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[Senate Hearing 109-20]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 109-20
 
                     SELL AND SCARLETT NOMINATIONS

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   TO

CONSIDER THE NOMINATIONS OF JEFFREY CLAY SELL TO BE DEPUTY SECRETARY OF 
   THE DEPARTMENT OF ENERGY AND PATRICIA LYNN SCARLETT TO BE DEPUTY 
              SECRETARY OF THE DEPARTMENT OF THE INTERIOR

                               __________

                             MARCH 9, 2005

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

                                 ______

                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2005
20-961 PDF

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD M. BURR, North Carolina,     TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               JON S. CORZINE, New Jersey
GORDON SMITH, Oregon                 KEN SALAZAR, Colorado
JIM BUNNING, Kentucky

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
                  Bob Simon, Democratic Staff Director
                  Sam Fowler, Democratic Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     3
Cornyn, Hon. John, U.S. Senator from Texas.......................     1
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............     1
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas..............     2
Murkowski, Hon. Lisa, U.S. Senator from Alaska...................    18
Salazar, Hon. Ken, U.S. Senator from Colorado....................    16
Scarlett, Patricia Lynn, Nominated to Be Deputy Secretary of the 
  Interior.......................................................     8
Sell, Jeffrey Clay, Nominated to Be Deputy Secretary of Energy...     5
Thomas, Hon. Craig, U.S. Senator from Wyoming....................    15
Wyden, Hon. Ron, U.S. Senator from Oregon........................    11

                               APPENDIXES

Responses to additional questions................................    27

                     SELL AND SCARLETT NOMINATIONS

                              ----------                              

                        WEDNESDAY, MARCH 9, 2005

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:07 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. We are 
here this morning to consider the nominations of Clay Sell to 
be Deputy Secretary of the Department of Energy and Lynn 
Scarlett to be Deputy Secretary of the Department of the 
Interior. Before we begin, our colleague Senator Hutchison has 
asked to make a few remarks with reference to one of the 
nominees. We welcome you to the committee and would you please 
proceed because we know you have a busy schedule, Senator.
    [The prepared statement of Senator Cornyn follows:]
    Prepared Statement of Hon. John Cornyn, U.S. Senator From Texas
    Chairman Domenici, Ranking Member Bingaman, and committee members, 
it is a privilege to join Senator Hutchison today in supporting Clay 
Sell's nomination as Deputy Secretary of Energy. I believe that 
President Bush has made strong choice for this nomination. As many of 
the members of this committee are well aware, Clay possesses a number 
of personal and professional attributes that make him an ideal 
candidate for this critical position.
    From his education in Texas, to working on national energy policy 
issues on Capitol Hill, to helping guide the Administration's formation 
and implementation of energy initiatives, Clay has demonstrated an 
intelligence and ability to negotiate complex policy matters.
    There are few greater skills in Washington than the ability to 
perceive overreaching national needs, formulate a vision for moving 
forward to address those needs, then working tirelessly to attain that 
vision for the greater good. I believe that Clay has demonstrated these 
abilities.
    There are many challenges that lie ahead to meet our energy needs. 
Our country has gone too long without a strategic, comprehensive energy 
policy. There are few things that have such a direct and pervasive 
affect on both our economy and our environment than ensuring our 
nation's energy security. Also, our good stewardship of our nuclear 
material and continuation of aggressive policies that assure 
nonproliferation have, perhaps, a greater importance now than in any 
other time in our history.
    I am confident that Clay's leadership, breadth of knowledge and 
vision will help guide the Department of Energy through these many 
challenges. For your part and for mine, I also know that Clay will be 
an effective partner with Congressional members and leadership in 
working to enact beneficial policies.
    Thank you for the opportunity to express my support for this 
nominee. I look forward to continuing to work alongside you, Secretary 
Bodman, and Clay on these important issues.

     STATEMENT OF HON. KAY BAILEY HUTCHISON, U.S. SENATOR 
                           FROM TEXAS

    Senator Hutchison. Well, thank you very much, Mr. Chairman. 
I am so proud to be here for my fellow Texan, Clay Sell. Mr. 
Chairman, I have to say that I know if you were not chairing 
this committee you would be sitting right here next to me also 
introducing him, because you and I have both worked with him, 
and especially you have.
    I cannot think of anyone more qualified for the office of 
Deputy Secretary of Energy than Clay Sell. I want to say that 
Senator Cornyn particularly wanted me to mention what a great 
supporter he is as well. He could not be here this morning, but 
he is 100 percent supportive of Clay Sell for this position.
    Clay graduated from Texas Tech University and the 
University of Texas School of Law. He served his country for 
the past decade, gaining all of the experience he needs for 
this type of job. Especially his experience with energy policy, 
coupled with his vision for the Department of Energy, I know he 
will be a valuable asset for Secretary Bodman.
    For the last 19 months, Clay has served President Bush as 
Special Assistant on Energy Policy and Legislative Affairs. 
Prior to joining the White House, he served in the office of 
Congressman Mack Thornberry for 5 years and then in the Senate 
as Majority Clerk for the Energy and Water Development 
Appropriations Subcommittee for 3\1/2\ years. As the Majority 
Clerk for you, Mr. Chairman, Clay always worked well with me 
and all the members of the Senate, and I know that he will 
continue in this spirit of cooperation.
    His qualification, his experience, and especially his 
integrity make him the right person for this job. On a personal 
note, I want to say that I have had such a great impression of 
Clay and his integrity. As we all know, in the Senate there are 
rough times and there are times when it is hard to get 
something done. Energy issues particularly seem to be divisive 
sometimes. But Clay Sell is always honest, always doing the 
right thing, and always trying to help everyone understand the 
issues and work to make a win for all of the people concerned. 
So on a personal note, I recommend him so highly.
    I am very pleased that he has wonderful support with him, 
who I know he will introduce today. But I have also known his 
wife Alisa and worked with her. They brought their son Jack, 
who even has on a tie and a coat--I am very impressed--and two 
proud Texas parents, George and Judy Sell from Amarillo, Texas.
    So I am very pleased to be here in support of this 
nomination, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Bingaman, did you have any comments with reference 
to the Senator, her remarks?
    Senator Bingaman. No, I did not, Mr. Chairman. I appreciate 
her coming.
    The Chairman. We will get to you in a moment.
    Thank you very much, Senator. Obviously, you are excused 
and thank you for being here.
    I think you all know that, as Senator Hutchison noted, Clay 
Sell worked for me as clerk of the Appropriations Energy and 
Water Development Subcommittee. During his tenure I was 
impressed by his combination of critical thinking skills and a 
wide range of knowledge of the numerous Department of Energy 
programs. Everyone on this committee and in this town that 
works in this area knows of the importance of the No. 2 job in 
the Department of Energy.
    As DOE moves forward this year in submitting a license 
application for NRC for Yucca Mountain and working on the next 
generation of cool nuclear power plants and continuing to work 
on environmental cleanup from our old wartime legacy, these are 
just a handful of issues that need to be tackled in the 
Department and I do not think there is anybody that, based on 
training, education, and experience, that is better than Clay 
to do that now.
    No less daunting is the task that you have, Secretary Lynn 
Scarlett. Your job as No. 2 person in the Department is a very 
difficult one. In your current position as Assistant for Policy 
and Management and Budget, which you have held since July 2001, 
you developed a grasp of the breadth of issues facing the 
Department, and I am hopeful that the increased authority that 
you will receive by virtue of this appointment will give you 
more opportunity to do things in the Department that are needed 
during the remainder of this President's term.
    So I welcome both of the nominees and I want to thank both 
of you for your willingness to undertake this responsibility. 
It is of serious magnitude and we hope you will do well.
    Now, I would now ask Senator Bingaman if he would like to 
comment and then we'll introduce your families.

         STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR 
                        FROM NEW MEXICO

    Senator Bingaman. Thank you very much, Mr. Chairman.
    First let me just welcome both nominees. I have met with 
both of them and indicated to them that I support their 
nominations and wish them well in these new jobs and feel they 
are both highly qualified. I did want to just refer to two 
broader issues. I will have a specific question or two of the 
nominees after their statement. But the two broader issues, one 
relates to science. These are issues related to the Department 
of the Interior.
    One relates to science. There is a recent survey that I 
think is troubling, a survey of U.S. Fish and Wildlife Service 
scientists that was conducted by the Union of Concerned 
Scientists and Public Employees for Environmental 
Responsibility. They found what they saw as widespread 
political interference with the scientific work there in the 
Fish and Wildlife Service. I would be, obviously, concerned if 
that is the case.
    Nearly half the scientists who responded in that poll, who 
worked on endangered species-related issues, said that they had 
been directed for non-scientific reasons to refrain from making 
findings that were protective of environmental species. I think 
we need to run that down. Obviously, public trust in our 
institutions of government I think is eroded to the extent that 
people feel like all decisions are politically driven.
    The second concern relates to the Department's 
responsiveness to the committee. I think 4 years ago the 
previous Deputy Secretary at his confirmation hearing pledged 
to work in a forthright, bipartisan and cooperative manner with 
the committee. Many of us have felt that that did not happen, 
as it should have. We have had difficulty getting technical and 
factual information without long delays, and career employees 
have apparently been forbidden to answer questions without 
first getting clearance from political appointees.
    Those are issues that have obviously caused consternation 
among myself and others in the committee and they are issues--I 
thought this was an appropriate issue to raise with these two 
nominees since they will be in a position to correct that in 
their new positions.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Senator Bingaman.
    Now, we would like to permit each of you, starting with 
you, Mr. Sell, to introduce family members that you would like 
to be introduced so they can stand up and we can see who they 
are and know who is supporting you.
    Mr. Sell. Thank you, Mr. Chairman.
    I am very proud today to have my wife here with me, Alisa 
Sell, as Senator Hutchison introduced; my oldest son Jack. I 
have two other children, Robert, who is 2, and Mary Margaret, 
who is 1, and I was tempted to bring them here today with the 
hopes that it might shorten the hearing. But I left them at 
home.
    [Laughter.]
    And my parents, George and Judy Sell from Amarillo, Texas, 
are here as well.
    The Chairman. Very good. Thank you very much.
    Ms. Scarlett.
    Ms. Scarlett. Yes, Senator. I have with me my mother 
Virginia Scarlett that I would like to introduce today. I 
regret that my husband is unable to be here. He is enjoying the 
warm weather of southern California in Santa Barbara.
    The Chairman. Thank you very much, Ms. Scarlett.
    Now, I think we have to do some things that we have to ask 
every nominee to do. The rules require that you be sworn in in 
connection with your testimony. So would each of you rise and 
raise your right hands.
    The Chairman. Do you solemnly swear that the testimony you 
are about to give to the Senate Committee on Energy and Natural 
Resources shall be the truth, the whole truth, and nothing but 
the truth?
    Mr. Sell. I do.
    Ms. Scarlett. I do.
    The Chairman. Be seated.
    Before you begin your statements, I ask you three 
questions. One: Will you be available to appear before this 
committee and other Congressional committees to represent 
departmental positions and respond to issues of concern to 
Congress? First, Mr. Sell?
    Mr. Sell. I will.
    The Chairman. Ms. Scarlett?
    Ms. Scarlett. I will.
    The Chairman. Are you aware of any personal holdings, 
investments or interests that could constitute a conflict or 
create the appearance of such a conflict should you be 
confirmed and assume the office to which you have been 
nominated by the President?
    Mr. Sell. Senator, my investments, personal holdings, and 
other interests have been reviewed both by myself and the 
appropriate ethics counselors within the Federal Government. 
I've taken appropriate action to avoid any conflicts of 
interest. There are no conflicts of interest or appearances 
thereof to my knowledge.
    The Chairman. Ms. Scarlett?
    Ms. Scarlett. Yes, Senator, my investments, personal 
holdings, and other interests have been reviewed both by myself 
and the appropriate ethics counselors within the Federal 
Government. I have taken appropriate action to avoid any 
conflicts of interest. There are no conflicts of interest or 
appearances thereof to my knowledge.
    The Chairman. Are you involved or do you have any assets 
held in blind trust?
    Mr. Sell. I do not.
    Ms. Scarlett. No, Senator.
    The Chairman. All right. Now we're going to proceed to have 
each of you give your statements, and I hope they will be as 
brief as possible, and then we'll proceed to questions.
    Mr. Sell.

    TESTIMONY OF JEFFREY CLAY SELL, NOMINATED TO BE DEPUTY 
                      SECRETARY OF ENERGY

    Mr. Sell. Mr. Chairman, Senator Bingaman, and members of 
the committee, I'm honored to appear before you today as the 
President's nominee to be Deputy Secretary of Energy. I earlier 
introduced my family, but I would like to say particularly 
about my wife, one of my greatest assets is being married to a 
tough, strong, Texas woman. I want to publicly thank Alisa for 
not just permitting me to continue to serve in the Government, 
but for being a great source of encouragement in my 
continuation.
    My educational background, as Senator Hutchison said, is in 
business and law. But for the last 10 years I've had the 
wonderful honor of serving my country and government. As such, 
I'm a product of my experiences in the House, Senate, and White 
House and of the outstanding individuals for whom I worked.
    For 5 years I served Congressman Mack Thornberry of Texas. 
His interest in national security missions of the Department of 
Energy and his vision for the National Nuclear Security 
Administration allowed me great involvement with the Department 
early in my career. Thereafter, I was proud to serve Senator 
Ted Stevens and you, Mr. Chairman, as your lead staffer on the 
Energy and Water Appropriations Subcommittee for 3\1/2\ years. 
That experience allowed me to get to know and understand the 
programs of the Department in a way few people are permitted to 
know them, and the experience allowed me to work under one of 
the Nation's foremost leaders of energy, science, and 
nonproliferation policy.
    For the last 19 months, as Senator Hutchison said, I've 
served President Bush as a Special Assistant on matters of 
energy policy and legislative affairs, a broadening experience 
that I believe further prepared me to help implement the 
President's vision for energy and national security.
    The experiences in these three jobs will assist me in 
serving the Department and I hope complement the impressive 
qualifications of the new Secretary of Energy, Sam Bodman.
    I have long thought that the Department's missions flow 
from two broad overarching themes, what can be and what must 
never be. The first mission theme allows us to lay out a vision 
of what can be: policies resulting in secure, reliable, and 
affordable sources of energy; new energy technologies that 
embrace the future and flow from the research occurring today 
in our laboratories and universities; world leadership in the 
management of resources in a way that increases and secures our 
Nation's wealth, but also allows us to share with the world our 
prosperity and the peace that follows prosperity. These are the 
Department's missions of energy policy, energy research and 
development, and science.
    The second mission theme is one that requires a commitment 
to what must never be. For 48 years this Department and its 
predecessors going back to the Manhattan Project combined human 
ingenuity with the physical sciences to end World War II and 
then win the cold war, protecting us from what must never be. 
Today this Department and its scientists, its technicians, its 
civil servants, are again called to build upon this historic 
mission by protecting the American people from the threat of 
nuclear terrorism in a rapidly changing world. These are the 
missions of the Department's nonproliferation activities around 
the globe, of its national security programs, and of the 
requirements to be true to the environmental obligations 
resulting from this work.
    These missions are among the most important to our Nation 
and to our world. The Department cannot succeed, however, 
without full management focus from the top on the safety and 
security of the Department's people and facilities. The 
Secretary has made this a top priority and if I am confirmed I 
intend to join him in making the management decisions and 
leading the operations of the Department in a manner that is 
true to the Secretary's commitment.
    Finally, regarding the management of the Department, I 
should say that I have the greatest respect and regard for 
former Deputy Secretary Kyle McSlarrow and I thank him for the 
course that he has set.
    In closing, I want to once again thank the President for 
the trust he has placed in me and thank the committee for the 
consideration of my nomination. Mr. Chairman, this concludes my 
statement and at the appropriate time I would be pleased to 
answer any questions.
    [The prepared statement of Mr. Sell follows:]
               Prepared Statement of Jeffrey Clay Sell, 
                Nominee to be Deputy Secretary of Energy
    Mr. Chairman, Senator Bingaman, and members of the committee, I am 
honored to appear before you today as the President's nominee to be 
Deputy Secretary of Energy.
    Before I proceed further, I would like to introduce and recognize 
my wife of 12 years, Alisa Sell. Like many Texas men, my greatest asset 
is being married to a tough, strong Texas woman. I want to publicly 
thank Alisa for not just permitting me to continue to serve, but for 
being my greatest source of encouragement.
    My oldest son, Jack, is here with me today, as well as my parents 
George and Judy Sell, from my home town of Amarillo, Texas. My two 
youngest children, Robert, age two, and Mary Margaret, age one, are not 
here today, but I believe I have their support as well.
    My educational background is in business and law. But for the last 
10 years, I have had the wonderful honor of serving my country in 
government. As such, I am a product of my experiences in the House, 
Senate, and White House; and of the outstanding individuals for whom I 
worked.
    For five years I served Congressman Mac Thornberry of Texas. His 
interest in the national security missions of the Department of Energy, 
and his vision for the National Nuclear Security Administration, 
allowed me great involvement with the Department early in my career.
    Thereafter, I was very proud to serve Senator Ted Stevens and you, 
Mr. Chairman, as your lead staffer on the Energy & Water Appropriations 
Subcommittee. For three and one-half years, that experience allowed me 
to get to know and understand the programs of the Department in a way 
few people are permitted to know them. And, the experience allowed me 
to work in the background of one of our Nation's foremost leaders of 
energy, science, and nonproliferation policy.
    For the last 19 months, I have served President Bush as a Special 
Assistant on matters of energy policy and legislative affairs--a 
broadening experience that I believe further prepared me to help 
implement the President's vision for energy and national security.
    The experiences in these three jobs will assist me in serving the 
Department and, I hope, complement the impressive qualifications of the 
new Secretary of Energy Sam Bodman.
    I have long thought that the Department's missions flow from two 
broad overarching themes: what can be, and what must never be.
    The first mission theme allows us to lay out a vision of what can 
be:

   Policies resulting in secure, reliable and affordable 
        sources of energy;
   New energy technologies that embrace the future and flow 
        from the research occurring today in our laboratories and 
        universities.
   World leadership in the management of resources in a way 
        that increases and secures our nation's wealth, but also allows 
        us to share with the world our prosperity and the peace that 
        follows prosperity.
   These are the Department's missions of energy policy, energy 
        R&D, and Science.

