February 11, 2004

Committee on Science U.S. House of Representatives

Testimony of Dr. Raymond L. Orbach Director, Office of Science

Introduction

Mr. Chairman, Members of the Committee, it is a pleasure to join you
today to present the Department of Energy\'s FY 2005 budget submission
and to focus on the details that fall under the purview of this
Committee. The Department appreciates the support of the Chairman and
the Members of the Committee over the past years and I look forward to
working with you to ensure that our Nation stays at the leading edge of
science and technology in the 21st Century. I am testifying on behalf of
Mr. Robert Card, Under Secretary for Energy, Science and the Environment
at the Department of Energy.

The Department of Energy in the last three years has been guided by the
Administration's commitment to better management in government and the
importance of scientific discovery.   Our cadre of scientists and
engineers from all disciplines create and inspire dynamic discoveries
that change our way of life.   To complement our support for scientific
discovery, the Department has fully embraced the President's Management
Agenda -- emphasizing performance, aligning resources directly to
mission priorities, and integrating these objectives into the management
of human capital.  This synergy has sharpened the focus of the
Department of Energy and, I believe, will result in dramatic
achievements of real importance to the everyday lives of Americans. 

Setting Priorities - Three years ago, Secretary Abraham defined the
Department's primary mission to support national security and
established a series of programmatic objectives in national security,
energy, environmental quality, science, and corporate management.   From
this mission and departmental objectives, the Department's Strategic
Plan was developed, setting in place a long-range programmatic vision. 
To orient the Department to results and performance, the long-range
planning goals and targets have been articulated into shorter-term
performance goals, objectives, and metrics that are reflected throughout
the FY 2005 detailed budget justifications.

The FY 2005 budget request of \$24.3 billion is formulated to meet four
broad programmatic goals and objectives in corporate management:

\* Defense - To protect our national security by applying advanced
science and nuclear technology to the Nation's defense.   The FY 2005
budget proposes \$9.0 billion to meet defense-related objectives.  The
budget request maintains commitments to the nuclear deterrence
requirements of the Administration's Nuclear Posture Review and
continues to fund a strong strategy to mitigate the threat of weapons of
mass destruction.

\* Energy - To protect our national and economic security by promoting a
diverse supply and the delivery of reliable, affordable, and
environmentally sound energy.   The FY 2005 budget requests \$2.7
billion to meet energy-related objectives. The budget request maintains
Presidential objectives to promote energy security and reliability
through increases in coal research and development, hydrogen production
and fuel cell powered vehicles, advanced nuclear energy technologies,
and electric transmission reliability.

\* Science - To protect our national and economic security by providing
a world-class scientific research capacity and advancing scientific
knowledge.   The FY 2005 budget seeks \$3.4 billion to meet
science-related objectives.  The budget request continues the
Administration's commitment to the Nation's scientific strength by
maintaining essential facility and national laboratory operations, and
support for research in the exciting fields of fusion, advanced
scientific computing, nanoscience, microbial genomics, high energy and
nuclear physics and the research tools that enable forefront scientific
research.

\* Environment - To protect the environment by providing a responsible
resolution to the environmental legacy of the Cold War and by providing
for the permanent disposal of the Nation's high level radioactive
waste.   The FY 2005 budget requests \$8.4 billion to meet
environmental-related objectives.  The budget request includes
significant increases to fulfill commitments to accelerate environmental
cleanup, maintain the schedule to establish a permanent geologic nuclear
waste repository by 2010, and accelerate assistance to employees of the
Cold War nuclear weapons complex who may have been harmed by their
work. 

All of the programs and activities highlighted in this Budget depend
heavily upon advanced research and development and could not be achieved
were it not for the world-leading scientific and engineering
capabilities available in the Department's national laboratories and at
universities across the Nation. 

I am proud to tell you that the Department of Energy was ranked the most
improved cabinet-level agency in the most recent scorecard to assess
implementation of the President's Management Agenda (PMA).   The
scorecard, which evaluates agency performance in the areas of human
capital, competitive sourcing, financial management, e-government, and
budget/performance integration, was issued by OMB in January and
recognized the Department as one of the agencies \"leading the pack with
regard to management improvement.\"

Let me now review the program areas under this Committee in greater
detail.

The Office of Science

Overview. The Office of Science FY 2005 budget request is \$3.432
billion, a \$68,451,000 decrease over the FY 2004 appropriation levels.
When \$140,762,000 for    FY 2004 Congressionally-directed projects is
set aside, there is an increase of \$72,311,000 in FY 2005. When
compared to the FY 2004 comparable President's Request, the FY 2005
request increases \$104,885,000 or 3.2 percent. This request allows us
to increase support for high priority scientific research, increase
operations at our key scientific user facilities, keep existing
construction projects on schedule, and support new initiatives.  This
request, coming at a time of tight overall Federal budgets, is also a
demonstration of the Administration's support for basic research and the
role that fundamental science plays in keeping our Nation strong and
secure.

When I joined the Office of Science after a career as a university
scientist and administrator, I came with an appreciation for the four
key roles that the Office plays in the U.S. research effort: We provide
solutions to our Nation's energy challenges, contributing essential
scientific foundations to the energy, national, and economic security
missions of the U.S. Department of Energy (DOE). We are the Nation's
leading supporter of the physical sciences, investing in research at
over 280 universities, 15 national laboratories, and many international
research institutions. We deliver the premier tools of science to our
Nation's science enterprise, building and operating major research
facilities for open access by the science community. We keep the U.S. at
the forefront of intellectual leadership, supporting the core
capabilities, theories, experiments, and simulations to advance science.

This FY 2005 budget request will set us on the path toward addressing
the challenges that face our Nation in the 21st Century. The Office of
Science has recently released Facilities for the Future of Science: A
Twenty-Year Outlook which sets an ambitious agenda for scientific
discovery over the next two decades.  The priorities established in this
plan---which is not a budget document---reflect national priorities set
by the President and the Congress, our commitment to the missions of the
Department of Energy, and the views of the U.S. scientific community.
Pursuing these priorities will be challenging, but they hold enormous
promise for the overall well-being of all of our citizens.  We will soon
release an updated Office of Science Strategic Plan that is fully
integrated with the Facilities Plan, the Department's new Strategic
Plan, and the President's Management Agenda -- including the R&D
Investment Criteria and OMB's Program Assessment Rating Tool.  The FY
2005 budget request begins to implement these plans.

