remember, when I was Governor, almost the most unglamorous part
of the budget was to try to maintain things, but if you did not
maintain infrastructure right along, you paid a big price
later.
The Federal budget has a strange procedure of including
those infrastructure payments in the operating budget. I am
worried that the DOE Office of Science request is down,
according to my figures, from $54 million to $29 million for
scientific laboratories infrastructure. I hope that while it is
not a sexy, spectacular part of any budget, that we can keep
the infrastructure spending to support the science and
technology investment.
Those are the three areas I hope to explore in questions.
Thank you for being here.
The Chairman. Thank you, Senator.
Senator Murkowski.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman, and thank you,
Mr. Secretary, for your willingness to join us this morning.
I am going to, during the question period, focus on two
very specific areas, specifically the Arctic energy research at
the University of Alaska and why we are not seeing a little
more assistance there and then also the Department's processing
of those claims under the Energy Employees Occupational Illness
Compensation Program Act. As you know, we had a hearing in
November and we were able to explore a little bit of what was
happening with the processing of those claims by the
Department. Specifically my concern was those claims coming out
of Amchitka and some of the problems that we have with that. If
I am not able to get all of my questions to you, I will
certainly submit them in writing.
I did have an opportunity, as we were sitting here, to just
briefly go through your statement that you will give, and I am
always looking for recognition of the fact that Alaska is truly
the energy bank or certainly a major energy bank for the rest
of the country when we think about domestic supply and
production. I am a little bit disappointed, I guess, to note
that the only mention of energy production in your narrative
here is as it relates to foreign imports, and specifically a
reference to the conference that was held in December on LNG,
bringing together all of the world's major gas-producing
countries to discuss increasing U.S. access to gas imports.
I have stated previously and I will continue to caution
that this country not go in the direction of increased imports
for our natural gas, as we have with oil where we are now
currently 57 or 58 percent dependent on foreign sources of oil.
We should not adopt or accept as a policy that we would do that
with our natural gas, when we have yet huge opportunities, vast
reserves up north--we have got 35 trillion cubic feet that we
are trying to get down to you with the pipeline. We would
certainly like to think that we would have the support for that
domestic production.
I look forward to your comments. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Now, Senator Bingaman, do you have anything further? Shall
we proceed?
Senator Bingaman. Yes.
The Chairman. Mr. Deputy Secretary, would you proceed? Your
statement will be made a part of the record. Keep it as brief
as you can.
STATEMENT OF KYLE E. McSLARROW, DEPUTY SECRETARY, DEPARTMENT OF
ENERGY
Mr. McSlarrow. Thank you, Mr. Chairman. I will.
I am pleased to appear before you today to discuss the
President's fiscal year 2005 budget request for the Department
of Energy.
This budget request builds on a number of successes we have
achieved over the past 3 years. We have implemented changes
that have fundamentally reformed DOE's environmental management
program. At the beginning of this administration, the time
table for completing cleanup at all sites was 70 years. Today
we have implemented reforms to accelerate completion of the
cleanup program by 35 years, saving taxpayers as much as $50
billion, and perhaps even more.
Two years ago, the administration made the decision to move
forward with the Yucca Mountain project. Thanks to the efforts
of this committee, the Yucca Mountain project is authorized and
on schedule to accept waste in 2010.
We are pursuing new technologies to meet future energy and
environmental challenges. We are pursuing a path toward a
hydrogen economy with affordable, zero-emission fuel cell
vehicles, abundant production sources, and safe storage and
transportation of hydrogen. We are developing carbon
sequestration which, when used in conjunction with advanced
power production, promises to ensure that this country's 250-
year coal reserves can be used without concern about
environmental impact.
In our national security programs, we have accelerated the
material protection programs and expanded the scope of our work
to ensure that dangerous materials do not fall into the hands
of terrorists. We have increased our cooperation with Russia's
Strategic Rocket Forces.
We have also taken measures to modernize the defense
complex. 3 years ago, it was clear to us that we needed to make
significant investments to restore those facilities to working
condition and we are doing so with a very substantial capital
investment program underway to make these repairs and
improvements.
While we are rebuilding and modernizing the defense
complex, we are also restoring its capabilities. The ability to
manufacture plutonium pits for nuclear weapons is just one
example. We produced the first certifiable pit last year and
are on a path forward now to have a new, fully certified pit
ready to enter the stockpile by fiscal year 2007.
The fiscal year 2005 budget proposal we are submitting to
Congress seeks to continue and build on those successes.
In the energy budget, the Office of Energy Efficiency and
Renewable Energy is at the forefront of implementing the
President's hydrogen fuel initiative. Hydrogen holds tremendous
promise to help meet our Nation's future energy challenges, and
we are requesting $227 million for hydrogen activities.
The budget also includes $291 million to fulfill the
President's commitment to increase funding for the
Weatherization Assistance program by $1.4 billion over 10
years.
We request $447 million for the President's Coal Research
initiative to dramatically improve the efficiency and
environmental protections being developed for coal-burning
power production.
The budget request for the Department's nuclear energy
programs is $410 million.
And we request $91 million, a $10 million increase over the
2004 level, to modernize an expand our national electricity
transmission grid.
Our $3.4 billion request for science-related programs and
activities supports work in areas like nanoscience, fusion,
advanced scientific computing, microbial genomes that hold
enormous promise for scientific discoveries over the next
decade.
Our commitment to the environment includes taking action to
address the environmental legacy of past work. It also means
doing right by former weapons employees who may have become ill
as a result of their work at nuclear facilities. We are seeking
over $7.4 billion for the Environmental Management program,
which is the most funding ever requested for this program. We
are seeking $43 million to accelerate the processing of claims
for former workers who may have become ill as a result of their
work, and with this budget request, we are making good on
implementing a 3-year program to completely eliminate the
backlog of applications by the end of 2006.
As was mentioned by several members, one of the most
significant and longstanding commitments addressed in this
budget is funding to establish a permanent repository at Yucca
Mountain. In order to remain on schedule to begin operation in
2010, the budget requests $880 million for Yucca Mountain
repository activities, $303 million above the fiscal year 2004
enacted level.
This budget request reflects the accomplishments of the
last 3 years, the successes, and the many changes. This request
charts a focused course of investment for the Nation's future,
one guided by a cohesive mission and targeted performance
metrics. Making all of this work are the extremely talented men
and women of the Department of Energy which include the world's
top engineers and scientists. It is a privilege to work
alongside them. It is an honor to serve a President who has
provided this vision of what this Department can and will
accomplish in 2005.
Thank you, Mr. Chairman. I will conclude my statement at
that point and be pleased to answer questions.
[The prepared statement of Mr. McSlarrow follows:]
Prepared Statement of Kyle E. McSlarrow, Deputy Secretary,
Department of Energy
Good Morning Mr. Chairman and Members of the Committee. I am
pleased to appear before you today to discuss the President's FY 2005
budget request for the Department of Energy. At $24.3 billion in gross
budget authority, the FY 2005 budget request is the largest in the
history of the Department, nearly a 4 percent increase over last year's
submission and 27 percent higher than when we took office.
This FY 2005 budget request builds on a number of successes we have
achieved over the past three years. Secretary Abraham and I are very
proud of what we have accomplished in terms of fulfilling the
President's management vision for this Department and also what we have
achieved for the national, energy, and economic security of the
American people. We are grateful for the support and guidance the
Members of this Committee have provided the Department.
The Office of Management and Budget recently announced that DOE has
made the most progress among cabinet-level agencies in the
implementation of the President's Management Agenda. OMB issued a
scorecard that evaluates agency performance in the areas of human
capital, competitive sourcing, financial management, e-government, and
budget/performance integration. OMB recognized the Department as the
cabinet-level agency ``leading the pack with regard to management
improvement.'' One hallmark of that leadership centers on defining the
mission of the Department. From our first days in office we stressed
that the overriding umbrella under which the operation of this
Department takes place is a mission of national security.
In addition to the progress we have made on management and mission
definition, we have made great progress in a number of our program
areas. We have implemented changes that have fundamentally reformed
DOE's Environmental Management program. Complex-wide, we have taken an
approach to accelerated cleanup that says we will not allow the legacy
of the work done in the weapons complex to be part of a community's
burden for future generations. At the beginning of this Administration,
the timetable for completing cleanup at all sites was 70 years. Today,
we have implemented reforms to accelerate completion of the cleanup
program by 35 years, saving American taxpayers as much as $50 billion
and perhaps even more.
Another area where we have made tremendous progress is ensuring
that nuclear power remains part of the Nation's fuel mix. Two years
ago, the Administration made the decision to move forward with the
Yucca Mountain project. Thanks to the efforts of this Committee, the
Yucca Mountain project is authorized and on-schedule to accept waste in
2010. There is still much work to be done--at the site, at the Nuclear
Regulatory Commission, and throughout the country--but at the end of
the day America will finally have a long-promised, safe repository for
nuclear waste.
The Yucca Mountain project goes hand-in-hand with other steps we
have taken to ensure nuclear energy plays an important part in our
future energy mix. Our scientists are pursuing an advanced fuel cycle
to significantly improve fuel performance, energy utilization, and
proliferation resistance for nuclear reactors. We are also working
internationally to develop the next generation of nuclear technologies
to take us to the next level in terms of efficiency, reliability, and
security.
In addition to advanced nuclear research we are pursuing other new
technologies to meet future energy and environmental challenges. These
are transformative technologies that will change the way we think about
how we use and produce energy. We are pursuing a path toward a
``hydrogen economy''--with affordable zero emission fuel cell vehicles,
abundant production sources, and safe storage and transportation of
hydrogen. We are developing carbon sequestration which, when used in
conjunction with advanced power production technologies, promises to
ensure that this country's 250 year coal reserves can be used without
concern about environmental impact.
Knowing of this Committee's strong interest in the Department's
national security programs, I would like to mention the great progress
we have made with Russia on nonproliferation. We have accelerated the
material protection programs and expanded the scope of our work to
ensure that dangerous materials don't fall into the hands of
terrorists. We have increased our cooperation with Russia's Strategic
Rocket Forces by initiating warhead security work at three new sites.
We have extended our International Nuclear and Radiological
Cleanout programs to states that were once part of the Soviet Union and
its empire. Working with them, with Russia, and with the International
Atomic Energy Agency, we have been able to secure radiological
materials in these countries.
Moreover, we have begun a MegaPorts program to detect the
trafficking of nuclear or radioactive materials in the world's busiest
seaports. Eventually we hope to have detection equipment in key
locations all over the planet.
We have also taken measures to modernize our defense complex. Three
years ago, our complex was in a seriously deteriorated condition. Many
of our buildings and facilities were in such disrepair that our ability
to carry out our defense responsibilities appeared jeopardized. It was
clear to us that we needed to make significant investments to restore
those facilities to working condition. And we are doing so, with a very
substantial capital investment program under way to make these repairs
and improvements.
While we are rebuilding and modernizing the defense complex, we are
also restoring its capabilities. Some of the capabilities within our
weapons complex have either been allowed to deteriorate or simply have
been lost. The ability to manufacture plutonium pits for nuclear
weapons is one example. We produced the first certifiable pit last
year, and are on a path forward now to have a new, fully certified pit
ready to enter the stockpile by FY 2007. This will complete the first
step for the United States to restore the capability that other nuclear
weapons states already have.
In the same vein we are enhancing our nuclear test readiness. The
weapons in the nuclear stockpile are of various ages and conditions.
Today we are confident they will function as our nuclear deterrent if
they are needed. But as these weapons age in an era in which we have a
moratorium on testing, it is up to our laboratories to do the
phenomenally complicated job of determining through science and
technology whether or not the weapons will work effectively.
We believe we can do that. But if some day in the future it were
determined that we had uncertainty, it would take us a minimum of three
years to conduct a test to determine whether or not the stockpile was
reliable. That is too long. We are in the process of reducing that
timeframe by half so that this Department can protect America's
national security by being able to conduct such a test in a timely
fashion.
Beyond the things we have done within the complex, we have
aggressively pursued international cooperation in order to advance our
initiatives. In a variety of areas, especially those that relate to
climate change, we have been able to create partnerships with other
countries to develop the Department's cutting-edge science and
technology.
Last November, the International Partnership for the Hydrogen
Economy brought together 15 countries and the European Union to work
together on fuel cells and other energy technologies for the future.
The Carbon Sequestration Leadership Forum in June brought together 13
countries to begin working on ways to sequester greenhouse gas
emissions from fossil fuels.
And we have expanded international partnerships on the energy
production side as well. We have developed much stronger relationships
with countries like Russia and others in the Caspian region, in Africa,
and in South America that have the potential to be major suppliers of
gas and oil for the 21st century. As important as it is to have a
diverse mix of fuel, it is equally important to have a diverse set of
sources from which we acquire that fuel. Toward that goal, in December
we hosted a conference on liquefied natural gas, or LNG, bringing
together all of the world's major gas-producing countries to discuss
increasing U.S. access to gas imports. It was an extremely successful
conference, one that will help produce the fuels we need in the 21st
Century.
And, finally, we have made a lot of progress on safety and shoring
up the security of this complex. Much of our Department's work is of a
highly skilled nature and deals with dangerous materials. Many of our
facilities are located near populated communities. Given these facts,
it is clear that safety has to be of paramount concern for everyone at
DOE. We have done a good job of driving that message home, and it is
best reflected in the improved safety record in our laboratories.
The same goes for security. Our Departmental mission is national
security. We cannot be said to be fulfilling that mission with any
confidence unless we can guarantee security at our facilities. We are
attempting to do that. We have increased the security budget by about
35 percent since FY 2002. We have made significant managerial changes
in the security leadership at our facilities. We have revised and are
implementing the Design Basis Threat, which is the post-September 11th
analysis of potential threats against which we must protect DOE sites
and materials across the country. And we have a high-level review of
security procedures being conducted by some of the Nation's top
military and civilian experts.
The FY 2005 budget proposal we are submitting to Congress seeks to
continue and build on these successes. It includes unprecedented
funding increases to hasten the cleanup of the Cold War environmental
legacy, to construct a permanent nuclear waste repository at Yucca
Mountain, to deliver on essential nuclear-related defense requirements,
to provide for energy security by exploring the promise of hydrogen and
fusion, and to promote basic science research to ensure America's
technological preeminence well into the future.
ENERGY
Turning to the energy budget, in FY2005 the Department is
requesting $2.7 billion for energy resource programs. An important
element of all our energy programs is making current forms of energy
use more secure, more efficient, and more environmentally benign. At
the same time, we are preparing long-term energy solutions that will
eventually make questions of supply and environmental effects obsolete.
The Administration's energy portfolio takes a long-term focus through
investments in hydrogen use and production, electricity reliability,
and advanced coal and nuclear energy power technologies. Investments in
these pivotal areas honor a commitment to strengthen the Nation's
energy security for the near-term and for generations to come.
In FY 2005, the Department's Office of Energy Efficiency and
Renewable Energy is at the forefront of implementing the President's
Hydrogen Fuel Initiative. Hydrogen holds tremendous promise to help
meet our Nation's future energy challenges. The Department is
requesting $227 million for hydrogen activities. That figure includes
$173 million in the Energy Efficiency and Renewable Energy program, $9
million in the Nuclear Energy program, $16 million in the Fossil Energy
program, and $29 million in the Science program.
The budget includes an investment of $544 million for R&D to
improve energy efficiency and reliability in buildings, transportation,
and industry, and $375 million for R&D to reduce the cost of renewable
energy technologies such as wind, solar, geothermal, and biomass, as
well as to promote deployment of renewable technologies. The Energy
Efficiency and Renewable Energy budget also includes $291 million to
fulfill the President's commitment to increase funding for the
Weatherization Assistance Program by $1.4 billion over ten years. The
FY 2005 request represents a $64 million (or 28 percent) increase over
FY 2004 funding, and would weatherize 119,000 homes in calendar year
2005.
This budget invests $447 million for the President's Coal Research
Initiative to dramatically improve the efficiency and environmental
protections being developed for coal burning power production. Of that
figure, $287 million will go to the President's Clean Coal Power
Initiative, including the ambitious FutureGen program. The Department
launched FutureGen in FY 2004. This cost-shared, $1 billion project
will create the world's first near zero-emissions fossil fuel plant.
When operational, FutureGen will be the cleanest fossil fuel-fired
power plant in the world.
Nuclear energy remains a critical component of the Nation's energy
portfolio and a significant part of America's energy future. The budget
request for the Department's nuclear energy programs in FY 2005 is $410
million, a $5 million increase above the FY 2004 level. These programs
work to address essential requirements to develop advanced nuclear
power technologies for deployment. The FY 2005 nuclear energy budget
request also reflects the establishment of the Idaho National
Laboratory. This new laboratory will serve as the Nation's primary
center for strategic nuclear energy research, development,
demonstration, and education. It will lead the Department's
investigation of a new type of nuclear power plant that is
proliferation-resistant and melt-down proof--the next generation
nuclear power plant. It is our objective that the Idaho National
Laboratory becomes the world's premier nuclear energy technology center
within a decade.
The widespread blackout of August 2003, affecting 50 million people
across eight states and one Canadian province, was a strong reminder
that our Nation's electricity grid has vulnerabilities and weaknesses
which need to be addressed. Energy reliability is imperative. To this
end, DOE requests $91 million, a $10 million or 12.5 percent increase
above the FY 2004 level, to modernize and expand our national
electricity transmission grid. Included within this request is $5.5
million for the new Gridworks program and $5 million for the Gridwise
program. These initiatives will improve electricity reliability by
bringing innovation in information technology and transmission hardware
into operational electric systems. The budget request for Other Defense
Activities includes $10.6 million for Energy Security and Assurance
activities to complement the efforts undertaken by the Office of
Electric Transmission and Distribution and the activities of the
Department of Homeland Security.
SCIENCE
Every one of the programs and activities requested in this budget
depends heavily upon advanced research and development. The work we do
could not be possible were it not for the scientific and engineering
capability available in the Department's national laboratories and at
universities across the Nation. Our $3.4 billion request for science-
related programs and activities supports work in areas like
nanoscience, fusion, advanced scientific computing, and microbial
genomes that hold enormous promise for scientific discoveries over the
next decade. Combined with the significant science expenditures
included in the nonproliferation and weapons budgets, this amount makes
the Department of Energy the largest federal supporter of the physical
sciences, and will help enable us to maintain America's position as the
world leader in scientific research and development.
Nanoscience--the study of particles at the atomic and molecular
level--has nearly unlimited potential. From the life sciences, to
building materials that repair themselves, to giving us the tools to
boost the potential of solar power, this new science will be a powerful
force for solving a host of challenges. For FY 2005, the Department
requests $211 million, an increase of approximately $8 million over FY
2004, to continue revolutionary nanoscience research.
The Department's budget also continues the pursuit of scientific
understanding of matter and energy. The FY 2005 budget includes $80.5
million for construction and $33.1 million for operation of the
Spallation Neutron Source; and $50 million for design and procurement
activities for the Linac Coherent Light Source, which will truly give
us a new window on nature. Both facilities are expected to
significantly advance the understanding of materials that will benefit
applied R&D across a wide range of disciplines.
Another important investment this budget continues is the pursuit
of fusion energy power. When the President announced that the U.S.
would join in the International Thermonuclear Experimental Reactor
(ITER) project, he noted that ``the results of ITER will advance the
effort to produce clean, safe, renewable, and commercially available
fusion energy by the middle of this century.'' In order to support the
President's commitment, funding for ITER-related activities is up $30
million from last year.
The FY 2005 budget includes $204 million for Advanced Scientific
Computing Research to further U.S. leadership in high performance
supercomputing, networking and software development. The request
includes $38 million for the Next Generation Computer Architecture to
acquire additional advanced computing capability for existing users,
and for longer-term research and development on new architectures for
scientific computers.
The request for our Genomes to Life program is $67.5 million, an
increase of $4 million over last year. This program will attempt to use
genetic techniques to harness microbes to consume pollution, create
hydrogen, and absorb carbon dioxide.
New in FY 2005 is the addition of targeted basic research
activities within the President's Hydrogen Fuel Initiative, a $29
million program within Basic Energy Sciences to advance the fundamental
understanding of the properties of hydrogen and fuel cells. This work
will complement the applied investigation underway elsewhere in the
Department on hydrogen production, storage, and infrastructure
development.
ENVIRONMENT
All of our scientific research is designed in part to meet our
Nation's environmental challenges. In that regard, DOE's work on
hydrogen, clean-coal technology, or next generation nuclear technology
comes as readily to mind as our renewable energy research. This
commitment to the environment includes taking action to address the
environmental legacy of our past work, particularly building the
nuclear weapons complex that helped win the Cold War. That means
cleaning up the contamination caused by the production of nuclear
weapons. It also means doing right by former weapons employees who may
have become ill as a result of their work at nuclear facilities. And we
must act to ensure our Nation is equipped to safely handle future high-
level nuclear waste generated by the use of conventional nuclear power
as well as the continued production of nuclear weapons.
DOE is prepared for these responsibilities though our Environmental
Management program and the work at Yucca Mountain. Our FY 2005 budget
requests $8.6 billion to meet our various environmental-related
objectives. Within that, we are seeking over $7.4 billion for the
Environmental Management program, a $426 million increase when compared
to this fiscal year. This is the most funding ever requested for this
program. This budget reflects the peak year of DOE's investment
strategy for accelerated cleanup. The budget also includes a $350
million proposal to reserve funds pending the satisfactory outcome of
uncertainties associated with a recent court ruling dealing with our
authority to classify certain lower-activity waste from reprocessing
(Waste Incidental to Reprocessing) under the Atomic Energy Act.
To better focus Environmental Management funds on actual cleanup
activities, the FY 2005 budget includes several program shifts from
environmental management to other programs within the Department. The
Department's accelerated cleanup strategy has led to the creation of
two new organizations outside of Environmental Management--the Office
of Legacy Management and the Office of Future Liabilities. Transferring
responsibilities to these new offices enables the Environmental
Management program to complete its current cleanup scope, and allows
other Departmental programs to focus on their primary missions.
The budget includes $66 million for the Office of Legacy Management
to manage post-environmental-cleanup activities. This organization
demonstrates the Department's long-term commitment to manage
requirements relevant to closure sites beyond the completion of
remediation.
The budget also includes $8 million for the Office of Future
Liabilities to address various cleanup activities at sites with
continuing missions. The FY 2005 budget provides funds to pay for and
manage environmental liabilities for sites not currently assigned
within the Department.
The FY 2005 budget includes $43 million within the Environment,
Safety and Health program to accelerate the processing of claims for
former workers who may have become ill as a result of their work at
U.S. weapons facilities. This is a matter of doing what's right and
taking care of those whose labors helped secure our safety. With this
budget request, we are making good on implementing a three-year program
to completely eliminate the backlog of applications by the end of 2006.
One of the most significant and long-standing commitments addressed
in this budget is funding to establish a permanent nuclear waste
repository at Yucca Mountain. In order to remain on schedule to begin
operation in 2010, the FY 2005 budget requests $880 million for Yucca
Mountain repository activities, $303 million above the FY 2004 enacted
level. This is key to ensuring the future use of nuclear power in this
Nation. It is also key to helping us complete the cleanup of our
weapons facilities and to consolidate high-level nuclear waste in one
safe, secure location. This request enables us to finalize the license
application for construction of the permanent repository, as well as
other activities associated with construction and with developing a
transportation system to Yucca. We plan to submit a license application
to the Nuclear Regulatory Commission by December 2004.
The Yucca Mountain project is moving toward a second phase, one
which will require a significant financial commitment to accomplish.
The FY 2005 budget request includes a legislative proposal to
reclassify currently mandatory receipts to the Nuclear Waste Fund as
discretionary, to offset the amount appropriated for geologic
repository activities. In FY 2005, the Department proposes that $749
million in fees collected from utilities for the purposes of the
Nuclear Waste Fund be used to offset FY 2005 non-defense appropriations
in support of design and other Yucca Mountain activities. This proposal
will help ensure that the Department will have the financial resources
needed to accomplish an undertaking of this scope.
Throughout the entire budget request is funding for one of our
highest priorities, safeguarding and securing DOE's sites and
facilities. The FY 2005 budget includes $1.38 billion for all DOE
safeguards and security programs to address additional requirements
identified as a result of the revised Design Basis Threat.
Within the total amount requested for safeguards and security
activities, approximately $707 million will support activities to
safeguard nuclear weapons facilities. About $265 million will support
activities that protect the Cold War nuclear waste material being
cleaned up at our environmental cleanup sites.
In addition, we are committing approximately $73 million to support
the continued safeguards and security activities at our scientific
laboratories and facilities. We are requesting $255 million to support
the development of DOE-wide security policies as well as to provide
physical security for DOE Headquarters. The FY 2005 budget request also
includes $58 million to support safeguards and security activities at
the new Idaho National Laboratory for nuclear energy R&D. Moreover, $25
million will fund the Department's cyber security activities
administered by the Department's Chief Information Officer, while an
additional $109 million within the amounts mentioned above will fund
DOE-wide cyber security measures.
CONCLUSION
The Department's FY 2005 request reflects the accomplishments of
the last three years, the successes and the many changes. This request
charts a focused course of investment for the Nation's future--one
guided by a cohesive mission and targeted performance metrics. Making
all of this work are the extremely talented men and women of the
Department of Energy which include the world's top engineers and
scientists. It is a privilege to work alongside them on a common
mission. It is an honor to serve a President who has provided this
vision of what this Department can--and will--accomplish in FY 2005 and
beyond.
Thank you. This concludes my formal statement. I would be pleased
to answer any questions you may have at this time.
The Chairman. Thank you very much, Mr. Deputy Secretary.
The committee is going to set a date of March 11 in order
to hear the outcome of the electricity blackout report. Do you
agree that DOE should testify before this committee when the
Federal blackout report is released on March 11?
Mr. McSlarrow. I do. I believe we have already committed to
having someone come up here.
The Chairman. I am just going to tick through several
issues, if you can answer.
Nuclear energy. In light of the administration's stated
support, can you help me understand why the administration
proposed significant cuts in nuclear energy R&D? It looks to me
like it cuts the Nuclear Energy Technologies program by 48
percent from $20 million to $10 million and it cuts the Advance
Fuel Cycle initiative by 31 percent. Granted, these are not
giant programs. We put them in the budget ourselves over the
years, as you know. So we did not use the administration to get
them started, but when they come along and cut them, that is an
effective reduction in the program. Do you have a quick
explanation for that?
Mr. McSlarrow. I do. First is I think it is a robust
nuclear energy budget, and the reason is because we actually
have three phases in terms of nuclear energy. First is what you
have been doing with the energy bill in terms of jump-starting
nuclear energy. A lot of the nuclear energy technologies budget
that you were talking about that was reduced was guided toward
nuclear power 2010, how to get a new plant on line. We have an
early site permitting process that is going on and we have a
solicitation that we are waiting for feedback from the
industry. There is a lot of uncertainty, as you well know, but
right now we did not feel like we had enough information and
enough indication from the industry on whether or not we could
go forward with NP 2010 in a more aggressive way.