    The second mission theme is one that requires a commitment to what 
must never be:

   For 48 years, this Department, and its predecessors going 
        back to the Manhattan Project, combined human ingenuity with 
        the physical sciences to end World War II, and then win the 
        Cold War--protecting us from what must never be.
   Today, this Department and its scientists, technicians, and 
        civil servants are again called to build upon this historic 
        mission by protecting the American people from the threat of 
        nuclear terrorism in a rapidly changing world.
   These are the missions of the Department's nonproliferation 
        activities around the globe, of its national security programs, 
        and of the requirement to be true to the environmental 
        obligations resulting from this work.

    These missions are among the most important to our nation and to 
our world. The Department cannot succeed, however, without full 
management focus from the top on the safety and security of the 
Department's people and facilities. The Secretary has made this a top 
priority, and if I am confirmed, I intend to join him in making the 
management decisions and leading the operations of the Department in a 
manner that is true to the Secretary's commitment. Finally, regarding 
the management of the Department, I should say that I have the greatest 
respect and regard for former Deputy Secretary Kyle McSlarrow and I 
thank him for the course that he has set.
    In closing, I want to once again thank the President for the trust 
he has placed in me and thank the Committee for considering my 
nomination.
    Mr. Chairman, this concludes my statement. I would be pleased to 
answer any questions.

    The Chairman. Thank you very much.
    First, I want to apologize for misstating your name. I say 
``Scar-LETT,'' but it's ``SCAR-lett.'' I hope I won't do that 
again.
    Ms. Scarlett. That's okay. Anything will do.
    The Chairman. No, I used to cringe when everybody said 
``DOMM-inn-EE-chee'' and it took them a long time to learn, and 
they still insist that I say it wrong and they say it right.
    Would you please proceed.

  TESTIMONY OF PATRICIA LYNN SCARLETT, NOMINATED TO BE DEPUTY 
                   SECRETARY OF THE INTERIOR

    Ms. Scarlett. Yes. Yes, thank you, Mr. Chairman and Senator 
Bingaman and all members of the committee. I am honored to be 
here today as the President's nominee for Deputy Secretary of 
the Department of the Interior. I've been privileged these past 
4 years to serve as Assistant Secretary of Policy, Management, 
and Budget at Interior, a position with responsibilities that 
span the scope of the entire Department and its eight bureaus. 
I've experienced both the challenges and opportunities in 
helping the Secretary of the Interior set priorities at a 
Department that manages one in every five acres of the United 
States with a work force of 70,000 people who operate at 2,400 
locations and manage over 40,000 facilities.
    As manager of over 500 million acres, Interior has a 
mission that lies at the confluence of people, land, and water. 
What is our compass in tackling those responsibilities? Three 
themes underpin our efforts. First is an emphasis on partnered 
problem-solving and cooperative conservation so that our 
decisions sustain healthy lands, thriving communities, and 
dynamic economies. That focus has set the stage, for example, 
for our multi-state partnerships to protect sage grouse. It 
underpins the President's Healthy Forests Initiative and the 
bipartisan Healthy Forest Restoration Act. It lies behind our 
budget emphasis on cooperative conservation grant programs.
    A second theme is our emphasis on balance. Americans want 
outdoor recreation opportunities. They want reliable and 
affordable energy and water. They want to ensure stewardship of 
this Nation's phenomenal natural, cultural, and historic 
resources.
    Our third theme is management excellence. 4 years ago 
Congress gave us an ``F'' for our information technology 
security. Today 98 percent of our systems have been certified 
and accredited for their security measures. In 2002 it took us 
4 months to close our financial books. This year it took us 45 
days.
    Should I be confirmed as Deputy Secretary of the Department 
of the Interior, I would anticipate maintaining the trajectory 
set by Secretary Norton to enhance cooperative decisionmaking, 
achieve balance among multiple goals and responsibilities, and 
modernize our administrative and management practices. My 
experiences over the past 4 years have deepened my familiarity 
with Interior's responsibilities. Those experiences have 
required diplomacy, openness to many voices and perspectives 
both within the agency and with the public, an ability to 
grapple with highly diverse and complex issues, and an 
attention to setting targets and time lines to achieve results. 
I have tried to bring those qualities to the position of 
Assistant Secretary. Should I be confirmed as Deputy Secretary, 
I will strive to apply those same qualities to the job.
    Thank you and I would be very happy to answer any 
questions.
    [The prepared statement of Ms. Scarlett follows:]
  Prepared Statement of P. Lynn Scarlett, Nominee for the position of 
           Deputy Secretary of the Department of the Interior
    Mr. Chairman, Senator Bingaman, and members of the Committee, I am 
honored to appear before you today as the President's nominee for 
Deputy Secretary of the Department of the Interior. I have been 
privileged, these past four years, to serve as Assistant Secretary of 
Policy, Management and Budget at the Department--a position with 
responsibilities that span the entire Department and its eight bureaus. 
I have experienced both the challenges and opportunities of helping the 
Secretary of the Interior set priorities at a Department that manages 
one in every five acres of the United States, with a workforce of 
70,000 employees who operate at 2,400 locations and maintain some 
40,000 facilities.
    As manager of over 500 million acres, Interior has a mission that 
lies at the confluence of people, land, and water. How well we do our 
job at Interior affects whether:

   people have water in their homes;
   farmers can irrigate their fields;
   families can warm and cool their homes with affordable, 
        reliable energy;
   Indian children enjoy educational opportunities;
   communities avoid risks from catastrophic fires and natural 
        hazards;
   our children and grandchildren can enjoy the grand vistas of 
        the Grand Canyon, or the geologic rainbows of Arches National 
        Park; and
   habitats flourish for this Nation's diverse flora and fauna

    As this Nation's premier land manager, our mission inevitably 
places us amid conflict as different people have diverse aspirations 
for these public lands. As guardian of thousands of buildings, roads, 
trails, research facilities, and scientific systems, our mission also 
triggers many basic management challenges.
    What is our compass in tackling these responsibilities? Three 
themes have underpinned our efforts over the past four years.
    First is an emphasis on partnered problem solving and cooperative 
conservation so that our decisions sustain healthy lands, thriving 
communities, and dynamic economies. That focus has set the stage for 
multi-state partnerships to protect sage grouse. It underlies the 
President's Healthy Forests Initiative and the bipartisan Healthy 
Forests Restoration Act through which reduction of hazardous fuels in 
forests and on rangelands occurs through collaboration with 
communities. It lies behind our budget emphasis on cooperative 
conservation grant programs.
    A second theme is our emphasis on balance. Americans want access to 
outdoor recreation opportunities; they want reliable and affordable 
energy; they want reliable supplies of clean water; they want to ensure 
the stewardship of this Nation's phenomenal natural, cultural and 
historic resources.
    Our third theme is management excellence. Though unglamorous and 
often outside the public eye, how well we manage facilities, financial 
reporting, information technology, and other basic administrative 
functions significantly affects our ability to serve the public 
effectively and efficiently. Four years ago, Congress gave us an ``F'' 
for our information technology security. Today, 98 percent of our 
systems have been certified and accredited for their security 
practices. Four years ago, it took us four months to close our 
financial books. This year is took us 45 days after the close of the 
fiscal year. Four years ago, we had no idea what condition our 
facilities were in. Today, almost all of our bureaus have completed 
condition assessments on their thousands of facilities.
    Should I be confirmed as Deputy Secretary of the Department of the 
Interior, I would anticipate maintaining the trajectory set by 
Secretary Norton over the past four years to enhance cooperative 
decision making, achieve balance among multiple goals and 
responsibilities, and modernize our administrative and management 
practices.
    These three themes--cooperation, balance, and management 
excellence--will inform our decisions to ensure the Nation has access 
to energy; enjoys clean and sufficient water supplies; and maintains 
healthy forests. These themes will also continue to underpin our 
approach to protecting at-risk and endangered species. And, finally, 
the theme of management excellence is the benchmark against which we 
are striving to tackle our Indian Trust responsibilities.
    My experiences over the past four years as Assistant Secretary of 
Policy, Management and Budget have deepened my familiarity with 
Interior's responsibilities. Those experiences have required diplomacy, 
openness to many voices and perspectives--both within the agency and 
with the public, ability to grapple with highly diverse and complex 
issues, and an attention to setting targets and timelines to achieve 
results. I have tried to bring those qualities to that position. Should 
I be confirmed as Deputy Secretary, I will strive to apply those 
qualities to the job.
    Thank you. I would be happy to answer any questions.

    The Chairman. Thank you very much.
    Senator Bingaman, do you have any questions?
    Senator Bingaman. Yes, Mr. Chairman. Thank you very much.
    Let me just ask about one issue that we raised during our 
budget hearing with Ms. Scarlett and raised with Secretary 
Norton at that time. It's one that concerns me still. I know it 
concerns you, Mr. Chairman. It's one that you've worked hard 
on. This relates to the funding for the Middle Rio Grande Area 
and how we get the resources to comply with this 2003 
biological opinion there.
    It strikes me, as I understand it, we have a reasonable and 
prudent alternative in this 2003 biological opinion, and the 
estimate that I've seen from the Department is that it's going 
to cost $230 million over 10 years to essentially do what's 
necessary in that alternative. The administration has asked in 
each of the last 3 years for a little over $6 million to 
implement this rather than the $23 million that would be 
necessary if you were to do a tenth of it each year, and I'm 
not sure that's the right speed with which to do it.
    Mr. Chairman, you've added funds in the appropriations 
process to try to get the funding up so that we could go ahead 
and get this done. It's very important to our State. I'm just 
concerned about what the level of commitment is in the 
Department to actually seeing this 2003 biological opinion 
followed through on, and I thought maybe this was a good time 
to ask Ms. Scarlett to give us any additional thoughts she has 
on this or how we can get this moved up on the priority list in 
the Department of the Interior. It seems to fall low on that 
priority list, or at least it has in recent years.
    Ms. Scarlett. Thank you, Senator, and of course first I'd 
like to say we applaud and thank you for your strong leadership 
and Senator Domenici in the Rio Grande, and with the 
challenging issues we have there.
    Our overall Middle Grande Budget for 2006 is proposed at 
$19 million. That is somewhat less than what the Congress 
appropriated in 2005, but nonetheless an increase over past 
years in what we had proposed. That effort is a composite of 
efforts, very collaborative, and we certainly place a high 
priority on it. I know we had some success last year with the 
silvery minnow in protecting them during low water flows and 
being able to move them and save some 12,000 silvery minnows 
that would have been adversely affected. Our Bureau of 
Reclamation continues to work on the design and planning for a 
possible sanctuary, which I know you've expressed interest in.
    So I look forward to working with you on continuing to 
focus on the Middle Grande, Middle Rio Grande, and the 
biological opinion there, and if we need to enhance our efforts 
we'll explore how we can do that.
    Senator Bingaman. Thank you. I think that's important and 
it's an issue that's not going to go away in our State. It's 
been a good wet winter in New Mexico for a change and we're 
very pleased about that, but this is an issue that is long term 
and will continue to require funding. I think any help you can 
get us in getting more administration support for that would be 
much appreciated.
    As I said before, Mr. Chairman, I strongly support both 
nominees, and I do not have any other questions at this time.
    The Chairman. If any members have questions, we want them 
submitted, what do you think, by the close of business today. 
Since there is no objection that we're aware of, no serious 
objection, we're going to proceed with dispatch. We need both 
of you confirmed as quickly as possible. So, Senators, if 
you've got questions get them in. Equally important that you 
get the answers in, so don't take 4 or 5 days if you can do it 
in 1 because it just delays your confirmation.
    I have a number of questions, but I'm not so sure I'm going 
to ask them. I have maybe six or eight. I'm going to submit 
them to you and ask you to answer them.
    Perhaps I could ask you, Mr. Sell, would you just discuss a 
little bit your views on nuclear power?
    Mr. Sell. Thank you, Mr. Chairman, for the opportunity to 
speak to that. As you have said and as the President has said 
on many occasions, beginning with the National Energy Policy 
from June 2001, nuclear power is critical to our energy 
security. It produces 20 percent of our electricity today and 
it is important, both for reasons of domestic energy security 
as well as due to environmental concerns, that nuclear power 
continues to be a large and in fact growing part of the United 
States energy mix.
    The Department has taken a number of efforts and started 
new initiatives in order to support nuclear power. The country 
has not ordered a new nuclear power plant since the 1970's, and 
the President has stated clearly his desire for that to change.
    The nuclear budget in the Department of Energy has 
increased substantially in fiscal year 2006 and if I'm 
confirmed I look forward to the opportunity to work closely 
with you and other Members of the Congress to continue to 
promote nuclear power as a safe, clean energy alternative.
    The Chairman. Thank you very much.
    Again, I want to move things along, so I don't have any 
additional questions. I'll submit them.
    I note the presence of--Senator, do you have some 
questions, observations? Are you for them, against them?
    Senator Burr. I'm for them.
    The Chairman. Well, that's good.
    I understand there's a Senator who wants to be heard. Would 
you please call him up and tell him I'll be open here for 10 
minutes. If he's not here we close the hearing down.
    We stand in recess for 10 minutes.
    [Recess.]
    The Chairman. The hearing will please come to order.
    Senator Wyden.

           STATEMENT OF HON. RON WYDEN, U.S. SENATOR 
                          FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman, my 
apologies to you. This was a crazy morning even by Senate 
standards, and I want to thank you for your thoughtfulness and 
appreciate all the courtesies that you always extend to me.
    I also want to note how extraordinarily helpful you've been 
to the people of our part of the country with respect to this 
administration proposal to privatize our power system, the 
Bonneville Power Administration. There's no question in my mind 
that the reason that we are well positioned legislatively to 
block it is we've had the good fortune of your support, and I 
want to thank you for that as well.
    The Chairman. You're welcome, Senator.
    Senator Wyden. Mr. Chairman, I want to explore with Mr. 
Sell, the nominee, both his position with respect to 
privatization, but also the way in which he's dealt with me and 
my office with respect to this whole topic, because I regret to 
say that I don't think in his dealings with our office that he 
has been completely forthright and I want to discuss my 
concerns and give him a chance to respond.
    Mr. Sell came----
    The Chairman. Senator, let me just say from the offset, I 
have found him to be nothing but forthright always. And I 
respect the prerogative of every Senator to do what, ask what 
they like, but I do remind you that we all have feelings about 
this man, many of us. So I would caution you to be sure you 
know what you're talking about with reference to him. That is 
enough.
    Senator Wyden. Mr. Chairman, he came to my office, and I 
want to go through with some specifics exactly what happened. 
Frankly, I would have blocked the Sell nomination formally with 
a public hold, which has been my practice, other than the fact 
that he is well thought of by you. I said that when I went to 
the floor, and the fact that you think favorably about him 
carries enormous weight with me. And as I announced on the 
floor, I would put a formal hold on the Sell nomination already 
because of my dealings if it were not for my friendship and 
respect for you, Mr. Chairman, and I appreciate your bringing 
that up.
    I want to go through with you, Mr. Sell, the events as I 
understand them and get your reaction to them so that the 
committee is aware of my concerns. You came to my office on 
January 17, when Secretary Bodman came to discuss his 
appointment as Secretary, and you were in the meeting when I 
asked Dr. Bodman on January 17 about privatization of 
Bonneville and he told me he opposed privatization, and you did 
not say that day that the White House had a privatization 
proposal.
    Now, the next day you worked with my staff where we 
extended a courtesy to the Bush administration to say we would 
like to make sure that the administration understands our 
concerns about privatization, and my staff, after extending the 
courtesy to the Bush administration, worked with you on the 
questions that I would ask the Secretary. And again you didn't 
say that the White House had a privatization proposal, and then 
the Secretary came and testified to that effect on January 19.
    Now, you came next to my office on February 16, to meet 
about your own nomination, and I asked if you knew about the 
administration's budget proposal affecting Bonneville when you 
accompanied Energy Secretary Bodman to my office on January 17. 
And you admitted to me that day that you knew about the 
administration's proposal at that January 17 meeting.
    Is that still correct? Is that still your understanding?
    Mr. Sell. Senator Wyden, if I could, I would like to--your 
recitation of the facts is consistent with my recollection, 
with two points. I now understand, because you've been kind 
enough to meet with me three times, including the meetings that 
you've just outlined, I now have a much greater appreciation 
for your perspective and the perspective of your constituents 
on this matter.
    Had I known at the time that you viewed privatization and a 
change in the law to charge market-based rates as the same 
thing, perhaps I could have handled the situation differently. 
I'm sure with the knowledge I have today, had I had it then I 
would have handled it in a different way.
    But the administration does not view privatization, that is 
selling the Federal asset which is Bonneville Power to a 
private entity, as the same thing as our proposal. You asked 
Secretary Bodman that day if he was--then-nominee Bodman that 
day, if he was opposed to privatization of BPA, and he 
responded that he was personally opposed to privatization and 
he believed that was the position of the administration. And I 
will tell you today, Senator Wyden, that I am personally 
opposed to privatization and I believe that continues to be the 
position of the administration.
    At that time in January, I did not perceive privatization, 
as I've just described it, as the same thing that was at that 
point under consideration in the White House. But as you said 
in your statement, I was aware that that proposal and other 
general proposals related to the power marketing 
administrations were under consideration inside the White House 
when I was in your office on January 16th.
    Senator Wyden. Do you think that at the time you should 
have told me that there was a proposal under consideration to 
move to market rates?
    Mr. Sell. Once again, Senator Wyden, I do want to thank you 
for the courtesy that you've extended me in offering me, giving 
me a number of opportunities to visit with you about this. And 
once again, I'll say, if I fully appreciated your concerns then 
as I do today I believe I could have handled the matter and 
handled your questions in a better way.
    Senator Wyden. Well, I intend to talk to the chairman about 
this some more. As I say, because of my enormous respect and 
affection for Chairman Domenici, which goes, as he knows, 
beyond the question of energy to our families and our families' 
history, I'm going to talk to the chairman about it some more.
    I would just make two points, Mr. Sell. First, if it looks 
like a pig and acts like a pig, it's a pig. And certainly, in 
our part of the world this approach with respect to market 
rates, this is seen as code for privatization, and I think that 
I should have been told at the time that there was an approach 
being advocated at the White House as it relates to market-
based rates.
    You've given your response today that, had you understood 
my concerns, you would have indicated that, and I think that's 
a step in the right direction. I want to have a chance to talk 
about this further with the chairman and ask--I would only ask 
you one other substantive question, and the chairman has been 
helpful on this point as well. Do you believe that it would be 
wrong to try to go to a market-based rate structure system for 
Bonneville and the other PMA's administratively? Because there 
is great concern that, while Congress may block this 
legislatively--certainly there is support in this committee for 
doing it--that there could be an end run by the administration 
to do this administratively, and I hope to work with the 
chairman and other colleagues as we try to address that 
tomorrow.
    But I would like to know your position substantively as to 
whether you would be opposed to an effort to administratively 
put in place this market-based approach to setting rates.
    The Chairman. Before you answer, Mr. Sell, might I just say 
to you, Senator Wyden, I think I'm fully aware of the issue. 
However, to ask a nominee for a position that is not going to 
be able to make the decision as to whether they go 
administratively or not--that's not his decision. It's not even 
the Secretary's decision. The President of the United States 
would have to say we're going to do it administratively.
    So I would think it's not relevant what he thinks 
personally. If you want to ask him--if you want to answer 
personally, I hope it's understood that whatever you say 
doesn't make any difference. The President of the United States 
will or won't.
    I'm hoping that we're finished with this issue. I've made 
it very clear I don't think we ought to keep sending that issue 
up here. You know that.
    I hope you're not part, Secretary Bodman said he's not 
going to be part, of--he's been telling the administration, 
don't send it up again. It's just getting to the point where 
it's finished.
    So, having said that, is that fair enough, that we 
understand the prerogative of his answer?
    Senator Wyden. Mr. Chairman, I think your comment is a very 
fair one. I just am interested in getting a sense from Mr. Sell 
with respect to how he would approach it, because he clearly is 
involved at the White House in these energy discussions. And 
while I think your point, Mr. Chairman, is very fair, I would 
be, with your leave, interested in having Mr. Sell's thoughts 
on the subject.
    Mr. Sell. I'm happy to respond to your question, Senator 
Wyden. It is my understanding that the underlying statutes 
governing the power marketing administrations and Bonneville 
require that the rates be based on a cost recovery methodology. 
That is why the administration in seeking to propose, pursue a 
different policy, proposed a change in the law. If that change 
is not made--and that is a change that would have to first 
begin in this committee. And if that change is not made, then 
we will continue to comply with the requirements of the 
existing law.
    Senator Wyden. I will take that as an answer that you will 
not go the administrative route. That's constructive as well.
    Mr. Chairman, you've been kind both in giving me this extra 
time and I just want to come back to what I have tried to say 
to the administration on this point, that I'm going to do 
everything in my power to make sure that there is a bipartisan 
coalition in this Senate to not inflict on our part of the 
world what amounts to economic poison. We have huge 
unemployment. Our whole economic underbelly is hard-hit, and 
this would cause enormous harm right now.
    Mr. Chairman, again I thank you both for your support in 
terms of the substance of this effort and your thoughtfulness 
with respect to my concerns about this appointment. And it's my 
inclination, before taking a position on this appointment, to 
have further discussions with you.
    The Chairman. I do want to say for the record before I call 
on the two remaining Senators--in fact, I want to thank you, 
Mr. Sell, as the current nominee, for the work you did with 
reference to helping when the BPA had to increase its borrowing 
authority in 2003. That was very helpful to the same area that 
Senator Wyden is talking about, and you were very helpful in 
seeing to it that the additional borrowing authority was 
granted, which became--was a very important, positive step in 
the direction of assuring that power that he is commenting upon 
as being vital to the area.
    I think the record should know that you helped then and we 
thank you for that. Those in the area ought to be thankful for 
it, too, including Senator Wyden.
    Senator Thomas.

         STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR 
                          FROM WYOMING

    Senator Thomas. Thank you, Mr. Chairman. This is my fourth 
committee meeting this morning, so I did want to stop by for a 
moment and welcome both of our folks here today and thank them 
for being here, certainly have done a great job. Ms. Scarlett, 
Lynn Scarlett, has really worked so hard over at Interior and 
we appreciate that very much.
    Just a couple of general philosophical kinds of things, I 
guess. In our bill in 1998 for parks, we set up a situation 
where we asked for a commission to specifically report about 
the rules and regulations with regard to concessions. Could you 
tell me where we are with that and what you expect?
    Ms. Scarlett. Yes, Senator. I am pleased that we have made 
significant progress on the concession issue. The advisory 
board has met and come to agreement on certain principles with 
respect to how to implement the new concession contracts. We 
have some 300 contracts that actually have been reissued and we 
are working on refining in particular some of the challenging 
issues, such as the possessory interest issue and how to 
translate into the new leasehold surrender calculations. I 
think we have agreement on that. We now look forward to moving 
ahead with the implementing details on that.
    Senator Thomas. Good.
    One of the problems we're having, of course, is the 
endangered species thing, and working with the various 
agencies, whether it be Forest Service or whether it be Park 
Service or so on. It just seems to me that maybe we could 
resolve some of those problems a little more easily if there 
was more cooperative, apparently more cooperative work done 
prior to the listing and prior to the development of recovery, 
so that more of these agencies could work together. Does that 
sound reasonable to you?
    Ms. Scarlett. Senator, that exactly expresses the 
philosophy that Secretary Norton has tried to advance these 
past 4 years. She uses her phrase ``Four C's--conservation 
through cooperation, communication, consultation.'' We have 
worked with the Congress on a number of grant programs that 
enable us to work with ranchers, other landowners, and 
citizens, States, tribes, and so forth to get ahead of the 
game.
    I think one very good example of that in fact is beginning 
to occur on the Middle Rio Grande with the silvery minnow; also 
our recent sage grouse decision in which we'll be working 
cooperatively across multiple States to try to protect that 
habitat and the sage grouse itself, so that listing is not 
necessary.
    Senator Thomas. Good, I hope not. I hope you'll give some 
thought to wolves and grizzly bears. That seems to be a little 
bit of a problem.
    Mr. Sell, glad to have you here, sir. I am pleased to have 
someone in this position with the kind of background that you 
have and energy, and I think that's very important. The 
Senator's gone from Oregon, but I also think when we talk about 
regional transmission organizations and other kinds of things 
that are going to be necessary to have a good national 
transportation system for electricity that places like 
Bonneville are going to have to be a little more cooperative 
and not be isolated quite as much as some would like to have 
them.
    At any rate, congratulations, both of you, and we look 
forward to working with you.
    The Chairman. Don't you even nod as he says that. Stay 
still.
    [Laughter.]
    The Chairman. Senator Salazar.

          STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR 
                         FROM COLORADO

    Senator Salazar. Thank you, Chairman Domenici. 
Congratulations to both of you, Lynn Scarlett and Jeff Sell, 
for your appointments. I have just a couple of questions.
    First to you, Mr. Sell, as the Deputy Secretary for Energy. 
I'm interested in hearing your views as we try to move our 
Nation more toward energy independence. All of us on this 
committee and with your background know what has happened to 
our country over the last 3 decades, where we've gone from a 
point where we were importing 30 percent of our oil to the 
point now where projections are it's going to be up to 70 
percent.
    I think that under the leadership of this committee and 
Chairman Domenici and his bipartisan approach to coming up with 
an energy bill, we hope to be able to get something for the 
President to be able to sign and create an energy framework for 
the future.
    As part of that framework, for me one of the matters that 
is of great interest is the interest that I have in renewable 
energy. I've always felt that renewable energy was important 
from the perspective of helping rural communities economically, 
developing energy in a way that is environmentally friendly, 
and also to help us lessen our overdependence on foreign oil.
    So I would like your views as Deputy Secretary on the 
renewable energy portfolio in terms of the components of that 
portfolio, as well as your views concerning a national standard 
with respect to renewable energy.
    Mr. Sell. Thank you, Senator, for the opportunity to 
respond to that. The President's view and Secretary Bodman's 
view--and it's mine as well--is that energy security must 
involve a diversity of many energy sources and that renewable 
power will continue to play a key and it must play a growing 
role as part of our energy mix.
    When this administration's energy policy was developed, I 
understand a very hard look was taken at how to incentivize an 
increase in renewable production of electricity, and the method 
that this administration arrived upon was to choose to do that 
through the tax code, and the President has proposed a number 
of tax incentives, production tax credits, to incentivize the 
development of more renewable resources.
    As you're well aware because you represent the National 
Renewable Energy Lab, we have also made a significant R&D 
effort and continue to do so, and if I'm confirmed as Deputy 
Secretary I look forward to returning to your lab out there and 
learning more about that.
    But to get back to your question on the renewable portfolio 
standard, the administration has chosen to support and grow 
this sector through incentives in the tax code and we have not 
at this point chosen to support the other alternative, which is 
to mandate a certain percentage of power to come from renewable 
sources.
    I understand from the hearing that this committee had 
yesterday, as well as Senator Domenici's statement and others, 
that the committee is considering that, and if I'm confirmed I 
would look forward to working closely with this committee and 
others in the Congress, because the one thing we all have in 
common, even though we may not agree on every point or 
initiative, is that we must get a comprehensive energy bill 
passed. And I look forward to working with you and the chairman 
in doing that.
    Senator Salazar. Thank you, Mr. Sell.
    Ms. Scarlett, I recognize that this may be the first time 
in history that we have a woman who is Secretary of the 
Interior and a woman who is Deputy Secretary of the Interior. 
So, given the fact that I have only two daughters and no sons, 
I think Interior is headed in the right direction in terms of 
gender balance. So I congratulate you.
    Let me just ask you a question about a specific issue in 
Colorado, and that's with respect to the Roan Plateau. There 
has been a plan on the part of the BLM which would allow for 
drilling on the top of the Roan Plateau, but to be phased in 
over a period of years commencing probably 10 or 15 years from 
now. There are a number of communities around the Roan Creek 
Plateau that are very concerned about the drilling on the top 
of the plateau. Garfield County and all of the cities within 
Garfield County have passed resolutions expressing their 
concern.
    Looking at that specific issue, how is it that you as 
Deputy Secretary of the Interior would take into account the 
feelings of those local elected officials who represent the 
county and the communities that are going to be affected by 
this drilling on the top of the Roan Creek Plateau in terms of 
how you move forward with those decisions? I know we have a 
development program on developing our fossil fuels, but how 
would you go about making sure that the most immediately 
impacted communities are in fact heard, and use the Roan Creek 
Plateau as your real hypothetical to explain that approach to 
us?
    Ms. Scarlett. Thank you, Senator. You touch upon an issue 
that really confronts the Department of the Interior in the 
many places where we must make management decisions and juggle 
and balance multiple interests, multiple concerns and needs. We 
put a priority on collaborating with relevant communities, the 
tribes, States, counties, local governments, as well as the 
citizenry, and indeed, in the particular instance of the Roan 
Plateau had many open forums and extended comment periods in 
order to try and achieve an outcome which on the one hand, 
speaking to your desire for energy security in the United 
States, would allow us to access those energy resources, and 
yet at the same time lighten our environmental footprint.
    The particular proposal in question is one that has the 
primary focus actually below the plateau and it is a 
performance-based plan, that is one that would require certain 
environmental performance to be achieved, and then over time 
through looking at that performance make determinations on any 
further extension of activity before actual oil activity would 
occur on the plateau itself.
    I might point out that there already is some preexisting 
activity on the plateau on some State lands. But this is one of 
the balancing acts that we have in play, and very much welcome 
ongoing public input on that process.
    Senator Salazar. Thank you.
    The Chairman. Thank you, Senator.
    I note that Senator Murkowski's here. I'm glad that you've 
arrived from Alaska and you didn't freeze up there, 48 degrees 
below or however cold it was. Was that the coldest, or 58, when 
we were there?