DOE's Office of Science leads the world in the conception, design,
construction, and operation of these large-scale devices. These machines
have enabled U.S. researchers to make some of the most important
scientific discoveries of the past 70 years, with spin-off technological
advances leading to entirely new industries. More than 19,000
researchers and their students from universities, other government
agencies (including the National Science Foundation and the National
Institutes of Health), private industry, and those from abroad use DOE
facilities each year. These users are both growing in number and
diversity.

We credit our outstanding track record in construction to a highly
effective management and review process. We have been so successful that
our process is now considered a "best practice" across the U.S.
government by OMB and OSTP, and we are being consulted by CERN, Europe's
premier particle physics laboratory, on construction of their Large
Hadron Collider, a facility to which the United States (through a
partnership between the Office of Science and the National Science
Foundation) is contributing \$531 million.

Because of the extraordinarily wide range of scientific disciplines
required to support facility users at national laboratories, and the
diversity of mission-driven research supported by the Office of Science,
we have developed an interdisciplinary capability that is extremely
valuable to some of the most important scientific initiatives of the
21st Century. There is also a symbiotic relationship between research
and research tools. Research efforts advance the capabilities of the
facilities and tools that in turn enable new avenues of research.

The Office of Science funds research at DOE's national laboratories and
at 280 colleges and universities located across the country. Excluding
funds used to construct or operate our facilities, approximately half of
our base research funding goes to support research at universities and
institutes. Academic scientists and their students are funded through
peer-reviewed grants, and SC's funding of university research has made
it an important source of support for graduate students and postdoctoral
researchers in the physical sciences during their early careers.

Office of Science research programs are managed in seven major areas,
including an enhanced effort in Workforce Development for Teachers and
Scientists.

Advanced Scientific Computing Research (ASCR). ASCR significantly
advances scientific simulation and computation, applying new approaches,
algorithms, and software and hardware combinations to address the
critical science challenges of the future, and provides access to
world-class, scientific computation and networking facilities to the
Nation's scientific community to support advancements in practically
every field of science and industry. The ASCR budget also supports the
Scientific Discovery through Advanced Computing (SciDAC) program --- a
set of coordinated investments across all Office of Science mission
areas with the goal of achieving breakthrough scientific advances via
computer simulation that were impossible using theoretical or laboratory
studies alone.  

The FY 2005 budget includes \$204 million for ASCR to advance
U.S. leadership in high performance supercomputing, networking and
software development to continue to advance the transformation of
scientific simulation and computation into the third pillar of
scientific discovery.  The request includes \$38 million for the Next
Generation Computer Architecture (NGA) to acquire additional advanced
computing capability for existing users, and for longer-term research
and development on new architectures for scientific computers.  
Enhancements are supported for ASCR facilities -- the Energy Sciences
Network (ESnet) and the National Energy Research Scientific Computing
Center (NERSC).  The request also includes \$8.5 million for the new
Atomic to Macroscopic Mathematics research effort to provide the
research support in applied mathematics needed to break through the
current barriers in our understanding of complex physical processes.

Basic Energy Sciences (BES).    The BES program is a principal sponsor
of fundamental research for the Nation in the areas of materials
sciences and engineering, chemistry, geosciences, and bioscience as it
relates to energy. This research underpins the DOE missions in energy,
environment, and national security; advances energy-related basic
science on a broad front; and provides unique user facilities for the
scientific community and industry.

For FY 2005, the Department requests \$1,064 million for BES including
\$209 million to continue to advance nanoscale science through atomic-
and molecular-level studies in materials sciences and engineering,
chemistry, geosciences, and energy biosciences.    This supports Project
Engineering Design (PED) and construction on four Nanoscale Science
Research Centers (NSRCs) and a Major Item of Equipment for the fifth and
final NSRC. NSRCs are user facilities for the synthesis, processing,
fabrication, and analysis of materials at the nanoscale. The request
also includes \$80.5 million for construction and \$33.1 million for
operation of the Spallation Neutron Source and \$50 million for design
and long lead procurement of the Linac Coherent Light Source, a
revolutionary x-ray laser light source.  With these tools, we will be
able to understand how the compositions of materials affect their
properties, watch proteins fold, see chemical reactions, and design
matter for desired outcomes.

The FY 2005 budget request also includes \$29 million for activities
that support the President's Hydrogen Fuel Initiative. This research
program is based on the BES workshop report "Basic Research Needs for
the Hydrogen Economy", which highlights the enormous gap between our
present capabilities and those required for a competitive hydrogen
economy.

Biological and Environmental Research (BER). BER advances energy-related
biological and environmental research in genomics and our understanding
of complete biological systems, such as microbes that produce hydrogen;
in climate change, including the development of models to predict
climate over decades to centuries; developing science-based methods for
cleaning up environmental contaminants; in radiation biology, providing
regulators with a stronger scientific basis for developing future
radiation protection standards; and in the medical sciences, by
developing new diagnostic and therapeutic tools, technology for disease
diagnosis and treatment, non-invasive medical imaging, and biomedical
engineering such as an artificial retina that will restore sight to the
blind.   For FY 2005, the Department requests \$502 million for BER
which does not provide continued support for the \$141 million in
Congressional earmarks from FY 2004.

Research on microbes through the Genomics: GTL program, addressing DOE
energy and environmental needs, continues to expand from \$63.4 million
in FY 2004 to \$67.5 million in FY 2005.  The request also supports
initiation of Project Engineering Design (PED) activities for the GTL
Facility for the Production and Characterization of Protein and
Molecular Tags, a facility that will help move the excitement of the
Genomics: GTL  systems biology research program to a new level by
greatly increasing the rate and cost-effectiveness with which
experiments can be done. DOE, through the Genomics: GTL program, will
attempt to use genetic techniques to harness microbes to consume
pollution, create hydrogen, and absorb carbon dioxide. 