Instead, what we have tried to do is focus on the advanced
technologies, Generation IV reactors, nuclear hydrogen,
including the Generation IV work that is included within the
advanced fuel cycle initiative line item. All of that has been
increased and so it is just a matter of, in a constrained
budget, where do we place our bets in terms of investing in the
future, and instead of investing on the technologies of today,
we decided to go for the higher-payoff, higher-risk
technologies of the future.
The Chairman. Quickly on fusion science and the budget for
ITER. I have no objection to what is going into that program. I
was here for the last great debate on let us do ITER or let us
not do it. The Japanese were anxious and so was another
country. But I do get kind of concerned when we look like we
are going after this gigantic program in a sort of half-baked
manner. We put in a few bucks and we take them out of other
programs. I do not think that is a real commitment to ITER. Are
we really committed to it or not?
Mr. McSlarrow. We are. The budget does not reflect what is
going to happen in the future. The out-year funding will be
different, and it is for this reason. What is happening right
now is, after the design period of the last couple of years, we
are going through a site selection process. So in this year and
the next year, it is just getting started. In 2006,
construction begins. What we are doing right now is we are
taking the fusion money that we requested for ITER, together
with the kind of fusion money that would actually support ITER
activities, and we're are spending I think about $38 million as
well we have requested for 2005, which is all we need in 2005,
but it will definitely increase in the out-years.
The Chairman. We will see.
My last question has to do with something that is of great
concern to Senator Bingaman. He raised the issue in his opening
remarks and has spoken to it in our home State. It has to do
with the Energy Employees Occupational Illness Compensation
program. He talked about a constituent in New Mexico with a
long-delayed adjudicative process following his illness.
I am concerned where workers are injured by work in the
past. Weapons program workers should be appropriately
compensated. We know that the current legislation is
fundamentally broken and it needs improvement. I am working
with my colleagues to decide how best to proceed with this
program which could involve another hearing or the
consideration of alternative legislation.
When would the Department be ready to discuss alternative
legislative options or ways to improve the performance of this
program?
Mr. McSlarrow. Well, I think we are already beginning those
discussions, so we are prepared to engage. As the budget
indicates, we would like to discuss what kinds of reforms would
make this a better program. And with the chairman's indulgence,
since several members have mentioned it, I will take a couple
of minutes to talk about where we are.
The Chairman. Okay.
Mr. McSlarrow. I know you had a hearing with Under
Secretary Card in December. This is a program where everybody,
Congress, the administration, DOE, everybody vastly
underestimated the scope of the program. There was a lively
debate about whether or not you would have a direct benefits
program or whether or not you would end up with what we have
today, which is a fairly complicated system that hinges on a
State workers compensation program.
Part B, which went to the Department of Labor, is a
relatively simple program. If you are in the pool, they write a
check.
Part D, which is what we have, is not that kind of program,
and it has three basic challenges. The first one--as Under
Secretary Card testified in December, we did not do a good job
of anticipating. It was just the sheer scope, the need for
resources. Under the Secretary's leadership, we requested a
transfer of approximately $10 million in fiscal year 2003. We
have requested another $33 million transfer this year, and we
are now requesting $43 million for this program next year. All
of that is just to put resources necessary to actually help the
applicants process their files. So that is the first bottleneck
and I feel like we are on the path right now. If we can get the
funding that we have requested, that is, the transfers and the
budget request in 2005, we are on a path to work off that
backlog by the end of 2006.
The second bottleneck is the physicians panel. Applicants
are only beginning now to arrive at that point. The physicians
panel was by statute constrained in ways that with you we
probably want to discuss changing. One of the ways is the fact
that the doctors are only paid $68 an hour. We are not able to
recruit the people who are willing to spend the time to do this
work. We want to vastly and aggressively expand the number of
available physicians. We probably want to reduce the number of
physicians on each panel. By rule, you have to have three
physicians on a panel. You could probably, if you had the right
qualifications, do this with one person on each panel. So there
are a variety of means which we can take to just speed up the
entire system, which has been obviously a major complaint and
well-founded in my judgment.
The final issue is this issue of willing payor. Now, in one
sense, willing payor was the purpose of the statute. That is,
Congress in this debate--and I know Senator Bingaman was in the
middle of it then--decided not to do a direct benefits package,
and instead they set up this hoops process to the workers
compensation boards throughout the States. Congress did not
tell DOE that we had to issue ``do not contest'' orders to our
contractors to force them, in essence, not to contest the
claim. But Secretary Abraham decided we would do that by rule.
Congress did not tell us that we had to reimburse contractors
who had a compensation claim by an employee, but Secretary
Abraham in his rule decided, because the statute allowed us to,
that we would do that.
At the end of the day, we are not a party to those
adversary proceedings, and there is an open question as to how
many contractors there are out there with whom we have no
contractual relationship where we are not able to issue a ``do
not contest'' order or we are not able to order reimbursement.
That is a very live issue. It is one that we would welcome
discussing. We have some ideas perhaps, with the National
Academy of Sciences looking into it, but it is one of those
things that, even though we have not really gotten to that
point yet, it is right around the corner. So we think that
there are things that Congress and the Department can do right
away. That is a larger issue that needs more discussion.
The Chairman. I am going to yield to you now, Senator.
I want to tell you now so there will not be any
misunderstanding, Mr. Secretary, I do not know how to solve the
problem. I cannot sit up here and tick it out and say this is
what we should do. But I want you to know that short of
somebody taking the jurisdiction away from this committee,
which we will resist--I will resist--we are going to pursue
this with vigor as to delay, why we cannot move more rapidly,
are there some definitions we ought to change. You have
suggested some today. But it does not make sense to build
people's enthusiasm up and then have a program like this.
Mr. McSlarrow. We agree.
The Chairman. Thank you.
Senator Bingaman.
Senator Bingaman. Thank you very much, Mr. Chairman.
Let me just follow up on this one issue. I am concerned
somewhat about your statement that we are going to work off the
backlog by the end of 2006. That is a pretty long time frame in
the minds of most people and particularly a lot of these people
who are quite ill. I do not know that that is adequate.
I am also concerned that we not get into a mind set that
Congress has got to come together and change the law before you
folks can fix this program. I do not doubt that there are
things that should be changed in the law, but it seems to me
there are also a great many things that can be done
administratively to speed this up, and I hope that that happens
very quickly regardless of how effectively we pursue a change
in the law. I want us to do both, but I do not want one to wait
on the other. I just wanted to make that point.
Mr. McSlarrow. Well, I agree with that.
Members of this committee rightly complained about the pace
of the applications processing last year, and one of the things
we said and the Secretary made a commitment to this committee
about was that if we got more resources, we could move it along
a lot faster, and whereas it might have been 10 or 20 a week in
mid-2003, the moment we got the reprogramming, suddenly we
jumped up to 100 a week and we have stayed consistently at
about 120 a week ever since. If we get more money, we believe
we can increase that even more.
But at some point it is implausible that we will have every
physician that we need, even if we just went to one physician
per panel, and at some point it is probably implausible that
you can just simply move the work faster and just get it done
in 1 year. If somebody can show that to us--and we have people
looking at that right now--then the Secretary's commitment is
we are going to do everything we can to move this as fast as
possible. Our judgment right now is that 3 years--that is, by
the end of 2006--and all this assumes, of course, we make some
changes to the physicians panel, we do the administrative
activities that you were just talking about, and we get the
necessary funding. But even that is an incredibly aggressive
schedule. So in spirit, we are right with you. We need to
operate on parallel tracks. We will do everything we can to fix
this.
Senator Bingaman. Well, I think the chairman is right that
we need to have more engagement on this and figure out what
Congress needs to do and what the Department needs to do to get
this problem on track.
We had a hearing last year also on polygraphs, and it was
my impression at the end of that hearing that there was going
to be a rescoping of the polygraph program as it applied to DOE
employees and contractors. That was one of the things that came
out of that hearing, or at least I was led to believe would
happen. What has happened on that?
Mr. McSlarrow. We are proceeding on that path. It is our
intention to put out a new proposed rule. The rule has already
gone through DOE review and is currently at OMB under review.
So I cannot put a date on it, but I hope very soon we will be
able to go out publicly.
Senator Bingaman. Okay.
You have in your budget a new proposal to fund an Office of
Future Liabilities, and the budget document states that this is
an office that will manage environmental liabilities that are
not assigned to the Office of Environmental Management. Then
there is another sentence that says, these needs are expected
to grow substantially due to the backlog of environmental
liabilities at active DOE sites.
Could you explain? I always thought that the Office of
Environmental Management was to be doing all of this type of
work. Why are we setting up a separate office here and how are
we distinguishing what goes into which office?
Mr. McSlarrow. When we came into office and conducted our
top to bottom review of the environmental management program,
we concluded two things. One, they were trying to do too much
and too little at the same time. We were convinced--and this
committee supported these efforts--that the only way we could
deal with the massive legacy cleanups, which are about $7
billion a year now, was to have Environmental Management
focused on the mission of cleanup, not distracted by other
liability issues or long-term stewardship. Get the job done.
And I would say just in the short time--that is, really the 2
years since the program went into effect--that we have had
major, major successes. In some ways it may be the best legacy
of what we have done in the last 3 years.
But part of that--and it is a philosophical management
choice I guess--is our view is that missions need to be defined
and very clear cut and that if you get too many missions for an
organization, it just fails. It flounders. So what we tried to
do was to separate out EM and make it clear that they are
responsible for cleaning up the legacy of the Cold War. The
Appropriations Committee supported last year--Congress did--the
establishment of the Legacy Management Office which would be,
once EM finishes a cleanup, the office responsible for the
long-term stewardship and monitoring of a site, plus issues
like pension benefits for former employees. So we established
that office for that.
Now the issue is how do we avoid getting into exactly the
same trap we got into when we had to create EM in the first
place. That is, who is doing the thinking about all of the
facilities and sites that may, over the next 30 years, need to
be decontaminated and decommissioned? It could be EM. Our
judgment is it should be someone else who is taking the broad
view, is not distracted by the current obligations of cleanup.
That is what the Office of Future Liabilities would be. And it
would probably be the case, as EM phases down and Future
Liabilities phases up, that some of the very same people and
talents and experiences would shift to a new organization.
But right now what is critical to us is--and when the
Secretary is asked this question--that we just have not done
enough thinking about these liabilities and we do not want to
be back here in 10 years saying we just discovered another
massive liability.
Senator Bingaman. Well, I think thinking about the future
liabilities is obviously very useful. I am just questioning
whether setting up a new office to do that is a better way to
proceed than just changing the planning process within EM
itself. But we will have plenty of opportunity to get back to
that.
I do not know what the time situation is. Am I out of time?
Do I have time for another question?
Senator Thomas [presiding]. I think you are out of time.
Senator Bingaman. All right.
[Laughter.]
Senator Thomas. Since you asked.
Senator Campbell.
Senator Campbell. Thank you, Mr. Chairman.
I am reading page 7 and 8, Mr. Secretary, and I am a little
bit confused, and please enlighten me a little bit on this. The
Department is requesting in paragraph 2, $880 million for the
Yucca Mountain repository activity, $303 million above fiscal
year 2004. And as I understand it, reading on, it is going to
be for licensing and construction and development of a
transportation system.
First, what transportation system is that? Is that
something within the Yucca Mountain area or something
nationwide we are doing?
Mr. McSlarrow. It is several things. One is the planning
necessary for transportation of the spent nuclear fuel once the
repository opens.
The second is actually building a rail system in the State
of Nevada. We announced I think in December, our preferred rail
corridor in Nevada. There are rail lines that come, obviously,
into Nevada. We want to avoid the city of Las Vegas, which
means that if we decide to select rail and that particular rail
corridor we are going to have to build a fairly lengthy spur to
meet up with some existing rail line.
Senator Campbell. The spur would be up further north of Las
Vegas apparently?
Mr. McSlarrow. Right.
Senator Campbell. Also on page 8, the Department proposes
that $749 million in fees collected from utilities for the
purposes of a nuclear waste fund be used to offset the fiscal
year 2005 non-defense appropriation in support of design and
other Yucca Mountain activities. That $749 million that you
want to use to offset that, what is it used for now? Does any
of that go towards Superfund cleanups or something of that
nature?
Mr. McSlarrow. I think it goes into the general revenue. So
it is just available for general purposes.
Senator Campbell. So it would not deteriorate our ability
to keep up with our Superfund cleanup.
Mr. McSlarrow. No.
Senator Campbell. Maybe one other question. On natural gas,
we are all pretty well aware of the spikes that have occurred
the last few years in natural gas. It is my understanding--I
think most of us--that it will be about a 10-year wait before
the Alaska natural gas pipeline comes on line, and yet every
winter we have got these spikes and people complaining that
natural gas is costing too much and there is not enough of it.
Is there some short-term proposal to try and alleviate that
problem between now and the time the Alaskan pipeline comes on
line?
Mr. McSlarrow. Well, there are a couple of things and all
of them are hard. As Senator Murkowski pointed out earlier, we
have got substantial reserves in this country, but we placed a
lot of it off limits. We have so restricted the lands that
people just cannot actually get to it economically or at all in
some cases.
One of the things the Department of the Interior is doing
is trying to take the initiative by being creative in terms of
royalty relief--for example, Secretary Norton just recently
announced a proposal to encourage the deep drilling in the
shallow waters in the gulf and the like. So those are probably,
in terms of just production in the short term, the kinds of
things we would have to focus on.
The mid-term to long-term is going to be an increase in
LNG, probably not a significant increase because it will take
time and we will have to see how the LNG facilities are
actually sited. And that is going to be challenging in and of
itself.
But until we get to the point of where we have a
combination of more LNG and the Alaska pipeline bringing Alaska
gas here, we are going to go through a period of time where
production in the States is declining. The Secretary
commissioned the National Petroleum Council 2 years ago to
produce a report, which they did last year, and that is
essentially what they reported, that we have topped out. We
import about 15 percent of our gas from Canada and they are
faced with declining production as well.
So at some point we are going to have to obtain it and we
are probably going to have to obtain it from multiple areas. It
is not just going to be one source that is the panacea.
Senator Campbell. Several American corporations are in the
process of trying to outfit tankers to bring in liquified
natural gas to some of our major ports and then re-gassify it
and put it into the existing grid, which I guess is good in one
respect from a short-term standpoint, maybe bad in another
because it gets us more and more dependent on foreign energy.
Has that been something that the Department has also been
involved in or looked at?
Mr. McSlarrow. We have. If you take the Energy Information
Administration's forecast for how the gas market is going to
look in 25 years, the interesting thing is that they forecast
that we are going to have a substantial, probably 8-fold
increase, in imports of liquified natural gas by 2025. And that
is on the assumption that we actually have the Alaska pipeline.
If we did not have the pipeline, who knows what position we
would be in.
There is obviously a concern in getting to the same
position that we are already in in terms of crude oil that we
are completely dependent. Today we are 55 percent dependent. We
are projected to go to 70 percent dependence on foreign oil in
20 years. I do not think anybody wants to see that happen with
gas. So we are going to have to help ourselves domestically.
But as I say, the EIA forecast suggests that even if we did
that, we are going to probably have to have more LNG
facilities, and there are significant issues that the
Department and FERC, for example, are engaged in to make sure
that we can site those facilities in the United States because
we are going to need them.
Senator Campbell. Thanks. Thank you, Mr. Chairman.
Senator Thomas. I think we are going here by the time of
arrival.
Senator Dorgan.
Senator Dorgan. Mr. McSlarrow, thank you for being with us.
Let me ask you about the purchase power issue for PMA's.
Can you describe to me why you want to zero that out?
Mr. McSlarrow. With purchase power wheeling, basically the
philosophy is that there is no reason for the Federal entity to
front-end the financing of wheeling across the PMA system. That
is something that the customers can do themselves. At least in
our reviews, we have seen nothing to suggest that that would
not be the case.
Senator Dorgan. I do not understand that answer. You have
seen nothing to suggest that that will not be the case? The
purchase power program is a program in which we in the
appropriations provide funding for purchase power above that
which the PMA's would normally generate themselves through
hydropower and so on. We went through this with the previous
administration. We had a fight with them about the purchase
power issue. I guess I do not quite understand your answer. Can
you explain it to me in a different way?
Mr. McSlarrow. I will try. In our analysis of whether or
not people needed us to essentially finance the transactions
across the system to wheel power, we have seen nothing to
suggest that customers are unable to do that on their own. So
what is in essence a Federal loan we thought is unnecessary. I
do not know if that makes it any clearer.
Senator Dorgan. So will this cost the customers more?
Mr. McSlarrow. I do not know if costs customers more, but
it gives our PMA's additional flexibility. I do not know that
the rates are any different.
Senator Dorgan. How does eliminating the funding for
purchase power give the PMA's more flexibility? It seems to me
it gives them less funding.
Mr. McSlarrow. No, because in a sense they are fronting the
money for wheeling power across the system. So it is going the
other direction.
Senator Dorgan. You know what? I am not sure either of us
know what we are talking about here.
[Laughter.]
Mr. McSlarrow. We may not be communicating here. I think
that is right. Should I take a crack in the record?
[The information follows:]
BACKGROUND
Purchase Power
The Southeastern Power Administration (Southeastern), Southwestern
Power Administration (Southwestern), and Western Area Power
Administration (Western), collectively called the Power Marketing
Administrations (PMAs), market energy produced at Federal dams to local
utilities in their region under long-term electric service contracts.
These contracts obligate each PMA to provide a level of energy to
customers.
However, the amount of energy generated at Federal hydroelectric
plants is not fixed. The amount of energy generated depends on changing
water conditions, unscheduled and scheduled outages variable dam
release rates in response to flood control, navigation, fish and
wildlife, public safety and recreation needs, and the effect of
drought. Hence, there are times each year when the PMAs need to
purchase power to supplement the hydropower produced at the dams in
order to meet their obligations under their respective electric service
contracts.
Additionally, Southeastern and Western purchase power to operate
pump-back units, which pump water from a lower reservoir into a higher
reservoir during off-peak periods, so the water can pass back through
the turbines during on-peak periods. Since the power for the pump-back
units is generally purchased at night, it is more economic to purchase
power on the market than it is to use the more valuable PMA peaking
resources to power the pump-back units.
If the PMAs are not able to guarantee delivery of a certain amount
of power, they would only be able to market non-firm power, which is a
less valuable product. The ability to purchase power enables the PMAs
to sell a more valuable product and to assure repayment of the Federal
investment.
Wheeling
Using the transmission facilities of one electric utility to
transmit power owned by another electric utility is termed
``wheeling.'' Wheeling is needed to move Federal power to certain PMA
customers that are not directly connected to Federal transmission
facilities. In particular, Southeastern, which does not own any
transmission lines, buys the right to use the transmission systems of
other electric utilities in the area. The price paid for wheeling
services fluctuates due to market prices for access to transmission
lines, which have risen substantially over the past two years.
Purchase Power and Wheeling Program
When combined, these energy products are termed, ``purchase power
and wheeling'' or ``PPW.'' All purchase power and wheeling expenses are
generally recovered in the year they are incurred through rates the
PMAs charge their customers--there is no net impact on the U.S.
Treasury. The PMAs do not purchase or wheel power beyond what is
necessary to meet their contractual commitments.
The use of proprietary receipts from the sale of power is one means
for the PMAs to acquire needed power and wheeling. In this mechanism,
the PMAs are allowed to use a portion of their receipts (which normally
flows into the U.S. Treasury) to fund their purchase power and wheeling
activities. Other financing mechanisms are also available, such as net
billing, bill crediting, and customer reimbursements (advances) by the
PMAs to enable them to make power and transmission purchases. Non-
Federal reimbursable funds, or customer advances, provide cash which is
available to the PMA for financing purchase power and wheeling services
in advance of PMA requirements.
Federal reimbursable authority, provided in the Economy Act, allows
the PMAs to perform firming and transmission services for other Federal
agencies using the other agencies' appropriations or funding sources.
Net billing is a funding mechanism that can be used when a customer
both buys power from, and sells power to, a PMA in the same billing
period. In instances when the PMA owes the customer less than the
customer owes the PMA, the PMA issues a bill to the customer that nets
the two amounts against each other. In effect, the customer's funds are
used to pay for the amount the PMA owes the customer.
Bill crediting is a funding mechanism where one or more PMA
customers sends its payment to a PMA supplier who has agreed to credit
the PMA for the payment as if the funds had come directly from the PMA.
The PMA credits the customer's bill as if the payment had been made
directly to the PMA. The Administration's decision to eliminate the use
of PMA receipts to fund purchase power and wheeling for the PMAs should
not hurt the PMAs' ability to meet their contractual commitments to
provide electricity as long as the PMAs' customers are willing and able
to advance funds to the PMAs for purchase power and wheeling.
The Administration believes that electric industry restructuring
and the resulting competition make it appropriate for PMA customers to
acquire these services themselves. The private sector routinely
provides these services and is fully capable of doing so.
1. Why is the Administration proposing to zero out purchase power
and wheeling?
Although the use of power receipts to fund purchase power and
wheeling activities is budget neutral, the Administration desires to
reduce Federal funding for the acquisition of firming energy and
wheeling services to fulfill PMA contractual requirements for the
delivery of Federal power.
The Administration believes that the function of purchasing power
from third-party suppliers and of arranging for transmission services
(i.e., wheeling) over non-federal transmission lines are services that
can and should be performed by parties other than the Federal
Government. The PMAs' customers should have the responsibility of
funding purchase power and wheeling.
The Administration believes that electric industry restructuring
and the resulting competition make it appropriate for PMA customers to
acquire these services themselves. The private sector routinely
provides these services and is fully capable of doing so.
2. Are the PMA customers able to provide purchase power and
wheeling on their own?
The PMAs market energy under long-term electric service contracts
that obligate each PMA to provide a specified level of energy to their
customers, regardless of water conditions. This requires the PMAs' to
purchase power to provide a more ``firm'' product and assure repayment
of the Federal investment. The PMAs' larger customers are generally
able to purchase power and wheeling services on their own. However,
small municipal electric departments may need to add staff to make
purchase power and wheeling arrangements and incur other transaction
costs to enable them to carry out this responsibility.
In addition, it is possible that transmission service for some of
Southeastern's customers may not be easily obtainable. The allocation
of Federal power received by many of Southeastern's customers is less
than one megawatt. Today most, if not all, transmission providers will
not provide transmission capacity for less than a whole megawatt.
Southeastern's customers may have to form their own organizations in
order to aggregate their various allocations from Southeastern.
3. If the customers provide their own purchase power and wheeling,
will it cost them more?
The use of proprietary, or ``customer,'' receipts is the most cost-
effective means for the PMAs to acquire needed energy and wheeling. If
the PMAs' authority to use proprietary receipts for purchase power and
wheeling is eliminated, the PMAs historically have been provided
authority by precedent and in the annual appropriation process to net
bill, bill credit, and use customer reimbursements (advances) to make
power and transmission purchases. In addition, the PMAs each have
access to ``Continuing Funds'' in the U.S. Treasury that can be used,
if certain conditions are met, to purchase power if needed to meet
Federal contractual commitments.
The customers generally prefer to have the PMAs use receipts to
fund purchase power and wheeling activities, rather than have the PMAs
use customer advances, because: (1) the use of customer advances is
more administratively burdensome; (2) it is not standard utility
practice; (3) it exposes the purchase power and wheeling program to
risks from late, erroneous, or disputed advances; (4) it potentially
restricts the PMAs abilities to buy purchase power and wheeling at the
lowest price; and (5) it may result in increased rates to the PMAs'
customers.
In addition, a reduction in the PMAs' authority to use proprietary
receipts for the acquisition of purchase power and wheeling services
may limit the PMAs' ability to purchase at the lowest market price.
This could result in increased costs to the PMAs, which would increase
rates to customers. The Administration will work with Congress to
attempt to minimize any rate impacts this change may have.
As long as Congress continues to provide these authorities, the
PMAs will use these authorities for purchase power and wheeling to meet
their contractual requirements as long as the customers are able and
willing to provide these methods of alternative financing.
4. How does eliminating the funding for purchase power and wheeling
give the PMA's more flexibility?
The PMAs have authority to net bill, bill credit, and use customer
reimbursements (advances) to make power and transmission purchases.
Bill crediting and cash advances are not standard financing methods
within the electric industry. However, they do provide a backup funding
method for the PMAs to meet their contractual obligations to deliver a
certain amount of energy to their customers. In addition, the PMAs each
have access to ``Continuing Funds'' in the U.S. Treasury that can be
used to purchase power under certain conditions. The PMAs will use
these other authorities to meet their contractual commitments for power
delivery.
Senator Dorgan. Let us do this. Let us exchange some paper
and we will have an opportunity to go at this some more.
Obviously, I am a big supporter of the PMA's. We have some
people in town that want to get rid of the PMA's which I think
would be a huge mistake. But we have had these battles on
purchase power previously and have resolved them.
Let me ask just a brief question about clean coal
technology and the Clean Coal Power initiative. Give me your
assessment of where the administration is with that issue in
terms of funding.
Mr. McSlarrow. The bottom line is the President made a
commitment to $2 billion over 10 years for clean coal, and our
budget and the out-years that we projected will support that
amply. If you looked at the 5 years prior to the Bush
administration, clean coal averaged about $160 million in
requests and about $180 million in appropriation. Even if you
were generous with the rate of inflation, you are talking, over
a 10-year period, of a $1.6 billion to $1.8 billion program. If
you take everything that we have requested, the budget that we
have before you now and the out-years that we have in our
budget, we will have requested $3.8 billion.
This is the most aggressive pro-coal budget that this
country has ever seen, and the fact that we are putting a lot
of money into FutureGen does not suggest that we are cutting
other programs. It is all designed to support how do you take
coal in this country and make it so that the environmental
challenges are not just completely a bar to its use. That is
what FutureGen is designed to do. It is a prototype. It takes
in all of the R&D that is being spent on clean coal and
reroutes it into a prototype demonstration plan. But at some
point, we have to prove all this. Right now we have a lot of
basic R&D. We are trying to move it to the applications.
Senator Dorgan. Mr. McSlarrow, while I support FutureGen
and think it will provide value to our country, I do not think
lumping it all together with clean coal technology programs
that we have had is in our interest. What I would like to do is
I will follow this up with the Secretary. I think he will be
testifying on the appropriations side before my subcommittee.
But the way I look at this, I think that you are actually
far short of where I would expect you to be, given what the
President supported and pledged with respect to clean coal
technology initiatives. And that is a very important issue.
Clean coal technology for many of our States is the advance by
which I think we will be able to continue to use coal as a
resource without endangering or injuring our environment. This
is a very, very important issue for those of us who come from
coal States.
I want to get into greater depth with the Department at a
future hearing. Perhaps we could also, between now and then, I
think in the next week or two, exchange some paper on this
general area of coal research. There is a difference between
all coal research and the clean coal technology initiative. So
I want to exchange some paper with you on that.
Again, while there is a lot to discuss, this the first
blush and first look at what you are proposing. I appreciate
your coming up and testifying today. We will have a lot more
discussions I am sure, before this is over.
Thank you.
Senator Thomas. Thank you.
Senator Smith.
Senator Smith. Thank you, Mr. Chairman.
Mr. Secretary, again welcome.