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. It was 48. We don't want to exaggerate.
    The Chairman. Or 58. I was up there also with her and 
others, Senator. We invited you and you couldn't make it. But 
needless to say, it's rather exhilarating.
    [Laughter.]
    Senator Salazar. I look forward to going there some time.
    The Chairman. You can't stay outside very long.
    Senator Salazar. I want to go in the summer, though.
    [Laughter.]
    The Chairman. Well, I tell you, if you go in the summer the 
environmentalists will tell you you didn't go in winter when 
all the activity's going to take place. If you go in the winter 
and not the summer, they'll say you should have gone in the 
summer because that's when there's marshes around and you can 
have more damage. So I guess you have to go two times. I won't 
do that, however. I've had my share of ANWR. If we win, if we 
win I'll never have to go back, send somebody else. If we lose, 
that's the end for me. Somebody else can take up this cause.
    Senator, we've got a few more minutes. You can proceed. If 
you want to go on very long, I'll leave the committee to you.
    Senator Murkowski. Mr. Chairman, I just have a couple quick 
questions, and I apologize that I wasn't here earlier. I was at 
Environment and Public Works. We're trying to get Clear Skies, 
and unfortunately we were not successful in that effort.
    But thank you, and I hear very clearly that you won't be 
joining me on my next trip to ANWR. We don't have spring and 
fall, so I can't offer you those seasons. But I do appreciate 
you leading the delegation up north this weekend. It was very 
important.
    A couple questions to both of you. First, thank you for 
being here this morning and congratulations to you as you move 
up and on.
    First, Ms. Scarlett, if I can ask you just a couple 
questions about the U.S. minerals industry. The National Mining 
Association frequently observes that many areas in the U.S. are 
regarded as the least attractive for new mineral investment due 
to permitting and other public policy considerations. Countries 
like Chile are often cited as most favorable for mineral 
development.
    What can the Interior Department do to improve the 
investment climate for mineral exploration here in the United 
States?
    Ms. Scarlett. Thank you, Senator Murkowski. We have worked 
hard these past 4 years at the Department of the Interior, 
whether it's with respect to energy development or minerals 
access, to ensure access to public lands where those resources 
are, doing so while balancing the environmental and other 
considerations.
    To that effect, we have tried to improve our permitting 
processes where that is relevant. For example, particularly in 
energy development, we project to reduce our backlog of 
applications for permits to drill to virtually nothing by 2006. 
In the minerals realm as well, we have undertaken certain 
decisions that try to provide greater security to those who are 
investing in minerals resource development on public lands.
    If you have particular issues that appear to be barriers, 
we would be happy to discuss those with you and determine how 
we might address them.
    Senator Murkowski. I'd look forward to that conversation 
because I know that some in Alaska feel that there are 
significant barriers. So we'd like to talk with you about that.
    The U.S. Geological Survey has a robust program to help 
identify promising areas for mineral exploration, including 
some areas in Alaska under the NRAP and some other programs. Do 
you believe that USGS has a legitimate role in encouraging 
mineral exploration in the United States and, if so, what about 
the funding component?
    Ms. Scarlett. The U.S. Geological Survey has played a very 
significant role in this Nation's history, in exploring its 
geology and including the minerals assessments. We have 
coverage of minerals assessments data bases in the U.S. 
Geological Survey of virtually the entire United States. Our 
2006 budget does propose to concentrate that effort on further 
assessments on Federal lands. We are making some very difficult 
balancing choices as we develop our budget and try to maintain 
fiscal discipline.
    In that context, we have determined to focus the USGS 
effort on the Federal lands, also understanding that the 
private sector, industry and others, do undertake some mineral 
assessments on the non-Federal private lands. So we feel that 
this is a good and effective utilization of the resources that 
we have at Interior.
    Senator Murkowski. So you're suggesting then that there 
needs to be more of a private investment focus, rather than our 
involvement on the Federal lands?
    Ms. Scarlett. No, let me clarify. We are continuing on the 
Federal lands the minerals assessment program for the U.S. 
Geological Survey, believing that that focus on Federal lands 
is appropriate and is indeed a high priority. Our 2006 proposal 
calls for focusing that assessment on Federal lands while 
leaving the assessment of non-Federal lands to other entities 
such as the private sector.
    Having said that, I want to note that we already do have 
and will continue to maintain the existing data bases that have 
coverage of mineral assessments on both Federal and non-Federal 
lands.
    Senator Murkowski. Okay. Very briefly on the fires that we 
suffered in Alaska last summer. It was the worst fire season in 
Alaska's history and, as you know, the wildfires in Alaska are 
attacked on an inter-agency basis, and the State took the lead 
in the southern part of the State and BLM's Alaska Fire Service 
took the lead in the northern part of the State.
    There was a lot of concern last year as the fires kind of 
stepped up about whether Canadian air tankers that were under 
contract to the State could be used to fight the fires in the 
BLM-protected areas. I was up there at that time and there was 
a great deal of uncertainty, and the uncertainty was made even 
worse because you couldn't see. The smoke in Fairbanks was so 
dense that you got up in the air and you couldn't tell what was 
State land, what was Federal land. In fact, we couldn't even 
fly the aircraft.
    But in terms of fighting the fires, it really is that 
initial attack, requiring an aggressive initial attack in our 
wildfires, sending all the heavy smoke into the urban 
communities like Anchorage and Fairbanks--and we recognize that 
we've got to do what we can to make these conditions so that 
you can actually breathe in the interior there. So I would like 
your assurance that you're going to work with me and the State 
of Alaska to ensure that the State's contracted air tankers can 
be deployed where they will be most needed to protect the 
health and safety of Alaskans.
    We anticipate again another tough fire year up north.
    Ms. Scarlett. Yes, Senator, thank you very much. And I 
actually have looked into this specific issue because it is a 
high priority to ensure that interoperability. As you will 
recall, last year we had an issue of having to ground the 
Federal large air tankers because of some safety concerns. I am 
pleased to note that we now have gone through a safety 
assessment process and have eight large air tankers that were 
approved toward the end of last year and several more being 
approved going forward.
    As we do that, we will have more of the large air tankers 
in the Federal force that we will be able to utilize on an 
inter-agency basis. What I am told is that the State assets, 
until we go through this process of safety assessment, the 
State assets will be utilized on the State lands, and in an 
emergency basis--that is, if there's a determination of threat 
to life or other significant emergency--that the State assets 
can be deployed on an inter-agency basis on Federal locations 
as well.
    But we will work hard to strengthen that interoperability 
and to ensure that we have seamless firefighting in Alaska and 
throughout the Nation.
    Senator Murkowski. Well, that's going to be important to 
us. When you say you will have the ability if there is threat 
to life, as you know, in many of these areas it's pretty wide 
open spaces. We don't have a lot of human life that is at risk, 
but it's the health safety factor with the intensity of the 
smoke that's coming in that causes real respiratory issues. So 
I'm not quite sure how we're defining that emergency when we 
can say we've got this seamless interoperability.
    But I'd like to think that we can work with you on that so 
that it works when we're in the midst of these very terrible 
fires.
    Ms. Scarlett. Senator, we very much look forward to working 
with you on that. We are getting through some hurdles on the 
large air tanker safety issues, but as we move forward through 
that certainly interoperability is a key goal.
    Senator Murkowski. Mr. Chairman, I just have a couple 
questions for Mr. Sell, but if Senator Salazar still has more I 
don't want to monopolize more time right now.
    The Chairman. Can we do it this way? Senator Salazar had 
some water questions, right?
    Senator Salazar. Yes.
    The Chairman. That's fine with me. Can you stay and if you 
want to ask a couple would you follow him, and then close the 
hearing?
    Senator Murkowski. I'd be happy to do that.
    The Chairman. I thank you.
    I wanted to say in closing, Mr. Sell, I didn't raise any 
issues about the pending RFP for management of the Los Alamos 
National Laboratory. I did not do that because I think you're 
familiar with the issues. But I think it would be only unfair 
when we--only fair when we're talking about your confirmation, 
that we spread on the record here and that you hear from me 
that I am very concerned at the RFP, the request for proposals, 
and what we ask of the bidders after 6 years of the same 
management is a very, very important issue for those thousands 
of employees who are there and ready to retire and those who 
are people we're looking at to try to recruit to come there.
    I am not at all sure that in an effort to assure bidders, 
which seems to be a part of the religion of the Department--I 
don't mind it, but they seem to want more people bidding than 
they seemed to get an idea about 6 months ago--they thought 
maybe there weren't going to be enough, so changes are made.
    I think that's a balancing act, and I'm very concerned that 
as you change it, like they have now to have a free-standing 
corporate entity be the management instrumentality--it sounds 
nice as a way of getting around the old University of 
California trust fund for pensioners and employment 
arrangements. But I think it cuts two ways. It may invite some 
more people, but it also may cause Los Alamos employees to say 
they don't want to work there under those conditions or they're 
fearful or they don't know what's going to happen.
    I thank the Department for at least considering a 180-day 
moratorium, so as to speak, meaning the new bidder if 
successful and it's not California, that the people up there 
will have 6 months to look and see what the new one is, so that 
they will know the reality of their decision.
    But I'm not sure that's enough to kind of calm down the 
notion that maybe people want to leave before this change. I 
don't know that you want to comment, but I do think it's 
important that you hear that from me. I think Senator Bingaman 
would say it, and perhaps more eloquently, because there's no 
question it's a very, very serious issue. It's a serious issue 
for America. If that personnel capacity is diminished 
substantially, we can't stand that for 8 or 10 years. It's got 
to continue in a rather, to borrow your word, seamless manner.
    Mr. Sell. Senator Domenici, I'm happy to briefly comment. I 
do know how important Los Alamos National Lab is to you. But 
more importantly, it is very important to this country. We must 
have it and they must be very successful. So the issues 
underlying this competition and the request for proposals are 
very serious, and I look forward to getting to the Department 
if I'm confirmed and involving myself in a way that can allow 
the Department to have a successful competition which will 
result in the continuation of excellence, which is the legacy 
of Los Alamos National Lab.
    The Chairman. Thank you very much.
    Senator, you're chairing and now we ask Senator Salazar if 
he'd like to ask some questions. Thank you.
    Senator Salazar. Dr. Scarlett--I guess we should call you 
``Doctor,'' right?
    Ms. Scarlett. Well, actually you've just elevated me. I'm 
what's called ``ABD,'' All But Dissertation.
    Senator Salazar. All But Dissertation. We'll call you 
Assistant Secretary.
    Let me ask you two questions about water. The first has to 
do with the Colorado River system and what is happening with 
the continued decline of water levels at Lake Powell and the 
conflict that currently is under way between the lower basin 
and the upper basin with respect to the allocation issues under 
the Colorado River Compact.
    My question to you is, what is the status of the Department 
of the Interior's involvement on the allocation issues of water 
on the Colorado River? And second, from a personnel point of 
view, where is the Department in terms of appointing the 
Assistant Secretary for Water and Science to replace Bennett 
Raley in that position?
    Ms. Scarlett. Thank you, Senator. As you rightly note in 
alluding to the water issues, water shortages in the West are a 
very significant issue, one in which we have--to which we've 
paid a lot of attention. Indeed, in portions of the West we are 
experiencing drought that is as severe as has occurred in some 
500 years.
    With respect to the appointment of the Assistant Secretary, 
that decision is in process. No individual has been announced. 
But I can assure you that that is a very high priority for the 
Secretary to get that position filled. It is a critical 
position in the Department.
    With respect to the Colorado River and the water 
allocation, let me step back more broadly and say that we have 
been very committed both with Assistant Secretary Bennett Raley 
and certainly going forward to working within the context of 
State water law; and also a second principle is to work in very 
close collaboration with the relevant States and the relevant 
water users. That is the approach that we have been utilizing 
as we move forward.
    I would have to go back to the office and look at any 
specific details in terms of where we are in discussions on the 
Colorado River water allocation challenges and will be happy to 
do that.
    I would add one more thing. As part of the larger water 
issues, Secretary Norton advanced our Water 2025 program. That 
is an attempt to try and get ahead of some of these water 
issues by improved water conservation, by water marketing where 
appropriate, and also by new technologies that ensure that the 
water that is there is delivered efficiently rather than 
evaporating or dispersing. And we look forward to working with 
communities on a competitive process through our grant programs 
to help address individual community water issues through that 
program.
    Senator Salazar. I think for all of the seven States that 
share the water from the Colorado River and are subject to both 
compacts on that river, I would ask that the Department of the 
Interior keep us informed as to what happens relative to the 
current discussions on the sharing of water from the Colorado 
River and how the surplus criteria are determined and enforced.
    Let me ask you a broader question, relative to process on 
Indian reserved rights claims. I've had the opportunity in my 
life to work on both successful negotiations that have resolved 
Indian reserved rights claims and I also have been a part of 
and watched massive expenditures of time and resources being 
spent on Indian reserved rights cases which really have led to 
nothing. And it's not a Republican deal, it's not a Democrat 
deal; it's not a Secretary Norton initiative or a Secretary 
Babbitt initiative. It's just I think the nature of the beast 
whenever you are dealing with these very complicated cases 
where there is so much at stake.
    I think it would be useful for the Department of the 
Interior to consider having a special position that is not a 
political appointed position, but where someone can have 
continuity with respect to some of these major cases that go on 
year after year. In my own experiences, what I have found is 
about the time that you get somebody up to speed on an Indian 
reserved rights claim that person moves on and somebody else 
comes in.
    I think that the Department of the Interior can play a 
major role in helping us resolve some of these issues that 
consume so many resources all across the Western United States 
at least. I just suggest that you take a look at the processes 
that have been used historically by the Department of the 
Interior to try to bring those cases to some resolution.
    Ms. Scarlett. Yes, Senator, we certainly concur that these 
are very complex, challenging issues and they take very many 
years. We remain committed to a focus on settlement rather than 
litigation. I believe the Secretary announced at our budget 
hearings last week that we have appointed Jennifer Gimbell 
within the Department to have as her portfolio a complete focus 
on the Indian water rights settlement issues. We think that 
should help to bring us some continuity over time and also some 
significant attention as we move forward.
    Senator Salazar. She's a very good choice.
    With that, Senator Murkowski, I'm finished and I wish you 
very well. Thank you.
    Senator Murkowski [presiding]. Thank you, Senator Salazar.
    Mr. Sell, welcome again. Nice to see you here in this 
capacity. As you know, we achieved some success in the last 
Congress as it related to moving forward at the Federal level 
with certain incentives for an Alaska natural gas pipeline, 
helping to address what we recognize in this country is an 
ever-increasing shortage of natural gas, and up in my State 
we've got the ability to supply vast quantities. We've just got 
to figure out how to get it from there to here.
    That process is moving forward at the State level. Now 
there are several applications that are pending. We don't know 
yet who the project sponsor will be, but there is going to be a 
lot of coordination that will be required at the Federal level. 
The DOE is going the play a vital role as this project moves 
forward regardless of who the project sponsor will be.
    DOE's responsibilities will include granting the necessary 
authorizations, establishing an Office of Federal Coordinator, 
conducting environmental reviews, and really just a lot of 
coordination amongst various Federal agencies. We learned at 
the budget hearing last week that DOE does not have funding in 
its fiscal year 2005 budget to carry out its responsibilities 
under the Alaska gas pipeline legislation and that DOE would 
need reprogramming authority to fund the responsibilities; and 
also, looking at the 2006 budget, doesn't include any funding 
as well.
    So I am looking for your assurance that you will work with 
us as we are moving forward to make this very important 
national project a reality as we determine what funding is 
required, certainly for instance with the Office of Federal 
Coordinator. These are things that we need to get in the 
pipeline, so to speak, as soon as possible. So just looking for 
your assistance on this very important issue.
    Mr. Sell. Senator, if I'm confirmed and make my way over to 
the Department of Energy, you will absolutely have my 
assistance in doing that. Your leadership in the last Congress 
in getting the relevant authorizations passed was critical. The 
lower 48 desperately needs the natural gas of Alaska and we 
need to build the pipeline to get it to the marketplace. It's a 
very important issue for the President and for this country and 
for the Department, and I look forward to the opportunity of 
getting over there and resolving these initial--or working with 
you to try to resolve these initial funding issues, and then as 
the project proceeds.
    Senator Murkowski. Good. Well, I appreciate that. I'm sure 
we will have a great deal of contact as we're moving forward to 
make this very important project a reality.
    We had an opportunity, I guess it was about a month and a 
half, 6 weeks or so ago, when this committee took up the issue 
of natural gas and the supply, and we, the committee, heard 
testimony from a gentleman from Alaska, they have the director 
of the Alaska Division of Oil and Gas, Dr. Mark Meyers, talking 
about the potential not only in Alaska but in the country for 
an unconventional gas source, natural gas hydrates, with the 
recognition that in my State we've got about 590 trillion cubic 
feet of onshore hydrate reserves, potentially 32,000 trillion 
cubic feet of potential offshore hydrate reserves--really, 
enough gas out there to supply the Nation for generations.
    And it's not just, these hydrates are not just located in 
Alaska, but down in the Gulf of Mexico, and truly a huge 
potential for us. Dr. Meyers was actually here in Washington 
yesterday and gave a presentation to some of us after lunch to 
just kind of educate a little bit more about the potential for 
this.
    Now, in 2000 the Congress passed the Methane Hydrate 
Research and Development Act and this had authorized 
appropriations through fiscal year 2005 for the methane hydrate 
research and development. Those appropriations and 
authorizations are set to expire this year. I'm working with 
Senator Akaka to renew this, to make sure that we will continue 
the funding for what I feel is incredibly important research in 
the hydrate area.
    We've been working with the Department of Energy. We've 
been working with the National Academies. We've read the 
National Research Council review of the act and view this again 
as something that has the potential to really make a 
difference. It's not something that has been focused on because 
we're either looking at our conventional reserves here 
domestically or we're looking to foreign sources of LNG.
    This is not so pie in the sky that we should not be 
focusing our attention and our funding in this area. Again, the 
fiscal year 2006 DOE budget does not include any funding to 
continue the research that was done--that was begun under the 
2006 act. So again I want to point this out to you as an 
incredible opportunity for the Department. I've had the 
opportunity to speak with Secretary Bodman about this and just 
let him know of the great potential, and I would ask for your 
enthusiastic support as we move forward in good research on 
this as well.
    Mr. Sell. Senator Murkowski, I appreciate you bringing this 
very important issue to my attention. I was aware, although not 
involved in the development of, I was aware of our proposal or 
the Department's proposal in the fiscal year 2006 budget, and 
you will have my enthusiasm in working with you. And I would 
like perhaps also to have the opportunity to meet with your 
expert from Alaska as I myself pursue an education on this 
important opportunity. So I look forward to doing that.
    Senator Murkowski. We'll make sure that you have an 
opportunity to meet with him. He's got some great, great 
information.
    Ms. Scarlett.
    Ms. Scarlett. Senator, might I add something on that? Our 
Minerals Management Service and our U.S. Geological Survey have 
also done some methane hydrate research work and perhaps we 
ought to work together with the Department of Energy to 
coordinate those efforts and ensure that we have a good 
program.
    Senator Murkowski. Absolutely.
    And I would feel remiss in not taking the opportunity with 
both of you under the spotlight today to extend an invitation 
to you both to come up to Alaska's North Slope, visit ANWR, 
visit the operations that we have. We feel that we have really 
taken the technology to its highest level and beyond as we have 
figured out a way to provide for exploration and production in 
an Arctic climate and do it in balance with the environment.
    I think that I can speak for the others that joined me on 
this trip this weekend that they were beyond just impressed, 
but really quite amazed at how well we have been able to 
balance what we do up North. The greatest example was the trip 
out to an exploration well from a facility, a production 
facility that is not connected by road. It is its own little 
island out on the northern plain, and it's connected to the 
exploration rig by an ice road that was built last month, and 
the rig was hauled out there on the ice road. The pad is built 
out of ice.
    They're exploring right now. They'll be done in another 10 
days or so. When they're done, they haul it out on the ice 
road. In another couple months, spring is going to come. Spring 
will be brief. But that ice road will melt. That ice pad will 
melt. There will be nothing out on that tundra except a plug 
that's about as tall as probably you, Mr. Sell, and about this 
big around [indicating], and if there was nothing found it will 
be capped so you won't even be able to view it from the tundra.
    But again, it's our recognition that we're dealing with a 
fragile ecosystem up there during the summer. So we only do our 
operations in the winter, operations of the exploration. It's 
fascinating. I could go all day long, but we've got votes 
beginning right now.
    I want to thank you for your time here this morning. I 
thank you for your willingness to serve the President, the 
administration, and the country. So thank you for joining us.
    And with that, we're adjourned.
    [Whereupon, at 11:31 a.m., the hearing was adjourned.]
                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