Fusion Energy Sciences (FES).   The FES program advances the theoretical
and experimental understanding of plasma and fusion science, including a
close collaboration with international partners in identifying and
exploring plasma and fusion physics issues through specialized
facilities. This includes: 1) exploring basic issues in plasma science;
2) developing the scientific basis and computational tools to predict
the behavior of magnetically confined plasmas; 3) using the advances in
tokomak research to enable the initiation of the burning plasma physics
phase of the Fusion Energy Sciences program; 4) exploring innovative
confinement options that offer the potential of more attractive fusion
energy sources in the long term; 5) focusing on the scientific issues of
nonneutral plasma physics and High Energy Density Physics;  6)
developing the cutting edge technologies that enable fusion facilities
to achieve their scientific goals; and 7) advancing the science base for
innovative materials to establish the economic feasibility and
environmental quality of fusion energy.

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." To this end, the Department continues its commitment
to the future of Fusion Energy Science research with a request of
\$264.1 million, slightly above the FY 2004 level.   Within that amount,
DOE's funding in preparation for ITER in FY 2005 is \$38 million, \$30
million more than last year.  Of this \$38 million, \$7 million is for
engineers who support the International Team and for the qualification
of vendors for superconducting cable.  The other \$31 million is for
experiments on our tokamak facilities and for component R&D in our
laboratories and universities that is closely related to our ongoing
program but which is focused on ITER's specific needs. 

Fabrication of the National Compact Stellarator Experiment (NCSX) will
continue with a target of FY 2008 for the initial operation of this
innovative new confinement system that is the product of advances in
physics understanding and computer modeling. In addition, work will be
initiated on the Fusion Simulation Project to provide an integrated
simulation and modeling capability for magnetic fusion energy
confinement systems over a 15-year development period.   The Inertial
Fusion Energy research program will be redirected toward high energy
density physics research based on recommendations of the recently
established Interagency Task Force on High Energy Density Physics.

High Energy Physics (HEP). HEP advances understanding of dark energy and
dark matter, the striking imbalance of matter and antimatter in the
current universe, the basic constituents of matter, and the possible
existence of other dimensions, collectively revealing the key secrets of
the birth, evolution, and final destiny of the universe.    HEP expands
the energy frontier with particle accelerators to study fundamental
interactions at the highest possible energies, which may reveal the rest
of the universe: new particles, new forces or undiscovered dimensions of
space and time; explain how everything came to have mass; and illuminate
the pathway to the underlying simplicity of the universe.

For FY 2005, the Department requests \$737 million for the HEP program,
about the same as in FY 2004.   Highest priority in HEP is the
operations, upgrades and infrastructure for the two major HEP user
facilities at the Fermi National Accelerator Laboratory (Fermilab) and
the Stanford Linear Accelerator Center (SLAC), to maximize the
scientific data generated.

In 2005, the Neutrinos at the Main Injector (NuMI) facility will be
complete and the beam line will be commissioned.  The FY 2005 budget
request also supports engineering design activities for a new Major Item
of Equipment, the BTeV ("B Physics at the TeVatron") experiment at
Fermilab to extend current investigations that uses modern detector
technology to increase our data rate by more than two orders of
magnitude. Research, development and design funding continues in FY 2005
on the proposed Supernova Acceleration Probe (SNAP) experiment for the
DOE/NASA Joint Dark Energy Mission (JDEM). 

Nuclear Physics (NP). NP supports innovative, peer reviewed scientific
research to advance knowledge and provide insights into the nature of
energy and matter, and in particular, to investigate the fundamental
forces which hold the nucleus together, and determine the detailed
structure and behavior of the atomic nuclei. Nuclear science plays a
vital role in studies of astrophysical phenomena and conditions of the
early universe. At stake is a fundamental grasp of how the universe has
evolved, an understanding of the origin of the elements, and the
mechanisms of supernovae core collapse. The program builds and supports
world-leading scientific facilities and state-of-the-art instruments
necessary to carry out its basic research agenda. Scientific discoveries
at the frontiers of Nuclear Physics further the nation's energy-related
research capacity, which in turn provides for the nation's security,
economic growth and opportunities, and improved quality of life.

The FY 2005 budget request of \$401 million gives highest priority to
exploiting the unique discovery potentials of the facilities at the RHIC
and Continuous Electron Beam Accelerator Facility (CEBAF) by increasing
operating time by 26% compared with FY 2004. R&D funding is provided for
the proposed Rare Isotope Accelerator (RIA) and 12 GeV upgrade of CEBAF
at Thomas Jefferson National Accelerator Facility.

Operations of the MIT/Bates facility will be terminated as planned,
following three months of operations in FY 2005 to complete its research
program. This facility closure follows the transitioning of operations
of the Lawrence Berkeley National Laboratory 88-Inch Cyclotron in FY
2004 from a user facility to a dedicated facility for the testing of
electronic circuit components for use in space (using funds from other
agencies) and a small in-house research program. These resources have
been redirected to better utilize and increase science productivity of
the remaining user facilities and provide for new opportunities in the
low-energy subprogram.  

Workforce Development for Teachers and Scientists.   The mission of the
Workforce Development for Teachers and Scientists program is to continue
the Office of Science's long-standing role of training young scientists,
engineers, and technicians in the scientifically and technically
advanced environments of our National Laboratories.

The FY 2005 budget request of \$7.66 million provides \$1.5 million for
a Laboratory Science Teacher Professional Development activity.  About
90 participating teachers will gain experience and enhance their skills
at five or more DOE laboratories in response to the national need for
science teachers who have strong content knowledge in the classes they
teach. A new \$0.5 million Faculty Sabbatical Fellowship activity will
provide sabbatical opportunities for 12 faculty from minority serving
institutions (MSIs). This proposed activity is an extension of the
successful Faculty and Student Teams (FaST) program where teams of
faculty members and two or three undergraduate students, from colleges
and universities with limited prior research capabilities, work with
mentor scientists at a National Laboratory to complete a research
project that is formally documented in a paper or presentation.