I listened with amazement, as we are in a political year,
that sometimes we do not think the administration is spending
enough on this or that. I know that these concerns are well
meaning because the Federal Government is becoming sort of the
answer to everybody's prayer on almost every issue. The truth
is there is almost no program in the Federal Government we are
not spending a lot more on than ever before in the history of
this country. So when we speak of not doing enough, one of the
concerns I hope you have is that we are not spending it so
quickly that we are wasting money and that you will use some
care in that regard.
I know, as part of the energy and water appropriations bill
that you are developing, and the Department is going to submit
a report on the Bonneville Power Administration (BPA), and I
would simply ask that you let me know how that is coming along
because that again is one of those other areas that is going to
require more investment. I hope the investments are carefully
made.
Kyle, I note also that the Department has announced that it
will not build a second vitrification plant at Hanford. A
concern that I have is that apparently the single one that is
being constructed will treat 53 million gallons of nuclear
waste at the site. Apparently it cannot do it all, and it will
leave some 60 percent or more untreated there. I suppose I am
interested in some of your alternatives to vitrification that
you may be pursuing, how effective they may be, and how safe
they will be because obviously this is a real concern to the
entire Northwest.
Mr. McSlarrow. We share the concern and you and I obviously
have had a number of discussions about the importance of
getting the cleanup done at Hanford.
I will say this. We are not going to do anything that is
not in compliance with the agreements that we have made with
State of Washington. Obviously, the budgets--not that money is
everything, but it is a lot--speak for themselves in terms of
what we requested and Congress has given us over the last
couple of years.
There are a number of issues that we need to explore beyond
the first vitrification plant, which is actually going quite
well right now, in terms of how we deal with these other
wastes, including I think very promising alternative
technologies for addressing it.
The final point I would make is that we do have the
situation that I think you had mentioned earlier on what we
call waste incidental to reprocessing, or WIR. Other people
just call it high-level waste. This is the situation again
where we and the State regulators in Washington, Idaho, and
South Carolina were working cooperatively together. Again, we
are not going to do anything that is not in compliance with
what the State regulators want to do. But out of left field
comes a lawsuit in Idaho District Court that essentially says
the way we are doing it is not in compliance with the Nuclear
Waste Policy Act.
Suddenly, we want to spend the money. Of course, the States
want us to spend money there, and I think it is about $64
million that is at issue at Hanford. But we are in the
situation that unless we can get a legislative resolution or
court decision on this issue, we are not able to spend money
that we have already planned on spending. So to me the most
dangerous thing that is going on in terms of cleanup at Hanford
is the fact that the environmentalists, the very people who
profess to be pro-environment are keeping us from doing the
cleanup that we need to do, and we want to get on with it.
The good news is we are working with Governor Locke and the
other two States to try to resolve this.
Senator Smith. Is it your belief you are going to win that
lawsuit?
Mr. McSlarrow. Well, if I said it was the Idaho District
Court and we are going to end up in the Ninth Circuit, would
that tell you anything?
Senator Smith. Good luck.
On another issue, again nuclear waste is going to be
transported in large amounts to Yucca Mountain by 2010. Can you
give us any update on transportation planning? Because a lot of
waste shipments will go through the State of Oregon.
Mr. McSlarrow. Well, the strategic plan was issued in
November and I would be glad to have folks come by and brief
your staff on that. As I mentioned earlier, we did designate a
corridor preference also in December, and I think we are going
to have a record of decision on that very soon.
The next thing that we have to do is an environmental
impact statement on the rail alignment. That is how do you
match up the site to the rest of the rail networks.
But we have to do what we can now to ensure that in
parallel we are doing the transportation system in a way that
we do not slow down opening the repository for waste receipt in
2010. That is the good news.
The bad news is we cannot jump too far ahead in terms of
talking about selection of routes until we have continued
through the licensing process. We are planning on applying for
the license in December of this year. So we are doing
everything we can now to keep from slowing up, but there are
still some additional steps that would take place I think
starting next year after the license application.
[The information follows:]
In the Notice of Preferred Nevada Rail Corridor, the Department had
announced the Caliente rail corridor as its preferred transportation
route in the State of Nevada for shipments of spent nuclear fuel and
high-level radioactive waste to a geologic repository at Yucca
Mountain. To date, the Department's Office of Civilian Radioactive
Waste Management has not received comments from anyone representing the
State of Oregon regarding this notice.
Oregon has been an active participant of the Western Interstate
Energy Board for approximately the past 20 years, working with the
Department on the program established by the Nuclear Waste Policy Act.
This Board serves as the technical arm of the Western Governors'
Association and has been assigned responsibility to work on issues
related to nuclear waste transportation. The Department's
transportation corridor preference was discussed with the Western
Interstate Energy Board and Oregon's representative on the High Level
Waste Committee of the Board in a meeting held on January 30, 2004.
The Department is committed to the development of a safe and secure
transportation system that will protect public health, safety, and the
environment. We intend to conduct an open and collaborative planning
process as we move forward in this process.
Senator Smith. Thank you.
Has the State of Oregon, to your knowledge, commented on
the corridor routes?
Mr. McSlarrow. Not that I know of, but I will find out and
get back to you.
Senator Smith. If you can let me know, I'd appreciate it.
Thank you, Mr. Chairman.
Senator Thomas. Senator Akaka.
Senator Akaka. Thank you very much, Mr. Chairman.
Mr. McSlarrow, as you know, I have a strong interest in
hydrogen programs. Hawaii and all islands in the Pacific share
a common need to decrease our dependence on imported energy
sources. I am pleased to see an overall increase of $13 million
for hydrogen technology research and development and for the
emphasis on renewables in the Production and Delivery account.
However, I have concerns and questions as to where the increase
is allocated.
As I said, I am pleased to see the increase in hydrogen
production from $14.9 million from fiscal year 2004 to fiscal
year 2005 in the Hydrogen Technology initiative. The budget
document states that the majority of funding will focus on
renewables.
So my question to you is what percentage of the funding
will be allocated to renewables?
Mr. McSlarrow. Well, I will give you a precise answer for
the record on that, but let me just give you the off-the-top
picture.
For the hydrogen initiative, we have requested $227
million. If you add to that the vehicle technologies, the
Freedom Car program, you are talking a total for the hydrogen
and Freedom Car programs about $319 million. So this is a huge
investment.
If you take fuel cells out, the energy efficiency and
renewable energy budget for the hydrogen program is $95 million
and compare that $95 million with the amount we asked for
hydrogen and fossil, which is $16 million, the amount we asked
for nuclear energy, which is $9 million, and the amount we
asked for basic research in science, which is $29 million, so
when you look at just that aggregate number--and as I said, I
will get you a more precise number--a huge portion of this
hydrogen budget is in the energy efficiency and renewable
energy section.
Senator Akaka. I will look forward to that information from
you later.
[The information follows:]
The total government request in FY 2005 for the President's
Hydrogen Fuel Initiative is $227.8 million. Of this, $50.3 million
supports research and development of hydrogen production technologies.
More funding is requested to convert renewable feedstocks to hydrogen
than any other single energy source. The FY 2005 hydrogen production
research includes:
$19 million for renewable production of hydrogen
$16 million for coal-based hydrogen
$9 million for nuclear-based hydrogen
$6.3 million for distributed natural gas-based hydrogen
Thus, renewables account for 38% of the Department's overall
hydrogen production budget of $50.3 million.
Do you foresee that this increase will be enough to make
hydrogen production costs from renewables competitive with
nonrenewable production--such as natural gas or coal--over the
next 5 years? So my question to you is, do you foresee that
this increase will be enough to make hydrogen production
competitive with nonrenewable production over the next 5 years?
Mr. McSlarrow. Five years sounds aggressive to me. I think
the issue with renewable energy production of hydrogen is
really twofold. First is what are the processes just to make
hydrogen from renewable energy, but there is not in my mind a
substantial--there may be some--but there is not a substantial
cost difference of the actual production of hydrogen. I think
the larger issue is the same issue we always confront with
renewable energy and electricity production for renewable
energy. We are doing great. The cost per kilowatt hour has come
down for wind and solar and geothermal, but we are still not to
the point, even with the renewable production tax credit, that
it is competitive. But the trend at least is going in the right
direction. I think if we can get to that point, then I think
the issue of how you produce hydrogen is a much easier
question. But as I say, I think 5 years--and I will have our
people contact your office with a more precise answer, but I
think that is probably too optimistic.
[The information follows:]
One of the Department's strategies for energy security is to
utilize diverse, domestic resources to produce hydrogen. Based on the
cost of gasoline today and normalized on a per mile basis, hydrogen
from any source must be approximately $2.00 per gallon gasoline
equivalent to be competitive with conventional technology. The
Department is focused on achieving cost and performance targets that
will enable industry to make a commercialization decision for hydrogen
fuel cell vehicles in 2015.
The FY 2005 request of $19 million for renewable hydrogen
production keeps us on track to meet our 2010 goal of $2.90 per gallon
gasoline equivalent (delivered, untaxed) for wind-based hydrogen
production using water electrolysis. Natural gas is currently a cheaper
feedstock, and we have a 2010 hydrogen production cost target of $1.50
per gallon gasoline equivalent (delivered, untaxed). Although
renewables may not be competitive with natural gas over the next five
years, the Department's plan reflects the high priority placed on
renewable production of hydrogen with the goal of approaching $2.25 per
gallon gasoline equivalent by 2015. Coal is potentially a very cheap
source of hydrogen; however, it will not be available in the near term
because carbon capture and sequestration will need to be resolved.
Senator Akaka. I am also pleased that the budget includes
$5.6 million for the National Nuclear Security Administration's
Off-site Source Recovery Project. This will certainly help
collect unwanted radioactive materials and prevent them from
being used as radiological dispersal devices.
I am also pleased that there is $3 million budgeted within
the Office of Future Liabilities to begin an environmental
impact statement for a facility to permanently dispose of these
sources.
While this is a good first step, I remain concerned about
the progress being made in this area. This disposal facility is
necessary to close the loop on the life cycle of these sources,
once they are collected, and should continue to be a priority
for the DOE.
My question is, how will the transfer of the off-site
source recovery project to the National Nuclear Security
Administration affect the Department's ability to develop a
permanent, safe, and secure disposal facility for these
sources?
Mr. McSlarrow. As you point out, NNSA now has the
responsibility for this program, and the reason they do is, as
you know, most of the sources that have been recovered are
stored at Los Alamos and they have significant experience in
recovering these kinds of sources, not just in the United
States but obviously in our international proliferation
programs. We anticipate that we will collect about 1,500
sources next year, bringing the total to about 10,000.
But as you point out, one of the reasons--and I probably
should have used this with Senator Bingaman--that we need an
Office of Future Liabilities is to think about the kinds of
disposal pathways that people had not thought about to date.
And the ``Greater-Than-Class-C'' wastes contained in these
kinds of sealed sources do not have an obvious disposal
pathway. So it is one of the obligations we are placing in that
office to begin the environmental work to try to figure out
what that pathway is because the storage at Los Alamos is not
intended to be permanent and we need to do this on a permanent
basis, as you said.
Senator Akaka. Thank you very much, Mr. Chairman.
Senator Thomas. Thank you.
I guess I am next here. Kyle, we have been working on an
energy policy for a good long time to lay out those things that
we have felt are most important, such as fossil fuels and
transmission, coal generation of electricity, coal being our
largest fossil fuel resource, hydrogen to be able to transfer
that differently, talking about the environment, reinjection
and sequestration of CO2, and these kinds of things
in addition to urging domestic production. So these are the
things that we have talked about that I hope are reflected in
the budget, and I think maybe they are.
You indicate in your budget book that we rely 85 percent on
fossil fuels for the energy we consume. Yet, at the same time,
the fossil energy program is slated for a 9.4 percent budget
reduction. How do you justify that?
Mr. McSlarrow. Well, there are a couple of things about
this. First, the starting place is we are in a constrained
environment. The President, as you pointed out correctly, is
focusing on homeland security and defense.
Now, if you take away the obligations that we have for
environmental management, the obligations that we have for
Yucca Mountain, the fact that the NNSA budget, $9 billion, is
clearly a part of that defense budget, that means all the rest
of a constrained budget is visited on science, fossil energy,
EERE, and nuclear energy.
In fossil energy, there are a couple of programs, for
example, the oil and natural gas. I realize this does not
accord with what you read about in the papers about the Bush
administration in oil and gas, but they simply did not perform
measured against the other programs. And this is 2 years in a
row. And so we have reduced funding for those programs.
As I say, we have really emphasized coal. We are trying to
meet the President's commitment, and assuming we get the
request for 2005 for coal, we will be on a path to have
provided $2 billion in clean coal over 10 years.
We feel like we are doing what needs to be done for fossil
energy, but we are also trying to change the program from one
that was focused on the near term to one that is focused on the
long term.
The really bright spot in this program to my mind is
FutureGen. We are talking about a $1 billion prototype, 275
megawatts, something that produces hydrogen, sequesters carbon,
gassifies coal, employs the most advanced sophisticated
technology to get rid of mercury and SO2 and
NOX. This is the future for the coal industry.
And I think there is a judgment that whereas coal has
significant environmental challenges that an R&D budget can
really help, when it comes to oil and gas, it is not clear to
us, in a way that it would be with the Department of the
Interior where they can actually produce oil and gas, what we
can do beyond the kind of basic R&D, the applied R&D to
actually help with oil and gas development. So we are trying to
do that. We feel like the budget is a fair way of balancing
that.
Senator Thomas. I am glad the Rocky Mountain Oil Testing
Center, which last year you did not fund in your budget but did
finally--and that is there. They are doing sequestration. They
are doing other kinds of things.
Mr. McSlarrow. They are doing enhanced oil injection with
the CO2, and it is a good project and they are doing
a good job.
Senator Thomas. Well, that is good.
The cooperative research and development is a joint project
with WRI in Wyoming and North Dakota. That was reduced
substantially, more than in half. Are you familiar with that
program?
Mr. McSlarrow. My recollection--and I may be wrong, and I
probably should just not say anything, but my recollection was
it was an earmark.
Senator Thomas. Say something nice, if you can.
[Laughter.]
Mr. McSlarrow. I think I will just say nothing and get you
an answer for the record, thinking nice thoughts.
Senator Thomas. Well, that will be fine. In any event, we
do need to work on this.
[The information follows:]
The University of North Dakota Energy and Environmental Research
Center (UNDEERC) has contributed greatly to the Department's coal
program:
In addition to the cooperative R&D program in Fossil Energy
($1.5 million requested in FY 2005) UNDEERC has competed for
and won contracts in other areas of Fossil Energy.
It has played an integral role in the development of the
``advanced transport gasifier.'' This gasifier has potential
for being lower in cost, higher in efficiency, and more readily
adaptable to a wide range of feedstocks than today's commercial
technologies. UNDEERC has evaluated the performance of the
transport gasifier over a wide range of coals (bituminous, sub-
bituminous, and lignite) and process conditions. These data are
providing critical guidance for the operation of the larger-
scale transport gasifier at DOE's Power Systems Development
Facility in Wilsonville, AL.
UNDEERC also supported the U.S./Australia Climate Action
Partnership by evaluating the performance of two Australian
lignites in the transport gasifier.
To further demonstrate the flexibility of the gasifier,
tests are being conducted to assess the co-feeding of coal with
biomass as a potential way to reduce CO2 emissions
from power generation. In addition, technologies for the
measurement and capture of mercury in the product gas from the
gasifier are being developed for operation at moderate process
temperatures (300-700 F) commensurate with the operation of the
transport gasifier and some commercial gasifiers as well.
The accomplishments from UNDEERC have, and will continue to
have, significant impact on the development of advanced
gasification technology that could potentially be the
cornerstone of the FutureGen project.
The Western Research Institute (WRI) in Laramie, Wyoming has also
contributed greatly to the Department's programs. As shown by the areas
of expertise listed below, WRI has been working with the private sector
to develop technologies that will lead to power systems capable of
sequestering carbon, as envisioned by the FutureGen project.
WRI has capabilities to test hydrogen separation membranes and
other components, and it has significant experience with catalysis,
petroleum product refining, CO2 sequestration and other
environmental issues associated with advanced power generation. WRI
engages in important research, development, demonstration and
commercialization of technologies related to energy, environment, and
transportation materials:
You talked about FutureGen. Do you have any idea what the
timing is on that and where it will be? We are, of course, very
hopeful that it could be in Wyoming where the greatest supply
of future coal might be.
Mr. McSlarrow. A site has not been selected for FutureGen.
The process we are going through now is essentially soliciting
ideas from what I would expect to be consortia of really
different players who all have an interest in coal,
electricity, and hydrogen as to how they might go about doing
the project themselves. So to some extent, we have outlined a
vision, but we are going to be looking for information from
industry to help us define that mission.
I think we are talking really 10 to 15 years to see this
project through full fruition, although the kinds of work that
we are going to be doing, the kind of R&D is stuff that can
spin off all along the way. So it is not just something that
pops out at the end of that process. It is a way of really
supporting the kind of R&D that we are doing today.
Senator Thomas. One of the real challenges, of course, is,
as I said, our greatest supply of fossil fuel is coal and yet
we have not had a coal plant for electricity developed in the
last 10 years. So we need to do some things and transmission to
the market, of course, has to be a very real part of that. And
I know, Kyle, that you understand that.
Senator Alexander.
Senator Alexander. Thank you, Mr. Chairman.
Mr. Deputy Secretary, thank you for coming again.
I am a big fan of the Secretary's 20-year facility plan. I
think creating a path to the future for investment in science
and technology is step number one, and I am glad that you have
done that. It is ambitious. It is in line with our Nation's
needs, and it reminds us that a lot of our ability to create
new jobs and compete in the world marketplace depends upon
these investments.
I would like to focus on one of the priorities in that
plan. I believe the number two priority in the 20-year plan was
supercomputing. Congress last year appropriated an additional
$30 million above the President's request to start the
development of a leadership class computational facility. It
would just start it, but it is consistent with the
recommendations made by the High End Computing Revitalization
Task Force. That is money you have got.
My first comment about it is that I want to encourage you
in your decision-making to spend all of it that you can in a
single direction rather than spread it out over a lot of
different places. Japan is the leader in supercomputing. This
is money that will be competed among the laboratories. All the
different laboratories, as I understand it, could be involved.
But what specifically I would like to see is that of the $30
million, at least $25 million of it be competed so that we can
take a first step toward leading the world in supercomputing.
My second comment on the same line would be, do you have
any plans in terms of additional appropriations in support of
that priority in your 20-year plan?
Mr. McSlarrow. Based on what I just heard, I think we are
completely in agreement here. Out of that $30 million that we
got for this year, about $5 million, as I understand, is going
to Berkeley.
Senator Alexander. That is the way I understand it.
Mr. McSlarrow. I think $5 million is going to actually buy
a couple more cabinets for the Cray facility at Oak Ridge, both
of which are designed to support the work we do in the
leadership class computational facility, which I guess is
another way of just saying the best in the world.
Senator Alexander. Right.
Mr. McSlarrow. $20 million is going to go out to be
competed, and my understanding is it will not be spread out. It
is to be competed for one leadership class facility and our
budget for 2005 includes I think about $38 million to continue
that drive toward such a leadership class facility.
Senator Alexander. I think the difference between what I
was thinking and what you said may be $5 million. What I am
encouraging--and I would just ask you to review this when you
go back--is it may be possible for you to compete as much as
$25 million instead of $20 million out of your existing funds,
and if you do, we may get even more bang for the bucks that you
have got. So I would ask that you take a look at that.
Mr. McSlarrow. I will have a look at it.
Senator Alexander. The second issue is infrastructure for
the labs. There are 10 labs. The way we read the budget, the
amount of money for infrastructure is $29 million. That is not
very much money to spread over 10 labs. Last year it was $54
million. Would you have any comment on that?
Mr. McSlarrow. I do. Actually, if I might, let me just make
a larger point about the science budget. There have been
several times statements that we are cutting this budget, and I
think we just need to understand something.
In 2004, we had $140 million of earmarks. I have been on
the other side working for Senators. I understand how this
goes. But this was a significant number of earmarks. In
addition, from 2004 to 2005, we have about $75 million of a
decrease that was planned. It is just construction activities
like the Spallatian Neutron Source. They are declining.
So the truth is while it is not a huge boost, in terms of
spending on programs in the science budget, the budget is going
up. I might add that the good news for this program is in 2000,
the budget for science was about $2.8 billion, and we have been
$600 million above that last year and in the request for next
year. So I know you and the Secretary absolutely share this
vision of what science can do. I would just say that it is easy
to read the tables, but there is actually more to the story
than meets the eye.
On the laboratories infrastructure, two points. First, I
have personally been a bear on deferred maintenance of our
facilities, both on the defense side and on the energy side.
You do not necessarily see it in this line item, but I think
Dr. Orbach and Under Secretary Card are doing a fantastic job
of rebuilding the infrastructure for these labs.
On the specific line item that you are talking about, I
would just note a couple things. It said that it was about a
$25 million decrease to $29 million, which is what you
mentioned. But this year in 2004, about $10 million was given
to the labs to work on NRC and OSHA compliance. Well, they
spent the money. It was a one-time tranche of money, so we have
not requested that again.
In addition, we decided, in 2003, that work that was
supposed to be done for infrastructure at the Pacific Northwest
lab would not be done because we were actually going to
dismantle those facilities. We spent that money instead on work
at Brookhaven and at Thomas Jefferson Accelerator Facility, and
so we do not have to request that in 2005. The net result of
that is that there is a very slight decrease in that line item.
But again, as I point out, the larger issue is really deferred
maintenance, and that is not all captured by that one line
item.
Senator Alexander. Thank you for the explanation, and I
encourage you to continue to be a bear on the deferred
maintenance. It never makes headlines except when it is
deferred too long and then it is hard to catch up.
Thank you very much for your testimony.
Senator Thomas. Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
I appreciate your comments on the supply issue as it
relates to natural gas in response to Senator Campbell. I think
we all recognize that we do need to look to the diversification
of sources, and we would like to certainly do all we can
domestically to ensure for that energy security. We have had
some good news in Alaska in the past month with some
applications, as they relate to our natural gas pipeline. We
are looking forward to the administration's support to make
this pipeline a reality in the very near future. We recognize
it takes a while to build it, but we need to get the gas here
as soon as possible.
I also want to make a side note with regard to LNG, that we
are also looking at that as an option to bring LNG down through
the State, put it in tankers and bring it across to the west
coast to provide for Americans on that side. So we have got a
lot going on.
I mentioned in my opening remarks my concern that the
budget does not reflect any funding for the Arctic Energy
Office. This is a program that is administered through the
University of Alaska with a mission to conduct Arctic energy
research in the categories of fossil energy and remote
electrical power and generation.
They have been doing some great work. We have got some
projects going on right now. The Tundra Travel Model project is
really helping to expand the number of days that we can
actually be involved in drilling on the North Slope using this
technology.
Another project that they are working on is the amount of
free water which can safely be removed from the tundra ponds
for ice road and ice pad construction so that again we can
truly do the work that we need to do up there without harming
the environment. They are great projects and they certainly
address the ability to work up there on the North Slope. These
are projects that are vital to continue if we want to continue
exploration and drilling up there.
We have also got a membrane separation technology for
possible use in the gas handling plant. These are great things
going on. So to see the funding pulled out from underneath them
causes a little degree of anxiety.
You had indicated earlier that you want to certainly
encourage R&D in the production and development end of things,
and I would like to know if we will be getting any support for
the Arctic Energy Office there in UAF.
Mr. McSlarrow. Well, today, Senator, I am probably not
going to be able to answer fully your question about the office
specifically. My understanding is we are planning on doing R&D
in Alaska, and I think what we owe you is an explanation as to
how that relates to the decision in the budget to zero out that
line item. But I am not able to go beyond that point right now.
But I certainly appreciate your leadership on all these
issues. You and I have discussed obviously the Alaska pipeline
many times, and I would be glad to commit to working with you
to explore what plans we have for those kinds of activities in
the State.
Senator Murkowski. Good. Maybe what we can do is set up a
separate meeting. But in the meantime, I have got some
additional questions that I will forward to you as they relate
to rural power generation in Alaska.
I want to ask real briefly about the Energy Employees
Occupational Illness Compensation program. We had a little bit
of an exchange earlier. The area that causes me some particular
concern is the willing payor issue, and it was asked why we
bring people down this path of believing that there will be
some compensation at the end and then, in fact, there is no
willing payor in the Amchitka situation. A little bit of truth
in advertising along the way here.
Senator Grassley and I submitted a series of inquiries to
the Department on implementation of subpart D in December. I
guess it was December 22. I understand we are still waiting for
those responses.
But again, understanding what the Department intends to do
with the willing payor issue--you indicated that you had some
ideas out there. Can you elaborate at all on the direction that
you might be taking?
Mr. McSlarrow. Yes. Let me try to be a little clearer on
willing payor. I described really three problems.
One we own. How do we process these things faster? We think
we have got a plan to do that now with the funding.
The second is the physicians panel. That would be a mixture
of legislative changes and our own administrative changes.
The third issue is the willing payor. I am not certain that
there's anything we can do about it, and it goes back to this
conversation I was having with Senator Bingaman. Congress had a
lively debate. On one side there were people who just wanted
this to be a direct benefits program modeled after the Federal
program. Others did not want to have the Government on the hook
for a liability at all. And they met somewhere in the middle
with something that relied on the State workers compensation
program. As I say, by definition, just the statute that was
passed, it was a willing payor problem in that sense, but that
was the choice that Congress made.
What Secretary Abraham did was at least make it more likely
that people could get to the compensation board, as I said
earlier, by putting in the rule that we will issue do not
contest orders, by saying we will reimburse it, which makes it
more likely you will not have a willing payor problem, and we
are certainly willing to look at whether or not there are other
things administratively that would help that. But at the end of
the day, my conclusion, after having now reviewed this record,
is that there was a fundamental choice made and it is not one
administratively that we are going to be able to solve by
ourselves.
Senator Murkowski. I guess I would just throw out that if
we are not able to solve that, then the Mrs. Carlsons of the
world that are going through this system with an expectation at
the end need to be brought in early on that there is an issue.
You may go through this process and there may be nothing for
you at the end. In fairness to the victims and the victims'
families, I think we need to give them that heads-up on the
issue.
Mr. McSlarrow. I agree.
Senator Murkowski. Thank you, Mr. Chairman.
Senator Thomas. Thank you.
Thank you, Mr. Secretary. You and Secretary Abraham are
doing a great job in a tough area, and we will be working on
this with you as time goes by because this is one of the most
important issues, of course, for Americans and for our jobs.
The record will be open for questions until the close of
business tomorrow.
We are adjourned. Thank you.
[Whereupon, at 11:36 a.m., the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
Department of Energy,
Congressional and Intergovernmental Affairs,
Washington, DC, April 30, 2004.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S. Senate,
Washington, DC.
Dear Chairman Domenici: On April 5, 2004, we sent you the edited
transcript of the February 10, 2004, testimony given by Kyle E.
McSlarrow, Deputy Secretary, regarding the President's FY 2005 budget
request for programs of the Department of Energy.
Enclosed are five inserts requested by Senators Dorgan, Smith,
Akaka and Thomas for the hearing record.
Enclosed also are the answers to 55 questions that were submitted
by you and Senators Craig, Alexander, Murkowski, Bunning, Bingaman,
Akaka, and Feinstein. The remaining answer to Part I of question 24 is
being prepared, and will be forwarded to you as soon as possible.