        Responses of Mr. Sell to Questions From Senator Domenici
                               oil prices
    Question 1. When President Bush introduced his National Energy 
Policy in May 2001, oil was $27 a barrel. Today it is well over $50.
    What, if anything, do you think the Department of Energy should do 
to address the continuing rise in oil prices?
    Answer. Senator, the Department will continue to seek to work with 
Congress to pass comprehensive energy legislation, support efforts to 
open the Arctic National Wildlife Refuge to environmentally responsible 
exploration and production, and continue to move forward in our efforts 
to develop new, sustainable sources of alternative energy like ethanol 
and hydrogen.
    Almost seven out of every ten barrels of oil we use are for 
transportation fuel, so our efforts to promote more efficient cars and 
trucks in the near term, and alternatives to petroleum such as hydrogen 
in the long term, are likely to be the most effective in reducing 
petroleum demand.
                             nuclear power
    Question 2. Last week Secretary Bodman testified before this 
committee on the DOE's FY 06 budget request. During that hearing I 
asked him if he would look into a delay occurring in the Office of 
Nuclear Power 2010 (NP2010) regarding disbursing the awards made by the 
DOE to two energy consortia last November.
    We have real momentum for the first time in three decades on the 
course for new plants, I would hate to think our own Department of 
Energy is the major impediment at the beginning of this historic 
process. The Secretary gave me his word that he would look into the 
delay and get things rolling.
    If you are confirmed, will you make that same commitment?
    Answer. Senator, I am aware of the exchange between you and 
Secretary Bodman and I will commit to reviewing the circumstances 
should I be confirmed.
                   yucca mountain license application
    Question 3. The Department now plans to submit a license 
application to NRC late in 2005 for the construction of the repository, 
a year later than the schedule the department provided to us last year. 
Last week I asked Secretary Bodman to provide this committee with a 
status update on the Yucca Mountain project.
    When you get to the DOE in your new role, will you commit to this 
committee that you will work to expedite getting a completed license 
application submitted to the NRC?
    Answer. Yes.
                yucca mountain licensing support network
    Question 4. The NRC has indicated they will not docket a license 
application until six months after certification of the License Support 
Network, a web-based data collection of all relevant documents for the 
application.
    Will you provide me with a status of the work being done at the 
department to address the shortcomings the NRC identified in the 
earlier license support network submission?
    Answer. Although I am not personally familiar with the details of 
the Yucca Mountain Licensing Support Network, I have been informed that 
the Department is currently working through the schedule with its 
contractor and about half of the documents have been reviewed. I 
understand the Department anticipates certifying the LSN by mid-year. 
Completing the licensing support network has evidently proven to be a 
more difficult challenge than the Department initially projected. 
Nevertheless, it is necessary that the Office of Civilian Radioactive 
Waste Management provide a document collection that is accurate and as 
open as possible to the participants in the licensing process.
         Responses of Mr. Sell to Questions From Senator Smith
    Question 1. For the last several years, the Administrator of the 
Bonneville Power Administration has reported directly to the Deputy 
Secretary of Energy. I believe this has been beneficial for the 
Administration and for the ratepayers of the Northwest. Will this 
direct line of reporting continue when you are confirmed as Deputy 
Secretary?
    Answer. Senator, I appreciate your experience and knowledge on the 
issue and place great weight on your recommendation. If confirmed, I 
plan to review all the operations relating to the activities and 
responsibilities of the Deputy Secretary and will take your sentiments 
into consideration. If I ultimately conclude that a change in the 
reporting relationship is needed, I will discuss that matter with you 
before any change is finalized.
    Question 2. As you may know, BPA has invested a great deal of 
effort over the past year to develop a Strategic Direction document to 
provide guidance for Bonneville and the region as we seek to clarify 
load obligations and assess infrastructure needs in the Northwest. The 
development of this plan is the result of many discussions between the 
congressional delegation, Bonneville, the Department of Energy 
leadership and BPA's customers and stakeholders in the Northwest. In 
fact, the Administration recently offered support for BPA's Strategic 
Direction. In the even that the legislative proposals discussed in the 
President's fiscal year 2006 budget proposal are not acted upon, is it 
reasonable to assume that you and the Department of Energy would 
continue to be supportive of Bonneville's Strategic Direction?
    Answer. Senator, at this time I am not familiar with the status of 
the development of the Strategic Direction for Bonneville Power. 
However, if I am confirmed, I will become familiar with the actions to 
date and work with you on this issue.
    Question 3. It has been my observation that most Administrations, 
regardless of party, do not want Administration officials discussing 
agenda items that may be in the President's budget proposal prior to 
the actual release of the budget. Has this Administration requested 
that officials not discuss budget provisions prior to the submittal of 
the budget to the Congress? Did you feel obligated not to discuss 
budget proposals prior to the transmittal of the budget to the 
Congress?
    Answer. Senator, as you are aware, the development of the 
President's Budget is an important process. The confidentiality of 
internal deliberations is important to a thorough exploration and 
consideration of issues. As such, staff are not authorized to release 
details or discuss potential budget proposals with individuals outside 
of the executive branch prior to the time the President authorizes the 
release of the budget or specific details therein. As you note, 
confidentiality considerations are not unprecedented and are, in fact, 
necessary to a well-functioning policy development process in all 
branches of the government.
         Response of Mr. Sell to Question From Senator Bunning
    Question 1. Mr. Sell, the Department of Energy has reduced spending 
for cleanup at the Paducah plant. Why was the funding for cleanup 
reduced? Was the funding reduction expected as part of the accelerated 
cleanup agreement for Paducah? Is the Paducah Plant on target to meet 
its completion date for accelerated cleanup that was agreed upon with 
the state of Kentucky?
    Answer. Senator, I am aware of your great interest in Paducah and 
your concerns about the proposed reduction in the FY 2006 Budget 
request. If confirmed, I will ask the Office of Environmental 
Management to provide me with a full explanation for the proposed 
reduction as well as a briefing on the status of the clean up.
        Responses of Mr. Sell to Questions From Senator Bingaman
              northern new mexico math and science academy
    Question 1. I am concerned about the projected shortfall in the 
development of our 21st century math and science workforce. New Mexico, 
in partnership with Los Alamos National Laboratory, has a very 
successful professional development program called the Northern New 
Mexico Math and Science Academy. We would like to export this model 
program throughout DOE's national laboratory complex, which has a vast 
untapped potential for addressing needs in math and science education. 
We are in the process of putting together a planning meeting in New 
Mexico to try to figure out how to do this.
   Do you share my concerns about math and science education?'
    Answer. Senator, I share your concern and I appreciate your support 
for the Department's effort to strengthen America's place as a world 
leader in math and science education. If I am confirmed, I look forward 
to working with you and with Secretary Bodman in this effort.
   Would you be willing to lend your support--and the 
        Department's resources--to the putting together the planning 
        meeting?
    Answer. Senator, I am not in a position today to commit the 
Department's resources. Should I be confirmed, I will look forward to 
working with you to determine the most appropriate avenues for moving 
forward and to determine how best to utilize the tremendous assets we 
have in the Nation's laboratories.
                         pajarito homesteaders
    Question 2. Section 3147 of the Ronald Reagan National Defense 
Authorization Act established a fund in the Treasury to compensate the 
Pajarito Plateau homesteaders whose homesteads were taken by the Army 
for the Manhattan Project more than sixty years ago. The Act directed 
DOE to deposit $10 million into the fund. The Act was signed into law 
last October, more than four months ago, but the Department has yet to 
deposit the necessary funds.
   Are you familiar with this situation?
   What is causing the delay?
   Will you take whatever action is needed to see that the 
        funds are deposited promptly, to correct this longstanding 
        injustice?
    Answer. Senator, I am not personally familiar with the legislation, 
but should I be confirmed, I will look into the issue and take whatever 
actions are necessary to meet the requirements of the statute.
        Responses of Mr. Sell to Questions From Senator Salazar
                    renewable energy economic model
    Question 1. Mr. Sell, I am concerned that the current estimates 
used by the Department of Energy to determine the costs and benefits of 
a Renewable Portfolio Standard are not realistic. For example, the 
Energy Information Administration's economic model has oil prices at 
about $35 dollars per barrel for the year 2005, even though actual 
prices are currently $53 dollars per barrel. The projected costs of 
renewable energy would compare much more favorably than current 
estimates allow if a credible model for oil and natural gas prices were 
used in the baseline assumptions. Secondly, that same model does not 
account for a modest reduction in the price of wind power over time.
    I do not expect that you are intricately familiar with these models 
or the numbers used. But what I would like from you, Mr. Sell, is your 
assurance that if confirmed, you will provide me with cost and benefit 
estimates of an RPS using a better set of input numbers. Specifically, 
I would like to see a model that starts oil above $50 per barrel in 
2004 dollars, steadying out at a new price floor of $40 per barrel by 
2025. I would like to see the results of this model for two different 
approaches: one with wind power prices held constant and one with a 
modest reduction in those prices over time. I am positive that using 
this more realistic approach will show renewable energy compares much 
more favorably than it does under current EIA analysis.
    Mr. Sell, can I have your assurance that if confirmed, you will 
provide me with that analysis?
    Answer. Senator, I am not familiar with the modeling associated 
with the analysis you reference. The Energy Information Administration 
(EIA) is an independent statistical and analytical agency within the 
U.S. Department of Energy. If I am confirmed, I would be happy to work 
with you and EIA to develop analysis that you will find helpful to 
better understanding the impacts of a renewable portfolio standard.
                              rural areas
    Question 2. Mr. Sell, I am also interested in the development of 
rural America. As Deputy Secretary, what approaches would you recommend 
to make sure that rural America will benefit from the Department of 
Energy's policies?
    Answer. Senator, I appreciate your raising the issue during my 
confirmation hearing. Rural America, as well as all other parts of the 
country, need abundant, affordable and reliable sources of energy. If 
confirmed, I look forward to working with you on this issue. I 
appreciate the importance you place on the development of renewable 
sources of energy and the importance these resources could play in 
rural communities. Certainly, the Administration's policies to 
encourage greater use of ethanol, biodiesel, and wind energy have had a 
very positive impact on rural areas. Furthermore, rural communities, 
particularly in the West, have enjoyed a long and beneficial 
relationship with the Power Marketing Administrations. I look forward 
to working with you on other approaches we may be able to develop 
together that will be good for rural America.
        Responses of Mr. Sell to Questions From Senator Cantwell
               hanford--high level waste reclassification
    Question 1. The President's 2006 budget proposes to cut funds for 
the Environmental Management program by $548 million--the on-going 
cleanup at Hanford would be required to bear more than half of all the 
proposed reduction. Hanford clean-up is not optional. It is disturbing 
to me that these cuts at Hanford, in addition to being poor cleanup 
policy, are also at odds with the Secretary's commitment to the 
Department's ongoing financial obligations under the TriParty 
Agreement.
    Secretary Bodman and I have talked about my ongoing concern about 
waste reclassification. In response to my requests, he stated for the 
record, that DOE-authored language in FY '05 Defense Reauthorization 
bill applies exclusively to Idaho and South Carolina AND NOT 
WASHINGTON. Despite the commitment of the Department for the record, 
the President's budget cites ``uncertainties'' regarding the 
classification of waste that is scheduled to be removed from the 177 
underground tanks at the Hanford Site. Your experience in working on 
the Hill--your potential new role as Deputy Secretary--combined with 
this ``uncertainty,'' and deep budget cuts raises a red flag to me.
    Will you give me your assurance that you and those you will 
supervise in your new position, if confirmed, will not pursue the same 
type of legislative end run--previously supported by the Department of 
Energy--that we saw during the Defense Reauthorization bill last year--
a policy that would have compromised DOE's commitment to cleaning up 
``everything that is technically feasible but no less than 99 percent'' 
of the waste in Hanford's tanks?
    Answer. Senator, I agree with you on the importance of cleaning up 
the Hanford site in a manner that protects human health and the 
environment. The remediation of waste in Washington, Idaho and South 
Carolina is by far the greatest environmental challenge facing the 
Department of Energy. If confirmed, I will seek to work with you on 
these very important issues in a direct and open manner. I will assure 
you that the Department will consult with you and the State of 
Washington on the cleanup of tank waste.
    Question 2. I also want to ask you some questions about the 
Department's efforts to implement Section 3116 of the fiscal year 2005 
Department of Defense Authorization Conference Report, which became law 
last October. Section 3116 establishes new procedures for the disposal 
of high-level radioactive waste in South Carolina and Idaho that 
resulted from the reprocessing of spent nuclear fuel at DOE facilities.
    Forty-eight members of the Senate supported my efforts voted to 
remove these provisions during Senate floor consideration of the fiscal 
year 2005 Department of Defense Authorization bill. I remain concerned 
that the provisions in the Senate-passed bill allow DOE to leave 
millions of gallons of high level nuclear waste next to drinking water 
supplies in South Carolina, and that this same approach will be 
proposed for Hanford. While this section was modified in Conference, I 
feel loopholes still remain that cast serious doubt about whether the 
environment near these facilities will be protected. I want to ask you 
about the actions the Department is taking to implement this new law.
    The opening lines of Section 3116 specifically eliminates the 
ability of the federal government to regulate these tanks under the 
Nuclear Waste Policy Act of 1982, the Energy Reorganization Act of 1974 
or any other laws that define classes of radioactive waste. This 
language is silent on states' authority, delegated to them by the 
federal government under the Clean Water and Safe Drinking Water Acts, 
to issue permits protecting surface water and drinking water.
    Do you agree that conferees did not exempt the Savannah River and 
Idaho sites in Section 3116 from the requirements of the federal Clean 
Water and Safe Drinking Water Acts, and that those laws and the 
regulations that implement them, which do contain lists of radioactive 
pollutants, are not overridden?
    Answer. Senator, I am aware that this legislation was enacted in 
the last Congress but I am not familiar with last year's conference 
proceedings or the resulting statute at a level of detail to provide an 
answer to the question you have posed. If confirmed, I intend to 
familiarize myself with the tank waste issue and this new law.
    Question 3. The National Academy of Sciences issued its report on 
DOE's on-site nuclear waste disposal program, a report mandated fiscal 
year 2005 Department of Defense Authorization Conference Report. The 
report also urged stronger and more comprehensive risk-based planning 
to govern DOE decisions about on-site disposal. I want to ask you about 
these findings, and how the proposed fiscal year 2006 budget will help 
DOE address the National Academy's recommendations.
    As I understand it, cleanup of DOE's nuclear complex over the next 
several decades will cost at least over $140 billion, but you are 
seeking to reduce costs. The proposed fiscal year 2006 environmental 
cleanup budget is about $6.5 billion, a steep cut from the fiscal 2005 
appropriation.
    I understand that the report says that recovery of ``every last 
gram'' of the nuclear waste at these sites is ``technically impractical 
and unnecessary,'' but it also finds that DOE cannot credibly make 
decisions about exempting wastes from deep burial.
    The report also calls for outside technical review of risk 
assessments and, crucially, said final decisions should be in the hands 
of another federal agency, U.S. EPA or the NRC. Specifically, the 
report says that ``a separate federal entity is needed as the 
regulatory decision maker'' with respect to reclassification.
    Another NAS panel this week took major issue with the plan to 
reclassify High Level Waste criticizing DOE for trying to reclassify 
material by mixing it with cement and also seconded the notion for the 
need for some review of DOE's reclassification of tanks.
    The Secretary did not have a chance to review the report when he 
testified before the Committee on March 1, 2005. I assume that you have 
had a chance to review its findings. Do you agree with the report's 
findings, and if so, are you willing to work with this Committee to 
implement the findings?
    Answer. Senator, I appreciate the question. I have not had the 
chance to review the report but will do so and will commit to working 
with you and the committee on this issue if confirmed.
    Question 4. I am also concerned that nuclear waste greater than 
Class C, and generally not suitable for near surface disposal, will 
remain on-site with limited oversight. Section 3116 allows these wastes 
to stay on-site at Savannah River and Idaho pursuant to a plan 
developed by the DOE in consultation with the NRC. I would have 
preferred that NRC be explicitly required to follow existing 
regulations regarding disposal of greater than Class C waste.
    As I read it, Section 3116 instead requires a new ``plan'' to be 
developed that as no particular requirements. Have you examined this 
issue and do you concur with that interpretation?
    Answer. Senator, I have not had the opportunity to review the 
language but, if confirmed, I will do so in order to more fully 
understand what is required in the new law.
    Question 4a. Can you detail for me the resources that will be 
allocated to be doing to make sure that DOE and NRC develop clear 
guidelines and a plan for disposal of this waste?
    Answer. Senator, I am not familiar at this time with the 
requirements of the legislation, but if confirmed, will commit to you 
that I will review the law and the Department's plans for 
implementation.
    Question 5. The National Academy report is effectively calling for 
far more oversight than currently exists in the program and questions 
DOE's ability to make judgments on waste management in calling for 
final decisions by another agency. It states ``The credibility of DOE's 
planning and decision making is reduced by the apparent conflict of 
interest created by DOE's authority to both propose and approve of 
disposition plans for radioactive wastes.''
    Ultimately, I think we may need additional legislation on this 
matter, but I want to know whether, should you be confirmed, you plan 
to conduct another internal review of this issue this year?
    Answer. Senator, I have not been associated with this issue in 
great detail so I cannot comment at this time on the need for another 
formal internal review. But, if I am confirmed, I will personally 
review the issue as part of assuming my new duties. I will look forward 
to working with you on these very important matters.
    Question 6. Your budget also sites some seismic issues as reasons 
for the budget cut backs for the construction of the Waste Treatment 
Plant. This seems a little counter intuitive to me--that is to cut 
budgets when you find more problems instead of addressing the issue 
head on.
    Can explain how these seismic issues come to the fore and how your 
cut to the budget helps move us through these problems?
    Answer. Senator, I am only generally aware of the seismic issues 
and cannot comment at this time on how the issue has affected both the 
construction of the Waste Treatment Plant and the budget. Should I be 
confirmed, I intend to learn more about the challenges that exist for 
the Hanford cleanup and I would look forward to working with you on 
your concerns.
    Question 7. As you're probably know by now, it's been estimated 
that this proposal would raise Northwest power rates by $1.7 billion, 
and reduce the incomes of Northwest residents by another $1.3 billion. 
I agree with some of my colleagues on this committee that this plan 
represents an effort to privatize BPA--which is deeply disturbing. 
Further, this proposal truly represents a one-two punch to our regional 
economy.
    The reason I keep raising the issue of the BPA rate hike proposal 
is because of the devastating economic impact it would have on the 
Northwest economy and my constituents. Are you aware that the West as a 
whole has lost about $35 billion and an estimated 589,000 jobs because 
of the energy crisis of 2000-2001 (according to an article in the 
journal, Competition & Trade)?
    Setting aside all of the economic devastation this plan would cause 
in my region, I've read in the press that the administration has said 
that this Northwest rate hike plan would somehow ``level the playing 
field'' because our region has been blessed with affordable, cost-based 
electricity. I'm a little bit confused by that statement, however. Are 
you under the impression that, somehow, if you jack up power rates in 
the Northwest that-magically-power rates in other parts of the country, 
say Texas or the Southeast or even the Northeast, will actually go 
down?
    Answer. Senator, I am not under that impression and appreciate the 
opportunity to clarify this aspect of the President's proposal. It is 
my understanding that this proposal addresses price anomalies within a 
region, not across regions.
    Question 7a. If raising Northwest power rates doesn't lower power 
rates anywhere else, how do consumers anywhere in this country benefit 
from your proposal?
    Answer. Senator, it is my understanding that the President's 
proposal would benefit consumers in the Northwest by removing the price 
disadvantage that some customers of other energy suppliers in the 
region have.
    Question 8. As I think you know, a 1996 federal law requires BPA to 
pay higher interest rates on its debt due to an agreement with their 
ratepayers to pay $100 million immediately. The customers received 
assurances that rates would remain cost-based and reserved the right to 
sue the federal government if that plan was amended.
    Is it your view that BPA power is a subsidy to the Northwest?
    Answer. Senator, it is my understanding that GAO, CBO, and DOE's 
Energy Information Administration have each concluded that the 
taxpayers do not recover the full cost of the power produced by 
hydroelectric facilities they financed. I recognize that there is a 
difference of opinion on this issue, and I would welcome the 
opportunity to review credible analysis to the contrary.
                                 ______
                                 