The Office Energy Efficiency and Renewable Energy

Research, development and deployment of advanced clean energy
technologies are making a difference in everyday lives of Americans
today and will make an even larger difference tomorrow.   Advanced
energy efficient technologies and practices that use less energy, as
well as renewable energy technologies that produce power and heat more
cleanly than conventional sources, are well on their way to becoming
today's answers to tomorrow's energy and environmental challenges. 

The Department allocates more funding for energy efficiency and
renewable energy than it does for any other energy activity.  The Fiscal
Year 2005 Budget Request for the Office of Energy Efficiency and
Renewable Energy (EERE) is \$1.25 billion, a \$15.3 million increase
over the Fiscal Year 2004 comparable funding level.  This budget builds
on successes already achieved and delivers on promises and commitments
made in past budget requests.

The Department's Fiscal Year 2005 budget request continues to implement
the priorities established in the National Energy Policy Report and the
Department of Energy Strategic Plan, and reflects priorities set in the
EERE Strategic Program Review.  EERE also used the research and
development investment criteria called for in the President's Management
Agenda to evaluate its portfolio and focus its research and development
dollars on long-term, potentially high payoff activities that require
Federal involvement to be successful and achieve public benefit.

The Fiscal Year 2005 budget reflects Secretary Abraham's challenge to
EERE that it take a bold approach to EERE-sponsored work.  Recognizing
increasing dependence on energy from areas of the world that can be
unstable, and recognizing that questions surrounding climate change can
increase the focus on reducing greenhouse gas emissions, the Secretary
directed that the program take a revolutionary, rather than an
evolutionary approach to meeting National Energy Policy Report's goals
of increased energy security, greater freedom for Americans in their
energy choices, and reduced costs and environmental impacts associated
with those choices.

One such revolutionary approach is embodied in the President's
FreedomCAR Partnership and Hydrogen Fuel Initiative, the goal of which
is an industry decision by 2015 to commercialize hydrogen-powered fuel
cell vehicles. To the extent that hydrogen is produced from domestic
resources in an environmentally sound manner, hydrogen fuel cell
vehicles will require no petroleum-based fuels and emit no criteria
pollutants or carbon dioxide, and their commercial success would
essentially remove personal transportation as an environmental issue and
substantially reduce our dependence on foreign oil.  The FreedomCAR
Partnership and Hydrogen Fuel Initiative now include both auto
manufacturers and energy companies, helping to ensure that hydrogen will
be available and affordably priced when fuel cell vehicles are ready for
commercialization. Over the past year significant R&D advances have
increased confidence that the 2015 goal is realistic and attainable.
Together with programs in Fossil Energy, Nuclear Energy and Science, the
Department's Fiscal Year 2005 commitment to the Hydrogen Fuel Initiative
is \$227 million.

The Fiscal Year 2005 budget requests \$10.2 million to continue our
Solid State Lighting program begun last year.  Solid State Lighting
represents a revolutionary approach to lighting our homes and businesses
that has the potential to more than double the efficiency of general
lighting systems in the coming decades, conserving enough electricity
nationally to power the states of Arizona, Colorado, and Mississippi.
Advancing the technology and lowering the cost of organic and inorganic
light emitting diodes will lead to more efficient, flexible and
functional lighting technology in the future.  The budget for Solid
State Lighting keeps the Department on track to overcome technical
barriers to everyday use of these innovative technologies.

In the deployment area, the Fiscal Year 2005 budget request maintains
the President's commitment to increase funding for the Weatherization
Assistance Program by \$1.4 billion over ten years to help low-income
Americans who spend a disproportionately high share of their income on
energy. This year's budget request will allow the weatherization of
nearly 119,000 low-income homes, saving \$1.30 in energy costs for every
dollar invested.

Federal Energy Management Program (FEMP) alternative financing programs
and technical assistance helps Federal agencies access private sector
financing to fund energy improvements through Energy Savings Performance
Contracts and Utility Energy Service Contracts at no net cost to
taxpayers.   In addition, FEMP promotes a whole-building design strategy
and provides awards to groups within Federal agencies that achieve
excellence in energy management.    The Fiscal Year 2005 request is
\$17.9 million for FEMP to continue reducing Federal energy
consumption.  As FEMP's core activities have evolved, efficiencies have
increased, enabling a reduced funding level in Fiscal Year 2005. 

The Office of Electric Transmission and Distribution

The mission of the newly created Office of Electric Transmission and
Distribution (OETD) is to lead a national effort to modernize and expand
America's electricity delivery system to ensure a more reliable and
robust electricity supply, as well as economic and national security. 
This is vital to the Department's strategic goal: to protect our
national and economic security by promoting a diverse supply and
delivery of reliable, affordable, and environmentally sound energy.

The August 14, 2003 blackout demonstrated the electric grid's strategic
importance to our Nation.  President George Bush stated in September
2003: "...it's clear that the power grid needs an overhaul.  It needs to
be modernized.  As we go into an exciting new period of American
history, we want the most modern electricity grid for our people... we
need more investment; we need research and development..."

OETD requests \$90.9 million for FY 2005 to increase reliability, which
reflects a 12.4 percent increase over the FY 2004 comparable
appropriation.   This effort includes research, development,
demonstration, technology transfer, and education and outreach
activities in partnership with industry, businesses, utilities, States,
other Federal programs and agencies, universities, national
laboratories, and other stakeholders. 

Neither government nor industry alone can satisfy the Nation's electric
infrastructure needs.   The National Delivery Technologies
Roadmap provides a framework for all of the electric industry
stakeholders to work together to achieve common aims.  The call for grid
modernization is coming from all levels of leadership.  The President's
2004 State of the Union request to Congress to "modernize our
electricity system" reiterated the Administration's objectives first
outlined in the National Energy Policy \[May 2001\] and then reinforced,
in more detail, in the National Transmission Grid Study (NTGS) \[May
2002\].

Modernizing the grid will involve time, resources, and unprecedented
levels of cooperation.   The Nation's aging electric infrastructure Å\\
and the increasing requirements placed on it Å\\ have contributed to
market inefficiencies and electricity congestion in several regions. 
 These conditions could lead to more outages, more power quality
disturbances, higher prices, and the less efficient use of resources. 
We must act now or risk even greater problems in the future.