If we can be of further assistance, please have your staff contact
our Congressional Hearing Coordinator, Lillian Owen, at (202) 586-2031.
Sincerely,
Rick A. Dearborn,
Assistant Secretary.
[Enclosures]
Responses to Questions From Senator Domenici
Question 1. What are the consequences on commercial development and
global competition if the budget request for High Temperature
Superconductivity projects is not met?
Answer. Without an adequate budget, we risk losing the world
leadership role that we hold today in High Temperature
Superconductivity (HTS). International HTS competition is significant
because the stakes are high. Investment in HTS can result in growth in
U.S. manufacturing of the next generation of transmission cables,
transformers, generators, motors and other equipment--and can provide
an important new capability to increase the efficiency, capacity and
reliability of our electric system.
Question 2. This Committee will set a hearing on the date of March
11 in order to hear the outcome of the Blackout Report. Do you agree
that DOE should testify before the Senate Energy Committee when the
Final Blackout Report is released on March 11?
Answer. On February 24, 2004, DOE testified before the Senate
Energy and Natural Resources Committee concerning the reliability of
the grid, including discussion of the August 14, 2003, blackout. Once
the final Blackout Report is released, which we hope will occur in late
March, DOE will work with the Committee if a new hearing is scheduled.
YUCCA MOUNTAIN PROJECT
Question 3. The budget request for Yucca Mountain increased from
$577 million in FY'04 to $880 million in FY'05. In addition, the
President proposed a new manner for financing this project by
reclassifying $749 million of the mandatory fees paid by utilities for
waste disposal as discretionary funds.
Legislative change to enact this proposed chance. The request
assumes that Congress will, in fact, move to enact their request.
Please explain why the Department has decided on this course of
action, why the revenue from this change is assumed up front, and what
the practical implications will be if Congress does or does not enact
this change. In this latter case, if the change is not enacted, how
does the Department plan to make up for the lost revenue?
Answer. Starting in FY 2005, the project will require a substantial
increase in funding as it moves forward on an extremely tight schedule
for licensing, designing and constructing a repository, and providing
the needed transportation infrastructure. Historical funding patterns
fall far short of the increased funding the Program will need. We have
reached the point where action is must be taken now to provide the
necessary resources.
The Administration's proposal would allow the revenues from the
nuclear utility fees to be used in the way that was intended when the
Nuclear Waste Policy Act was passed: to develop a repository for
disposal of high-level radioactive waste and spent nuclear fuel.
Specifically, under the Administration's proposal, the amount of
receipts from annual fees would be credited as offsetting collections
in an amount equal to the appropriation for the Yucca Mountain
repository. The amount credited as offsetting collections would still
be subject to approval in an appropriations act, but could be
appropriated without reducing the discretionary funding that would be
available for other Federal programs. Reclassifying the fees will
ensure that money collected to pay for Yucca Mountain is spent on Yucca
Mountain. If the President's Budget had simply included additional
money for Yucca Mountain, it could not have been assured that the
dollars would have been spent on Yucca Mountain and not used for some
other purpose, as they have been in past years.
By using the fees that electricity consumers pay into the Nuclear
Waste Fund to offset appropriations, the proposed legislation would
both assure consumers that their fees are being used for their intended
purpose and enable Congress to meet the challenge of financing the
repository's construction. This is a technical change that reasserts a
key principle established in the Nuclear Waste Policy Act, a principle
with longstanding bipartisan support--that those who receive the
benefit of nuclear-generated electricity pay for waste disposal. The
federal government, in exchange for fee payments, will implement a
permanent solution for management of the waste. The federal government
is contractually required to perform the service for which the disposal
fees are paid.
If sufficient appropriations from the Nuclear Waste Fund are not
available, the Nation will not have an operational repository in 2010.
Delays could mean additional costs of nearly a billion dollars per year
for commercial utilities and federal defense nuclear waste sites to
continue to provide temporary storage. The country will be forced to
spend billions of dollars, without solving the problem. Nuclear waste
will remain at sites near communities and water supplies throughout the
country, and we will not have finished the job of cleaning up the Cold
War legacy at defense sites.
The Administration has proposed what we believe is a workable
solution to the problem. We recognize there may be other workable
solutions, and are open to working with the Congress on other solutions
it may wish to propose.
PORTSMOUTH FACILITY
Congress has been funding two de-conversion facilities to treat the
tails from uranium enrichment which now reside at Portsmouth, Ohio;
Paducah, Kentucky; and other locations. With Federal funding, these
would of course be national facilities, available to treat tails as
needed to address national issues.
Before we proceed with further funding of the Ohio facility, I need
the Department to clarify recent suggestions by Governor Taft of Ohio
that the Portsmouth facility might be unable to accept tails from
outside this state.
Question 4. Will the Department please verify with Governor Taft
that he understands that the Ohio de-conversion facility, if built with
Federal funds, will be available to treat tails originating anywhere in
the nation?
Answer. The mission of the two conversion facilities that the
Department is designing, one in Ohio and one in Kentucky, is to provide
for the conversion of the legacy from the Department's enrichment
program of approximately 700,000 metric tons of DOE depleted uranium
hexafluoride (DUF6) to a more stable chemical form suitable
for beneficial use or disposal, as appropriate.
The Governor of Ohio's Office has been informed that these Federal
conversion plants may be used by the Department to convert its
DUF6 currently stored at other DOE sites. No decision has
been made by the Department whether these facilities will, at some
point in the future, be made available for the disposition of
commercially generated DUF6. However, in the event a
decision is made to make these facilities available to the commercial
industry, the Department believes that all domestic commercial uranium
enrichment plant operators should have equal access without regard to
the state in which they reside.
FUTURE EM PROGRAM AND PERFORMANCE
The EM program has seen many changes lately. Just to name a few,
the Department has re-organized the EM management, created a new Office
of Legacy Management, created a new Office of Future Liabilities, and
shifted responsibility for several programs between Offices. I'd
appreciate your discussion of the overall vision guiding these changes.
Question 5. What do you foresee for the Department's future EM
program and performance?
Answer. The changes we have made over the last several years have
been designed to focus EM on its original core mission--the cleanup of
the environmental legacy that resulted from several decades of nuclear
weapons production and research. As such, programs and activities that
are not part of this core mission have been transferred to other
programs where we believe they can be performed more effectively. For
example, long-term stewardship of sites where cleanup has been
completed involves different issues and requires different skills and
management strategies compared to active cleanup work. For this reason,
the Office of Legacy Management was created to focus on long-term
stewardship. We also believe that for effective management efficiency
and control it is important that EM be focused on a defined, finite
work scope. However, the Department also recognizes that there may be
environmental liabilities beyond those identified in the EM work scope.
The Office of Future Liabilities will plan for how the Department
should handle environmental liabilities beyond those identified in the
EM work scope. In addition, responsibility for on-going waste
management activities is being transferred to the generator programs.
DOE is doing so to promote incentives for cost efficiency and waste
minimization by the waste generators.
Having streamlined and focused EM on its core mission, we are
making great progress toward our cleanup goals and are confident that
EM is well poised to complete its cleanup mission by 2035 at the
latest. I believe, however, that we will be able to accelerate the
completion date of the EM program even more.
Question 6. I need help understanding the Administration's
rationale for cuts in Nuclear Energy R&D Programs.
Strong statements by the Administration, including support in the
National Energy Policy, recognized the vital role that nuclear energy
must play in our future energy mix. Working together, we've created
some strong nuclear energy programs, programs that did not exist back
in 1997 when Senator Craig and I wrote to Secretary Pena expressing our
concern for the Department's neglect of nuclear energy.
Despite strong statements of support for nuclear energy, the Budget
proposal zeroes the Nuclear Energy Research Initiative and the Nuclear
Energy Plant Optimization Program.
It cuts the Nuclear Energy Technologies Program by 48 percent from
$20 to $10 million, and it cuts the Advanced Fuel Cycle Initiative by
31%.
In light of the Administration's stated support for nuclear energy,
can you help me understand why the Administration proposed these cuts?
Answer. The President's budget request increases the funding for
the Department's nuclear energy program by 1.2% to about $410 million
for FY 2005. This budget allows the Department's priority efforts in
programs such as Generation IV and the Nuclear Hydrogen Initiative to
proceed vigorously. The Department's request more than doubles the FY
2004 request for each of these programs.
Two of the Department's nuclear R&D programs have ended with the FY
2005 budget.
We request no funding for the Nuclear Energy Research
Initiative (NERD for FY 2005, but the activity will continue as
an annual competitive research grants program for university
researchers that is tied to mainline programs such as
Generation IV and Nuclear Hydrogen Initiative.
The Nuclear Energy Plant Optimization program has
accomplished the most important mission it was designed for:
encouraging longer-range technology development by the private
sector.
We are requesting less for two other programs:
The Advanced Fuel Cycle Initiative requires less funding in FY 2005
because the Department has decided against the rapid deployment of
commercial-scale UREX+ technology. Instead, we are focusing on longer-
term, higher-payoff research at laboratory scale in next-generation
fuel cycle technologies including advanced aqueous and pyroprocessing
spent fuel treatment, advanced transmutation and Generation IV fuels,
and detailed systems analysis and modeling. Further, given the tight
budget environment, we did not request funds to continue some of the
useful, but still not essential programs that were contained in various
earmarks in FY 2004.
The Nuclear Power 2010 program seeks to achieve near-term
deployment of new power plants in the United States through
cost-shared demonstration of untested regulatory processes
affecting the siting, construction and operation of new nuclear
power plants, cost-shared development of advanced reactor
technologies, and implementation of appropriate strategies to
enhance the business case for building new nuclear power
plants. In FY 2005, the budget request focuses primarily on
regulatory tasks including the demonstration of the Early Site
Permit (ESP) and combined Construction and Operating License
(COL) processes to reduce licensing uncertainties and minimize
the attendant financial risks to the licensee. The request will
enable the continuation of ongoing licensing demonstration and
related analysis projects. Future requirements for the program
will be reviewed as Congress completes work on comprehensive
energy legislation and the Department assesses the responses
and requirements associated with its recent solicitation
related to New Plant Licensing Demonstration Projects.
Question 7. I'm also concerned that several laboratories seem to be
slated for sharp cuts in their contributions to nuclear energy
programs. I appreciate the Department's interest in focusing Nuclear
Energy research at Idaho, but I also recall many statements by the
Administration in the past that the capabilities of all labs would
continue to contribute.
In the proposed Budget, for example, funding for R&D funding is cut
by 35 percent at Los Alamos, by 28 percent at Sandia, and by 18 percent
at Oak Ridge. In contrast, Idaho's R&D funding is level. Further, Idaho
is slated for a 40 percent increase in infrastructure support.
Is it still the Department's intent to assure that the critical
capabilities of several laboratories continue to be part of a growing
nuclear energy program?
Answer. Yes, the Department intends to do everything it can to
retain the critical capabilities of all its nuclear energy laboratories
in carrying out the research required to support the growth of nuclear
energy in the United States. Even in the tight budget environment the
Department faces next year, the nuclear energy program will receive a
$4.8 million budget increase.
Question 8. In Appropriations for the current year, the Department
is directed to begin research, development, and design work for a
project in Idaho involving an advanced reactor with hydrogen co-
generation. Just two weeks ago, in a January 28, 2004, letter to
Senator Craig and me, the Secretary stated that design competition for
this reactor would begin this fiscal year.
Is this competition on schedule for this year and are there
adequate resources requested in this budget for next year to support
competitive selection and progress on a final design?
Answer. In FY 2004, the Department's Generation IV Nuclear Energy
Systems Initiative continues to emphasize research and development on
the Next Generation Nuclear Plant and continues collaborative research
on the Lead-Cooled Fast Reactor, the Gas-Cooled Fast Reactor, and the
Supercritical Water-Cooled Reactor. These systems were chosen as the
best match for the future needs of the United States. Beginning in FY
200, the Department puts special emphasis on the NGNP, working towards
the potential early deployment of the NGNP as a demonstration of a
promising Generation IV reactor technology. The Department has not at
this time made a decision to proceed with such a demonstration plant.
The budget request for FY 2005 for the NGNP is $19.3 million.
Approximately $5 million of the $19.3 million request for FY 2005 is
slated for NGNP design activities to define future research and
development requirements, with the balance being applied to critical
fuel and materials research.
LOS ALAMOS SCHOOLS
Question 9. Is this competition on schedule for this year and are
there adequate resources requested in this budget for next year to
support competitive selection and progression a final design?
Funding of $8 million for the annual contract with the Los Alamos
Schools is authorized through fiscal year 2005. In addition, the Armed
Services Committee requested a report from the Department to assess
paths forward for funding of these Schools. This funding has been
provided for many years to assure an educational system which supports
recruitment and retention of Los Alamos National Laboratory staff.
To date, no report has been provided to Congress by the Department,
and the FY05 budget zeroed funding for the Los Alamos Schools.
Answer. I understand and appreciate the importance that a high
quality education system provides for the recruitment and retention of
quality scientists and engineers at Los Alamos National Laboratory. The
Administration however doesn't feel that the President's budget for
stockpile stewardship activities is the proper funding vehicle for this
activity. NNSA recently submitted a report to the Congress on Los
Alamos schools and funding options that could take the place of the
annual authorization and appropriations approach.* Option 1 would rely
on the State of New Mexico and the citizens of Los Alamos County to
ensure that adequate funding is available for the schools. Option 2
would reestablish a charitable foundation funded by annual
appropriations for a limited period of time so that Los Alamos Schools
would receive approximately $8M annually from the endowment. Finally,
Option 3, would allow the M&O contractor for LANL to support the school
system by modifying the provisions in Appendix N of the contract.
Currently under Appendix N, Los Alamos provides a few million dollars
to the school systems in the vicinity of Los Alamos County.
---------------------------------------------------------------------------
* The report has been retained in committee files.
---------------------------------------------------------------------------
OVERALL SCIENCE BUDGET
Question 10. Last year in this budget briefing, I expressed great
concern over years of flat funding for the Office of Science. This
year, I can't even make that statement, since the proposed budget
reflects a 2 percent drop.
In Appropriations for this year, the Senate expressed its concern
that
``Shrinking investment in physical sciences and engineering
poses serious risks to DOE's ability to perform . . . It also
threatens the Nation's science and technology enterprise.''
The Secretary just announced a 20 year initiative for new DOE
science facilities. I'm concerned that this budget, added to the
history of past years, doesn't prepare the Department for this
initiative and can't adequately support the initiative.
Do you share my concern that the DOE Science budget, given its
immense impact on the health of science in the nation, is not living up
to our needs? When do you foresee reversal of this trend?
Answer. Compared with the FY 2004 appropriation, the request for
the Office of Science reflects a decrease of $68,451,000, or 2.0%.
However, the FY 2004 appropriation contains $140,762,000 of
Congressionally-directed projects--projects which are not continued in
the FY 2005 request. The request is an increase of $72,311,000 or 2.2%
over FY 2004 when these projects are excluded from the FY 2004 base. We
believe this request continues to reflect the Department's strong
support for the Office of Science programs given the tight fiscal
environment in which the Nation currently finds itself.
COMMITMENT TO ITER
Question 11. Last year I said that the Administration was making an
insignificant commitment to the ITER (International Thermonuclear
Experimental Reactor) program in light of their stated intent to
support at least 10 percent, or about $500 million, of this
international program.
Last year, the ITER Budget request for $8 million forced the Office
of Science to take it out of existing programs. This year, the
commitment is $38 million and again the funds are just taken from
existing programs.
I have no objection to participation in ITER, but only if the
Administration is serious about the commitment. I do not regard flat
Science and Fusion Energy budgets as demonstrating serious commitment.
Answer. Assuming that the negotiations succeed, significant
budgetary commitments for construction are not scheduled to begin until
FY 2006. Until that time, the U.S. has funded, and proposes in FY 2005
to fund, ITER preparatory activities that reorient domestic fusion
experimental, theoretical and enabling technology research more toward
the needs of ITER. The vast majority of this research is performed by
existing fusion scientists and engineers. In other words, these
researchers are not doing less work, they are doing different work.
Only a very small amount, on the order of $1,000,000, of the
preparatory activities is for industrial preparations at this time.
This committee recently held a hearing to understand the
Department's commitment to resolution of the immense backlog of cases
pending under the DOE's part of the Energy Employees Occupational
Illness Compensation Program. I note that your budget request includes
a commitment to work through the backlog in three years.
I am concerned that workers who were injured by work in past
weapons programs should be appropriately compensated. We know that the
current legislation is fundamentally broken, and needs improvements.
I am working with my colleagues to decide how best to proceed with
this program, which could involve another hearing or consideration of
alternative legislation.
Question 12. When would the Department be ready to discuss
alternative legislative options to improve the program?
Answer. The Secretary transmitted a legislative proposal on March
29, 2004 to eliminate the pay cap for physicians serving on EEOICPA
Part D Physician Panels, expand the hiring authority of the physicians,
and allow Part D applications to move forward to a Physicians Panel
even if a State agreement is not yet in place. In addition, the
Administration is currently working on an additional legislative
proposal to clarify the definition of a DOE facility for purposes of
the EEOICPA programs. The Department is available at your convenience
to discuss legislation pending in Congress that affects the Part D
program.
Question 13. Mr. Secretary, the President's budget provides $227.8
million in total funding for the Hydrogen Fuel Initiative in four
separate DOE programs including the Offices of Energy Efficiency and
Renewable Energy, Science, Fossil Energy and Nuclear Energy and the
Department of Transportation.
Can you explain how these funds are allocated and assure the
Committee that the accounts don't duplicate work being done in any of
the other DOE accounts or offices.
FUNDING SUMMARY
[Dollars in 000's]
----------------------------------------------------------------------------------------------------------------
FY 2003 FY 2004
Program/Activity comp. FY 2004 comp. FY 2005
approp. request approp. request
----------------------------------------------------------------------------------------------------------------
EERE Energy Supply (Hydrogen)................................. 38,113 87,982 81,991 95,325
----------------------------------------------------------------------------------------------------------------
EERE Conservation (Fuel Cells)................................ 53,906 77,500 65,187 77,500
----------------------------------------------------------------------------------------------------------------
Fossil Energy................................................. 2,280 11,555 4,889 16,000
----------------------------------------------------------------------------------------------------------------
Nuclear Energy................................................ 2,000 4,000 6,377 9,000
----------------------------------------------------------------------------------------------------------------
Office of Science............................................. 0 0 0 29,183
----------------------------------------------------------------------------------------------------------------
Department of Energy, Total................................... 96,299 181,037 158,444 227,008
----------------------------------------------------------------------------------------------------------------
Department of Transportation.................................. 0 674 555 832
----------------------------------------------------------------------------------------------------------------
Hydrogen Fuel Initiative, Total............................... 96,299 181,711 158,999 227,840
----------------------------------------------------------------------------------------------------------------
Answer. Please reference the above chart.
The Department has formed a cross-cutting team with representatives
from each of the four DOE offices involved in the President's Hydrogen
Fuel Initiative (Office of Energy Efficiency and Renewable Energy;
Office of Nuclear Energy, Science and Technology; Office of Science;
and Office of Fossil Energy) to ensure there is no duplication of work.
This team has jointly developed a ``Hydrogen Posture Plan'' which
integrates the hydrogen activities of the Department. This plan,
developed with the Office of Management and Budget (OMB), was used in
formulating the President's FY 2004 and FY 2005 budget requests.
In addition, an interagency plan was developed with the Department
of Transportation, National Institute of Standards and Technology, and
Environmental Protection Agency to ensure that codes and standards
activities are coordinated and to avoid duplication. This plan was also
developed under OMB's guidance.
CARBON SEQUESTRATION
Question 14. The President's Coal Research Initiative contains
funds ($49 million) for research on carbon sequestration. Can you
elaborate on the types of technologies that are to be examined? Can you
also provide information on the potential cost of implementing these
technologies, and their expected impact on carbon emission reductions?
Answer.
Technologies
The carbon sequestration program is developing cost-effective,
environmentally sound technology options for coal and other carbon-
based fuels that could ultimately lead to stabilization of greenhouse
gas concentrations in the atmosphere. The Program is divided into
several key areas: Capture; Sequestration; Measurement, Monitoring &
Verification (MMV); Non-CO2 Greenhouse Gas Mitigation and
Regional Partnerships. For the capture area, the primary goal of this
research is to develop technology options that dramatically lower the
cost of eliminating CO2 from flue gas and other streams by
use of either pre- or post-combustion processes. This research is in
its early stages and is exploring a wide range of approaches, including
membranes, improved CO2 sorbents, advanced combustor
concepts, advanced scrubbing, formation of CO2 hydrates, and
economic assessments. For the sequestration area, technologies are
being developed for geologic sequestration for cost optimization,
monitoring, modeling, and capacity estimation. Numerous field studies
are underway to determine the degree to which CO2 can be
injected and remain safely and permanently sequestered in geologic
formations while concurrently assuring no adverse long-term ecological
impacts. Terrestrial sequestration technologies are being developed to
enhance uptake and storage of CO2 in soils and vegetation.
Field tests are underway to maximize productivity of infertile soils
and change current mine reclamation perceptions and practices to make
uncompacted soil and forest establishment the preferred choice for
restoring mined lands. In the MMV area, fundamental and applied studies
are developing instrumentation and protocols that can track the fate of
sequestered CO2 and provide the necessary scientific tools
to ensure permanent storage. Non-CO2 greenhouse gas
technologies are under development that will reduce fugitive methane
emissions from landfills and coal mines. Lastly, seven regional carbon
sequestration partnerships have been established throughout the United
States to develop the infrastructure for widespread deployment of
greenhouse gas mitigation technologies should they be deemed necessary.
Costs & Benefits
The President's Global Climate Change Initiative (GCCI) has the
goal of significantly reducing the greenhouse gas intensity of the
United States economy over the next 10 years, while sustaining the
economic growth needed to finance investment in new, clean energy
technologies. The GCCI calls for increased research and development
investments to provide an improved basis for sound future decisions,
for increased emphasis on carbon sequestration, and for reductions in
non-CO2 greenhouse gas emissions such as methane. The GCCI
also calls for a progress review relative to the goals of the
initiative in 2012, at which time decisions about additional
implementation measures will be made. The GCCI has defined a metric
goal of an 18% reduction in greenhouse gas intensity over the next ten
years. The Sequestration Program will show substantial contributions
toward meeting greenhouse gas intensity reduction goals of the Global
Climate Change Initiative (GCCI) and provide a portfolio of
``commercially ready'' technologies to support the decision making
process for future action in 2012, as mandated by GCCI.
Developments within the Sequestration Program will be key to
reducing greenhouse gas emissions. Benefits derived from the
Sequestration Program assume that a sustained investment in
sequestration R&D will continually drive down the cost of sequestration
and create an infrastructure for wide scale deployment of greenhouse
gas mitigation technologies. Technology developments are assumed to
occur with adequate R&D funding such that by the 2012 timeframe, carbon
sequestration technologies will be available that result in less than a
10% increase in cost of energy services for direct capture technologies
and less that $10/ton carbon sequestered for indirect capture
technologies. Current capture and sequestration technology options
result in at least a 30% increase for new plants and a 70% increase for
retrofit plants.
A reduced emissions scenario consistent with the GCCI and the
Administration's National Climate Change Technology Initiative (NCCTI)
calls for slowing of emission growth in the near term and stabilization
of emissions toward mid-century, if warranted by technology
developments. Using results from an FE/NETL analysis, the Sequestration
Program has estimated the contribution that various options will make
toward meeting the future Greenhouse Gas (GHG) emissions reduction
needs. Sequestration technologies have the potential to account for
more than 30 MMTCE (Million Metric Tons of Carbon Equivalents) GHG
reduction in 2012 or about a 30% direct contribution to President's
GCCI goals. GHG emissions stabilization is highly unlikely without
substantial contributions technologies.
Question 15. Energy from biomass seems to be very promising yet the
President's budget reduces funding for biomass and biorefinery systems
R&D by almost $14 million.
Can you explain the Department's rationale for decreasing the
budget request in this area? Similarly, the request reduces the amount
for solar and wind energy research. Again, solar and wind energy
technology hold great promise for the U.S., the Southwest especially,
why is the Department decreasing emphasis on solar and wind energy?
FUNDING SCHEDULE
[Dollars in 000's]
----------------------------------------------------------------------------------------------------------------
FY 2004 FY 2004 comp. FY 2005
Program/activity request approp. request
----------------------------------------------------------------------------------------------------------------
Biomass......................................................... 69,750 86,471 72,596
----------------------------------------------------------------------------------------------------------------
Solar Energy.................................................... 79,693 83,393 80,333
----------------------------------------------------------------------------------------------------------------
Wind Energy..................................................... 41,600 41,310 41,600
----------------------------------------------------------------------------------------------------------------
Answer. First and foremost, our funding request level is guided by
factors such as program performance, alignment with the
Administration's R&D investment criteria (including potential
benefits), resources needed to meet program goals, relative priority,
and other factors. While a useful input, last year's funding level is
not determinative. Nevertheless, the table above provides a good
perspective on funding levels. Funding for the Wind Energy Technology
Program is not decreasing; the FY 2005 request is higher than the FY
2004 appropriation and the same as the Department's FY 2004 request
level.
In the Solar Energy Technology Program, the decrease from the FY
2004 appropriation is due to our request for Concentrating Solar Power
(CSP), a non-photovoltaic technology that ``concentrates'' solar rays
to heat fluid for steam production and power generation. Last year we
requested zero funding for CSP, and this year we are requesting $2
million to maintain facilities and undertake a more thorough
investigation of the proper course for our R&D.
The reduction in the Biomass Program reflects the lack of requested
funding in FY 2005 for congressionally-directed activities that were
included within the FY 2004 appropriation. In fact, when compared to
the unencumbered FY 2004 enacted figure, our FY 2005 request provides a
significant increase for biomass activities. The termination of
Congressional earmarks will not affect our R&D plan or the ability to
achieve our R&D goals.
Question 16. The President's funding request for Industrial
Technologies is decreased by $35 million. The Budget Highlights states
that ``New projects will be selected that are unlikely to be undertaken
without federal support that significantly reduce energy intensity and
that are in alignment with the Administration's R&D investment
criteria.''
Would you please provide the Committee with some examples of the
projects that The Department believes will be funded?
Answer. In FY 2005, the Department will focus on high-impact R&D
Grand Challenges for next generation manufacturing and energy systems
technologies that are in line with the Administration's R&D investment
criteria. These Grand Challenges typically require high-risk investment
for high-return gains to achieve much greater energy efficiencies than
current processes. Grand Challenges examples include:
cokeless ironmaking (steel industry);
an alternative reduction technology to produce aluminum with
less energy and emissions (aluminum industry);
advanced melting technology (glass and metal casting
industry); and
distillation technologies (chemical industry).
Question 17. The President's budget assumes that the Southeastern
Power Administration (``SEPA''), the Southwestern Power Administration
(``SWPA''), and the Western Area Power Administration (``WAPA'') will
complete the phase out of federal power receipt financing of purchase
power and wheeling activities that began in FY 2001.