      Responses of Ms. Scarlett to Questions From Senator Domenici
                    indian water rights settlements
    Question. I have repeatedly expressed my frustration over the 
Department's failure to seriously engage in the ongoing Indian water 
rights settlement negotiations in New Mexico. In responses to questions 
at last week's hearing on the President's Budget, Secretary Norton 
committed to address this issue.
    Will you commit to meaningful participation by a high-level 
Department official in all future New Mexico water settlement 
negotiations?
    Answer. I share your concerns regarding Indian water right 
settlement negotiations in New Mexico. These negotiations are of great 
importance to the Secretary. If confirmed as Deputy Secretary, I will 
commit to ensure that a high-level Departmental employee is assigned to 
work with the Department of Justice (DOJ) and the Department's bureaus 
to resolve future water settlement negotiations.
    Question. Can you also assure me that you will work to ensure that 
the Department seeks enough funding to implement these settlements?
    Answer. If confirmed, I will work with the Department's Bureaus, 
the Office of Management and Budget, and other appropriate agencies to 
seek adequate funding to implement the water settlements.
                              oil and gas
    Question. In spite of a commitment by this administration to expand 
oil and gas development on public lands, recent reports indicate that 
fewer acres have been leased during the past four years than were made 
available during the preceding four years under the Clinton 
Administration.
    What are the primary reasons for this?
    Answer. The law requires BLM to hold quarterly sales. The majority 
of parcels offered at these sales are requested by industry. The BLM 
only leases lands pursuant to land use plans that designate certain 
areas as suitable for leasing. The BLM deferred leasing on 2.7 million 
acres bureau-wide in 2004 so that we could update land use plans or 
complete Endangered Species Act or National Historic Preservation Act 
consultations.
    In addition, the number of protests of parcels being offered for 
oil and gas leasing in the last two years has dramatically increased. 
For example, during the period 1997 to 2000, the BLM received 666 
protests (the first level of appeal) on leases the BLM offered for 
sale, and 366 appeals of leases the BLM offered for sale. During the 
period 2001 to 2004, the BLM received 4,425 protests and 925 appeals. 
Most of the protests and appeals concerned environmental issues. These 
protests slow the issuance of new oil and gas leases. Even after 
protests have been dismissed, some parties are challenging the leases 
at the Interior Board of Land Appeals (IBLA) and Federal Court to 
prevent new leases from being issued. The IBLA and court decisions have 
often imposed more land-use management requirements before oil and gas 
leases can be issued, resulting in further delays.
    Question. What steps do you believe should be taken to improve 
access to development of our nation's oil and gas resources?
    Answer. The BLM has taken a number of steps to improve processing 
of Applications for Permits to Drill (APDs) and to improve the process 
for leasing lands for oil and gas development. For example, the BLM 
tracks the processing of APDs on a weekly basis so that managers can 
make necessary adjustments in workloads. The BLM has implemented a 
computerized tracking system to better identify bottlenecks in the 
process for approving APDs. The BLM is providing technical assistance 
to industry to ensure submission of complete applications. Between 2001 
and 2004, we approved over 17,000 APDS, an 88 percent increase over the 
numbers of APDs approved between 1997 and 2000.
    The BLM has formed Quality Assurance Teams to identify tasks that 
Field Offices are successfully implementing so that these successes can 
be duplicated in other offices. These Quality Assurance Teams also 
identify areas for improvement. The BLM has worked with State Historic 
Preservation Officers to streamline cultural resource clearances.
    The BLM has implemented Best Management Practices, which provide 
guidance for companies to use in developing their operating plans. This 
should allow the BLM and the energy industry to minimize the amount of 
surface disturbance to the public lands while maintaining access to 
energy resources. We continue to look for ways to improve the 
permitting process to allow increased access to oil and gas development 
on the public lands. For example, we are nearing completion of revised 
guidance for oil and gas companies that will assist them in developing 
complete APD packages. Complete application packages will allow the BLM 
to process the applications while minimizing delays to obtain 
additional information.
    Question. It has now been nearly four years since President Bush 
unveiled the report of his National Energy Policy. At that time, oil 
was $27 a barrel, now it is well over $50. Natural gas has seen a 
similar rise in prices.
    What, if anything, do you think the Department of the Interior 
should be doing to address this situation?
    Answer. The Administration's efforts to increase production of oil 
and gas from Federal lands and waters will serve to sustain and promote 
domestic supply and help moderate prices. Oil and gas production from 
onshore and offshore Federal lands currently accounts for about 35% of 
the U.S. domestic production. The Department is actively working to 
increase the opportunities for development of oil and gas resources on 
the Federal lands it manages and on the Outer Continental Shelf while 
maintaining and enhancing environmental protections.
    In support of the Administration proposal, the Department is also 
working to promote exploration and development of the area within the 
Alaska National Wildlife Refuge (ANWR), where the U.S. Geological 
Survey estimates a mean expected volume of 10.4 billion barrels of 
technically recoverable oil if Congress acts to lift the ban on 
development. The President's FY 2006 budget assumes enactment of 
legislation to open ANWR to exploration and development, with the first 
lease sale held in 2007 expected to generate an estimated $2.4 billion 
for bonus bid revenues. The Department is also working with other 
Federal agencies on the approval and permitting processes for the 
Alaska Natural Gas Pipeline.
    Question. The Nation's land management agencies have a long history 
of continually creating new processes and procedures that, in total, 
have nearly paralyzed their ability to accomplish their missions.
    What do you propose to do to improve streamlining of procedures by 
agencies within the Department?
    Answer. The Department is committed to encouraging and facilitating 
increased access to oil and gas resources, in a manner that is 
consistent with land use plans and the BLM multiple-use mandate. To 
this end, the BLM has made significant progress in expediting and 
facilitating access to energy resources. Recent funding increases and 
management improvements instituted by the BLM have greatly increased 
the capacity to process applications for permits to drill, resulting in 
an 88 percent increase in APDs approved between 2001 and 2004 compared 
with APD approvals from 1997-2000. The BLM has established quality 
assurance teams to review field office processes for applications 
permits to drill (APDs) in order to identify opportunities for 
employing best practices. Utilizing cost and demand data, the BLM has 
shifted resources to field offices where they will have the greatest 
impact. The BLM is currently evaluating additional ideas, including 
streamlining the NEPA process, pursuing e-Permitting, and sharing 
personnel across field office boundaries and program.
    Similarly, the MMS is implementing a number of directives under the 
National Energy Policy designed to improve and, where appropriate, 
streamline procedures to ensure safe and efficient operations on the 
Outer Continental Shelf and promote OCS oil and gas leasing and 
approval of exploration and development plans on predictable schedules. 
MMS completed the 5-Year OCS Oil and Gas Leasing Program for 2002-2007 
in July 2002. The Program proposed up to 20 lease sales in the Gulf of 
Mexico and offshore Alaska. All sales have been held on schedule. MMS 
also continues to process exploration and development plans in a timely 
manner. MMS regulations require that all exploration plans must be 
processed and final action taken within 30 days, and Development and 
Production Plans must be processed and final action taken within 
approximately 120 days. For the last two years, all plans for the Gulf 
of Mexico OCS met these goals. In addition, MMS works closely with a 
number of other Federal agencies and State and local governments to 
streamline many of its activities. MMS works closely with the Coast 
Guard to promote consistency and improve coordination on joint 
regulatory oversight responsibilities for OCS operations and on 
coordinating reviews for permitting deepwater ports (e.g., for 
Liquefied Natural Gas imports). To further streamline its procedures, 
MMS's ongoing e-Government Transformation project will re-engineer 
business processes, using technology to receive and process data and 
information, resulting in more efficient and effective work processes.
    I would be pleased to keep you informed of our progress as we 
continue to develop improvements to the process.
                            land acquisition
    The Department continues to put in large requests for land 
acquisition each year, and at the same time bemoans the maintenance 
backlog that continues to grow.
    Question. Why should Congress provide money for land acquisition 
when it seems we cannot afford to manage the lands for which the 
Department is already responsible?
    Answer. Mr. Chairman, I agree that taking care of what we already 
manage is a top priority. The Department of the Interior manages one in 
every five acres of the United States. We believe significant 
conservation results are possible by work in partnership and 
cooperatively with landowners, Tribes, states, local agencies, and 
other organizations. Such partnerships leverage Federal funds sometimes 
at a ratio of more than 4 to 1. They enable us to achieve conservation 
goals while maintaining productive economic activity and thriving 
communities. They also enable us to achieve significant conservation 
goals without taking on long-term operating expenses that accompany 
land acquisition projects.
    Consistent with this perspective, over the past four years, the 
Department's budget has emphasized: 1) taking care of the lands and 
facilities currently managed by the Department; and 2) addressing 
conservation goals through partnerships with private landowners, 
Tribes, States, and local communities. Our budget over the past four 
years has proposed significant funding increases for these activities. 
Consistent with that focus, we have, in turn, significantly decreased 
proposed funding for land acquisition since 2001.
    Nonetheless, the Department continues to propose some funding for 
land acquisition, including purchase of easements in which the base 
property remains in private ownership. Under this Administration, these 
acquisitions have focused on transactions: 1) within existing park and 
refuge boundaries; 2) national priorities such as enhancing 
commemoration of the Lewis and Clark expedition and the site of the 
Flight 93 plane crash; and 3) lands through which acquisition can 
resolve conflicts and help solve land use and water problems, such as 
the proposed acquisition of the Barnes property in the Klamath Basin.
    The Department proposes $107 million in FY 2006, which contrasts to 
an enacted level of Interior federal land acquisition funding in 2001 
of $303 million. In making decisions about each proposed acquisition, 
the Department looks at the cost of operation and maintenance 
associated with the purchase of the interest in land to be sure that it 
is affordable and appropriate--and that alternatives to land 
acquisition do not exist.
                             western water
    Question. How does the Department plan to deal with water storage 
needs in the West?
    Answer. First, the Department intends to maintain and preserve the 
existing storage infrastructure that has been developed over the past 
103 years. This includes continuing to maintain and operate projects 
such as Glen Canyon Dam and Lake Powell. These storage projects have 
been critical to the West in coping with drought and ensuring water 
supplies to maintain community well being and economic progress.
    Second, we are looking at new storage capacity in key locations. 
For example, the CALFED legislation that Congress passed late last year 
includes studies of four storage sites that would benefit farms, fish 
and wildlife, and municipal and industrial uses.
    At the same time, we must ensure that any new storage projects are 
economically and environmentally justified. The Department intends to 
maintain its standards for thorough review of project justifications.
    Ensuring adequate water supplies requires storage; it also requires 
enhancing the efficiency of water usage through better technologies 
that reduce evaporation, provide water flows in more targeted ways, and 
enable water trading, where appropriate. The Department's Water 2025 
Initiative focuses on enhancing water availability through these means.
    Question. Is Water 2025 the Department's primary mechanism for 
addressing future western water needs? Please describe the program's 
achievements to date.
    Answer. As beneficial as Water 2025 is, the Department recognizes 
that addressing future water needs in the West requires a mix of 
different strategies. These include vigilance in the efficient 
operation and maintenance of existing facilities, particularly the 
array of storage projects installed over the last century. We also look 
for additional storage opportunities that are justified from economic 
and environmental perspectives. The Department is collaborating with 
the Western states to address Western water needs.
    The Challenge Grant Program, a key feature of Water 2025, elicited 
an overwhelming response in FY 2004 and 2005. We received over 100 
proposals in both years, enabling the Department to select an 
impressive array of water conservation and water management projects 
for Federal cost-sharing.
    With the $4 million available for the FY 2004 Challenge Grant 
Program, 19 projects were selected in 10 different states throughout 
the West. Those projects broke ground in 2004 and will be completed 
during 2006. One of the 19 projects, Springville Irrigation District in 
Utah, was completed just six months from the date of the award and the 
rest are progressing according to schedule.
    The 19 selected projects represent a total of almost $40 million in 
on-the-ground water delivery system improvements, including 
Reclamation's contribution of $4 million and a non-Federal contribution 
of approximately $36 million. This represents a 10% investment from the 
Federal side. These projects improve water delivery systems and involve 
a combination of different measures to improve water management and 
conserve water.
    Ten projects will collectively convert almost 20 miles of leaky 
dirt canals to pipeline, eliminating water losses due to seepage and 
evaporation, resulting in substantial water savings. Five projects 
focus on the installation of measuring devices; several also involve 
the installation of Supervisory Control and Data Acquisition (SCADA) 
systems. Both greatly improve water delivery control and reduce 
spillage. Three projects involve installation of automation technology 
allowing precise, remote control of water diversions and/or deliveries. 
Two projects involve water marketing, including one project to 
establish a pilot water bank in the Deschutes River Basin in Oregon to 
facilitate the voluntary transfer of water among water users.
    In addition, under the Water 2025 funding, Reclamation is entering 
into a strategic alliance with a consortium of universities, including 
the International Center for Water Resources Management at Central 
State University in Ohio, the Ohio View Consortium, and Colorado State 
University in Colorado (collectively, ``Alliance Universities'' or 
``AU''). Reclamation and the AU will develop remote sensing 
technologies to aid in making water management decisions.
    In October 2004, Reclamation entered into a Water 2025 cooperative 
agreement with the Middle Rio Grande Conservancy District (MRGCD), 
awarding the district $1.3 million for delivery system improvements. 
The award was a 50/50 cost share between Reclamation and MRGCD, for a 
total of $2.6 million for the project. This project will improve and 
modernize irrigation surface water conveyance facilities through the 
replacement of turnouts and old gates, concrete lining of canals, 
installation of telemetry, measurement devices, and automation. The 
project also involves the development of a computer system able to 
manage hundreds of gates, with information being published on the 
internet which will be made available to other water agencies to aid in 
managing flows of the Rio Grande. MRGCD expects to begin construction 
and implementation of the improvements in the spring of 2005, and will 
complete the project in the fall of 2007.
    Of the $19.5 million appropriated in FY 2005, $10 million has been 
allocated to the grant program. Reclamation has received 117 proposals 
requesting $35.5 million in Federal assistance, $10 million more than 
was requested in FY 2004. The combined Federal and partner funding 
totals $115 million in water delivery system improvements across the 
West, of which $79.5 million would come from non-Federal matching 
funds. Reclamation will select the projects by July 2005.
    The FY 2005 funding for Water 2025 also included $1.75 million for 
continued water conservation and efficiency improvements related to the 
MRGCD. Reclamation and MRGCD are working together to develop a plan for 
application of this additional funding.
    Taken together, these projects advance the purpose of making water 
delivery and use more efficient.
    Question. Why isn't there a construction component to the Water 
2025 program?
    Answer. Larger Reclamation construction projects have traditionally 
been authorized by Congress individually, while Water 2025 work in the 
field has focused on competitive, cost-share grants for projects such 
as conservation improvements and installing technology for measuring 
and accurately delivering water. Although some conservation 
improvements aimed at preventing leakage in canals involve significant 
capital investment (headgates, canal lining, pipe replacement, water 
measurement flumes), these improvements are not regarded by Reclamation 
as part of its construction program.
                     title xvi recycling and reuse
    Question. Every year Congress supports the authorization of new 
Title XVI recycling and reuse projects, despite the Administration's 
stated objections to the program. Last Congress, Commissioner Keys 
appeared before this Committee and testified that the program has a 15-
year funding backlog.
    The Administration's FY 2006 budget requests approximately $10 
million to support a handful of projects. As you know, this Committee 
will hold a Water Conference in April to examine numerous water issues, 
including the Title XVI program.
    What role do you believe the Department should play in the area of 
water recycling and reuse?
    Answer. Since 1992, the Department has actively supported water 
recycling and reuse through its Title XVI Water Reclamation and Reuse 
program. The program has provided significant financial assistance to 
local water agencies and has helped to demonstrate that water recycling 
is an excellent water management tool to extend water supplies. The 
Department is committed to continuing to fund those projects that have 
been supported in the President's budget request in prior years but 
questions the need for more Federal dollars through Reclamation to fund 
additional projects, given other potential funding sources throughout 
the West. However, the Department is committed to focusing Federal 
funding on research to lower the cost of desalination and recycling. By 
advancing the science of water treatment technologies, we believe the 
cost of implementing water recycling and desalination projects can be 
reduced to a level that makes these types of new water supplies more 
affordable to a greater number of local communities.
    The Secretary's Water 2025 initiative currently focuses on projects 
and awards matching challenge grants on a competitive basis to help 
finance these projects. One of the components of the initiative is to 
reduce the cost of new water treatment technology, such as 
desalination, through research and development efforts funded by 
competitive cost shared grants.
    Question. What criteria does the Department use for either 
supporting or not supporting projects authorized to receive federal 
assistance?
    Answer. The Department is frequently asked to testify on proposed 
new authorizations for Title XVI projects. While we understand the 
importance of many of these efforts, we have focused our budget 
proposals on completing projects already started rather than funding 
additional Title XVI projects. Our budget has proposed focusing on 
improving existing water projects and water availability by addressing 
aging Federal water infrastructure and the safety and security of these 
facilities and by helping to prevent conflict over water in the West 
through Water 2025 competitive grants.
    Question. In the recently enacted CALFED legislation, Congress 
directed the Department to review, within 180 days of enactment, the 
feasibility of proceeding to construction of a number of projects 
studied as part of the Southern California Comprehensive Water 
Reclamation and Reuse Study and the Bay Area Water Plan. What is the 
status of this effort?
    Answer. In January and February of this year, the Bureau of 
Reclamation wrote to more than 160 water and wastewater agencies and 
organizations associated with the two comprehensive water reclamation 
and reuse studies in northern and southern California seeking 
information on any water recycling projects that the agencies may have 
sponsored as part of the studies. Reclamation requested that the 
agencies provide copies of existing planning and environmental studies 
and other supporting documentation that may have been produced for each 
potential project. When the reports and supporting documentation have 
been transmitted to Reclamation, a review of each project will 
commence. I would be pleased to keep you informed of our progress.
                                drought
    Question. As you are well aware, the Southwestern U.S. has been 
experiencing drought conditions since 2000. The Pacific Northwest is 
also experiencing water supply shortages and the current snow pack is 
well below average. In anticipation of our upcoming water conference, 
this Committee has asked for proposals to address the drought 
situation.
    What is the status of the voluntary protocol that the Department is 
working on with the basin states to deal with water shortages on the 
Colorado River?
    Answer. The Department has asked the seven Colorado River Basin 
States for consensus recommendations by April regarding the development 
of ``shortage guidelines'' for the Lower Basin of the Colorado River. 
In light of the significant drought in the Colorado River Basin since 
1999, the Department anticipates initiating a public process to develop 
Lower Basin shortage guidelines later this year. The Department 
anticipates that this process will follow a development protocol 
similar to that utilized by the Department for the development and 
adoption of Lower Basin Interim Surplus Guidelines in 2001. In that 
process, the seven Colorado River Basin states submitted a consensus-
based recommendation that formed the basis of the Surplus Guidelines 
adopted by the Department and now relied upon by the Secretary in the 
preparation of each year's Annual Operating Plan.
    Question. What other measures is the Department using or proposing 
to deal with the drought situation?
    Answer. The Department is currently using Reclamation's existing 
drought authority to provide some water management tools, on an 
emergency basis, such as moving non-project water through Federal 
project facilities, allowing temporary water transfers, encouraging 
water banking and markets, and providing small grants to affected 
communities for drought emergencies. On a larger scale, we have found 
that the best time to prepare for drought conditions is not during the 
drought but during times of plenty. Reclamation has been working over 
the past decade to assist our water contractors in upgrading their 
facilities, installing new water management technologies, and generally 
improving their ability to manage water much more efficiently, 
especially during times of shortages. Water 2025 helps promote these 
activities and projects through the competitive challenge grant 
program, especially in areas of the West where we can predict conflict 
over water is likely. Drought occurs somewhere in the West almost every 
year, but other pressures on western water supplies exist, such as 
population growth and environmental needs. The tools we are currently 
implementing through Reclamation programs will work for both drought 
and other water-shortage situations.
    All of the foregoing efforts are in addition to continued operation 
and maintenance of our storage infrastructure, which has made an 
impressive contribution to the efforts throughout the West to meet 
water requirements in the face of sustained drought.
    Question. Is Interior coordinating with any other federal agencies 
to address the drought situation?
    Answer. USGS hydrology programs relate to predicting and monitoring 
droughts. The US Water Monitor website has been developed in 
cooperation with NOAA, NRCS and the National Drought Mitigation Center. 
In addition, the Department, through the Bureau of Reclamation, is 
coordinating with the U.S. Department of Agriculture's Natural Resource 
Conservation Service, both at the headquarters level and, more 
importantly, at the watershed level. The USDA-NRCS provides runoff 
predictions on a bimonthly basis for most of our Western watersheds. We 
work closely with them in analyzing and disseminating this important 
water management information to affected water users. Also, through 
Water 2025 and other Memoranda of Understanding, we work with USDA to 
identify where Federal programs and projects can be coordinated more 
effectively, communicating and contributing our resources where 
practicable.
       Responses of Ms. Scarlett to Questions From Senator Smith
    Question. I would like to be supportive of the Administration's 
request in the Fish and Wildlife Service budget for the acquisition of 
the Barnes Property. However, in order for me to be supportive of this 
$6 million request, I need to know how any water created by the 
inundation of the Barnes Property and the adjacent Agency Ranch 
property will be managed within the federal project (i.e. will this 
water be available for irrigation, will it be water bank water, etc.?). 
Please let me know how this water will be used by the federal project 
and how it will be credited against the Endangered Species Act 
obligations of the federal project.
    Answer. The Barnes tract would be passively managed in conjunction 
with Agency Lake Ranch to accomplish three goals. These include:
    1. Helping protect and recover the endangered suckers at Upper 
Klamath Lake by providing additional habitat for the suckers, 
especially juvenile-rearing habitat. A major problem in recovering the 
fish is that there is little recruitment from the juvenile stage to the 
adult population. Providing additional juvenile-rearing habitat in most 
years is a key step in recovering the suckers.
    2. Storing additional water in Upper Klamath Lake to provide water 
that can be counted as part of the water bank. Storing water on Agency 
Lake Ranch alone adds approximately 12,000-15,000 acre feet of water in 
most years to Upper Klamath Lake (when Upper Klamath Lake fills). This 
water is counted as part of the water bank and is managed to meet coho 
salmon flows under the NOAA biological opinion. Any additional storage 
at currently managed sites would flood the adjacent Barnes Ranch, a 
private holding. With Barnes acquired by the FWS as part of Upper 
Klamath Lake National Wildlife Refuge and managed conjunctively with 
Agency Lake Ranch, between 34,000 and 42,000 acre feet of additional 
water would be stored in Upper Klamath Lake. This water would be 
counted as part of the water bank. By increasing this component of the 
water bank, Reclamation will be able to reduce the amount of land idled 
and/or ground water pumped to provide the water needed for the water 
bank. Additionally, the consumptive use portion of water rights that go 
with the Barnes property (roughly estimated at 2,700 acre feet) can be 
counted as part of the water bank, further offsetting the need for land 
idling and groundwater pumping to meet the water bank requirement.
    3. Contributing, over the long term, to improving water quality in 
Upper Klamath Lake and downstream in the Klamath River. Typical 
operations for Barnes Ranch involve using the Barnes' water rights to 
irrigate their land for forage, and then pump the tail water into 
drainage canals connecting with the lake. This water has a high 
phosphorous and nitrogen content and adds to the nutrient loading of 
Upper Klamath Lake. This contributes to the severe algae problem in the 
lake, a serious water-quality problem for fish in Upper Klamath Lake 
and also a significant source of water-quality problems downstream. The 
additional wetlands habitat will also add substantially to the prime 
waterfowl and wetland habitat contained in Upper Klamath National 
Wildlife Refuge.
    Question. How much money will be needed to stabilize the levies at 
the back of the Barnes Ranch property?
    Answer. A preliminary estimate from the Bureau of Reclamation is 
approximately $2 million, a portion of which can be met through account 
work by the Reclamation to increase the storage on Agency Lake Ranch.
    Question. If Barnes Ranch is acquired by the U.S. Fish and Wildlife 
Service, it will be adjacent to the Agency Ranch property owned by 
Reclamation and near another federal parcel managed by the Bureau of 
Land Management. How does the Department of the Interior intend to 
coordinate the management of these three parcels? Is the Department 
considering consolidating these three parcels under the management of 
one Interior agency?
    Answer. Our intention is to develop an efficient, effective, and 
coordinated approach to managing these parcels. The area actually 
includes four parcels, counting Upper Klamath Lake National Wildlife 
Refuge. Agencies have had preliminary discussions about combining the 
other three parcels with Upper Klamath Lake National Wildlife Refuge, 
since one option would be to manage them efficiently and at modest cost 
by FWS.
    Question. Next year, the power rates in the Klamath Basin could go 
up ten-fold from the current rate. What is the Department doing now to 
prepare for these increased power rates? Is the Department studying 
ways to reduce power use by the Fish and Wildlife Service, by 
Reclamation and by the BLM in the Upper Basin? How much of 
Reclamation's annual reimbursable operations and maintenance costs are 
attributable to power? What does the Department anticipate that cost to 
be once power rates increase?
    Answer. The Department is negotiating with PacifiCorp and the power 
users. Key issues include the Federal Energy Regulatory Commission re-
licensing of the PacifiCorp's power project, provisions of the 
Interstate Compact, falling water charges, and rate equity for all 
users. It appears that the FERC re-licensing process will not be 
completed by 2006 and an extension will be requested. The Department 
believes the provisions of the 1956 contract between CopCo (now 
PacifiCorp) and Reclamation should similarly be extended. Energy 
efficiency has been an ongoing concern of the Department, and the 
operation of Bureau facilities is continually being reviewed to ensure 
cost savings where ever possible.
    The specific amount of Reclamation's annual reimbursable operations 
and maintenance costs attributable to power is difficult to determine 
because the data currently on hand do not separate maintenance costs 
from power costs. Reclamation estimates that operation and maintenance 
costs for electrical power to operate numerous pumps within the Klamath 
Project currently range between $100,000 and $175,000 each year. These 
costs represent between 25% and 50% of all O&M reimbursable costs. If 
power costs to the Project were to increase 10 times, as some have 
predicted, reimbursable costs to the irrigation Districts would range 
between $1,000,000 and $1,750,000 each year and become the single 
largest reimbursable O&M expense. I would be pleased to keep you 
informed as we proceed through this process.
      Responses of Ms. Scarlett to Questions From Senator Bunning
    Question. Ms. Scarlett, has the Department of Interior examined how 
to fix the expected funding shortage for the Combined Benefit Fund 
which receives funding from the AML program?
    Answer. The Surface Mining Control and Reclamation Act requires 
that OSM transfer an amount equivalent to the amount of interest earned 
on the Abandoned Mine Land (AML) Fund to cover the health benefits of 
unassigned beneficiaries of the Combined Benefits Fund (CBF). We are 
required to transfer annually up to $70 million or the actual needs of 
the CBF, whichever is less.
    In recent years, the amount of interest earned has not been 
sufficient to meet the needs of the unassigned beneficiaries. The 
Administration has taken several steps to improve this situation:

   We have implemented and extended a prescription drug program 
        which lowers the cost of prescription drugs to the CBF members 
        saving an estimated $190 million thus far.
   We have changed our investment strategy to generate more 
        funds for CBF.
   We have proposed making available to the unassigned 
        beneficiaries more than $100 million in funds equivalent to the 
        amount of interest that was credited to the account or 
        otherwise not available for use in prior years.
   We have proposed removing the $70 million cap so that all 
        interest earned in a year, up to an amount equal to the needs 
        of CBF for unassigned beneficiaries, could be utilized to 
        transfer funds to the CBF.
   In order to help defray the costs of health benefits for 
        coal miners even if Congress allows the Abandoned Mine Land 
        (AML) fee to expire, the Department has taken steps to honor 
        its responsibility to continue to transfer funds to the CBF. 
        The Energy Policy Act of 1992 amended SMCRA with an additional 
        requirement providing that even if the AML fee expires, 
        operators must continue to pay fees to fund annual transfers to 
        the CBF. That is, although AML fees for use in reclamation 
        would no longer be collected, the fee will be established at a 
        rate sufficient to continue to provide for transfers to the 
        Combined Benefit Fund with respect to unassigned beneficiaries. 
        The Department is currently reviewing public comments provided 
        in response to its published, proposed rule that will implement 
        this provision.
   As proposed, the new fee rates will be based upon estimates 
        of the CBF's needs for unassigned beneficiaries, the AML fund's 
        estimated interest earnings, and projected coal production for 
        which there is a reclamation fee payment obligation. The rates 
        will be adjusted as necessary to reflect any differences 
        between estimated and actual CBF expenditures, AML fund 
        interest earnings, and fee collections in prior years.
      Responses of Ms. Scarlett to Questions From Senator Bingaman
                        1. scientific integrity
    Question. A recent poll of scientists at the Fish and Wildlife 
Service conducted by the Union of Concerned Scientists and Public 
Employees for Environmental Responsibility found a very disturbing 
level of political interference with the agency's scientific work. It 
also found that many USFWS scientists feel unable to express their 
concerns without fear of retaliation.
    Will you commit to looking into this problem in a way that avoids 
further intimidation?
    Answer. The Department places great importance on the integrity of 
science and the role which it plays in the decision-making process. The 
Department has over the past four years taken a number of actions to 
enhance both the integrity of our science and the role which it plays 
in the decision-making process. We take seriously any concerns 
employees or others might have about scientific integrity. To that end, 
our Inspector General has investigated several allegations of 
interference.
    In two recent cases cited by critics as instances in which 
Department leadership interfered with flows of scientific information, 
neutral observers have closely examined the accusations and found them 
unsubstantiated. For example, regarding the Missouri River, in a letter 
to former Senator Daschle dated May 14, 2004, the Inspector General 
stated that he ``found no evidence to suggest the Assistant Secretary's 
decision to remove scientists was made for any reason other than to 
resolve the stalemate between the Corps and FWS; no evidence that the 
Assistant Secretary attempted to influence the team members in any way; 
and no evidence that the team co-chairs and members perceived any undue 
influence or political pressure.'' Also, regarding the Klamath Basin, 
in a letter to Senator Kerry dated March 1, 2004, the Inspector General 
stated that his office ``found no evidence of political influence 
affecting the decisions pertaining to the water in the Klamath 
Project'' and that ``the administrative process followed in this matter 
did not deviate from the norm.''
    The Inspector General also noted that his ``review of the available 
documents and the rulings of the U.S. District Court for the Northern 
District of California support the conclusion that the Department had 
compiled the necessary information to support its various decisions 
related to the Klamath Project'' and that ``none of the individuals 
interviewed--including the Whistleblower--was able to provide any 
competent evidence that the Department utilized suspect scientific data 
or suppressed information that was contained in economic and scientific 
reports related to the Klamath Project.'' Rather, the Inspector General 
noted that, to the contrary, the National Academy of Sciences 
specifically disagreed with the criticism that had been directed 
against the Department for using ``junk science''.
    Notwithstanding these particular findings, upon receipt of the 
recent PEER statements regarding concerns among employees about science 
integrity, Assistant Secretary Craig Manson is evaluating options for 
improved communication and procedures for ensuring high scientific 
standards and information flows throughout the Fish and Wildlife 
Service.
    I have a personal commitment to scientific integrity and look 
forward to working throughout the Department and with the Secretary to 
meet our goals for scientific integrity.
    Question. Will you further commit to looking into ways to prevent 
further political interference with science at the Department?
    Answer. The Department of the Interior has over the past four years 
taken a number of actions to enhance both the integrity of our science 
and the role which it plays in the decision-making process. Responsible 
for managing approximately 1 in every 5 acres of land in the United 
States, the Department of the Interior frequently faces challenging 
ecosystem and resource management issues. Interior has addressed such 
challenges by significantly enhancing the use of science in its 
decision-making processes.
    The U.S. Geological Survey (USGS), our primary scientific agency, 
seeks through its Science Impact Program to replace conflict with a 
solutions-oriented focus underpinned by a spirit of cooperation and 
consensus seeking. To further these research activities, the Science 
Impact Program has established external partnerships with universities, 
including one with the University of New Mexico, to focus external 
innovation in the use of USGS science information and to provide 
specialized skills beyond those traditional to the USGS. The Department 
has also taken significant steps to ensure the quality of the science 
we use. We have, for example, (i) crafted Information Quality 
Guidelines to ensure and maximize the quality, objectivity, utility, 
and integrity of information disseminated to the public; and (ii) are 
developing a draft Code of Scientific Conduct that has been 
independently reviewed by a panel of leading scientists and ethicists 
to help ensure the integrity of all scientific work done by both our 
employees and our contractors.
                           2. responsiveness
    Question. Our experience over the last several years has been that 
it is oftentimes difficult to get factual information and technical and 
legal support from the Department without long delays and clearances. 
We also believe that career employees have been forbidden to provide 
such information and support to us without clearance from political 
appointees.
    Will you pledge to work in a bipartisan manner with us on the 
energy bill and the many other legislative matters relating to the 
Interior Department? In committing to address our concerns, will you 
review, and modify as necessary, any guidance or instructions that have 
gone out to career employees to ensure that they understand that they 
are free to take our calls and to be responsive to our requests? I have 
particular concerns about employees in the Solicitor's office feeling 
constrained in their interactions with us.
    Answer. I pledge to work with you in a bipartisan manner on 
comprehensive energy legislation and any other legislation before the 
Committee. During my four years working as Assistant Secretary of 
Policy, Management and Budget, I have tried always to work in a 
bipartisan, fair, and open fashion with members of Congress and their 
staff.
    The Department has a process for responding to requests from 
Committee staff. We ask that Committee staff call our Office of 
Congressional and Legislative Affairs. Housed within that office are 
the Legislative Counsel and her staff of legislative attorney advisors. 
I believe that office has been responsive to all calls or letters 
received by Committee staff and has made staff available from the 
Solicitor's Office when legal questions are asked. This process of 
interoffice coordination is a longstanding policy set forth in the 
Departmental Manual.
    Our policy of coordination helps to ensure that relevant offices 
are aware of any Congressional concerns or issues so that they can 
provide complete, accurate information. Notwithstanding this 
Departmental policy of coordinating responses to Committee staff 
requests, I want to ensure that the Department is fully responsive to 
requests for meetings or information at all times.
                      3. hydroelectric relicensing
    Question. Last month, I sent Secretary Norton a letter co-signed by 
several other Senators of both parties expressing serious concern about 
a rulemaking pending before the Department relating to hydroelectric 
relicensing. The rulemaking proposes a new appeals process at the 
Interior Department that would give a license applicant the right to an 
appeal a license condition or fishway prescription if the applicant is 
not in agreement with the Department's actions. However, the proposed 
rule grants no such right of appeal to Tribes, States, or other 
interested parties. I am strongly opposed to this provision.
    When can we expect to see the final rule issued?
    Answer. The Department received numerous comments reflecting 
various perspectives on this issue during the 60-day comment period on 
the proposed rule. Those comments are now being reviewed. The 
Department expects to publish a final rule in late spring.
    Question. Do I have your commitment that you will look carefully at 
this provision, which I believe raises serious issues of procedure and 
fundamental fairness?
    Answer. I can assure you I will look closely at this issue and the 
procedural and fairness elements associated with it.
                      4. national park management
    Question. The National Park Service Organic Act states that the 
purpose of the National Park System is ``to conserve the scenery and 
the natural and historic objects and the wildlife therein and to 
provide for the enjoyment of the same in such manner and by such means 
as will leave them unimpaired for the enjoyment of future 
generations.'' The National Park Service management policies address 
the potential conflict between the two directives protecting park 
resources and providing for their enjoyment. Specifically, section 
1.4.3 of the management policies states ``when there is a conflict 
between conserving resources and values and providing for enjoyment of 
them, conservation is to be predominant. This is how courts have 
consistently interpreted the Organic Act. . . .''
    At the confirmation hearing of Fran Mainella to be the Director of 
the National Park Service, I asked her whether she agreed with those 
management policies, that the conservation of park resources is the 
primary mission of the National Park Service. Her answer was ``I am 
advised that the courts have consistently interpreted the Organic Act 
this way. Therefore, I would agree that the resource is always the 
primary focus.''
    Can you tell me whether you agree with this policy, that 
conservation of park resources is the primary mission of the National 
Park Service, and can you assure me that the Department will not seek 
to modify or overturn the Park Service management policies to that 
effect?
    Answer. The National Park Service Organic Act makes it clear that 
the National Park Service mission is to conserve park resources 
unimpaired so that each generation of Americans may fully enjoy them. 
The Park Service views this as a combined mandate to: (1) conserve park 
resources in an unimpaired condition; and (2) provide the public with 
opportunities to enjoy those unimpaired resources. I am totally 
committed to meeting both these responsibilities. These goals can be 
achieved in tandem, as the Organic Act envisions. As Director Mainella 
has noted, visitor enjoyment depends upon conserving park resources in 
an unimpaired condition. Should I be confirmed as Deputy Secretary, I 
will work closely with the National Park Service to fulfill the vision 
set forth in the Organic Act.
    If confirmed, I will work to ensure that NPS Management Policies 
continue to conserve park resources as set forth in the Organic Act and 
as required by the courts.
                       5. teshekpuk lake leasing
    Question. A 1998 Record of Decision for the Northeast Planning area 
of the National Petroleum Reserve-Alaska opened 87 percent of the area 
for oil and gas leasing, but kept much of the area around Teshekpuk 
Lake closed to leasing because of its importance to wildlife. The 
Department is now considering opening the Teshekpuk Lake area to 
leasing. The Bureau of Land Management claims that ``new information 
since the 1998 ROD'' and ``various scientific studies on the biological 
resources of the area'' support opening the area to leasing. Many 
ornithologists and wildlife professionals have said that they are ``not 
aware of any new studies'' that would lead to that conclusion.
    Please provide copies of the ``various scientific studies completed 
on the biological resources of the area'' since completion of the 1998 
ROD.
    Specifically, what biological studies were conducted and what new 
information did they provide, regardless of whether that new 
information does or does not justify opening the area to leasing?
    Answer. At the time the 1998 plan was crafted, we had very little 
sub-surface information. During the past seven years, however, 18 wells 
have been drilled which have provided real data that demonstrates the 
ability to drill in the sub-surface. We are providing copies of all of 
the reports, with the exception of one that will be provided as soon as 
the BLM receives it from the BLM Alaska State Office.
Biological studies completed since 1998
    Influence of oil/gas development on nest success of shorebirds. A 
statistical consultant was hired to analyze pilot data comparing nest 
success of shorebirds in the oil fields with undisturbed areas of the 
Arctic Coastal Plain, such as the NPR-A and the Arctic National 
Wildlife Refuge. The report of that analysis has been completed and 
additional fieldwork has begun based on the results. (Report included.)
    Effects of oil field development on population and distribution of 
tundra swans. This study and its report are complete. The objectives 
were to determine whether swans have shifted their nesting distribution 
in response to facility development and whether swan population trends 
in the oil fields differ significantly from trends for the North Slope 
population as a whole. (Report included.)
    Workshop to review studies of impacts to vegetation from winter 
oil/gas activities. This workshop has been completed. The current 
Research Monitoring Team has chosen not to include impacts to 
vegetation among the highest priority issues for a monitoring plan for 
the NPR-A currently in development. (Report included.)
    Workshop to discuss a cooperative monitoring program to document 
subsistence concerns. This workshop has been completed, but follow-up 
actions are ongoing. The goal is to provide a means by which 
subsistence hunters and other local residents can express concerns to 
the appropriate agency about industrial impacts to subsistence 
activities and resources, and be assured they will receive some type of 
resolution to their concerns. (Report included.)
    Workshop to standardize aerial bird surveys on the North Slope. 
Agencies and private industry have conducted low-level aerial surveys 
using various methods to monitor populations of large waterbirds on the 
North Slope of Alaska. This workshop has been completed and will result 
in more consistent and comparable survey results, increasing the 
utility of these data sets for the management of migratory birds. 
(Report included.)
On-going studies
    Summarize subsistence harvest and seasonal land use data for four 
villages. The analysis and summary of these data are near completion. 
The objectives are to describe the current subsistence land and 
resource use by residents of Nuiqsut, Atqasuk, Wainwright and Barrow; 
document the annual harvest of wildlife and fish resources within the 
NPR-A; identify areas within the NPR-A that are of particular 
importance to subsistence users; document hunter/industry interactions 
and determine whether those interactions have led to changes in 
hunters' behaviors; and identify and minimize potential impacts to 
subsistence hunters from industry actions.
    Impacts of Seismic Trails, Camp Trails and Ice Roads on Tundra 
Vegetation in the Northeast NPR-A. This study is similar to one that 
has been ongoing in the Arctic National Wildlife Refuge (ANWR) since 
1985. It will give us a better idea of how impacts to the tundra and 
recovery by tundra vegetation compare to that in ANWR.
    Overlapping vs. off-setting ice-roads year-to-year. A stipulation 
in the 1998 ROD requires offsetting ice roads from one year to the 
next. This would impact a greater area, but presumably with less 
intensity of impact per acre and thus provide a benefit through less 
severe impacts and quicker recovery. This study is meant to suggest 
which alternative is environmentally preferable.
    Caribou demography, distribution and movements in relation to oil 
field infrastructure. This study is ongoing. It is intended to model, 
using real data from caribou ranging through oil fields, the effects of 
oil field infrastructure on caribou productivity. This is the most 
critical issue in the caribou vs. oil fields debate, and one which has 
never been directly addressed.