The GridWise and GridWorks Initiatives. OETD's FY 2005 Budget request
Å\\ reflecting the Administration's efforts to modernize and expand the
electric grid Å\\ includes \$10.5 million for the new GridWorks
Initiative and the existing GridWise Initiative, which are aimed at
reducing the likelihood and impact of reliability events, such as
blackouts. 

GridWise denotes a modernized electric infrastructure framework where
open, but secure, communication and information technologies, and
associated standards, are used throughout the electric grid to enhance
reliability and robustness, promote economic efficiencies, and provide
value and choices to electricity consumers.   The GridWise program
activity (software-centric) comprises the intelligence -- or brains --
behind a modern electric grid that incorporates GridWorks
(hardware-centric) technology.  

GridWorks is focused on advanced equipment applications, taking an
integrated approach to the entire electric system.   It bridges the gap
between the laboratory prototypes of the base programs and the
application needs of the electric industry.   GridWorks uses the
facilities at DOE's National Laboratories to accelerate the development
and testing of advanced conductors, which can increase much-needed
transmission line capacity.  It complements GridWise's architectural
software development by developing and demonstrating associated
hardware, such as sensors.  GridWorks pursues advanced power electronic
breakthroughs to provide faster means of limiting transmission problems
before they propagate through the electric system.

High Temperature Superconductivity.   OETD's FY 2005 Budget request
includes a \$10.9 million increase for High Temperature
Superconductivity R&D to develop second generation wire usable in
cables, generators, transformers, and motors -- equipment that crosscuts
the entire electric power value chain.

High temperature superconductors are a good example of advanced
materials that have the potential to revolutionize electric power
delivery in America.   The prospect of transmitting large amounts of
power through compact underground corridors, with minimal electrical
losses and voltage drop over long distances, could significantly enhance
the overall energy efficiency and reliability of the electric system,
while reducing fuel use, air emissions, and any physical footprint.  
Also, breakthroughs in basic science are rapidly applied in the area of
high temperature superconductivity.  For instance, benefits from
nanoscience research are accelerating progress in superconductivity wire
development.

The Office of Fossil Energy

Fossil Energy's programs focus on supporting the President's top
initiatives for energy security, clean air, climate change, and coal
research.  FY 2005 Fossil Energy programs:

\* Support the development of lower cost, more effective pollution
control technologies embodied in the President's Coal Research
Initiative or help diversify the nation's future sources of
clean-burning natural gas to meet the goals of President's Clear Skies
initiative;

\* Expand the nation's technological options for reducing greenhouse
gases either by increasing power plant efficiencies or by capturing and
isolating these gases from the atmosphere as called for by the
President's Global Climate Initiative;

\* Or measurably add to the nation's energy security by providing a
short-term emergency response, such as the Strategic Petroleum Reserve,
or a longer-term alternative to imported oil, such as hydrogen and
methane hydrates.

The President's Coal Research Initiative. Fossil Energy's FY 2005 Budget
continues to meet the President's clean coal commitment by providing
\$447 million for the Coal Research Initiative, an increase of 40
percent or \$126.5 million over last year's request. 

Under President Bush's leadership, budget requests for coal R&D have
more than doubled over historical amounts and appropriations.  

Clean Coal Power Initiative and FutureGen. The Clean Coal Power
Initiative (CCPI) is a key component of the National Energy Policy to
address the reliability and affordability of the Nation's electricity
supply, particularly from its coal-based generation.  The  FY 2005
Budget includes \$287 million for CCPI, of which \$237 million is for
FutureGen, the world's first zero-emissions hydrogen and electicity
producing power plant.   FutureGen will establish the capability and
feasibility of co-producing electricity and hydrogen from coal with
essentially zero emissions, including carbon sequestration and
gasification combined cycle, both integral components of the zero
emissions plant of the future.

The CCPI is a cooperative, cost-shared program between the government
and industry to rapidly demonstrate emerging technologies in coal-based
power generation and to accelerate their commercialization.   The
Nation's power generators, equipment manufacturers, and coal producers
help identify the most critical barriers to coal's use in the power
sector.   Technologies are selected with the goal of accelerating
development and deployment of coal technologies that will economically
meet environmental standards, while increasing the efficiency and
reliability of coal power plants. 

CCPI is especially significant because it directly supports the
President's Clear Skies initiative.  The first projects included an
array of new cleaner and cheaper concepts for reducing sulfur dioxide,
nitrogen oxides, and mercury -- the three air pollutants targeted by the
Clear Skies initiative.

Since last year, the Department has made significant progress on a new
generation of environmentally-clean coal technologies.

The "first round" in the Clean Coal Power Initiative -- the centerpiece
of the President's clean coal commitment -- attracted three dozen
proposals for projects totaling more than \$5 billion.  In early 2003,
we announced the first winners of the competition -- eight projects with
a total value of more than \$1.3 billion, more than one billion dollars
of which would be provided by the private sector.  These projects are
expected to help pioneer a new generation of innovative power plant
technologies that could help meet the President's Clear Skies and
climate change objectives.

Competitive solicitations for the "second round" will be made in early
2004 and are open to technologies capable of producing any combination
of heat, fuels, chemicals, or other useful by-products in conjunction
with electricity generation. 

FutureGen. In order to assure that FutureGen is successful, it will be
supported in FY05 by a clean coal R&D effort at a proposed level of
\$46.5 million.  It will be focused on all the key technologies needed -
such as carbon sequestration, membrane technologies for oxygen and
hydrogen separation, advanced turbines, fuel cells, coal to hydrogen
conversion, gasifier related technologies, and other technologies.

Carbon Management. Several Clean Coal projects also help expand the menu
of options for meeting the President's climate change goal of an 18
percent reduction in greenhouse gas intensity (carbon equivalent per
GDP) by 2012, primarily by boosting the efficiencies of power plants
(meaning that less fuel is needed to generate electricity with a
corresponding reduction in greenhouse gases).

Carbon management has become an increasingly important element of our
coal research program.   Carbon sequestration -- the capture and
permanent storage of carbon dioxide -- has emerged as one of our highest
priorities in the Fossil Energy research program -- a priority reflected
in the proposed budget of \$49 million in FY 2005.  