However, every year since FY 2001, the Appropriations Committee has
adjusted the funding to ensure that the PMAs' purchase power and
wheeling activities are appropriately funded.
Question 17-1. Isn't it true that this funding is budget neutral
from a scoring perspective, which is simply a reflection of the reality
that the amounts appropriated in the budget are returned to the
Treasury in the same year?
Answer. Yes, when looking at the total Federal budget (both
discretionary and mandatory), PMA purchase power and wheeling
activities are budget neutral. This is because the funds appropriated
to the PMAs for purchase power and wheeling will generally be recovered
through power rates and resulting revenues deposited into the U.S.
Treasury in the same year.
Question 17-2. Has anyone within the Administration studied the
impact of completely eliminating purchased power and wheeling funds for
the PMAs and whether such a decision would reduce revenues for the
Treasury?
Answer. I am not aware of any formal study undertaken by the
Administration. However, the General Accounting Office conducted a
study in 1990 to review the level of market activity for purchase power
and wheeling services occurring across the east coast. The findings
indicated the purchase and wheeling products were available in some
locations, they were reliable and satisfactorily marketed. Today, the
PMAs purchase power and energy to meet their contractual obligations to
their customers. Some customers are able to contract for these services
on their own if they choose to, or rely on the PMAs to provide these
services for them. Customers currently reimburse the PMAs for these
services. Eliminating Federal appropriations (costs for purchase power
and wheeling activities) correspondingly reduces receipts to the U.S.
Treasury by the same amount. However, if purchase power and wheeling
activities are funded through the use of receipts, eliminating such
funding would have no impact on Treasury receipts.
Question 17-3. If funding is not provided this year, how will the
PMAs meet their purchase power and wheeling activities--particularly
SEPA which has no transmission capability?
Answer. The PMAs are authorized to market excess power made
available at Corps and Bureau of Reclamation projects not required for
project use. Since their inception, the three PMAs--the Southeastern
Power Administration, Southwestern Power Administration and Western
Area Power Administration--have purchased power to even out (``firm
up'') the PMAs' fluctuating hydropower resource, or to provide power
for Federal pump-storage generating units. The latter is used by some
of the PMAs to pump water at off-peak times which enables them to
generate more power during peak-use times. In addition, the PMAs buy
transmission services (wheeling) from other utilities in order to
integrate the hydro resources to make them more dependable and to move
Federal power and purchased power to PMA customer loads not serviced by
Federally owned transmission lines.
The PMAs have determined to market a certain number of megawatt-
hours of energy each year and guarantee such delivery by contract.
Given variable reservoir and river conditions, the PMAs may need to
purchase power to ``blend'' with the Federally-produced hydropower.
This results in more firm energy that is available to meet contract
commitments than might otherwise be available.
The PMAs have historically financed purchase power and wheeling
services through a combination of appropriations and ``alternative''
financing, such as net billing, bill crediting and customer
reimbursements (advances). PPW expenses are included in the rates the
PMAs charge for their power, and there is no net cost to the Federal
Government.
The termination of Federal funding for PPW by the PMAs will not
harm the PMAs' ability to meet their power delivery contracts with
customers. The PMAs have authority to use alternative financing
mechanisms to make power and transmission purchases. Bill crediting and
cash advances, although not standard electric industry financing
methods, provide a backup funding source for the PMAs to continue PPW
activities. In addition, the PMAs each have access to ``Continuing
Funds'' in the U.S. Treasury to purchase power under certain
conditions. The PMAs would, if necessary, use these other authorities
to meet their contractual commitments for power delivery.
Question 17-4. Without sufficient funding for purchase power and
wheeling activities, will the power rates of the PMAs' customers
significantly increase?
Answer. If the PMA customers agree to use alternative financing
methods, and if sufficient net billing, bill crediting and reimbursable
authority is provided to the PMAs to support their purchase power and
wheeling programs to meet their contractual requirements, there would
be no impact on PMA or customer power rates.
The PMAs are authorized to market power made available at Corps and
Bureau of Reclamation projects not required for project use. The PMAs
have determined to market a certain number of megawatt-hours of energy
each year and guarantee such delivery by contract. Given variable
reservoir and river conditions, the PMAs may need to purchase power to
meet their contractual commitments to customers. If sufficient funding
for purchase power and wheeling was not available, the PMAs would rely
on the alternative funding mechanisms noted above and customer lines
credit or advances to purchase power to address variable reservoir and
river conditions, to produce a more reliable product and to assure the
repayment of the Federal investment.
Smaller customers of the PMAs may need to increase their power
rates due to higher transaction costs incurred to obtain the same level
and quality of service currently received from their PMA, but this may
be partially offset by a reduction in PMA rates reflecting a decrease
in purchase power costs incurred by the PMAs. For example, a small
municipal electric department might need to add staff and incur other
transaction costs to make purchase power and wheeling arrangements
previously performed by the PMA. Other added costs may be incurred with
the unbundling of ancillary service charges. If small customers are
able to form associations (such as joint action agencies) to take over
the PMAs' function, they could potentially continue to benefit from
economies of scale, with little or no impact on their rates. It is also
possible PMA customers will begin buying power for themselves and
therefore will not need to rely on the PMAs for that service.
Question 17-5. The President's budget proposal notes that PMAs may
use alternative financing mechanisms, such as net billing, bill
crediting, and reimbursable authority to assist customers. Please
explain these alternatives and whether or not such alternatives would
provide a sufficient safeguard for PMA customers.
Answer. In addition to customers entering the market to buy power
on their own, the PMAs make use of several methods of alternative non-
appropriated financing in order to fund purchase power and wheeling
program requirements necessary to meet the terms of their existing
long-term power marketing contracts. These methods include non-Federal
customer advances, Federal reimbursable financing, net billing, and
bill crediting.
Non-Federal customer advances provide cash to the PMA for financing
purchase power and wheeling requirements. Western's authority is
derived from the Interior Department Appropriations Act of 1928, and
Southwestern's authority is derived from the Energy and Water
Development Appropriations Act, 2004. Southeastern does not have
permanent authority to use customer advances for its programs; however,
the FY 2005 budget includes language authorizing the use of $32.7
million in customer advances for purchase power and wheeling
expenditures. This provides for meeting individualized needs of
specific customers; however, it does not necessarily provide for the
most efficient aggregation of customer resources needed to ensure
overall low-cost operations. Further, receiving advance funding from
some customers is not a standard business practice and may be a heavy
burden for some customers.
Federal reimbursable authority, provided in the Economy Act, allows
the PMAs to perform firming and transmission services for other Federal
agencies using the other agencies' appropriations or funding sources.
Net billing is a funding mechanism that can be used when a customer
both buys and sells power to a PMA in the same billing period. In
instances when the PMA owes the customer less than the customer owes
the PMA, the PMA issues a bill to the customer that nets the two
amounts against each other. In effect, the customer's funds are used to
pay for the amount the PMA owes the customer. The use of this funding
mechanism is constrained by receipts available within the particular
billing period and the ability of customers to provide the needed
resource. The use of this method does not provide for high level
aggregation of requirements.
Bill crediting is a funding mechanism where one or more PMA
customers sends its payment to a PMA supplier who has agreed to credit
the PMA for the payment as if the funds had come directly from the PMA.
The PMA credits the customer's bill as if the payment had been made
directly to the PMA. This non-standard business method is constrained
by revenues available within the particular billing period. It also
requires the participation of suppliers who must perform special
handling to ensure payments are recorded properly. This approach has
not been favored by PMA customers and suppliers. In today's ever
changing electrical utility industry, which exposes such purchases to
modifications, such as transmission curtailments, differences between
what the PMA needs (which can change on a moment's notice due to daily
changes in the availability of Federal hydroelectric resources to
accommodate competing uses) and what the customer purchases can cause
conflict and potential litigation between the customer and the PMA.
It is the Administration's intent to encourage the three PMAs'
customers to shop for their own power and transmission services.
Industry restructuring and resulting competition now make it attractive
for many PMA customers to enter the marketplace. For customers that are
unable or unwilling to conduct these activities on their own, the
alternative financing mechanisms previously discussed, subject to
adequate apportionment, provide safeguards to ensure continued power
delivery.
Question 18. The President's budget again proposes to directly fund
the Army Corps of Engineers' hydropower operations and maintenance
activities using federal power receipts for SEPA, SWPA, and WAPA.
Last year, the Energy and Water [Development] Appropriations
Subcommittee attempted to carry this proposal. However, the
Subcommittee was prevented from enacting the proposal because the CBO
score for such [a] change--about $1.3 billion--was cost prohibitive. We
tried again on the Energy bill but the scoring problems persisted.
Question 18-1. If the Administration wants to provide funding for
the Corps by allowing the use of PMA receipts, isn't the Administration
sending mixed signals to Congress by simultaneously eliminating
purchased power and wheeling funds for the PMAs?
Answer. The operation and maintenance of Army Corps of Engineer
hydro power plants is clearly a Federal function, and should be funded
in a timely manner that minimizes unscheduled ``downtime'' and results
in greater power production and reliability. We believe the best way to
ensure steady funding for this activity is by using receipts from the
sale of power to directly fund the power plants' O&M. A similar
arrangement has worked well for Corps plants whose power is marketed by
the Bonneville Power Administration.
In contrast, given variable reservoir and river conditions, the
PMAs purchase power to ``blend'' with the Federally-produced
hydropower. This results in more firm energy that is available to meet
contract commitments than might otherwise be available. The purchase
power and wheeling activities of the PMAs are a standard function of an
electric utility with hydro generation. The PMAs purchase power to
``firm up'' Federal hydropower and market a certain number of hours of
peaking energy each year and guarantee such delivery by contract. In
this era of emerging competition in the electric power industry, it is
the Administration's belief that it is possible for the customers of
the three PMAs to arrange for their own power purchases and wheeling
arrangements without using Federal funds.
Question 18-2. Is CBO scoring this proposal accurately?
Answer. We have not seen a formal report from CBO on the scoring of
this proposal. Since the Office of Management and Budget, working with
CBO, has reclassified the receipts associated with Corps hydropower O&M
from mandatory to discretionary, we believe that enactment of this
proposal will be neutral from a budget scoring perspective.
Question 18-3. What steps will the Administration take to ensure
that the power customers can provide some input and that the Corps will
not reprogram the funds provided under this proposed change in law?
Answer. The customers, Corps and PMAs have formed stakeholder
groups to develop a memorandum of agreement (MOA) that clearly defines
the operation and maintenance activities to be completed under direct
funding authority. The MOA will establish a framework to govern the
respective responsibilities of the parties regarding funding
maintenance, rehabilitation, or modernization activities on a system-
by-system basis.
Question 19. The Renewable Energy Production Incentive (REPI) was
created in the Energy Policy Act of 1992 to help communities served by
municipal electric utilities and rural electric cooperatives (combined
representing 25 percent of the industry) invest in renewable energy
projects.
The Administration's budget includes recommendations to extend and
expand the availability of tax incentives for wind, biomass and
landfill gas facilities. REPI represents the recognition that these
not-for-profit electric utilities cannot utilize such tax credits for
renewable energy that are made available to private utilities and
developers.
If the goal is to increase the use of renewable energy in this
country, then not-for-profit electric utilities need the same type of
federal incentives that Congress typically provides to for-profit
utilities. What is the current backlog of projects awaiting funding
through the Renewable Energy Production Incentive (REPI) program?
Answer. The backlog of unpaid awards from the Renewable Energy
Production Incentive program is $55.7 million. A two-tier system was
established to allocate available funds in years when the demand for
payments exceeded funding. To date, REPI incentive payments for Tier 1-
based technologies have been fully paid. These are technologies that
have comparable tax credits, such as wind and solar. The backlog in
payments consists solely of Tier 2-based technologies (open loop
biomass, landfill gas) that would not qualify for a tax credit if
privately owned.
NONPROLIFERATION AND NATIONAL SECURITY INSTITUTE (NNSI)
The Budget request for the NNSI located in Albuquerque was reduced
from $12 million to $8 million--a 32 percent cut. Recently, nearly 40
individuals who worked at this security training facility were laid off
and there was only a small decrease in funding from FY 03 to FY 04.
The budget justification states that this facility ``is a DOE
leader in the development of standardized state-of-the-art security
training.'' The facility also provides training assistance to the
Department of Homeland Security and the Department of State for our
embassies.
This facility is an important element in protecting nuclear
material as well as U.S. personnel around the world.
Question 20. What will be the impact of this budget reduction on
staffing as a result of this 32 percent cut and can you ensure that
this budget will provide sufficient funding to maintain the current
level of security and training?
Answer. We expect no additional impact to staffing over and above
the recent layoff of contractor employees, which was the result of a
contractor management decision to resolve overspending issues. In FY
2005, we will restructure the Department's security training program to
provide needed capacity for essential security courses. We will
continue to conduct basic security police officer training courses at
NNSI on a demand basis, as sites also adapt and transfer portions of
training to meet their site-unique requirements on premises. In FY
2005, the NNSI will curtail its distance learning program using
traditional learning methods in lieu of live interactive broadcasts. We
will consolidate other courses in safeguards, information management
systems, materials accountability, and security management for greater
efficiency. An overall strategy will be introduced at NNSI whereby core
capabilities are maintained as more courses are offered to Department
offices on a reimbursable basis.
Question 21. The budget proposes the creation of a new office to
[b]e called the Office of Future Liabilities and have the
responsibility to manage cleanup not assigned to the Office of
Environmental Management. I am not clear as to why we are creating
another office charged with cleaning up DOE sites. It is my
understanding that [the] cleanup cost for the new office could amount
to $15 to $20 billion, which of course will require a substantial staff
and budget to manage these efforts.
Why is the Department asking Congress to create and fund another
office within the Department to address DOE cleanup? What is the
estimated lifespan of this new office and what do you believe will be
the total estimated cost to address the cleanup needs assigned to this
new office?
Answer. The main focus of the Office of Environmental Management
(EM) is the legacy cleanup at DOE sites where the primary mission has
been completed and the site is being closed. With the support of
Congress, the Department has successfully implemented an accelerated
cleanup strategy at these sites. The accelerated cleanup strategy is
delivering near-term and measurable results to accelerate cleanup,
reduce risk, and complete cleanup at EM sites.
However, there are long-term cleanup activities that will be
required at Department sites with continuing missions in science,
energy, and defense that EM is not now undertaking, and long-term waste
treatment and disposal activities at these sites once the EM mission is
complete. There are unknown future liabilities that need to be
identified.
To effectively address these long-term cleanup requirements, the
Department has proposed a new Office of Future Liabilities (FL). FL
will work with the line DOE science, energy, and defense organizations
to develop an approach to aggregate requirements, develop integrated
plans and budgets, and manage programs. FL is proposed as a small
organization with $8 million and 4 Full Time Equivalent (FTE) staff to
develop the baseline for cleanup and waste management activities not
currently part of the EM inventory. A rough-order-of-magnitude estimate
for science, energy, and defense environmental liabilities at sites
with continuing missions is $35 billion: $3 billion during the current
budget planning period from FY 2005 to FY 2009; $8 billion during the
period from FY 2010 to FY 2025, and $35 billion beyond FY 2025. The
estimate of includes environmental activities not yet assigned to a DOE
organization for action. FL will work to define the baseline for these
activities and the options for organizational assignment, including the
possible expansion of FL's mission to do these activities.
Responses to Questions From Senator Craig
Question 22. In fiscal year 2004, Congress provided DOE with $15
million in nuclear energy funding to initiate a procurement for two
competing reactor designs--one of which would ultimately be
demonstrated in Idaho for the cogeneration of electricity and hydrogen.
What is the status of DOE's initiation of this procurement in the
current fiscal year?
Answer. In FY 2004, the Department's Generation IV Nuclear Energy
Systems Initiative continues to emphasize research and development on
the Next Generation Nuclear Plant and continues collaborative research
on the Lead-Cooled Fast Reactor, the Gas-Cooled Fast Reactor, and the
Supercritical Water-Cooled Reactor. These systems were chosen as the
best match for the future needs of the United States. Beginning in FY
2005, the Department puts special emphasis on the NGNP, working towards
the potential early deployment of the NGNP as a demonstration of a
promising Generation IV reactor technology. The Department has not at
this time made a decision to proceed with such a demonstration plant.
The budget request for FY 2005 for the NGNP is $19.3 million.
Approximately $5 million of the $19.3 million request for FY 2005 is
slated for NGNP design activities to define future research and
development requirements, with the balance being applied to critical
fuel and materials research.
Question. Why has DOE requested no funds to continue this reactor
design and development in FY 2005?
Answer. DOE's FY 2005 budget request includes $19.3 million for
research and development activities related to the Next Generation
Nuclear Plant within the budget for the Generation IV Nuclear Energy
Systems Initiative. Of this $19.3 million, approximately $5 million
will be spent on design to define future research and development
requirements with the balance spent on critical fuel and materials
research and development.
Question. Is it the position of DOE that because DOE has requested
no funds for the reactor in FY 2005, that DOE may divert the $15
million it has this fiscal year for other purposes within the Office of
Nuclear Energy?
Answer. DOE's FY 2005 budget request includes $19.3 million for the
Next Generation Nuclear Plant within the budget for the Generation IV
Nuclear Energy Systems Initiative. In FY 2004, the Generation IV
Nuclear Energy Systems Initiative continues to emphasize research and
development on the Next Generation Nuclear Plant and continues
collaborative research on the Lead-Cooled Fast Reactor, the Gas-Cooled
Fast Reactor, and the Supercritical Water-Cooled Reactor. No NGNP
funding is being diverted to any other program. DOE is committed to the
Next Generation Nuclear Plant project; it is the highest priority
nuclear energy R&D project in the Office of Nuclear Energy.
Question. Please provide a detailed breakdown of the planned uses
of the $15 million in FY 2004 and a schedule for INEEL to initiate the
procurement.
Answer. In FY 2004 NGNP funding has been allocated as follows:
NGNP Fuel Development $6.1 million
NGNP Reactor and Plant Design $7.6 million
NGNP Materials and Turbine Development $0.7 million
SBIR and Budget Rescission $0.6 million
YUCCA MOUNTAIN PROJECT
Question 23. In the fiscal year 2005 budget, DOE proposes that the
Office of Civilian Radioactive Waste Management will assume
responsibility for the transportation of research reactor spent nuclear
fuel as well as the management and operation of two DOE-owned spent
nuclear fuel storage installations--one of which is at the Idaho
National Engineering and Environmental Laboratory. These
responsibilities are being transferred from the Environmental
Management program.
QUESTIONS:
1) Does DOE plan to continue, in future fiscal years, to shift more
spent nuclear fuel and high level waste storage functions from
Environmental Management to Civilian Radioactive Waste Management?
Answer. Over the next several fiscal years, the Office, of
Environmental Management plans to realign functions that do not support
its legacy waste cleanup mission to other Offices within the
Department. Those functions that involve the management of non-legacy
spent fuel and high-level waste, and possibly some other functions, may
be realigned to the Office of Civilian Radioactive Waste Management.
This realignment is consistent with final disposition of spent nuclear
fuel and high-level radioactive waste in a geologic repository at Yucca
Mountain. At this time, no decisions have been made regarding
additional out-year realignments of spent nuclear fuel and high-level
waste storage functions.
1) Where in the Nuclear Waste Policy Act does DOE find
authorization for the Office of Civilian Radioactive Waste Management
to be in the business of managing DOE spent fuel on DOE sites?
Answer. The Nuclear Waste Policy Act (NWPA) established the Office
of Civilian Radioactive Waste Management (OCRWM) and assigned certain
functions to OCRWM. Consistent with the DOE Organization Act, the
Secretary may assign other functions to the Director of OCRWM in
addition to those authorized by the NWPAnswer. The Atomic Energy Act is
the source of the Department's authority to manage spent fuel at DOE
sites.
In order to implement the proposed realignments, OCRWM has proposed
funding through two separate budgetary accounts--Other Defense
Activities and Energy Supply R&D. A separate organizational structure
will be established to manage the realigned activities. This will
ensure that OCRWM's primary objective--development of a geologic
repository at Yucca Mountain and a transportation system to ship spent
fuel and high level waste--will be separate from the realigned
activities. The funding for these new activities will not use monies
from the Nuclear Waste Fund or Defense Nuclear Waste Disposal
appropriations.
1) Is the funding transferred from EM to RW in fiscal year 2005
fully adequate for the spent fuel storage responsibility being
transferred?
Answer. The FY 2005 funding requested for all realigned activities
is based on funding requests in prior years for the same activities
from the Office of Environmental Management. The table below provides a
breakout of Fiscal Year 2005 funding proposed for spent nuclear fuel
storage facility responsibilities being realigned.
1) How does the amount requested for these spent fuel storage
activities in FY 2005 compare to the funding provided for the same
activities in both fiscal years 2004 and 2003?
Answer. The FY 2005 funding request is based on similar requests in
prior years for the same activities. The table below provides a
breakout of Fiscal Year 2003 and 2004 funding for spent nuclear fuel
storage facility responsibilities requested by the Office of
Environmental Management.
TABLE OF FUNDING REQUESTS BY FISCAL YEAR FOR CERTAIN STORAGE FACILITIES
------------------------------------------------------------------------
FY 2003 FY 2004 FY 2005
Storage Facility (millions) (millions) (millions)
------------------------------------------------------------------------
Ft. St. Vrain and Three Mile Island 4.762 4.861 5.023
Independent Spent Fuel
StorageInstallations...............
------------------------------------------------------------------------
Idaho Nuclear Technology and 7.637 7.797 8.055
Engineering Center-666.............
------------------------------------------------------------------------
DISTRACTION FROM EM MISSION
Question 24(2). How is the management, handling and storage of
spent nuclear fuel on DOE Sites a distraction from the EM mission?
Answer. The Office of Environmental Management (EM) is focused on
accelerated risk reduction and cleanup at each of the EM sites.
Currently, EM's mission includes activities related to the safe,
interim storage of spent nuclear fuel at three major facilities--
Hanford, Idaho and Savannah River--pending the availability of
permanent disposal at a geologic repository. EM's risk reduction
mission includes the retrieval and packaging of spent nuclear fuel
located in degrading K-Basin wet storage pools at Hanford. It also
includes the consolidation of certain spent fuel inventories at
Hanford, Idaho and Savannah River to support the accelerated cleanup of
those facilities and sites.
However, the continued maintenance of spent fuel and storage
facilities where the inventory is in a safe condition, awaiting the
availability of the repository, is not consistent with the EM's core
mission of accelerated risk reduction and cleanup. These activities are
being strategically transferred in response to the Top-To-Bottom
Review, which found that EM was suffering from a lack of focus. These
responsibilities are better suited with the Civilian Radioactive Waste
Management program (RW), the office responsible for the licensing,
design and construction of the repository. As such, RW will ultimately
be responsible for the final management of all spent nuclear fuel
within the Department.
FY 2005 AS PEAK FUNDING YEAR
Question 24(3). Given that DOE has not yet begun processing high-
level waste at either Idaho or Hanford into its final form for
disposal--nor constructed the processing plants to do so, how can FY
2005 be the peak funding year?
Answer. For the past several years, the Administration has
requested and received significantly more funding for the EM program to
accelerate cleanup and reduce risk. The strategy is to invest these
additional resources to accelerate cleanup and complete work sooner,
resulting in cost savings in the longer term. This strategy is working;
work is being accelerated. Cleanup projects are being completed years
ahead of what was once thought possible. As a result, the cleanup
program has been accelerated by 35 years and life-cycle cleanup costs
reduced by at least $50 billion. Because of this acceleration and
reduction in life-cycle costs, we now expect that FY 2005 will be the
``peak'' year of EM funding and that future funding requests will begin
to decrease. Our audited life-cycle projection, based on our
accelerated cleanup strategies, indicates that the remaining EM scope
can be accomplished at annual funding levels that are lower than FY
2005.
IDAHO DETAILED WORK SCOPE
In response to its loss in court in Idaho over the issue of high-
level waste classification, DOE has proposed a budget that sequesters
funding for high-level waste in Idaho, Hanford and Savannah River,
pending Congressional clarification of tank closure requirements in
statute.
Question 24(4). In the case of Idaho, the funding sequestered is
approximately $94 million. Please provide the detailed work scope
breakdown for this $94 million, including a justification of why each
piece of individual work scope is being held up by any legal ambiguity.
Answer. The Idaho work scope being held up by legal ambiguity
includes activities associated with stabilizing waste residues
remaining in tanks after as much waste as possible has been removed
(approximately $2 million) and design, procurement, and supporting
project work on the Sodium-Bearing Waste Treatment Facility and
associated operating funds (approximately $92 million). DOE will
continue to empty the Idaho tanks, through retrieval and cleaning, and
consolidate removed wastes into the minimum number of tanks. Any work
on stabilizing any remaining residues into a solid form is deferred.
DOE's long-standing plans for the disposition of Idaho's sodium-bearing
tank wastes were to treat them for disposal as transuranic waste at the
Waste Isolation Pilot Plant (WIPP) in New Mexico. However, the July
2003 Idaho District Court decision over the issue of high-level waste
classification voided DOE's criteria for legally determining that the
sodium-bearing wastes should properly be managed as non-high-level
waste. Thus, development of the new Sodium-Bearing Waste Treatment
Facility to prepare the tank waste for disposal as transuranic waste
does not now seem a prudent use of taxpayer dollars, given the legal
uncertainty that DOE can actually dispose of the tank waste at WIPP.
Question 24(5). Is it the position of DOE that it can dictate the
timing of Congressional action on this matter, and if Congress should
fail to act within that time frame, that DOE can neglect its
responsibility to isolate this high-level waste from the environment?
Answer. No. The U.S. Department of Energy (DOE) takes very
seriously its responsibility to safely disposition wastes stored in
underground tanks in Idaho, Hanford and Savannah River. However, DOE
must comply with court orders resulting from litigation. Accordingly,
it is DOE's position that we cannot proceed with implementing plans to
treat tank wastes if the legal basis for those plans is in question.
Absent legislative modification to the definition of high-level waste,
DOE is continuing to clarify the matter through the appeals process.
This approach could take years and make it difficult for DOE to commit
with confidence to any long-term strategy to managing and disposing of
the tank waste. The Department must pursue a conservative approach that
assumes that the lower court decision is upheld. This scenario further
assumes the ruling is given nation-wide application and stands for the
proposition that virtually all waste from reprocessing must be sent to
Yucca Mountain, Nevada, regardless of risk. In the Department's view,
this will result in substantial delay and additional expense in
removing and disposing of this waste--delay and expense not driven by
public health and safety considerations. In fact, such delay could
create the potential for serious health and safety risks to workers and
members of the public by leaving the waste in tanks longer and risking
leaks to groundwater.
In any event, the Department will take all appropriate means to
mitigate the risk potential until the issue is resolved.
PRICE-ANDERSON ACT
Question 25. Please provide DOE's views on the impact of the
failure to renew Price-Anderson Act indemnification--since the
commercial provisions of that authority have already expired and the
authority for DOE contractors will expire at the end of this year.
Won't the lack of Price-Anderson authority negatively impact the
numerous DOE site contract re-competitions planned for the next several
years?