    Determine relative importance of avian nest predators. This study 
is ongoing, with the final year of data collection in 2005. The 
objectives are to identify predators responsible for nest failure of 
selected species of waterfowl and shorebirds; compare the relative 
impact of various predator species within the oil fields and away from 
development; and develop better methods to identify predators 
responsible for nest failure.
    Distribution, density and productivity of yellow-billed loons in 
the NPR-A. The fieldwork for this study was completed in 2004; data 
analysis and report preparation are ongoing. The primary objective is 
to design and implement yellow-billed loon breeding and production 
surveys in the NPR-A. This research will also assess the feasibility 
and justification for a long term study to address potential impacts of 
climate variation on abundance, breeding biology, distribution and 
productivity.
    Population size and productivity of raptors along the Colville 
River. This is a long-term monitoring effort, and is ongoing. The 
objectives are to provide managers with current raptor nest site 
information; monitor population size and productivity trends for arctic 
raptors; and identify factors contributing to recent poor productivity 
for peregrine falcons.
    Effects of noise from vibroseis equipment on arctic fish. The 
fieldwork for this study is complete and report preparation is ongoing. 
The objective was to measure sound energy levels of vibroseis equipment 
at various distances from the sound source; use underwater video to 
record the reactions of fish from the noise generated by the vibroseis 
equipment; and use caged fish for both treatment and controls to 
determine the physical and physiological effects of sound exposure.
    Population distribution of molting geese near Teshekpuk Lake. The 
fieldwork for this study was completed in 2003. Data analysis using a 
Geographical Information System and report preparation are ongoing. The 
objective is to monitor and assess potential changes in the populations 
and distribution of molting brant and other geese and to document 
habitat selection of specific shoreline habitats.
    Document local knowledge of subsistence fish life histories. This 
study is ongoing. Its objectives are to conduct detailed interviews 
with ``key informants'' in Nuiqsut, Barrow, Atqasuk and Wainwright; 
collect spatial and temporal data on fish; focus on life histories of 
key subsistence fish species; identify fish bearing lakes and rivers; 
and digitize data in Geographical Information System format.
    Literature review of effects of pipeline height on crossing success 
by caribou. This review is ongoing. The objectives are to review all 
published and unpublished information regarding potential effects of 
pipelines on caribou movements, and to prepare and publish a synthesis 
and annotated bibliography of the information. This will summarize a 
wide body of knowledge in a single document.
    Literature review of rare plant distribution on Alaska's North 
Slope. This review is ongoing. The objective is to detail in a single, 
comprehensive report all known information on rare plant distribution 
and habitat types in the NPR-A. This information will better suggest to 
managers where unrecorded populations of rare plants may occur.
    We would be happy to provide a briefing for you or your staff if 
you need further information.
      Responses of Ms. Scarlett to Questions From Senator Salazar
                             blm/oil & gas
    Question 1. As you are aware, Ms. Scarlett, Colorado and the BLM is 
experiencing a boom in the number of drilling permits (APDs) applied 
for and the resulting boom in wells actually being drilled on our 
public lands. I am concerned that while the BLM is emphasizing and 
funding the personnel needed to process APDs in a timely fashion, it is 
not funding the needed oversight to enforce the stipulations and 
conditions under which those APDs are approved.
    The President's budget calls for maintaining funding for Oil & Gas 
Management programs at 2005 levels by increasing user fees for 
processing APDs, will this fee be implemented? If the fee is not 
implemented, what effects will that have on BLM oversight of oil & 
natural gas exploration and production?
    Answer. The BLM will publish a proposed regulation shortly. We will 
request comments from the public and then publish a final regulation by 
Fall 2005. The regulation, to be implemented in FY 2006, will provide 
funding to allow the BLM to more effectively meet increased customer 
demand by processing additional leases and APDs. The BLM expects to 
collect $9.7 million through cost recovery in the oil and gas program 
primarily from a new fee for APD processing. With these additional 
funds, the BLM will be able to process virtually all of the remaining 
backlogged APDs, except for those few that are delayed through 
litigation or complex environmental review. In FY 2006, BLM plans to 
process 500 more APDs and 250 more oil and gas leases than in FY 2005. 
If the regulation is not implemented, BLM will not process as many 
leases and APDs.
    Question 2. The increase in drilling activity in Colorado demands 
an increase in the number of inspectors and inspections in Colorado to 
insure it is done properly. Can you please tell us what the 
Department's priorities are in regards to Oil & Gas Management in terms 
of inspectors and inspections and how those priorities are reflected in 
the BLM budget justification? Will more funds be provided to the BLM in 
the Rocky Mountain West for more inspectors?
    Answer. Inspection and Enforcement (I&E) are integral and key 
components of Departmental management of both onshore and offshore oil 
and gas operations. In fact, I&E activities are identified as a high 
priority in the Department's Strategic Plan. The Department has 
committed considerable resources in recent years to ensure that we have 
an effective I&E program. Over the past four years, the BLM recognized 
the need to strengthen its I&E program as the number of APDs approved 
and drilled increased. The BLM has been successful through its budget 
justifications to document its need for additional inspectors and 
obtain additional funding. Those funds have been used to hire 
additional inspectors in priority Rocky Mountain locations, including 
in the Piceance Basin of Colorado.
    The FY 2006 President's Budget Request maintains the past level of 
funding for the I&E program for oil and gas, coal, and other minerals. 
The BLM is committed to ensuring that priority inspections are 
completed even if adjustments within the oil and gas program are needed 
to keep pace with industry demand.
    Question 3. Would the Department be amenable to an increase in Oil 
& Gas Management funding for increased oversight of oil and gas 
operations on Federal Lands as well as ``split-estate'' lands?
    Answer. Senator, the Department very much appreciates your interest 
in and concern about these issues. We believe the funding level in the 
FY 2006 President's Budget Request, when combined with the amounts we 
expect to collect through cost recovery, provides adequate funding to 
accomplish oversight of oil and gas operations on Federal lands as well 
as for oversight of oil and gas operations on split estate lands.
    Question 4. How does the BLM view the ``split estate'' issue in the 
west and what is their position on retaining mineral rights when they 
sell or trade BLM property?
    Answer. Many of the split estate lands in the West were patented 
under the Stock Raising Homestead Act of 1916. This Act allows surface 
owners to be compensated for damages to crops and stock raising values 
of the land as a result of mineral development. The BLM's policy is to 
include the surface owner at the earliest possible time to assure that 
his or her desires are included in the use authorization. The BLM 
cannot force the surface owner to respond when the mineral estate owner 
files an application to drill a well. However, the BLM will make a good 
faith effort to involve the surface owner and will accommodate their 
requests if at all possible without significantly reducing the mineral 
developer's right to enjoy the minerals. The BLM requires that the 
mineral operator make a good faith effort to reach an agreement with 
the surface owner prior to entering upon the lands. The BLM allows the 
mineral developer to post a bond for the benefit of the surface owner 
in lieu of an agreement, but only if a good faith effort fails to 
achieve an agreement. The BLM then makes an effort to contact the 
surface owner to assure that he or she understands their rights. The 
BLM is committed to working with mineral operators and surface owners 
to assure that fair and equitable treatment is afforded to all. For the 
sale of lands, the BLM must retain the mineral estate, as required by 
section 209 of the Federal Land Policy Management Act. For exchanges of 
lands, the BLM can determine whether to dispose of the mineral estate, 
based on an evaluation of the public interest, which includes 
consideration of the mineral potential and the mineral value.
    Question 5. Is the Department willing to let the BLM get involved 
in disputes between landowners and energy companies when there is 
unmitigated damage to the surface rights of the landowner?
    Answer. Many of the split-estate lands in the West were patented 
under the Stock Raising Homestead Act of 1916. This Act allows surface 
owners to be compensated for damages to crops and stock raising values 
of the land due to mineral development.
    The Act, and its implementing regulations, provides a mechanism for 
surface owner involvement and compensation while the mineral estate 
owner retains the right to develop the mineral estate. The BLM 
encourages all parties to work together under principles of 
accommodation. Absent any agreement, the law provides a remedy through 
the posting of a bond for the benefit of the surface owner. It is our 
experience that surface owners will fare better if they negotiate an 
agreement for compensation. Mineral operators also fare better with a 
negotiated agreement because they do not suffer lengthy delays that 
will result from bond filing and appeal even if the bond is deemed 
adequate. The agreement is a private contract between the surface owner 
and mineral developer. The BLM is generally not privy to the contents 
of the agreements because often the parties to the agreements prefer to 
keep confidential the terms of their agreement. The BLM will advise 
either party about their legal rights and recommend appropriate terms 
for the protection of resources.
                         department operations
    Question 1. Recent media reports have uncovered that the Department 
of Education was paying media figures to promote the No Child Left 
Behind law. Can you assure us that no contracts of a similar nature 
have been, or will be, provided by DOI? Will you direct your IG to 
conduct a full review in order to prove a full accounting of the 
contracts, especially to so-called ``personal service contracts,'' 
entered into by your office? Will you submit those findings to this 
committee?
    Answer. GovWorks is a Federal acquisition center within the 
Department of the Interior created pursuant to franchise fund authority 
provided by Congress in the Government Management Reform Act of 1994. 
GovWorks provides a variety of procurement, cooperative agreement, and 
grant agreement services to other Federal agencies on a service-for-fee 
basis.
    GovWorks has not awarded or administered public relations contracts 
using paid media figures.
    We are developing procedures for future public relations contracts 
to include language prohibiting the use of paid media figures unless 
explicitly authorized by public law.
    GovWorks does not enter into ``personal service contracts''.
    We have worked closely with our Inspector General over the past 
several years to review GovWorks and its practices. As a result of the 
IG's reviews, we have made numerous changes to how GovWorks operates. 
Our IG is continuing to review GovWorks fee-for-service activities. We 
would be happy to share the results of that review with you.
    Question 2. As we work to reduce the federal deficit the Department 
of Interior has had to make tough choices, choices that not all of us 
agree with. Cuts to PILT and the LWCF stateside grants are examples of 
these cuts. While there have been cuts to these important programs can 
you please walk me through the reasoning behind increasing the funding 
for Departmental Management?
    Answer. The increased funding in the 2006 budget request for 
Departmental Management is primarily for investments in Department-wide 
systems that will improve the effectiveness and efficiency of business 
practices throughout the Department's programs and covers fixed costs, 
including the January 2006 pay raise and health benefits and other 
costs that are not discretionary. The Department Management budget also 
includes budget-neutral shifting of funding of the appraisal function 
to Department Management. While this shift appears to increase the DM 
budget, it is simply a result of relocating existing functions from one 
set accounts to another.
    Specifically, the 2006 request for Departmental Management is 
$120.2 million, a net program increase of increase of $10.8 million 
above 2005. Almost all of this program increase--$9.4 million of the 
total is for deployment of the second phase of the Financial and 
Business Management System. This increase provides Department-wide 
benefits and involves all 8 bureaus under the Department. The new 
system will replace the financial and business systems now used by the 
Department's bureaus and offices with a single system that provides 
improved access to information and results and will facilitate more 
productive operations.
    As with the proposals for the Department's bureaus, the 
Departmental Management proposal includes the full amount needed to 
cover pay and other fixed cost increases for 2006. The fixed cost 
increase for DM is $6.1 million.
    Finally, the request for Departmental Management includes the 
transfer of $7.4 million to support integration of the real property 
appraisal services. These costs were previously included on a 
decentralized basis in bureau budgets. The transfer is one of a number 
of efforts implemented by the Department to address longstanding 
concerns related to the integrity and transparency of appraisal work.
    Question 3. As you know, Colorado has over 8 million surface acres 
and over 25 million sub-surface acres in Colorado managed by the 
Department of the Interior. It is very important for my office, as well 
as the offices of my fellow Senators, to be able to rely on the 
Department and its agencies for timely and accurate information 
regarding those federal lands in our state. Will you assure me that 
your office will do everything possible to respond in a timely manner 
to requests from my office and from my colleagues for information from 
the Department?''
    Answer. You have my assurance that I will work to ensure that 
requests from your office and all members of Congress receive timely 
and accurate responses.
                              roan plateau
    Question. In the West, many people feel that oil and gas leasing 
and drilling decisions are often being made with little public input or 
review. Other times, the BLM approves oil and gas drilling or leasing 
against the strong objections of citizens and local governments, who 
might want to limit drilling, or who favor stronger protections or 
other public uses.
    How will you work with the BLM to ensure that public land use 
decisions are honoring local communities, involving the broad public, 
and considering updated science and current public uses regarding these 
national lands?
    Answer. Involving the public in decisions that affect them is a 
central principle of the Department under Secretary Norton's vision of 
cooperative conservation. Public lands issues have a direct affect on 
the health of a community and the community issues have a direct affect 
on the health of the public lands. The Department of the Interior is 
strongly committed to engaging the public and giving them that voice. 
Over the past 4 years, Interior has enhanced the public's role by: 1) 
strengthening the role of Resource Advisory Councils; 2) establishing 
NEPA guidance to enhance consensus-based decision-making and adaptive 
management; and 3) establishing a cooperative conservation interagency 
team to enhance training and other measures that build agency capacity 
to work closely with the public. On August 26, 2004, the President 
issued an Executive Order on Cooperative Conservation. Under the 
umbrella of that Order, we continue to invest significant effort in 
making cooperative conservation and strong public input into our 
decision making a keystone of the Department. We will continue to work 
with local communities, involve the public, and at all times ensure 
that citizen input and science inform important land use decisions. 
These issues are complex, interrelated, and defy easy answers. I am 
committed to ensuring that the BLM and all Interior agencies work 
cooperatively with our Federal, state, tribal and local government 
partners and all interested parties.
    Specifically in the case of the Roan Plateau, since 1997 when Naval 
Oil Shale Reserves 1 and 3 were transferred to BLM, the Bureau has 
worked diligently in an open public process to develop a balanced 
resource strategy for the Roan Plateau planning area. The Draft Roan 
Plateau RMP/EIS is the result of an extensive cooperative effort with 
state, local and federal government agencies, private partners and the 
public. The State of Colorado, Garfield and Rio Blanco Counties, and 
the communities of Rifle and Parachute are official cooperating 
agencies for the planning process. Numerous public meetings have been 
hosted by the BLM and cooperating agencies. Public input is being 
carefully considered by the BLM and its cooperators in developing a 
final plan which will guide the management of a wide range of multiple 
uses on these very important public lands.
    The Roan Plateau Draft EIS also utilizes science and updated 
methodologies to analyze effects of current and projected resource use 
as noted in your question. Examples include comprehensive sensitive 
plant and wildlife inventories, state-of-the art air quality modeling, 
and thorough natural gas reserve assessments.

                                                                   

      
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