Continuing in FY 2005, one of the cornerstones of our carbon
sequestration program will be a national network of regional
partnerships.   This Secretarial initiative, which I announced last
year, will bring together the federal government, state agencies,
universities, and private industry to begin determining which options
for capturing and storing greenhouse gases are most practicable for
specific areas of the country. 

Funding from the Fossil Energy program will be combined with funding
from the Office of Nuclear Energy and the Office of Energy Efficiency
and Renewable Energy to competitively fund technology R&D with the
greatest potential to reduce, avoid, or sequester gas emissions.

Hydrogen. Another aspect of the President's Clean Coal Research
Initiative is the production of clean fuels from coal.   Hydrogen has
emerged as a major priority within the Administration and the Department
of Energy as a clean fuel for tomorrow's advanced power technologies
(such as fuel cells) and for future transportation systems.  Within the
Fossil Energy program, we have allocated \$16 million for research into
new methods for making hydrogen from coal.

Advanced Research. To provide fundamental scientific knowledge that
benefits all of our coal technology efforts, our FY 2005 Budget includes
\$30.5 million for advanced research in such areas as materials, coal
utilization science, analytical efforts, and support for coal research
at universities (including historically black and other minority
institutions).

Other Power Systems Research and Development.   We are also proposing
\$23 million for continued development of fuel cells with an emphasis on
lower-cost technologies that can contribute to both Clear Skies emission
reductions, particularly in distributed generation applications, and
Climate Change goals by providing an ultra-high efficiency
electricity-generating component for tomorrow's power plants. 
 Distributed power systems, such as fuel cells, also can contribute to
the overall reliability of electricity supplies in the United States and
help strengthen the security of our energy infrastructure.

Natural Gas Research.   The President's Clear Skies Initiative also
provides the rationale for much of the department's \$26.0 million
budget request for natural gas research.   Even in the absence of new
environmental requirements, natural gas use in the United States is
likely to increase by 50 percent by 2020.

Our natural gas research program, therefore, is directed primarily at
providing new tools and technologies that producers can use to diversify
future supplies of gas.  Emphasis will be increased on research that can
improve access to onshore public lands, especially in the Rocky Mountain
region where much of our undiscovered gas resource is located.  A
particularly important aspect of this research will be to develop
innovative ways to recover this resource while continuing to protect the
environmental quality of these areas.

We also plan to establish a new industry-led, university consortia-based
program to develop breakthrough technologies that can help assure a
continued supply of affordable natural gas beyond 2015.   The focus of
this program will be on projects that could revolutionize the way
natural gas is supplied in the United States -- a focus that is well
beyond the type of research industry is now doing. 

Natural gas storage will also assume increasing significance in the
United States as more and more power plants require consistent,
year-round supplies of natural gas.  Toward this end, we will initiate a
nationwide, industry-led consortium that will examine ways to improve
the reliability and efficiency of our nation's gas storage system and
explore opportunities for LNG facility siting.

Over the long-term, the production of natural gas from hydrates could
have major energy security implications.  Hydrates are natural
gas-bearing, ice-like formations in Alaska and offshore.

U.S. Geological Survey estimates indicate U.S. gas hydrates resources
are larger by several orders of magnitude than previously thought and
dwarf the estimated 1,400 trillion cubic feet of conventional recovered
gas resources and reserves in the United States.

This huge resource warrants a new look at advanced technologies that
might one day reliably and cost-effectively detect and produce natural
gas from methane hydrates.

Hydrate production, if it can be proved technically and economically
feasible, has the potential to shift the world energy balance away from
the Middle East.  Understanding hydrates can also improve our knowledge
of the science of greenhouse gases and possibly offer future mechanisms
for sequestering carbon dioxide.  For these reasons, we are continuing a
research program to study gas hydrates with a proposed funding level of
\$6.0 million.

Oil Technology Development.   The President's NEP calls attention to the
continued need to strengthen our nation's energy security by promoting
enhanced oil (and gas) recovery and improving oil (and gas) exploration
technology through continued partnerships with public and private
entities.

At the same time, however, we recognize that if the Federal oil
technology R&D program is to produce beneficial results, it must be more
tightly focused than in prior years.  Consequently, our FY 2005 Budget
request of \$15.0 million reflects a reorientation of the program toward
those areas where there is clearly a national benefit.

One example is the use of carbon dioxide (CO2) injection to enhance the
recovery of oil from existing fields.   CO2 injection is a proven
enhanced oil recovery practice that prolongs the life of some mature
fields, but the private sector has not applied this technique to its
fullest potential due to insufficient supplies of economical CO2.   A
key Federal role to be carried out in our proposed FY 2005 program will
be to facilitate the greater use of this oil recovery process by
integrating it with CO2 captured and delivered from fossil fuel power
plants. 

We will also refocus much of our Oil Technology program on a new
Domestic Resource Conservation effort that will target partnerships with
industry and universities to sustain access to marginal wells and
reservoirs.   These aging fields account for 40 percent of our domestic
production and contain billions of barrels of oil that might still be
recovered with ever-improving technology. 

A high priority effort in FY 2005 will be to develop "micro-hole"
technology.   Rather than developing just another new drilling tool, the
Federal program will integrate "smart" drilling systems, advanced
imaging, and enhanced recovery technologies into a complete exploration
and production system.   Micro-hole systems may offer one of our best
opportunities for keeping marginal fields active because the
smaller-diameter wells can significantly reduce exploration costs and
make new drilling between existing wells ("infill" drilling) more
affordable. 

Using breakthrough technology like this to keep marginal fields in
production preserves the opportunity to eventually apply even more
advanced innovations that could recover even larger quantities of
domestic crude that traditional oil recovery methods currently leave
behind.

Other Fossil Energy Activities.   Our budget also includes \$124.8
million for other activities in our Fossil Energy program, including
\$106.0 million for headquarters and field office salaries, \$6.0
million for environmental restoration, \$3.0 million for Federal
matching funds for cooperative research and development projects at the
University of North Dakota and the Western Research Institute, \$1.8
million for natural gas import/export responsibilities, and \$8 million
for advanced metallurgical research at our Albany Research Center. 