Answer. In 2002, the authority for NRC to extend Price-Anderson
protection to new commercial nuclear powerplants and for DOE to extend
such protection to new DOE contractors expired. Congress included
interim authority in the 2003 Defense Authorization Act. This authority
expired for commercial nuclear powerplants at the end of 2003 and will
expire for DOE contractors at the end of this year.
Without Price-Anderson protection, no new commercial nuclear
powerplants will be initiated. Likewise, without the authority to
include Price-Anderson indemnification in its contracts, competition
for DOE's largest and most important contracts will be detrimentally
affected. In order to assure any competition, DOE will have to use
other mechanisms (such as Public Law 85-804) to indemnify its
contractors or risk discontinuance of important missions.
These other mechanisms may not be available for all contracts and
are less effective than Price-Anderson. Price-Anderson is the only
source of indemnification that Congress designed specifically to assure
prompt compensation to those who may be damaged by a nuclear incident
without unnecessarily cumbersome litigation. The absence of Price-
Anderson indemnification in a contract also denies DOE the ability to
exact civil or criminal penalties for a contractor's failure to comply
with DOE's nuclear safety regulations.
Responses to Questions From Senator Alexander
LEADERSHIP CLASS COMPUTATIONAL FACILITY
Question 26. The Congress appropriated an additional $30 million in
funding above the President's request to the Department of Energy's
Office of Science in FY 2004 to start the development of a leadership
class computational facility based on recommendations by the High-End
Computing Revitalization Task Force. I would prefer that we put at
least $25 million of these funds toward developing a leadership class
computational facility. I would like an explanation of the plans that
the Department has for these funds and also an explanation of the
Department's plans for the funds requested in the President's budget
for high performance computing.
Answer. The Department is acting to pursue a leadership class
computing system for the computational science community, and we
believe that our current plans for spending these additional
appropriated funds comports well with the guidance provided by the
Congress in the FY 2004 Conference Report. We have allocated $5 million
of the $30 million you reference to the National Energy Research
Scientific Computing Center (NERSC) in order to provide additional
near-term resources for today's scientific computing users. In a
complementary move, we issued a call for proposals to the Office of
Science laboratories on February 23, 2004 to begin development and
deployment of a Leadership Class computer for open science. We expect
responses to this call by April 1, 2004, with an award of the remaining
$25 million around April 15, 2004.
In FY 2005, we expect to continue both our enhanced investment at
NERSC and our investments in a Leadership Class Computer for the
Nation. These investments will be complemented by critical investments
in high-end computing research including relevant software and applied
mathematics areas. All of these investment decisions will be made
within the context of the work of the High-End Computing Revitalization
Task Force.
Background
Office of Science Notice to SC Laboratories
Leadership-Class Computing Capability for Science
SUMMARY: The Office of Advanced Scientific Computing Research
(ASCR) of the Office of Science (SC), U.S. Department of Energy (DOE),
hereby announces its interest in receiving applications for leadership-
class scientific computing capability in support of both the ASCR and
the broader SC research programs; as well as other capability-limited
federally-funded computational science activities. Prospective
applicants should observe that:
1) The focus of the proposed effort should be on capability
computing in support of high-end science--rather than on enhanced
computing capacity for general science users;
2) Proposed activities should be designed to support computational
science applications research areas relevant to the mission of the
Office of Science, as well as those of other federal agencies;
3) The proposed activities should include a plan for an active
dialogue with industry, universities, and other laboratories and
centers in order to maximize the dissemination of information, promote
and support technology commercialization, and avoid unnecessary
duplication of effort;
4) Multiple year funding is anticipated, but not guaranteed.
Applicants may request periods of performance ranging up to five years;
5) Only Office of Science Laboratories are eligible to respond to
this solicitation.
6) The proposed effort must be a user facility providing leadership
class computing capability to scientists and engineers nationwide
independent of their institutional affiliation or source of funding.
More specific information on this solicitation is outlined in the
Supplementary Information section below.
DATES: The deadline for receipt of formal applications is 4:30
P.M., E.S.T. Friday, 2 April 2004, in order to be accepted for merit
review and to permit timely consideration for award in Fiscal Year
2004. Decisions are expected on or about 15 April 2004.
ADDRESSES: All applications, referencing this notice, should be
sent by e-mail to Ms. Jane Hiegel at: [email protected] with
a copy to Dr. Gary Johnson at: [email protected]. Responses
to this solicitation should be in either Microsoft Word or Adobe
Acrobat (.pdf) format.
SUPPLEMENTARY INFORMATION: DOE's Office of Science, in order to
accomplish its mission, is faced with the need for computing capability
that far exceeds what is currently available from commercial sources.
The Office of Science's needs are documented at the Ultrascale
Simulation for Science web site: http://www.ultrasim.info/index.html,
and in the report from the Science Case for Large-scale Simulation
(ScaLeS) workshop: http://www.dev.pnl.gov/scales/.
In March of 2003, the High End Computing Revitalization Task Force
(HECRTF) was formed to address this problem at the inter-agency level
and additional information may be found at its web site: http://
www.itrd.gov/hecrtf-outreach/index.html.
This solicitation is part of ASCR's response to the need for
leadership-class computing for capability-limited science applications.
ASCR announces its interest in receiving applications to provide
leadership-class scientific computing capability for scientific areas
that support the missions of the Office of Science and those of other
federal agencies.
Proposals should include a plan for playing an active role in
maintaining a dialogue with industry, universities, and other
laboratories and centers in order to maximize the dissemination of
information, promote and support technology commercialization, and
avoid unnecessary duplication of effort.
Proposals must include information on the specific computer
architecture or architectures to be provided over the life of the
project as well as a list of the target scientific application areas
and data that supports the ability of the proposed architectures to
provide computing capability that enables science that could not be
accomplished elsewhere in this time frame.
The funding appropriated for this solicitation covers only a single
year--FY2004. However it is anticipated--but not guaranteed--that, at a
minimum, level funding will be available to support activities in the
years beyond FY2004. The proposed period of performance may be as much
as five years.
Collaboration
Applicants are encouraged to collaborate with researchers in other
institutions and to include cost sharing wherever feasible.
Program Funding
It is anticipated that up to $25 million will be available in
Fiscal Year 2004. It is anticipated that one (1) award will be made.
Multiple-year funding is not guaranteed. Applicants may request periods
of performance ranging up to five years.
Merit Review
Applications will be subjected to scientific merit review (peer
review) and will be evaluated against the following evaluation
criteria, which are listed in descending order of importance codified
at 10 CFR 605.10(d):
1) Scientific and/or Technical Merit of the Project;
2) Appropriateness of the Proposed Method or Approach;
3) Competency of Applicant's Personnel and Adequacy of
Proposed Resources;
4) Reasonableness and Appropriateness of the Proposed Budget.
The evaluation under item 1, Scientific and/or Technical Merit of
the Project, will also consider the following elements:
a) The relevance of the proposed target high-end
computational science application areas to the missions of the
Office of Science and those of other federal agencies.
b) The focus of the proposed effort on leadership-class
capability computing in support of high-end science--rather
than on enhanced computing capacity for general science users.
c) The potential of the proposed project to make a
significant impact on the targeted high-end science
applications areas.
The evaluation under item 2, Appropriateness of the Proposed Method
or Approach, will also consider the following elements:
a) The quality of the plan for making the proposed
leadership-class computer available as a user facility to
scientists in the targeted application communities including:
a. Supporting services such as archives and
visualization;
b. Supporting remote access to the computer and the
data it generates;
c. Planning for outreach to the targeted application
user communities;
d. Managing user access and user support; and
e. Responding to special requirements from targeted
application communities.
b) The extent to which the project incorporates broad
community (industry/academia/other federal programs)
interaction and outreach.
c) Quality and clarity of proposed work schedule and
deliverables.
The evaluation under item 3, Competency of Applicant's Personnel
and Adequacy of Proposed Resources, will also consider the following
elements:
a) The availability of appropriate physical facilities,
computer network connectivity and system management and
operation staff to support operation of a leadership class
computer;
b) Quality of the physical environment for both research
activities and computer and networking operations;
c) Quality of the physical and cyber security plans for the
project.
The evaluation will include program policy factors, such as the
relevance of the proposed research to the terms of the announcement and
the agency's programmatic needs. Note: External peer reviewers are
selected with regard to both their scientific expertise and the absence
of conflict-of-interest issues. Non-federal reviewers will often be
used, and submission of an application constitutes agreement that this
is acceptable to the investigator(s) and the submitting institution.
Submission Information
The Project Description must be 20 pages or less, exclusive of
attachments. It must contain an abstract or project summary on a
separate page with the name of the applicant, mailing address, phone,
FAX and e-mail listed. The application must include letters of intent
from collaborators (briefly describing the intended contribution of
each to the research), and short curriculum vitaes for the applicant
and any co-PIs. Applicants must disclose all information on their
current and pending support.
To provide a consistent format for the submission and review
responses to this notice, the preparation and submission of the budget
portion of responses to this notice must follow the format guidelines
given in the Application Guide for the Office of Science Financial
Assistance Program, 10 CFR Part 605. Access to SC's Financial
Assistance Application Guide is possible via the World Wide Web at:
http://www.science.doe.gov/production/grants/grants.html. The necessary
budget forms are available at: http://www.science.doe.gov/production/
grants/Forms-E.html.
DOE is under no obligation to pay for any costs associated with the
preparation or submission of applications if an award is not made.
OFFICE OF SCIENCE 20-YEAR FACILITY PLAN
Question 27. I am also very concerned with the lack of funding for
the Department's 20-year facility plan for the Office of Science. The
Department took the first step toward putting our nation back in the
leadership in science and technology by developing this comprehensive
plan. Our investments in science are investments in jobs. I would like
to know how the Department plans to make these facilities a reality
with essentially a flat budget. I specifically would like to know what
time line the Department envisions for making the top five priority
facilities a reality.
Answer. The 20-year facility plan, which is not a budget document,
reflects our vision of the future of the Office of Science.
Affordability of these facilities will depend upon many factors in the
future, and the list of facilities may change as science priorities
evolve and mature. In the FY 2005 request, funding is provided for the
top 5 facility priorities in the plan as follows: ITER $7,000,000;
Ultrascale Scientific Computing capability $38,212,000; Joint Dark
Energy mission $7,580,000; Linac Coherent Light Source $54,075,000; and
Protein Production and Tags $5,000,000. If the multilateral
negotiations are successful, ITER construction is expected to begin in
FY 2006. The Ultrascale Scientific Computing Capability is not a
traditional facility, and some research and development was already
started in FY 2003. Construction start decisions for the Linac Coherent
Light Source and the Protein Production and Tags facility will be
considered as a part of the normal process for preparing the
President's future budget requests. We consider the above facilities to
be near-term priorities for the next decade.
SUPPORT AND MAINTENANCE AT THE TEN SCIENCE LABORATORIES
Question 28. I am concerned with the Department's budget request
for science laboratories infrastructure with in the DOE Office of
Science budget. Although I realize that last year's budget request had
some one-time expenditures which resulted in a budget request of $54
million, I am still concerned that the Department is not investing
enough in infrastructure that is needed to support the new and existing
user facilities. I would like the Department to elaborate on the
adequacy of the $29 million request for infrastructure to support the
ten science laboratories. I would also like the Department to provide
an explanation of their plan to address deferred maintenance at the ten
science laboratories.
Answer. The request is sufficient for the current Office of Science
(SC) Laboratories Infrastructure (SLI) projects underway. SC's
infrastructure revitalization needs are real and significant and will
be addressed in FY 05 by re-balancing existing budgets to increase
General Plant Project (GPP) funding, increasing maintenance
investments, and, in some select cases, using alternative funding
approaches that comport with the budget scoring guidelines of the
Office of Management and Budget and the Congressional Budget Office.
The overall reduction of $25,190,000 in the SLI program is driven
by two components: a $9,941,000 reduction in the SLI Health and Safety
Improvement (HSI) subprogram and a $15,368,000 reduction in the SLI
construction subprogram.
With regard to the HSI subprogram reduction. Congress appropriated
$9.941,000 in FY 2004 to address the OSHA and NRC identified health and
safety deficiencies and recommendations for improved health and safety
practices at SC laboratories. This $9,941,000 is sufficient to address
the most significant health and safety issues at the laboratories so
additional funds are not requested in FY 2005. SC will continue to
study this issue in order to determine if health and safety issues
remain after these funds are expended.
With regard to the SLI construction subprogram reduction, the
$15,368,000 reduction was a hard decision, resulting from our
prioritization of SC research requirements within our budget.
The FY 2005 budget was based on our plan to re-direct the FY 2003
and FY 2004 funds From the canceled Pacific Northwest National
Laboratory (PNNL) ``Laboratory Systems Upgrade'' project to other on-
going SLI projects. In particular, we had planned to redirect these
funds to the ``CEBAF Addition'' at Thomas Jefferson National
Accelerator Facility (TJNAF) and the Brookhaven National Laboratory
``Research Support Building'' to accelerate their completion. This plan
was rejected by appropriations committee staff. We therefore plan to
consider options to use this funding for the development of a project
or projects that will accommodate the scientific work funded by the
Office of Science at PNNL.
While the SLI construction subprogram funding has decreased, GPP
funding across Office of Science programs has increased $8,215,000.
This shift reflects the numerous smaller construction needs (i.e.,
those less than $5,000,000) that are of high importance but need not be
addressed with line item funding.
In addition, SC has set a goal for maintenance funding of 1.4% of
replacement plant value (RPV) for conventional facilities in FY 2004
and, 2.0% of RPV for FY 2005. The change in total maintenance funding
from FY 2004 to FY 2005 will result in an additional $35,000,000 to
sustain facilities if we meet this 2.0% goal. Maintenance at SC
laboratories is funded from laboratory overhead which represents a cost
to all programs sponsoring work at the laboratory.
SC sites are developing a number of alternatively financed projects
including housing, office buildings, and utility system replacements.
These proposals are not yet fully developed, nor are their selection
and internal Administration review processes fully developed.
We have made substantial progress on the backlog of deferred
maintenance, reducing it from $649,000,000 at the end of FY 2001 to
$491,000,000 at the end of FY 2003. This downward trend is significant
and we expect to continue it.
SC funding for capital renewal and excess facilities disposition
also helps reduce the deferred maintenance backlog. For example, in
rehabilitating a building or utility, replacing a building or
demolishing a structure, numerous deferred maintenance items are also
eliminated, which helps reduce the deferred maintenance. Such funding
will continue in FY 2005 though at a somewhat reduced level.
department's plans in helping the oak ridge community achieve financial
SELF SUFFICIENCY
Question 29. I have a strong interest in the relationship between
the Department of Energy and the Oak Ridge community in my state. Oak
Ridge is one of only three Manhattan Project atomic energy communities
that have a relationship defined statutorily with the federal
government. In the FY04 energy and water appropriations bill, the
Congress had urged the Department to work with the city and county
officials to develop a plan to help the Oak Ridge community achieve
financial self-sufficiency. I would like an explanation of the
Department's plans in helping the Oak Ridge community achieve financial
self-sufficiency.
Answer. The Department of Energy (DOE) (and its predecessor
agencies) along with its major contractors, have worked and continue to
work closely with the city of Oak Ridge and organizations within Oak
Ridge associated with economic development to assist in their attempt
to attain self-sufficiency. This assistance has taken many forms,
including direct and indirect land transfers, financial payments,
facility and infrastructure transfers, and planning assistance.
Of the initial 58,575 acres acquired for the Oak Ridge Reservation,
almost 25,000 acres have been transferred or conveyed to the city of
Oak Ridge or other entities which support the city for a variety of
purposes including, schools, housing, industrial park developments,
recreational parks, utilities and roads. In addition to land transfers,
DOE has granted many easements, licenses, permits and leases to the
city of Oak Ridge and to others within the city. These have been for a
myriad of purposes that have supported community development, including
the construction of roads and utilities, public greenways,
telecommunication towers, use of rail facilities, barge facilities and
buildings in the East Tennessee Technology Park.
In addition, financial assistance payments and Payment in Lieu of
Taxes (PILT) payments have been made to the city. The financial
assistance from 1960 through 1986 totaled $69,403,970. The 1986 payment
included a $22,254,187 payment that covered financial assistance
expectations through 1995. PILT payments resumed in FY 1996 and to-
date, the city has been paid $8,113,017.
One of the keys to supporting the development within the city of
Oak Ridge has been working closely with the Community Reuse
Organization of East Tennessee (CROFT). By pursuing transfers of under-
utilized federal assets to the commercial sector through CROFT in the
form of facilities, land, equipment, and technology, new businesses
have been created, existing businesses have been able to expand, and
displaced workers have been given an alternative to leaving the region
in order to find work.
In the spring of 2003, title to a 500-acre new greenfield
industrial park named Horizon Center was transferred to CROFT. This
high amenity park is perfectly suited to high-tech, high-wage, highly
rewarding jobs necessary to sustain economic growth in a global
economy. The first company to locate there, Theragenics, is now in an
ideal location to draw from the technology resources of the Oak Ridge
National Lab and the region's trained and experienced labor pool.
The competitive cost effectiveness of a brownfield setting may be
more suitable to a company's business strategy. Therefore, DOE is
making the Heritage Center available. CROFT operates Heritage Center,
as a second industrial park. Heritage Center, also known as the East
Tennessee Technology Park, offers extensive utilities and
transportation infrastructure and is comprised of both facilities and
land parcels available for commercial development. To date, CROFT has
leased approximately 80 facilities to approximately 40 separate
companies. Over the next several years as DOE's Environmental
Management Program continues its Accelerated Cleanup Plan for Heritage
Center, additional facilities and land parcels will become available to
the commercial sector.
DOE recently transferred 182 acres of DOE lake access land to help
establish a housing development. The city of Oak Ridge and DOE are also
working to transfer over 200 acres contiguous to Wisconsin Avenue for
expansion of a housing development.
In 2002, with the support of the city, DOE committed to pursue the
transfer of the Vance Road Facility in Oak Ridge to the Methodist
Medical Center, which is contiguous to that facility. This transfer
process will likely begin in CY 2005 when the facility is completely
vacated and cleaned. This will allow this community based medical
facility to expand its facilities and services to the community.
DOE contractors have also been committed to the support of Oak
Ridge. As an example, UT-Battelle, the contractor for the Oak Ridge
National Laboratory (ORNL), has provided enhancements to Melton Hill
Lake which increases its drawing power as a premier competitive rowing
course used by many colleges. In addition, UT-Battelle is currently
heavily invested in and committed to planning for a new high school for
the city of Oak Ridge, including commitment of about $150,000 to assist
in the planning and design. UT-Battelle is also loaning executives from
the lab to continue to assist the city in this effort.
At the same time, ORNL continues to contribute to the economic
development of the region through its activities to transfer
technologies to the private sector. As research and development of
technologies mature to the point where private sector companies can
successfully manufacture or deploy the technology in a cost-effective
manner, these companies tend to remain in the Oak Ridge and east
Tennessee area, furthering the economic development and providing
careers in science and technology.
Lastly, the major contractors, including UT-Battelle, BWXT Y-12,
Oak Ridge Institute for Science and Education, and Wackenhut pay
various taxes dependent on their individual situation. These range from
state sales tax, use taxes, business tax, and property tax, etc. These
taxes total about $2,380,000, and the city of Oak Ridge receives a
portion of that back from the state.
Responses to Questions From Senator Murkowski
Question 30. The Department of Energy (DOE) Budget Highlights
states that the DOE FY 2005 budget includes $43 million within the
Environment, Safety and Health program, to accelerate the processing of
claims required as part of the Energy Employees Occupational Illness
Compensation Program Act (EEOICPA). The DOE further states that the $43
million, together with the additional funds provided in FY 2003 and
funds to be reprogrammed in FY 2004, will enable the DOE to complete
the processing of the applications currently on file with the DOE in FY
2005, up to the point of review by a Physician Panel, and completely
process all of the applications through the Physician Panels in FY
2006. The Department has implemented reforms that have already improved
performance from a rate of 30 cases per week in 2003, to over 100 per
week by the end of the year.
1) The DOE has spent many millions of dollars over the past several
years and processed only a tiny fraction of pending EEOICPA Part D
applications. DOE's budget request states that the Department has
instituted a series of reforms to improve its claims processing
performance.
Specifically what are these reforms?
Why should the Committee have any confidence that the new
claims processing rate will be maintained or improved?
Answer. The Department has instituted a series of reforms to
improve its applications processing performance, highlights of which
include:
the revision to the Physician Panel Rule issued as an
Interim Final Rule on March 17, 2004. The revised rule is
expected to double the productivity of the Physicians Panel
process,
a reprioritization of work on Part D applications so as to
expedite the processing of the greatest number of cases and
move to the front of the queue those applicants we believe are
most likely to receive the greatest benefit from the program.
Specifically, we have moved those applications relating to
beryllium, silica, and asbestos exposure to the front of the
queue, as well as those applications which have already
received a positive determination from the Part B program. In
addition, we are processing applications from living applicants
first because of the availability of medical benefits for
living applicants in most State workers compensation systems,
and are awaiting dose reconstructions for those remaining
applications where dose reconstructions are pending from the
Part B program.
the implementation of 17 of 21 recommendations made by The
Hays Companies, a management consulting company, hired to
analyze our processes and make recommendations on how to
improve the program. The attached chart details those
recommendations and DOE's implementation of them. Of the
remaining four recommendations, DOE rejected two, because they
recommended limiting access to the program as a way to limit
the growth in the backlog of applications; and DOE has under
consideration two recommendations.
an aggressive, and multi-agency coordinated set of
initiatives to recruit physicians, and
the creation of a new advisory committee focused on the
implementation of Part D process improvements and the
development of additional process improvements.
However, these procedural and policy reforms are only one part of
an integrated four-part program to achieve the elimination of the
backlog of cases by the end of 2006. The other elements of the plan
are:
Legislative changes: the Secretary submitted legislation to
amend the EEOICPA statute on March 29, 2004. The legislation
would eliminate the pay cap on physicians and expand hiring
authority for them. If enacted, these changes would
significantly increase the supply of physicians willing and
able to work on Physician Panels, and would greatly expedite
processing of applications.
Budget: an appropriations transfer for FY04 of $33M and a
FY05 budget request of $43M. These funds will provide for the
contractor support, staff and other resources needed to ramp up
the number of determinations from approximately 35 per week
today to 300 per week in FY05.
The Department believes such a plan is very feasible and that the
Department's analysis is credible in its projections. First, we have
already achieved three- to six-fold improvements in the application
processing and Physician Panel determination processes in the last six-
months through the execution of other program changes and resource
increases. This has demonstrated the Department's ability to quickly
accelerate its production given adequate resources. Second, most of
these recommendations were previously suggested or supported by
Congress, other Federal Agencies, the Department's previous Workers
Advocacy Advisory Committee, or other outside groups such as workers
advocacy organizations, labor unions, consultants like the Hays Group,
and the General Accounting Office. Finally, as the attached letter
details, the American College of Occupational and Environmental
Medicine believes our plan will get the Part D program ``back on
track.''
2) I understand that DOE is working on a Plan to address the
unacceptable rate at which DOE has been processing claims and perhaps
other issues concerning implementation of the EEOICPA.
What is this Plan?
What will it include?
When will it be available to this Committee?
Answer. The Department's plan to eliminate by the end of 2006 the
current backlog of Part D applications pending at DOE has been
submitted to the Committee as well as to your office. The Plan involves
four components that, together, should enable us to increase Physician
Panel determinations from 35 per week to 310 per week. The four
components areas discussed above: performance improvements, the revised
Physician Panel rule, enactment of the proposed legislation and
approval of our budget requests. This plan was discussed during Under
Secretary Robert Card's Senate Energy and Natural Resources testimony
on March 30, 2004, and also has been presented to the House of
Representatives and several House and Senate committees.
3) The DOE FY 2005 budget request includes $43 million to
accelerate the processing of claims under the EEOICPA. However, there
is another equally, if not more important part of the EEOICPA
implementation for citizens of Alaska and many other states. That is
the willing payor issue. In Alaska, we currently have an unacceptable
situation. Former workers or survivors of workers have received
positive Physician Panel determinations. DOE has adopted these
findings. Yet the workers have not received a penny. Nothing. Worse
yet, many of these elderly and ill Alaskans are now having to fight
with insurance companies and endure expensive, time consuming and
mentally and physically debilitating litigation trying to secure
compensation under the EEOICPA. I know DOE is aware of this situation.
Yet the DOE budget is deafeningly silent on this issue.
What does DOE propose to address the willing payor issue?
I understand DOE may believe it is doing all it can to
address the willing payor issue consistent with the authority
DOE has under EEOOICPA. Is this correct?
If yes, can we expect a legislative proposal from DOE
suggesting how EEOICPA can be modified or what new legislation
could be enacted to remedy the current willing payor fiasco?
If not, please explain why DOE does not plan to offer a
legislative remedy for a program that DOE acknowledges is not
working.
Will the Plan DOE is working on include a proposal to remedy
the willing payor issue?
Answer. The Department is addressing the ``willing payer'' issue by
working hard to identify DOE contractors who may be directed not to
contest workers' compensation claims filed by workers who have received
positive Part D Physician Panel findings. The Department is not
proposing legislation that would change the Part D benefit provided by
current law because: 1) Congress determined after multiple proposals
and much debate to create the benefit currently provided by the
statute; and 2) it will be many months before a sufficient number of
cases will be completed through the States' workers' compensation
processes in order to provide sufficiently large data sets of results
to offer somewhat statistically significant results about the benefits
provided under state workers' compensation systems. The Department
believes it is fully and fairly carrying out the requirements of the
law.
The Department is providing all assistance allowed by law to Part D
applicants in Alaska. Some of these applicants are calling the program
management directly to get answers to their questions. The Department
is happy to provide this type of support as these cases represent some
of the initial claims entering into a State workers' compensation
process. And, the Department is providing access to all available
resources in order to ensure these applicants obtain answers as quickly
as possible. In addition, the Department is developing a ``post-panel
determination'' assistance program to help our applicants with the
filing of their State workers' compensation claims. This program will
provide applicants with assistance on the rules and procedures for
filing State workers' compensation claims in their respective States.
Certain elements of this assistance are already in place, and the
program will be fully implemented within the next several months.
4) The FY 2005 DOE budget request notes that DOE plans to request
reprogramming of some FY 2004 funds to improve implementation of Part D
of the EEOICPA.
When will this request be forthcoming?
Can you now share with us the amount you will ask to
reprogram?
What will these reprogrammed funds be used for?
Answer. An FY04 appropriations transfer request for $33.3 million
was submitted to the appropriate committees of Congress on January 30,
2004. A copy of the appropriations transfer request letter is attached.
The President's FY05 budget requested $43 million. We do not anticipate
any additional reprogramming requests of FY04 funds.
These funds are an integral component to eliminating the backlog by
the end of CY06 and will be used to ramp up all aspects of DOE's Part D
operations and to provide additional assistance to workers after they
receive their determination from the Physician Panels. In the twelve
months after approval of the appropriations transfer, the funds will be
used to eliminate the backlog of approximately 9,000 field data
collection requirements for the applications, develop an additional
15,000 cases up to the Physician Panels and process an additional 5,000
cases through the Physician Panels. In the following twelve months the
Department plans to increase the Physician Panels' determinations rate
by an additional 300% providing for an additional 15,000 cases through
the panels. In order to accomplish these goals the Department will need
an additional 40 case manager and an additional 135 support staff. The
Department has also requested that NIOSH recruit the equivalent of 25
full time equivalent (FTE) physicians by September 2004, and 60 by June
2005. Of note, the Department's plan to eliminate the backlog of
applications by the end of 2006 is based, in part, on receiving the
requested FY04 appropriations transfer funds in April 2004.