Petroleum Reserves. The Strategic Petroleum Reserve and Northeast Home
Heating Oil Reserve are key elements of our Nation's energy security. 
Both serve as response tools for the President to use to protect U.S.
citizens from disruptions in commercial energy supplies. 

Strategic Petroleum Reserve.   The President has directed us to fill the
Strategic Petroleum Reserve to its full 700 million barrel capacity. 
 The mechanism for doing this is a cooperative effort with the Minerals
Management Service to exchange royalty oil from Federal leases in the
Gulf of Mexico.  We have been able to accelerate fill from an average of
60,000 barrels per day at the start of the President's initiative to a
rate of 130,000 barrels per day. 

Because of the President's "royalty in kind" initiative, we have
achieved the Reserve's highest inventory level ever, now at 638 million
barrels.  Our goal remains to have a full inventory of 700 million
barrels by the end of calendar 2005.

Our FY 2005 Budget for the SPR is \$177.1 million, all of which is now
in our facilities development and operations account. We do not require
additional funds in the oil acquisition account because charges for
transporting "royalty in kind" oil to the SPR are now the responsibility
of the oil supplier.  Also, because we have the authority to "borrow"
funds from other Departmental accounts to support an emergency SPR
drawdown, we no longer require the same amount of standby funding in
this account. 

Northeast Home Heating Oil Reserve. We are requesting \$5.0 million for
the Northeast Home Heating Oil Reserve, the same level as last year. 
 The 2-million barrel reserve remains ready to respond to a Presidential
order should there be a severe fuel oil supply disruption in the
Northeast.  A key element of this readiness is a new online computerized
"auction" system that we implemented to expedite the bidding process. 
Installing and testing the electronic system (including tests with
prospective commercial bidders) has been a major element of the Office
of Fossil Energy's role in implementing the "e-government" initiatives
in the President's management agenda.

Naval Petroleum and Oil Shale Reserves.   The FY 2005 Budget request of
\$20.0 million funds continued operations.   The Rocky Mountain Oilfield
Testing Center (RMOTC), established at the Naval Petroleum Reserve No. 3
in Wyoming, will be funded at \$3 million.  We also are working on
proposals to transfer the Naval Petroleum Reserve No. 2 in California to
the Department of the Interior by the end of FY 2005, although we
anticipate that transition and certain environmental compliance
activities will continue into FY 2005.  We also expect to be able to
reduce our funding requirements for equity redetermination studies for
the Government's portion of the Elk Hills Naval Petroleum Reserve No. 1,
which was divested in 1998.  Of the four producing zones for which final
equity shares had to be finalized, three have been completed; the fourth
(the Shallow Oil Zone) is expected to be finished in FY 2005.

The Office of Nuclear Energy, Science and Technology

Overview.   The FY 2005 budget proposal continues the Department's
commitment to refining the benefits of nuclear power as a clean,
reliable and affordable source of energy for this nation.   The proposed
\$410 million investment in the Department's nuclear energy program 
includes funding to establish a new laboratory for nuclear energy
research, development, demonstration and education;  preconceptual
design work for the Next Generation Nuclear Plant; continued work with
utilities to pave the way for an industry order for a new nuclear power
plant in the near future; and continued work with other countries to
develop new reactor and fuel cycle technologies.

This budget request moves forward the Department's commitment to support
the President's priorities to fortify U.S. energy independence and
security while making significant improvements in environmental quality
through the deployment of non-emitting generation capacity by the end of
the decade.  It also strengthens our nation's nuclear education
infrastructure, and recommends increased support for the Nuclear
Hydrogen Initiative, which will take high temperature nuclear energy
systems for clean hydrogen production from concept to reality.  Finally,
this request supports funds for the Advanced Fuel Cycle Initiative,
which is aimed at developing proliferation-resistant fuel cycle
technologies to reduce the volume and toxicity of commercial spent
nuclear fuel and maximize energy from nuclear fuel.

Please allow me to explain in more detail how this budget proposal
continues to advance the Department's nuclear energy initiatives.

Development of the Idaho National Laboratory -- DOE's Nuclear Energy
Research Center. This budget supports the Secretary's realignment of the
mission at the current Idaho National Engineering and Environmental
Laboratory to a focus on nuclear energy research and development.  The
Department is in the process of establishing the Idaho National
Laboratory, which will combine the resources of the INEEL and the
Argonne-West site.  As the Department's leading center of nuclear
research and development, a core mission of this laboratory is advanced
nuclear reactor and fuel cycle technologies, including the development
of space nuclear power and propulsion technologies.  The new Idaho
National Laboratory will play a vital role in the research and
development of enabling technologies for the Next Generation Nuclear
Plant, which will support the Department's long-term vision of a
zero-emissions future free of reliance on imported energy.

The Department issued a Request for Proposals last week to find a
management team to reduce costs and build expertise at the INL. The
Department's nuclear energy program involves the collective talents of
universities, the private sector, international partners and many of our
other national laboratories -- Argonne, Los Alamos, Sandia and Oak Ridge
among them.  The rebuilding of the Department's nuclear power research
and development program, however, will be centered at INL.  While
environmental cleanup remains an important focus at the Idaho site, real
progress is being made that will aid in the expansion of nuclear
research and development.  Within the 2005 budget, an additional \$44
million is requested to manage laboratory infrastructure and security.

Generation IV Nuclear Energy Systems.   The Generation IV program
continues to support the Department's work to develop advanced reactor
technologies for commercial deployment in the 2015 to 2030 timeframe. 
 These advanced reactor concepts offer significant improvements in
sustainability, proliferation resistance, physical protection, safety
and economics.  Generation IV nuclear energy systems will not only be
safe, economic and secure, but also include energy conversion systems
that produce valuable commodities such as hydrogen, desalinated water
and process heat.  These features make Generation IV reactors ideal for
meeting the President's energy and environmental objectives.

The development of these reactors is being led by the Generation IV
International Forum, a group of 10 leading nuclear nations (Argentina,
Brazil, Canada, France, Japan, the Republic of Korea, the Republic of
South Africa, Switzerland, the United Kingdom and the United States),
plus Euratom.  The forum has selected six promising technologies for
next-generation nuclear energy systems.  While the Department is
supporting research on several reactor concepts, this budget proposal
places priority on the Next Generation Nuclear Plant (NGNP), a Very-High
Temperature Reactor.  This emphasis reflects the NGNP's potential for
economically and safely producing electricity and hydrogen without
emitting greenhouse gases.  FY 2005 NGNP activities will be focused on
research and development of fuels and structural materials for
high-temperature, high-radiation environments, and continuing the
concept design activities initiated in FY 2004. Research and development
for the other Generation IV systems will focus on establishing technical
and economic viability, and the resulting core and fuel designs and
materials requirements.

Nuclear Hydrogen Initiatives.   Hydrogen offers significant promise as a
future energy technology, particularly for the transportation sector. 
 The use of hydrogen in transportation will reduce U.S. dependence on
foreign sources of petroleum, enhancing national security.  Significant
progress in hydrogen combustion engines and fuel cells is making
transportation by hydrogen a reality.  The goal of the Nuclear Hydrogen
Initiative is to demonstrate the economic, commercial-scale production
of hydrogen using nuclear energy.  If successful, this research could
lead to a large-scale, emission-free domestic hydrogen production
capability to fuel a future hydrogen economy.

The Nuclear Hydrogen Initiative will focus primarily on hydrogen
production technologies that utilize high-temperature nuclear reactors
to produce hydrogen, which then could supplant fossil fuels in our
transportation system.  With funding of \$9 million in FY 2005, the
Nuclear Hydrogen Initiative will move toward demonstrating nuclear-based
hydrogen producing technologies in the laboratory, study potential
hydrogen production schemes, and develop deployment alternatives to meet
growing hydrogen demand.

As previously noted, the Generation IV program priority is on the Next
Generation Nuclear Plant, which utilizes a Very-High-Temperature Reactor
for advanced hydrogen production and electricity generation. 
Investigating and demonstrating the Generation IV nuclear energy systems
will require advances in materials and systems technology, including
development of high temperature and corrosion-resistant materials, and
advanced chemical systems analysis.  NE is working in close cooperation
with the Department's Office of Science, through the Future Energy
Advanced Materials Initiative, to evaluate common areas of research to
develop advanced materials for use in nuclear hydrogen systems, as well
as Generation IV Nuclear Energy Systems.

Advanced Fuel Cycle Initiative.   Of all the challenges affecting the
expansion of nuclear energy in the U.S. and worldwide, none is more
important or more difficult than dealing effectively with spent nuclear
fuel.  After a long and difficult process, the country is moving forward
with licensing a geologic repository for spent nuclear fuel. This is an
absolute necessity, even as the Department develops advanced forms of
spent nuclear fuel treatment.  The Department plans to submit a license
application for the repository to the Nuclear Regulatory Commission by
the end of 2004.

Research on improving ways to treat and utilize materials from spent
nuclear fuel will allow the Department to optimize the first repository,
and delay -- and perhaps even eliminate -- the need for future
repositories.  The Advanced Fuel Cycle Initiative, with an investment of
\$46 million for FY 2005, will continue the progress made in the
development of proliferation-resistant treatment and transmutation
technologies that can reduce both the volume and toxicity of spent
nuclear fuel.  These technologies would support both national security
and energy independence by reducing inventories of
commercially-generated plutonium while recovering residual energy value
from spent nuclear fuel.

The Department is proposing a research program leading to a
demonstration of proliferation-resistant fuel treatment technology to
reduce the volume of high-level waste, and development of advanced fuels
that could allow the consumption of plutonium using existing light water
reactors, or advanced gas reactors.  Under the President's request, the
Department will continue work toward demonstration of
proliferation-resistant fuel treatment technology and continue design
and testing of transmutation fuels for future use with current reactor
technologies.

For the Advanced Fuel Cycle Initiative to be successful, advanced fuel
treatment and transmutation research and development must be integrated
with the development of Generation IV nuclear energy systems,
particularly with those reactor technologies that can produce very high
neutron levels that would be needed to transmute a wide variety of toxic
radioactive species.  To support this goal, the Advanced Fuel Cycle
Initiative will develop the advanced proliferation resistant fuels and
fuel cycle systems for Generation IV reactors.

Nuclear Power 2010. The President's budget supports continuation of
Nuclear Power 2010 in FY 2005 to demonstrate, in cost-shared cooperation
with industry, key regulatory processes associated with licensing new
nuclear plants in the U.S.   The requested funds of \$10 million would
support the activities associated with achieving NRC approval of early
site permits and development of Combined Construction and Operating
License applications.

University Reactor Infrastructure and Education Initiative.   For years,
the Energy Department has sponsored an initiative that supports nuclear
science and technology educational infrastructure through our University
Reactor Infrastructure and Education Initiative.   This program is
essential to the continued operation of the nation's university research
and training reactors, which play a vital role in supporting nuclear
education and training.

The growth of nuclear energy in the United States is dependent on the
preservation of the education and training infrastructure at
universities.  Research conducted using these reactors is critical to
many national priorities.  Currently there are 27 operating university
research reactors at 26 campuses in 20 states.  These reactors are
providing support for research in such diverse areas as medical
isotopes, human health, life sciences, environmental protection,
advanced materials, lasers, energy conversion and food irradiation.

Beyond technology and equipment, the DOE's university program supports
the personnel required for a strong nuclear energy future.  The demand
for trained and qualified nuclear scientists currently exceeds supply. 
The President's budget includes \$21 million for fellowships,
scholarships, nuclear engineering research, and for critical support to
university research reactors -- all of which will help address this
shortage of well-trained nuclear scientists.

Closing

Mr. Chairman, I believe the Department\'s FY 2005 budget submission
meets the Nation\'s critical needs for energy, environmental and
national security at a difficult time in our history. The Department of
Energy, which Secretary Abraham has said might well be called the
Department of Energy and Science, hopes to join the members of the
Committee in working to strengthen American science and technology.