5) I understand DOE will be reconstituting the Worker Advocacy
Advisory Committee. I further understand that before this Committee was
terminated, it included recognized experts in the workers' compensation
area and offered some very valuable advice to the DOE.
When will the new Advisory Committee be up and operating?
Does DOE plan to staff the Committee with the same
individuals who worked on the original Committee, or with
people of similar credentials?
Answer. The Workers Compensation Assistance Advisory Committee is
in the process of being established. It is not a reconstituted version
of the previous Workers Advocacy Advisory Committee, but a new
Committee established for the new purpose of advising the Department
how best to execute the current Part D program. The previous Committee
was established to advise the Department on how best to set-up the Part
D program. It was not terminated, but rather its charter expired, as do
the charters of all Advisory Committees established under the Federal
Advisory Committee Act. We expect to hold the first meeting of the new
Advisory Committee in April 2004. Several members of the former Worker
Advocacy Advisory Committee have been nominated for this new Committee,
and their nominations are being actively reviewed now. The Secretary
will select members with the skills and experience to address current
operational issues faced by DOE and the Part D program.
6) I know DOE understands that the Physician Panel review of
applications can constitute a tremendous bottleneck in the raid
processing of claims.
What does DOE propose to do to avoid having the Physician
Panel reviews dramatically slow down the claims processing?
Answer. The regulatory changes that DOE has implemented and the
legislative changes DOE has proposed are expected to increase the rate
of Physician Panel determinations sufficient to eliminate by the end of
2006 the backlog of Part D applications currently pending at DOE,
provided Congress gives DOE sufficient funds to do so. The regulatory
changes DOE has already implemented permit a Physician Panel to be
composed of a single qualified physician. Permitting single-physician
Panels will immediately double the number of Panels available to review
completed applications and will also simplify logistics by largely
eliminating the time expended in coordinating and attending
conferences, teleconferences, or meetings.
The proposed legislative changes will remove the current statutory
cap on the pay of Physician Panel members and expand the hiring
authority for these physicians, thereby greatly expanding the pool of
physicians who may want to work on this program. The medical community
has told us that the current statutory pay cap on physicians is half
the standard consulting rate. Empirically, this substandard pay has
resulted in our part-time physicians on average spending only three
hours per month reviewing cases.
DOE'S ARCTIC ENERGY OFFICE
Question 31-1. Why has DOE chosen not to include the Arctic Energy
Office in its budget request?
Answer. At the requested budget level for oil and gas, DOE decided
it would not identify a specific line for Arctic research. This does
not preclude funding Arctic projects consistent with program
priorities. However, any funding for Arctic research would be at a
significantly lower level than the previous appropriations as a result
of the overall decrease in funding for oil and gas.
Responses to Questions From Senator Bunning
PADUCAH CLEANUP FUNDING
Kentucky recently signed onto the DOE's accelerated cleanup plan.
Part of the purpose of the plan was for Kentucky to receive adequate
funding to cleanup the site in a more efficient and timely manner.
Despite this, however, the President's budget request has asked for
only $92.8 million for cleanup at the Paducah site. There are still a
lot of areas at the site that require cleanup.
Question 32. Why did the DOE ask for nearly $30 million less than
last year's appropriation for cleanup?
Answer. The decrease in the EM budget request for Paducah cleanup
funding, funded in the Uranium Enrichment Decontamination and
Decommissioning Fund, is due to the completion of several cleanup
projects in FY 2004, including the north/south diversion ditch project,
the dismantling and removal of all the piping and equipment from
Sectors 1 and 9 in building C-410, and preparation of Sectors 2 and 3
for dismantling and piping equipment removal. These completions, in
combination with modest increases in other projects, reduced our
requirements for Paducah cleanup in FY 2005 by $27.4 million.
The FY 2005 funding request fully supports the cleanup commitments
set forth in the Agreed Order signed with the Kentucky regulators at
the end of last fiscal year. No impact is expected to our new
accelerated 2019 completion schedule.
Question 33. At last year's DOE budget hearing, I asked Secretary
Abraham why zero Paducah claimants had received compensation under Part
D of the Energy Employees Occupational Illness Compensation Program
Act. Today, Paducah still has zero claimants out of now more than 2,200
claims receiving any compensation for their illnesses due to their work
with toxic substances at the Paducah DOE site. The DOE has requested
over $40 million to deal with the backlog of the more than 20,000
claims it has received nationwide.
Why should Congress give the DOE more money to fix a problem
that the Department has been unable to resolve in the last
three and a half years?
What are the DOE's plans to move the cases through the
Physician Panels?
Answer. After a four month top-to-bottom program review, the
Department developed a comprehensive and coordinated plan that should
eliminate the current backlog of Part D applications pending at DOE.
The Department's operational improvements over the last six months
demonstrate that this plan is achievable and credible with sufficient
funding. In the past six months, the Physician Panel determinations
have increased nine fold and the Department believes that over the next
twelve months it is well positioned to increase the determinations
three-fold and an additional three-fold twelve months later. This
assumes that Congress approves the proposed legislation that the
Secretary transmitted to Congress on March 29, 2004 and approves the
FY04 appropriations transfer request submitted to Congress on January
30, 2004. (Copies of the appropriations transfer request and the
proposed legislation are attached.) The elements of the plan:
the revision to the Physician Panel Rule issued as an
Interim Final Rule on March 17, 2004. The revised rule is
expected to double the productivity of the Physician Panel
process.
a reprioritization of work on Part D applications so as to
expedite the processing of the greatest number of cases and
move to the front of the queue those applicants we believe are
most likely to receive the greatest benefit from the program.
Specifically, we have moved those applications relating to
beryllium, silica, and asbestos exposure to the front of the
queue, as well as those applications which have already
received a positive determination from the Part B program. In
addition, we are processing applications from living applicants
first because of the availability of medical benefits for
living applicants in most State workers compensation systems,
and are awaiting dose reconstructions for those remaining
applications where dose reconstructions are pending from the
Part B program.
the implementation of 17 of 21 recommendations made by The
Hays Companies, a management consulting company, hired to
analyze our processes and make recommendations on how to
improve the program. The attached chart details those
recommendations and DOE's implementation of them. Of the
remaining four recommendations, DOE rejected two, because they
recommended limiting access to the program as a way to limit
the growth in the backlog of applications; and DOE has under
consideration two recommendations.
an aggressive, and multi-agency coordinated set of
initiatives to recruit physicians, and
the creation of a new advisory committee focused on the
implementation of Part D process improvements and the
development of additional process improvements.
Legislative changes: the Secretary submitted legislation to
amend the EEOICPA statute on March 29, 2004. The legislation
would eliminate the pay cap on physicians and expand hiring
authority for them. If enacted, these changes would
significantly increase the supply of physicians willing and
able to work on Physician Panels, and would greatly expedite
processing of applications.
Budget: an appropriations transfer for FY04 of $33M and a
FY05 budget request of $43M. These funds will provide for the
contractor support, staff and other resources needed to ramp up
the number of determinations from approximately 35 per week
today to 300 per week in FY05.
Question 34. The GAO has told me that many of the workers at the
Paducah plant will not have a willing payor even if their claims are
determined valid. This problem was identified by your advisory
committee nearly 2 and a half years ago.
Does the DOE ever plan to address this issue?
Will any of the $40 million that DOE is requesting for the
Energy Employees Occupational Illness Compensation Program be
used to help resolve this issue?
Answer. The Department is addressing the ``willing payer'' issue by
working hard to identify DOE contractors who may be directed not to
contest workers' compensation claims filed by workers who have received
positive Part D Physician Panel findings. The Department is not at this
time proposing legislation that would change the Part D benefit
provided by current law because: 1) Congress determined after multiple
proposals and much debate to create the benefit currently provided by
the statute; and 2) it will be many months before a sufficient number
of cases will be completed through the States' workers' compensation
processes in order to provide sufficiently large data sets of results
to offer somewhat statistically significant results about the benefits
provided under state workers' compensation systems. The Department
believes it is fully and fairly carrying out the requirements of the
law.
The Department is providing all assistance allowed by law to Part D
applicants. Some of these applicants are calling the program management
directly to get answers to their questions. The Department is happy to
provide this type of support as these cases represent some of the
initial claims entering into a State workers' compensation process.
And, the Department is providing access to all available resources in
order to ensure these applicants obtain answers as quickly as possible.
In addition, the Department is developing a ``post-panel
determination'' assistance program to help our applicants with the
filing of their State workers' compensation claims. This program will
provide applicants with assistance on the rules and procedures for
filing State workers' compensation claims in their respective States.
Certain elements of this assistance are already in place and the
program will be fully implemented within the next several months.
Question 35. In the Fiscal Year 2003 Defense Authorization Bill, I
helped add a provision which was intended to strengthen industrial and
construction safety protections for workers at DOE sites. Recently, the
DOE proposed regulations for these protections which appear to actually
weaken safety protections. Can you explain to me why allowing
contractors to develop their own safety standards and eliminating DOE
Order 440.1A will increase safety protection for workers.
Answer. Please see attached letter to Senator Bunning.
DUF6 STATUTORY DEADLINE
The DOE has requested $55.9 million for the DUF6
facility. Under current law, construction of the DUF6
facilities at Paducah and Portsmouth is supposed to begin by July 31,
2004. I have heard concern that this deadline may not be met because
the DOE may delay issuing a required environmental impact statement or
making a determination about whether the contractor has an adequate
percentage of foreign ownership control.
Question 36. Does the DOE plan to meet the statutory deadline?
Answer. Yes, groundbreaking at both sites is planned for July 2004.
coal research & development funding
Question 37. Coal plays a vital role for the energy in our country.
Do you think the DOE funding for coal research and development will
help bring clean coal technology into the commercial sector quickly?
Answer. Yes, it will. Clean coal technology is already entering the
commercial sector. For example, low cost SO2 scrubber
technology developed in partnership with industry is broadly deployed.
Low NOX combustors, which were developed with DOE money,
have been deployed on over 70% of the coal power plants capable of
using them.
The Clean Coal Power Initiative (CCPI) is now taking the next
generation of clean coal technologies currently leaving the laboratory
stages and demonstrating their commercial feasibility as a final
stepping stone to their commercial deployment.
______
The Secretary of Energy,
Washington, DC, March 5, 2004.
Hon. Jim Bunning,
U.S. Senate, Washington, DC.
Dear Senator Bunning: Thank you for your February 6, 2004, letter
providing comments on the Department's notice of proposed rulemaking
for Title 10 of the Code of Federal Regulations, part 851, ``Worker
Safety and Health.'' We have added your letter to the public file for
the worker safety and health rulemaking.
Protecting the health and safety of workers at DOE sites is a top
personal priority for me. The incidences of injury and days lost as a
result of workplace injury have fallen at DOE for the third straight
year and are now well below the rates experienced in private industry.
I am pleased that in the legislation instructing us to promulgate this
legislation, Congress recognized DOE's impressive record by directing
us to promulgate a worker health and safety rule that ``provides a
level of protection for workers at [DOE] facilities that is
substantially equivalent to the level of protection currently provided
to such workers at such facilities.
I am determined that the end-product of this rulemaking will be one
that meets Congress's direction and my own commitment that DOE
promulgate a rule that builds and improves on the level of protection
that we currently provide.
Since publication of the notice of proposed rulemaking on December
8, 2003 (68 FR 68276), the Department has received significant concerns
and comments from several parties, including the Defense Nuclear
Facilities Safety Board (DNFSB). Therefore, I directed that our
rulemaking be suspended on February 27, 2004 to allow the Department
time to consult with DNFSB to resolve its concerns and to consider the
views of other interested stakeholders as appropriate (69 FR 9277). We
are in the process of engaging in consultation with the DNFSB and
evaluating all of the comments received to identify the major issues
and recommendations for further rulemaking actions. Please be assured
that we have noted and will give appropriate consideration to the
issues and recommendations discussed in your comment letter.
I am personally committed to ensuring that any rule we promulgate
is constant with the principles I have outlined here and will see to it
that appropriate changes be made to the proposed rule to meet these
goals.
Sincerely,
Spencer Abraham
______
Question 38. The former worker medical screening programs received
$14.95 million in Fiscal Year 2004. Yet the DOE recently indicated it
only allocated $9.7 million in FY 04 for this purpose. Please explain
what happened to the $5.25 million that was appropriated for this
purpose within the Office of Environment, Safety and Health account,
and why the total $14.95 million has not been used for its stated
purpose?
Answer. The Occupational Medicine/Worker Medical Surveillance
program was identified at a level of $14.950 million in the Health line
item in the President's FY 04 budget. EH intends to support the program
at this level. This program includes both the Former Worker Medical
Screening Program and the Former Beryllium Worker Medical Screening
Program.
The FY 04 funding level was arrived at through extensive discussion
with the Principal Investigators of each of our studies. Funding
provided are those funds agreed upon between DOE and the Principal
Investigators of the site-specific studies across the DOE. The funding
levels are sufficient, as agreed upon by the Principal Investigator, to
fully fund their project in FY 04. The site-specific studies will be
fully funded at $12.574M in FY 04. Of the $12.574M, $1M is
congressionally directed to support medical screening at the Gaseous
Diffusion Plants. In addition, $2.161M is included to fund ORISE in
support of their beryllium lymphocyte proliferation testing and
analysis, and beryllium surveillance activities, also in support of the
Worker Medical Surveillance Program.
The Department is looking to transition the program from these site
specific activities to a nation-wide program in FY 05 to provide
medical screening to all former DOE workers, regardless of their
physical location. This move to a nation-wide program is also
anticipated to make a greater percentage of funds available for former
workers medical screening by reducing the overhead charges from the
existing dozen Principal Investigators. The remaining funds of $2.376M
($14.950-$12.574) will be used in support of the transition to the
nation-wide program.
All the $14.950M will be used in support of the Worker Medical
Surveillance Programs.
Responses to Questions From Senator Bingaman
Question 39. The Department is proposing to create a new office
called the ``Office of Future Liabilities''. In volume 4, page 187, it
states that this Office will ``manage environmental liabilities not
assigned to the Office of Environmental Management.'' The next sentence
then says ``These needs are expected to grow substantially due to the
back log of environmental liabilities at active DOE sites.''
Can you explain (1) approximately how much will this budget grow
beyond its fiscal year 2005 $8 million?
Answer. FL is proposed as a small organization with $8 million and
4 Full Time Equivalent (FTE) staff to develop the baseline for cleanup
activities not currently part of the EM inventory. The future size of
the FL organization will be determined through the initial planning
activities to define the baseline for environmental activities and to
establish organizational assignments within the Department for carrying
out these activities.
LOS ALAMOS CORRECTIVE ACTION ORDER
Since November 2002, the Department has been in negotiation with
the State of New Mexico over its corrective action order for the Los
Alamos clean up. I understand that for fiscal years 2003 and 2004, when
the corrective action order was issued, the Department has held back
$69.5 million of the budgeted amount of $214 million, or roughly 33
percent.
Question 40. Can you explain the substantial rationale based on
change of work scopes why the Department has held back 33 percent of
the clean up funds and does the Department have similar hold back plans
for fiscal year 2005?
Answer. In accordance with Congressional direction, the Department
has been restricted in fiscal years (FY) 2003 and 2004 from providing
certain funds for cleanup at sites where the Department has not entered
into agreement with State regulators consistent with the intent of the
Department's accelerated cleanup reform initiative. In FY 2003, in
accordance with Section 315 of H.J. Res. 2 (January 23, 2003), the
Department was restricted from releasing $26.4 million to Los Alamos.
For FY 2004, consistent with Report 108-357 (November 7, 2003)
accompanying the FY 2004 Energy and Water Development Appropriations
(H.R. 2754), the Department likewise was restricted from releasing
$26.6 million to Los Alamos. In March 2004, the Department and the
State of New Mexico reached agreement on all issues associated with a
Consent Order for cleanup at the laboratory. In the judgment of the
Assistant Secretary for Environmental Management, the Consent Order is
consistent with the Department's accelerated cleanup initiative. The
Consent Order will be made available for public comment prior to
signature and execution by the Department and the State. As a result,
the Department released the accelerated cleanup funds.
NWPA LEGISLATIVE STRATEGY
The Department last year proposed to legislatively amend the
Nuclear Waste Policy Act to reclassify high-level waste left over as
residue in reprocessing waste storage tanks at Hanford and Idaho.
Question 41. If the Department were to pursue this legislative
strategy, do you have an estimate of the additional TRU waste that
would be bound for the Waste Isolation Pilot Plant?
Answer. Prior to the Idaho District Court decision, DOE had planned
to dispose of approximately 2.2 million gallons of tank waste from
Hanford and Idaho as transuranic (TRU) waste, based on the Department's
interpretation of the Nuclear Waste Policy Act. The legislative
clarification that the Department would pursue would not increase the
estimate of 2.2 million gallons.
The Department has experienced embarrassing delays over the Energy
Employees Occupational Illness Compensation Program Act.
Question 42. Beyond simply increasing the number of physician
panels, does the Department support developing mechanisms for
establishing new cohort classes of illnesses, which the Department of
Labor can act quickly on?
Answer. The statute and Executive Order 13179 designate HHS as the
agency responsible for deciding whether to add classes of employees to
the Special Exposure Cohort (SEC) for the Part B program. HHS is
currently in the final interagency review process for its Proposed Rule
for procedures to consider and make these determinations. The only role
the law provides for DOE in the SEC process is to provide access to
relevant information on worker exposures to HHS and the Advisory Board
on Radiation and Worker Health, and DOE stands ready to provide such
assistance. SEC is not part of the Part D program for which DOE has
responsibility; it is used only in the Part B process. That is why
increasing the number of Part D Physician Panels is not related to
developing mechanisms for adding new classes of employees to the SEC.
TRUPACT III CONTAINER
As you know, the NRC has recently approved regulations for
licensing new TRUPACT III containers as part of the effort to speed up
waste shipments to the Waste Isolation Pilot Plant. On page 198, volume
5, of the fiscal year 2005 budget, the DOE proposes submitting a
TRUPACT III license to the NRC.
Question 43. If the DOE were to submit a license for a TRUPACT III
container to the NRC, would the DOE agree to perform full scale testing
of a TRUPACT III container and compare it to computer models to ensure
its safety as was performed similar to the TRUPACT II's?
Answer. DOE would follow the U.S. Nuclear Regulatory Commission's
(NRC) requirements for certification of TRUPACT III containers. At this
time, DOE is not contemplating additional analyses or testing beyond
what NRC requires.
Question 44. This year the OMB gave the environmental management
program a Program Analysis Rating of 26 out of 100, while the Office of
Science got score ranging from 82-93 percent.
Given these scores, why then, did the EM program's funding increase
by 6 percent by $433 million while the Office of Science declined by 2
percent or $68 million?
Answer. Environmental Management's (EM) total Program Assessment
Rating Tool (PART) score for the FY 2005 cycle was 61 out of 100 (rated
Adequate).
Since 2001, a top priority for the EM program has been to reform
and refocus its program to reduce risk and make cleanup more efficient
and cost effective, EM's budget request for FY 2005 represents the peak
year of investment in this strategy. The out-year funding profile
begins to reflect the dramatic cost savings from this approach.
It should be noted that PART scores are just one of many factors
that are considered in making resource allocation decisions. PART helps
managers identify areas for improvement, and is considered along with
other factors in determining the resources required to meet our
strategic objectives. The level of resources requested for both the
Environmental Management program and the Science program are considered
sufficient to achieve the Department's mission in these areas.
FUSION DOMESTIC RESEARCH
Question 45. The FY04 Energy and Water Appropriations Conference
Report states, and I quote, that ``The conferees strongly caution the
Department against submitting any future budget requests for ITER that
are funded at the expense of domestic research.'' This reflects the
recommendations of the recent National Academies Burning Plasma Report
and the DOE'S own Fusion Energy Sciences Advisory Committee. And yet
the proposed budget makes precisely those cuts. The number of vital run
weeks at each of the three major magnetic fusion facilities is slashed
from 18 to 14, and the long-term fusion technology program is zeroed
out, in part to pay for preparation for ITER construction. If, as part
of our nation's effort to reduce our dependence on foreign oil support
for fusion has become a major priority of this administration as it has
claimed, and if the U.S. is expected to make a serious scientific
contribution to this new international endeavor, how can these cuts be
justified?
Answer. The FY 2005 budget request does not reduce the overall
level of domestic fusion research to any significant extent as a result
of ITER preparations. Where appropriate, domestic fusion experimental,
theoretical and enabling technology research is reoriented more toward
the needs of ITER. This research is performed by existing fusion
scientists and engineers. Only a very small amount, on the order of
$1,000,000 of the ITER preparations, is for industrial preparations at
this time. This reorientation of fusion research has resulted in some
shifts in priorities, such as reducing facility operating time and
focusing technology more on the near term, but overall the domestic
fusion research is not reduced to any significant extent. This
reorientation of the fusion program is consistent with the National
Research Council recommendation to include ITER as part of the fusion
program due to its significant interfaces with all parts of the
program.
Question 46. Is the Administration or the Energy Department
concerned about the expiration of the ESPC authority? Does the
Administration or the Energy Department have a plan for meeting the
Federal government's energy savings goals without this means of
financing energy efficiency improvements? Do you have a legislative
strategy for extending the authority for ESPCs?
Answer. The Administration is very concerned about the expiration
of ESPC authority, and we hope that the Congress will reauthorize the
use of ESPCs as soon as possible. Without ESPCs, we do not believe that
the Federal government will meet its energy efficiency and renewable
energy goals.
The Department supports comprehensive energy legislation that
contains a reauthorization of ESPC authority. In the absence of such
legislation, we also would support a stand-alone provision for the
reauthorization of ESPCs.
Question 47. Please provide copies of the budget request for the
Marshall Islands Program, Office of Health, including a breakout of
major program elements for fiscal years FY03 (as funded), FY04 (as
funded), and FY05 (as requested).
Answer. The following chart shows the breakout of funding for
fiscal years FY03 and our anticipated expenditures for FY04. The costs
in FY04 are less than FY03 because our contractor will be evaluating
the current data that has been collected over several years and
generating reports. There will be no need for a trip to the Marshall
Islands by the contractor in FY04 to collect additional data.
The Department does not request funding for the Marshall Islands
Program as a separate line item. It is part of the overall Health line
for the Office of Environment, Safety and Health. The request for the
Health budget line in FY05 is $45,222,000.
UNITED STATES DEPARTMENT OF ENERGY MARSHALL ISLANDS PROGRAM BUDGET
SUMMARY FY2002-2004
[Dollars in 000's]
------------------------------------------------------------------------
FY 2004
Program element FY 2003 (estimate
(actual) to date)
------------------------------------------------------------------------
Medical care--general............................. $1,025 $ 900
------------------------------------------------------------------------
Medical care logistics--general................... 947 900
------------------------------------------------------------------------
Medical care logistics--patient referrals......... 368 300
------------------------------------------------------------------------
Subtotal, Special Medical Care Activities..... 2,340 2,100
------------------------------------------------------------------------
Radiological monitoring--general.................. 2,177 1,600
------------------------------------------------------------------------
Radiological monitoring--plutonium urinalysis..... 323 150
------------------------------------------------------------------------
Radiological monitoring logistics--general........ 1,285 550
------------------------------------------------------------------------
Subtotal, Radiological Monitoring Activities.. 3,785 2,300
------------------------------------------------------------------------
Technical support................................. 175 0
------------------------------------------------------------------------
Capital equipment:................................ 0 0
------------------------------------------------------------------------
Total, Marshall Islands Activities............ $6,300 $4,300
------------------------------------------------------------------------
Responses to Questions From Senator Akaka
Question 48A. I am pleased to see the increase for hydrogen
production--$14.9 million from FY 2004 to FY 2005--in the Hydrogen
Technology Initiative. The budget document states that the majority of
funding will focus on renewables.
(1) What percentage of the line item will be allocated to
renewables?
EERIE FUNDING TABLE
[Dollars in 000's]
------------------------------------------------------------------------
FY 2004
Hydrogen technology--EERE FY 2004 Comp. FY 2005 $ Change
0nly request approp. request
------------------------------------------------------------------------
Production and Delivery R&D. 23,000 22,564 25,325 +2,761
------------------------------------------------------------------------
Storage R&D................. 30,000 29,432 30,000 +568
------------------------------------------------------------------------
Infrastructure Validation... 13,160 18,379 15,000 -3,379
------------------------------------------------------------------------
Safety, Codes & Standards, 16,000 5,904 18,000 +12,096
and Utilization............
------------------------------------------------------------------------
Education and Cross-Cutting 5,822 5,712 7,000 +1,288
Analysis...................
------------------------------------------------------------------------
Total, Hydrogen 87,982 81,991 95,325 +13,334
Technology.............
------------------------------------------------------------------------
Answer. The requested $13.3 million increase in Hydrogen Technology
funding from FY 2004 to FY 2005 includes funding for production and
delivery; storage; infrastructure validation; safety, codes &
standards, and utilization; and Education and Cross-Cutting Analysis as
shown in the table below.
Of the $25.3 million requested in production in EERE, $19 million
is for renewable hydrogen production and delivery technology and $6.3
is for distributed natural gas reforming technologies. In addition,
approximately $25 million in additional funding is being requested from
other offices within the Department for hydrogen production from coal
and nuclear energy.
Question 48B. I am pleased to see the increase for hydrogen
production--$14.9 million from FY 2004 to FY 2005--in the Hydrogen
Technology initiative. The budget document states that the majority of
funding will focus on renewables.
(2) Do you project that this increase, which is modest, will be
enough to make hydrogen production costs from renewables competitive
with non-renewable production, such as from natural gas or coal, over
the next five years?
Answer. The FY 2005 request of $19 million for renewable hydrogen
production keeps us on track to meet our 2010 goal of $3.90 per gallon
gasoline equivalent (delivered, untaxed). In fact, based on alternative
renewable technology pathways for hydrogen production, we now believe
we can achieve a more aggressive target of $2.85 per gallon gasoline
equivalent by 2010. Even this more aggressive target will probably not
be competitive with production of hydrogen from natural gas in 2010 in
most markets, but continued research will lower costs further. The FY
2005 request for hydrogen production from distributed natural gas is
$6.3 million and from coal is $16 million. Our strategy for energy
security is to have multiple pathways for hydrogen production from
domestic energy resources.
Question 48C. I am pleased to see the increase for hydrogen
production--$14.9 million from FY 2004 to FY 2005--in the Hydrogen
Technology initiative. The budget document states that the majority of
funding will focus on renewables.
(3) What is your estimate of the funding necessary to make
renewable production realistic and affordable for the future?
Answer. For research and development, the funding needs are
difficult to estimate and depend on technical advances made by DOE and
other government agencies, industry, and/or other governments. We will
focus on making incremental progress toward reducing costs of hydrogen
production from renewables, and our funding requests each year will
reflect our estimated needs to achieve our targets.
Question 48D. One question I have is about the decrease in funding
for Vehicle Technologies by $21.3 million dollars and the increase in
funding for the Fuel Cell Technologies program of $12.3 million
dollars.
(4) Of the fuel cell increases, can you please explain what
proportion of those increases support the FreedomCAR Partnership
objectives? And can you please provide the budget details to my staff.
Answer.
FUNDING SUMMARY
[Dollars in 000's]
------------------------------------------------------------------------
FY 2004
FreedomCAR & vehicle technologies FY 2004 comp. FY 2005
request approp. request
------------------------------------------------------------------------
Vehicle Systems........................ 14,514 14,335 13,883
------------------------------------------------------------------------
Innovative Concepts.................... 500 494 500
------------------------------------------------------------------------
Hybrid and Electric Propulsion......... 49,563 45,002 51,821
------------------------------------------------------------------------
Advanced Combustion R&D................ 37,085 54,405 35,936
------------------------------------------------------------------------
Materials Technology................... 39,640 39,744 39,799
------------------------------------------------------------------------
Fuels Technology....................... 6,800 16,494 6,800
------------------------------------------------------------------------
Technology Introduction................ 5,900 4,939 6,014
------------------------------------------------------------------------
Technical Program Mgmt. Support........ 2,121 2,095 1,903
------------------------------------------------------------------------
Biennial FreedomCAR Peer Review........ 1,500 494 0
------------------------------------------------------------------------
Program Total...................... 157,623 2 156,656
------------------------------------------------------------------------
------------------------------------------------------------------------
FY 2004
Hydrogen, fuel cells, and FY 2004 comp. FY 2005
infrastructure technologies request approp. request
------------------------------------------------------------------------
Production and Delivery................ 23,000 22,564 25,325
------------------------------------------------------------------------
Storage R&D............................ 30,000 29,432 30,000
------------------------------------------------------------------------
Infrastructure Validation.............. 13,160 18,379 15,000
------------------------------------------------------------------------
Safety, Codes & Standards,and Util..... 16,000 5,904 18,000
------------------------------------------------------------------------
Education and Cross-Cutting Analysis... 5,822 5,712 7,000
------------------------------------------------------------------------
Total, Hydrogen Technology (EWD)... 87,982 81,991 95,325
------------------------------------------------------------------------
Transportation Systems................. 7,600 7,506 7,600
------------------------------------------------------------------------
Distributed EnergySystems.............. 7,500 7,408 7,500
------------------------------------------------------------------------
Stack Component R&D.................... 28,000 25,186 30,000
------------------------------------------------------------------------
Fuel Processor R&D..................... 19,000 14,815 13,858
------------------------------------------------------------------------
Technology Validation.................. 15,000 9,877 18,000
------------------------------------------------------------------------
Technical Program Mgmt. Support........ 400 395 542
------------------------------------------------------------------------
Total, Fuel Cell Technologies 77,500 65,187 77,500
(Interior)............................
------------------------------------------------------------------------
Program Total...................... 165,482 147,178 172,825
------------------------------------------------------------------------
The entire increase of $12.3 million from the FY 2004 appropriated
levels to the FY 2005 request in the Fuel Cell Technologies (Interior)
directly supports the objectives of the FreedomCAR Partnership. For
instance, the increase in Stack Component R&D addresses key FreedomCAR
Partnership fuel cell objectives for decreasing cost and improving
durability.
In addition, the increase in Technology Validation directly
addresses safety issues, vehicle/refueling interfaces, and evaluation
of fuel cell vehicle performance and durability issues by obtaining
data under real operating conditions. This data will reveal
understanding of degradation and failure mechanisms of fuel cell
vehicles and engines, which will help focus fuel cell research under
the FreedomCAR Partnership.
The decrease in Fuel Processing R&D reflects a decrease in outyear
funding commitments as a result of conducting the FY 2004 Go/No-Go
decision for on-board fuel processing.
NATURAL GAS TECHNOLOGIES PROGRAM
The Department of Energy is requesting $26 million in the FY 2005
budget for the Natural Gas Technologies Program. One of the goals of
the program is long-term production of natural gas from the U.S.'s vast
deposits of methane hydrates. This little-understood resource could
also provide more detailed information on greenhouse gases and the
mechanisms necessary to reduce carbon dioxide. We need to continue and
increase this commitment to invest in basic research.
Question 49(1). Given the stated commitment of the Department to
affordable natural gas, why has the Department's funding request
decreased? Starting with FY 2003, funds have declined over 43% to the
proposed FY 2005 budget request. Is the Department not committed to
innovative research and resource assessment for gas technologies? Does
the funding request reflect the Department's commitment to the program?
Answer. Evaluation of this program under the Program Assessment
Rating Tool (PART) found that it frequently duplicated private sector
R&D efforts, and lacked a rigorous peer review process. Although the
PART scores increased from 34% to 48% for oil and 32% to 44% for
natural gas, PART still rates these programs as ``ineffective.'' The
reduced funding represents a reordering of the priorities to focus on
activities like natural gas production from hydrates and LNG safety
that require a Federal presence to attain the President's energy
security, Clear Skies and Climate Change goals, or are long term, high
risk activities. The Administration believes that Oil and Gas R&D are
important to ensuring the energy security for the Nation.
The program will continue to fund advanced research for more
efficient and environmentally sound technologies such as finding
beneficial uses for water that is produced in association with oil and
gas, and will ensure that each project will work toward the goals of
the program. In addition, DOE will perform important research to ensure
government decision making occurs using the best available science.
Question 49(2). A key component of the Natural Gas Exploration and
Production--Sustainable Supply Program is to support the Liquefied
Natural Gas importation initiative. How does this promote the over-
arching goal of decreasing the nation's dependence on imported energy
sources?
Answer. LNG imports will be needed to augment U.S. production,
which is projected to be unable to fill increased demand.
U.S. demand for natural gas is increasing and this increase is
forecast to continue. EIA (AEO 2004) projects that natural gas demand
will grow by nearly 40% by 2025 C from 22.78 Tcf in 2002 to 31.41 Tcf
in 2025. However, domestic supplies have been unable to satisfy natural
gas demand and this ``gap'' is expected to widen. Natural gas imports
(with Canada supplying the vast majority via pipeline) have made up the
deficit. By all accounts, increases in Canadian imports are not viable.
Natural gas imports are needed to augment U.S. production. LNG can
supplement U.S. supplies in the near term. With respect to natural gas,
world resources are significant with ``stranded gas'' unable to reach
potential markets unless using LNG. At the beginning of 2003, known
world natural gas reserves were 5,500 trillion cubic ft--60 times the
volume of gas consumed that year.
According to EIA's Annual Energy Outlook (AEO) 2004, ``Just a few
years ago, it was believed that natural gas supplies would increase
relatively easily in response to an increase in wellhead prices because
of the large domestic resource base. This perception has changed over
the past few years. While average natural gas wellhead prices since
2000 have generally been higher than during the 1990s and have led to
significant increases in drilling, the higher prices have not resulted
in a significant increase in production. With increasing rates of
production decline, producers are drilling more and more wells just to
maintain current levels of production.'' EIA's AEO 2004 further states:
``LNG imports are expected to constitute an increasing proportion of
U.S. natural gas supply . . .''. Total net imports are projected to
supply 21 per cent of total U.S. natural gas consumption in 2010 (5.5
TCF) and 23 percent in 2005 (7.2 TCF), compared with recent historical
levels of around 15 percent. Nearly all of the increase in net imports,
from 3.5 TCF in 2002, is expected to consist of LNG.
Question 49(3). Are funds being diverted from programs that
investigate such sources as methane hydrates to the Sustainable Supply
initiative, and if so, how does this contribute to long-term energy
independence?
Answer. No, funds are not being diverted. The Exploration and
Production program has been integrated into a Sustainable Supply
program that is focused on creating public benefits by investing in
research that the gas industry would not take on itself. We are
focusing on long-term, high-risk research and data analysis that is
critical to policy makers. Our efforts have potentially high payoffs
for the public.
The budget for the methane hydrates program reflects a long time
horizon and our need to prioritize within the Fossil Energy program to
address other issues, such as Liquefied Natural Gas (LNG), with a
shorter time frame for realizing benefit to the taxpayer.
Question 50. I am pleased that the budget includes $5.6 million
dollars for the National Nuclear Security Administration's Off-site
Source Recovery Project, which will help collect unwanted radioactive
materials and prevent them from being used as radiological dispersal
devices. I am also pleased that there is $3 million dollars budgeted
within the Office of Future Liabilities to begin an Environmental
Impact Statement for a facility to permanently dispose of these
sources.
While this is a good first step, I remain concerned about the
progress being made in this area. This disposal facility is necessary
to close the loop on the life-cycle of these sources once they are
collected, and should continue to be a priority for the DOE.
Questions:
Question 1. How will the transfer of the Off-site Source Recovery
Project to the National Nuclear Security Administration affect the
Department's ability to develop a permanent, safe, and secure disposal
facility for these sources?
Answer. The transfer of the function for recovering unwanted
radioactive sources and providing interim safe and secure storage has
no impact on the function of permanently disposing of these sources.
The National Nuclear Security Administration can continue to identify
and recover such sources and put them into secure storage to prevent
them from being potential used in radiological dispersion devices. Such
sources will be one waste stream that will be disposed in a facility or
facilities developed for the disposal of all Greater Than Class C
(GTCC) low-level radioactive waste, as defined in the Low-Level
Radioactive Waste Policy Act Amendment. Development of such disposal
capability must take into account projections for quantity and forms of
sealed sources but the transfer of responsibility for recovering and
storing such sources has no impact on developing disposal capabilities.
Question 2. Is the $3 million dollars budgeted for the
environmental impact statement for the Greater-Than Class-C waste
adequate to allow for the exploration of disposal alternatives?
Answer. Prior year funds have already been obligated to start work
on the environmental impact statement. The additional $3 million
requested for FY 2005 will complete all activities associated with the
environmental impact statement.
Question 3. Could you elaborate on the Department's plan to proceed
with the development of a facility to permanently dispose of these
wastes?
Answer. The Department's plans for developing capabilities for
disposing of Greater Than Class C (GTCC) low-level waste are focused on
the National Environmental Policy Act (NEPA) process. This process sets
the overall framework for the federal government to make decisions that
may have an impact on the environment. The Department will prepare an
environmental impact statement pursuant to NEPA to address disposal of
GTCC low-level waste. As part of the EIS process the Department will:
1) develop estimates of the inventory of such wastes including forms of
the waste and specific radiological and chemical characteristics; 2)
identify alternatives for providing disposal capability, including
technologies to be used and sites to be considered; 3) evaluate the
impacts of these alternatives (including both environmental and socio-
economic impacts); and 4) address environmental and regulatory issues
in developing GTCC low-level waste disposal capabilities. Upon
completion of the EIS, the Department will prepare a Record of Decision
documenting how it intends to develop GTCC low-level waste disposal
capability. This may include a single facility or a set of facilities.
The Low-Level Radioactive Waste Policy Act Amendments stipulate
that the Nuclear Regulatory Commission (NRC) will license facilities
for disposing of GTCC low-level waste. DOE will need to submit a
license application to the NRC demonstrating it can safely construct
and operate such a facility. The NRC will then license the facility(s)
according to its licensing processes.
Respomses to Questions From Senator Feinstein
REQUEST FOR RNEP RESEARCH
Question 51.1 Has the Department of Defense requested research to
be conducted on either the Robust Nuclear Earth Penetrator or other
earth penetrating nuclear weapon? If there is no requirement from the
Department of Defense, then why is the Department of Energy conducting
this research?
Answer. On January 18, 2002, the Nuclear Weapons Council, composed
of the National Nuclear Security Administration (NNSA) Administrator,
the Undersecretary of Defense for Acquisition, Technology, and
Logistics and the Vice Chairman of the Joint Chiefs of Staff requested
the Air Force to lead the current joint Department of Defense-NNSA
feasibility, design definition, and cost study of the Robust Nuclear
Earth Penetrator.
The request for RNEP research is consistent with the
recommendations of the December 2001 Nuclear Posture Review Report and
the January 2001 Capstone Requirements Document for the Defeat of Hard
and Deeply Buried Targets.
ADVANCED CONCEPT RESEARCH ACTIVITIES
Question 51.2 Recently, Ambassador Brooks wrote to the Directors of
the Weapons labs that they are now ``free to explore a range of
technical options without any concern that some ideas could violate a
vague and arbitrary limitation'' and encourages design teams ``to take
advantage of this opportunity.'' Yet Congress is on the record in the
FY 2004 Energy and Water Appropriations bill expressing its concern
about advanced concepts work, fenced two-thirds of the advanced
concepts funding and in the 2004 Defense Authorization bill, places a
clear limit between research and design and development engineering.
Given the clear statement of congressional intent I am concerned about
National Nuclear Administration and Department of Energy intentions.
Please provide detailed in a classified annex, if necessary, of exactly
what research activities you plan to undertake and your understanding
of what limitations are in fact in place.
Answer. In section 3116 of the FY 2004 National Defense
Authorization Act, Public Law 108-136, Congress repealed the 1994
restriction on low yield weapon research and development, giving NNSA
the opportunity to direct the laboratories to explore concepts in this
regime. The Act also fully funded the Administration's request for this
important national security work as did the Senate passed version of
the Energy and Water Development Appropriations bill. The single
committee that differed was the House Energy and Water Development
Appropriations Committee. In the Appropriations Conference, the
conferees reached the compromise of fencing two thirds of the funds
pending the receipt of a report that is a product of a Department of
Defense planning.
We understand our advanced concepts activities to have the
following limitations: for all research and development activities
involving new or modified warheads in phases prior to phase 3 or 6.3,
we are limited to the funds authorized and appropriated for that
purpose, which in FY 2004 is $13.5 million of which $7.5 million is for
the RNEP study, and of the remaining $6 million, $4 million is fenced
until ninety days after a DOE-DoD stockpile plan is submitted to
Congress. Any engineering development or later activities involving the
Robust Nuclear Earth Penetrator or new low yield nuclear warheads must
be specifically authorized by Congress (PL 108-136, Section 3116,
paragraph (c) and Section 3117). For any other new or modified weapons
work in phase 3 or 6.3 or later, with some specific exceptions, we must
request funds as a separate dedicated line item (PL 107-314, Section
3143, subparagraph (b)(2)).
A detailed report of the Advanced Concepts Initiative activities in
FY 2004 is being prepared for Congress and will be delivered soon.
NNSA ADVISORY COMMITTEE
Question 51.3. Last July, Administrator Brooks announced the
decision to dissolve the National Nuclear Security Administration
Advisory Committee. This panel not only provided an advisory role on
our nuclear weapons programs but also provided transparency to Congress
and the American people regarding how decisions were being made
regarding our nuclear stockpile. Why did the Department of Energy
decide to dissolve this important advisory committee, particularly when
the Administration is proposing to double and triple funding for
controversial programs seeking to research and develop new or modified
nuclear weapons?
Answer. The committee's charter expired and was not renewed. It had
always been intended that this would be an experiment. The decision not
to renew the charter was based on: (1) the contrast between the form of
advice (long-term, detailed studies) that the Committee appeared to
prefer and the more ad hoc approach that the NNSA Administrator and his
senior staff preferred; and (2) the substantial administrative burden
of supporting the committee. Some former Committee members (including
its Chair) still provide advice through other mechanisms. In addition
NNSA gets input from the U.S. Strategic Command Strategic Advisory
Group, the Defense Sciences Board, the Secretary of Energy Advisory
Board and the national Academy of Sciences/National Research Council.
Question 52. As you may know, existing contracts between PG&E and
Western Area Power Administration expire on January 1, 2005. It is my
understanding that Western Area Power Administration is looking at
alternatives that are subject to the Department of Energy's authority.
Can you detail for me the criteria with which you will make a decision
regarding Western Area Power Administration's future, particularly
relating to how it will affect electricity reliability and cost of
electric power?
Answer. The criteria used by the Western Area Power Administration
(Western), as described in its June 24, 2003, Federal Register notice,
are flexibility, certainty, durability, operating transparency and
cost-effectiveness.
Flexibility preserves the ability of Western to join a Federal
Energy Regulatory Commission-approved and certified regional
transmission organization in the future and to adapt to ongoing changes
in the electric utility industry.
Certainty assures that cost-of-service rates remain stable and
predictable. Western further defined certainty as having stable rates
and charges so Western and its customers will be able to continue
engaging in long-term business planning and to undertake prudent long-
term commitments under a reasonable risk management planning horizon.
Durability assures operating protocols are well established and
subject to minimal changes over time. This definition also included
business processes; major changes in business processes can
significantly impair the efficiency and ability of individual
organizations to respond effectively because of the need for increased
staffing and resources.
Operating transparency minimizes operating impacts on third
parties. Western defines this factor as Western's ability to operate
the Federal system with minimal impacts on third parties.
Cost-effectiveness minimizes cost shifts and considers the relative
cost and benefits to Western's customers. Cost-effectiveness also
includes the concept of ensuring that the overall cost of system
operation and delivery of Federal power is kept as low as possible
consistent with sound business principles.
During the public process, the California Independent System
Operator and several other commenters expressed a desire to include
reliability as an additional evaluation category. However, Western
decided not to include reliability as a separate evaluation criteria
because, under existing Western Electricity Coordinating Council and
North American Electric Reliability Council operating criteria, Western
must assure that, whichever operational alternative is ultimately
selected does not negatively impact third parties. Consequently,
Western determined that adopting this criteria would be redundant.
Question 53A. Can you tell me how the Administration will overcome
the barriers in its way regarding storing and shipping hydrogen,
finding renewable sources from which to develop a hydrogen economy; and
how to make the cost of hydrogen fuel cells equal to regular gasoline?
Answer. The Department has developed detailed multi-year research
plans which describe the technical approaches to overcoming the
barriers to a hydrogen economy. These plans are based on a year-long
effort among the Department, industry, academia and other groups that
resulted in a National Hydrogen Energy Roadmap for hydrogen production,
delivery, storage, conversion, applications, as well as codes and
standards and education. Our detailed plans include interim milestones
to track progress and ``go/no-go'' decision points to down-select best
approaches to overcoming each of the barriers. In May 2003, the
Department hosted a Basic Energy Sciences Workshop to develop and
document the basic research needs for the hydrogen economy. This report
and the Department's multi-year plans are available at
www.eere.energy.gov.
Question 53B. Can you tell me why the Administration does not more
aggressively fund technologies that are available today, such as
hybrids, to bridge the gap between purely gasoline vehicles and the
hydrogen economy?
FUNDING SUMMARY
[Dollars in 000's]
------------------------------------------------------------------------
FY 2004
FreedomCAR & vehicle technologies FY 2004 comp. FY 2005
program request approp. request
------------------------------------------------------------------------
Hybrid and Electric Propulsion......... 49,563 45,002 51,821
------------------------------------------------------------------------
Answer. The Department does support hybrid-electric vehicles
through its FreedomCAR and Vehicle Technologies Program. In fact, the
Department is requesting more than $51 million for hybrid and electric
propulsion activities in FY 2005, a 15% increase over FY 2004
appropriation levels. This effort focuses on removing the barriers to
efficient, cost-effective hybrid vehicles by improving both the
performance and potential cost of the components that make up a hybrid
system.
Improving hybrid technologies (e.g., batteries or capacitors for
energy storage, power electronics for energy conversion and management,
and efficient electric traction motors) will assist in the application
of hybrid technologies across the entire vehicle market, an important
objective of the FreedomCAR Partnership. Advances in hybrid
technologies also contribute to bridging the gap to hydrogen fuel cell
vehicles.
Finally, the President's National Energy Policy recommended that
consumer tax credits for hybrid vehicles be passed by the Congress. We
hope the Congress will soon adopt such a tax credit as part of
comprehensive energy legislation.
PERCHLORATE REMEDIATION
There are 44 states in which perchlorate use and manufacturing has
been confirmed. Twenty-five states, including California, have reported
perchlorate ground and surface water contamination. California obtains
approximately 30% of its drinking water from groundwater sources.
Current perchlorate remediation efforts are costly and time consuming.
Question 54. Has any national laboratory been afforded the
opportunity and funding to conduct a study to determine cost effective
processes for perchlorate remediation to address this national problem?
Answer. The national laboratories have performed scientific
research on perchlorate. The following is a synopsis of two ongoing
projects:
The Oak Ridge National Laboratory has been researching
perchlorate treatment and recently developed a new methodology
to degrade perchlorate in regenerant solutions using ferrous
iron and/or non-toxic organic reducing agents.
Through the National Nuclear Security Administration Service
Center in Albuquerque, Los Alamos National Laboratory and the
Pantex Plant have developed a measurement technique for
extremely low levels of perchlorate. The technique, liquid
chromatography mass spectrometry mass spectrometry (LC/MS/MS)
has been demonstrated to reliably measure perchlorate in
groundwater in concentrations well under one part per billion.
CLIMATE CHANGE
Question 55. I remain very concerned about this Administration's
lack of real action against climate change. I believe that we need to
make emission reductions mandatory now, and that we need to work again
with the rest of the world to finalize a version of the Kyoto protocol.
The President, however, has said that the Administration would instead
focus on research and improving our scientific understanding of climate
change.
Given the President's stated commitment to such research, I would
have expected a significant request for climate change research.
However, the line item in this budget is only $3 million, and it
appears that much of this research will focus on researching fossil
fuel energy sources.
How do you plan to use this money and how do you explain the
request for only $3 million in the climate change line item? Does this
indicate a change in the Administration's position on climate change?
Answer. The Bush Administration remains committed to a
comprehensive, innovative program of domestic and international
initiatives to reduce greenhouse gas emissions. The Administration
believes that the aims of the United Nations Framework Convention on
Climate Change (UNFCCC), to which the United States is a party, can be
accomplished in one of two ways--through short-term regulations like
those that would be mandated by the Kyoto Protocol, or through the
development of new, low- or zero-emissions energy technologies that
will allow us to make larger, long-term reductions in emissions while
fostering economic growth.
President Bush has chosen the latter approach. The Bush
Administration will spend approximately $4 billion during this fiscal
year on climate change science and technology activities. President
Bush also supports an additional $4 billion in tax incentives over the
next five years to spur these clean, renewable energy and energy-
efficient technologies.
The $3 million line-item referred to in the question is a modest,
but important part of the President's National Climate Change
Technology Initiative (NCCTI). It will explore, through competitive
solicitations of research grant proposals, novel concepts, technologies
or technical approaches, not elsewhere covered, that could, if
successful, contribute in significant ways to the reduction, avoidance
or permanent sequestration of greenhouse gas (GHG) emissions.
In FY 2005, the Department will spend nearly $2 billion on the
research and development of low-emitting or non-emitting energy
technologies and practices that reduce, avoid, or sequester emissions
of greenhouse gases. For example, the President's FY 2005 Budget
requested increases of $110 million for U.S. participation in four
international climate change technology initiatives: the Hydrogen Fuel
Initiative, Carbon Sequestration, Generation IV Nuclear Systems, and
the International Thermonuclear Experimental Reactor.
International cooperation is a key aspect of our technology
approach, and we are pleased to be partners with the U.K. and/or the
European Union in four of our most important multilateral efforts to
address the risk of climate change. The Administration has also
negotiated climate change agreements with 13 countries or regional
groups that together account for a significant amount of global
greenhouse gas emissions.
As we work on developing these long-term breakthrough energy
technologies, we are also taking action in the near-term. Two years
ago, President Bush set an aggressive national goal of reducing
greenhouse gas intensity 18 percent by 2012. Since then we have
vigorously pursued that goal many successful Federal programs,
including: DOE's Climate VISION program, which involves voluntary,
industry-wide commitments to reduce emissions in 12 energy-intensive
sectors, and EPA's Climate Leaders, which involves 50 major companies
that have developed comprehensive climate change strategies with
corporate-wide emissions reduction goals. The USDA has also modified
its farm conservation programs to encourage farmers to set aside
farmland for carbon sequestration.
ENERGY TECHNOLOGY ENGINEERING CENTER (ETEC)
The Department of Energy used to develop ballistics missiles at the
Santa Susana Field Laboratory in Simi Valley, California. Over the
decades, this site has become highly contaminated with radiation,
mercury, lead, PCBs, dioxins, and other highly toxic chemicals.
For those of you who have never been there, the Santa Susana site
is located on a hillside up above a community, and poses a health risk
to the people who live in the valley below.
The Department of Energy is fully aware of this contamination, and
the threat that it poses. As a matter of fact, in a 1995 agreement, the
Department of Energy entered into a Joint Policy with the Environmental
Protection Agency in which it committed to clean its sites--
nationwide--to standards consistent with the EPA's Superfund cleanup
standards, irrespective of whether the sites were on the National
Priority List of Superfund sites.
It now appears that the Department of Energy has decided to renege
on its promises to the community, to the EPA, and to my office that is
will provide sufficient cleanup of the site. The Department of Energy
is even going so far as to refuse to fund the EPA or anyone else to
conduct a separate, independent survey of the contamination in the
area.
I was dismayed to learn that the Department of Energy's final
cleanup plan does not meet the Federal health and safety standards
deemed necessary by the EPA. And in fact, your Agency's plan is to
remove just 2 percent of the nuclear contaminated soil, an action that
EPA feels is insufficiently protective of human health and the
environment.
Question 56(1). Can you explain why the Department of Energy will
not conduct a full cleanup of the site?
Answer. DOE is meeting all of its commitments to the U.S.
Environmental Protection Agency (EPA) and site stakeholders, including
the State regulator site cleanup requirements. The preferred cleanup
alternative contained in the Environmental Assessment for the ETEC site
released on March 31, 2003, is being implemented at the site. Cleanup
of the site under this alternative is fully protective of human health
and the environment using the 15 mrem dose exposure per year, a cleanup
standard which is consistent with the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) and agreed to with
the California Department of Health Services. This cleanup standard
meets the level that EPA has stated is fully protective of human health
and the environment. Furthermore, in employing this cleanup standard at
the ETEC site, the residual risk at the site will fall within the
CERCLA risk range of 10E-4 to 10E-6.
INDEPENDENT MONITORING OF RADIOACTIVE CONTAMINATION
Question 56(2). Can you explain why the Department of Energy has
reneged on its promise to fund an independent monitoring of radioactive
contamination?
Answer. We are unaware of a commitment by the U.S. Department of
Energy to fund an independent radiological survey of the Energy
Technology Engineering Center (ETEC) site. The Department will be
conducting a survey when cleanup is complete to verify that the cleanup
objectives have been met. In March 2003, the U.S. Environmental
Protection Agency's (EPA) then Acting Administrator, Marianne Horinko,
and DOE's Assistant Secretary, Jessie Roberson, discussed this matter.
In a letter dated September 11, 2003, Ms. Roberson stated the overall
conclusions from these discussions were that DOE will not separately
fund EPA to conduct a separate radiological survey or an historical
site assessment (HSA) of the ETEC site. During the discussions, it was
agreed DOE will conduct a final verification survey of the site that
will incorporate certain elements from EPA's proposed HSA work scope.
This survey will be designed and executed in a manner such that it can
clearly verify that the established cleanup objectives and standards
for the ETEC site have been met.