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41–830 PDF 2008

S. HRG. 110–351 

BUDGET FOR FISCAL YEAR 2009 FOR THE 

DEPARTMENT OF ENERGY 

HEARING 

BEFORE THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

TO

RECEIVE TESTIMONY ON THE U.S. DEPARTMENT OF ENERGY’S BUDGET 

FOR FISCAL YEAR 2009 

FEBRUARY 6, 2008 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

JEFF BINGAMAN, New Mexico, Chairman 

DANIEL K. AKAKA, Hawaii 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

MARIA CANTWELL, Washington 

KEN SALAZAR, Colorado 

ROBERT MENENDEZ, New Jersey 

BLANCHE L. LINCOLN, Arkansas 

BERNARD SANDERS, Vermont 

JON TESTER, Montana 

PETE V. DOMENICI, New Mexico 

LARRY E. CRAIG, Idaho 

LISA MURKOWSKI, Alaska 

RICHARD BURR, North Carolina 

JIM DEMINT, South Carolina 

BOB CORKER, Tennessee 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

GORDON H. SMITH, Oregon 

JIM BUNNING, Kentucky 

MEL MARTINEZ, Florida 

ROBERT M. SIMON, Staff Director 

SAM E. FOWLER, Chief Counsel 

FRANK MACCHIAROLA, Republican Staff Director 

JUDITH K. PENSABENE, Republican Chief Counsel 

(III) 

C O N T E N T S 

STATEMENTS 

Page 

Bingaman, Hon. Jeff, U.S. Senator From New Mexico ........................................ 1 

Bodman, Hon. Samuel W., Secretary, Department of Energy ............................. 6 

Domenici, Hon. Pete V., U.S. Senator From New Mexico .................................... 3 

Salazar, Hon. Ken, U.S. Senator From Colorado .................................................. 2 

APPENDIX 

Responses to additional questions .......................................................................... 57 

(1) 

BUDGET FOR FISCAL YEAR 2009 FOR THE 

DEPARTMENT OF ENERGY 

WEDNESDAY, FEBRUARY 6, 2008 

U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. 

The committee met, pursuant to notice, at 10:04 a.m. in room 

SD–366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 

chairman, presiding. 

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. 

SENATOR FROM NEW MEXICO 

The CHAIRMAN. Ok. Why don’t we get started here? Today’s hearing will examine the President’s budget proposal for the Department of Energy for fiscal year 2009. 

We welcome our witness Secretary Bodman to the committee this 

morning. The President’s energy budget proposal has some very 

meritorious aspects as they relate to the Department of Energy 

budget and some problematic ones, at least in my view. On the 

positive side the overall budget of the Department is increasing. 

This is in a year which other Federal agencies, for example the 

Forest Service, are slated for steep and damaging cuts. 

Within the Department there are a number of well run programs 

that are proposed for strong increases. All of us here, I believe, 

would generally support the commitment that the budget shows to 

basic research in the Office of Science. We need that strong commitment to keep our Nation globally competitive in science and engineering as Congress called for in the America Competes Act and 

that the President signed last year. 

These programs did not fare well in the omnibus spending bill 

that Congress passed at the end of the last Congress, last session. 

I very much appreciate the impact analysis of these problems that 

you sent to my office earlier this week. We have an important job 

to do to try to enumerate these problems in this fiscal year. 

The budget proposal also gives strong support for biofuels, advanced hybrid batteries, solar and geothermal energy to diversify 

our energy portfolio. In the case of geothermal energy, I’m pleased 

that the Administration listened to and worked with Congress to 

define a new profile for that program in the recent energy bill and 

came through with a good funding proposal in this budget request. 

That said, the new budget proposal has several specific proposals 

for cuts that are difficult to square with sound energy policy. Let 

me mention three that I’ll return to in the question and answer period. First, I’m concerned about the proposed 27 percent decline 

2 

from the current funding levels for the Office of Energy Efficiency 

and Renewable Energy. I’d hoped that the Department would have 

taken the strong support by the Congress for this office to put forward an equally strong request. That does not appear to be the 

case. 

A big part of the budget decline in this office is due to the decision to eliminate the Department of Energy’s Weatherization Assistance Program that looks to me to be wrong headed. The Weatherization Assistance Program is a valuable and successful program. 

The types of activities it funds are viewed by outside experts as 

being some of the most cost effective ways we have of improving 

national energy efficiency. 

Cutting funding for this important program is particularly hard 

to understand when heating oil prices have almost doubled since 

2003. Propane is up 75 percent. Natural gas is up by more than 

50 percent and electricity by more than 21 percent. 

Second I’m concerned with the cost of expanding the strategic petroleum reserve. I think that the proposal there outweighs the benefits. In this budget the Administration proposes to spend 584 million, to buy millions of barrels of crude oil and take them off the 

market. It seems odd to be spending a half billion dollars of taxpayer dollars on an activity that will help keep oil prices high. 

When Congress passed the Energy Policy Act of 2005 we included specific language that any filling of the SPR avoid excessive 

cost and minimize expense. I can’t understand why the Administration would continue to take crude oil off the market when according 

to the Department of Energy’s Energy Information Administration, 

crude oil prices over the next few years will be lower than they are 

today. 

Finally I’d like to hear more on the Department’s rationale for 

changing the programmatic direction on Future Gen. We need to 

have a clear path forward for advanced coal technologies and carbon capture and storage associated with such plants. While the Future Gen project may certainly have its flaws, the question is 

whether we have something better that is proposed to take its 

place. 

Again Secretary, thanks for being here. Let me call on Senator 

Domenici for any comments he has. 

[The prepared statement of Senator Salazar follows:] 

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

Mr. Chairman, thank you for holding this hearing today on the Department of Energy’s fiscal year 2009 budget. And, thank you Mr. Secretary for coming today. It 

is always a pleasure to see you and have the opportunity to discuss the absolutely 

essential work that your Department undertakes. 

Today I would like to highlight a few issues that stand out as I examine the Department’s proposed budget for the next fiscal year. Secretary Bodman, you have 

been quite supportive of the National Renewable Energy Laboratory in Golden, Colorado, as well as Energy Efficiency and Renewable Energy programs in general. 

Once again, however, I see a lack of strong leadership by this Administration for 

supporting EERE programs, and in particular for NREL. I believe our strategic energy and environmental security needs demand a robust expansion of EERE programs. However, this year’s budget request shows a 27% decrease in spending for 

EERE programs over FY2008 spending levels. Even accounting the unwise proposed 

cancellation of the Weatherization Assistance program and the planned ramp-down 

of hydrogen technology spending, EERE faces a cut. 

3 

While I applaud the proposed increase in biomass and biorefinery R&D funding, 

the proposed cut in solar energy research simply does not make sense. Juxtaposing 

the top-line EERE number to those for nuclear and fossil energy programs, I am 

left with no other conclusion than that the Administration does not believe developing renewable energy sources should be a major national priority. 

Toward that end, I am extremely concerned that NREL is essentially flat-funded. 

After major recent investments in new laboratory infrastructure, including the new 

Science and Technology Facility and the planned Energy Systems Integration Facility, it is disappointing that the Administration continually fails to acknowledge 

NREL’s growth capacity from a programmatic standpoint. Instead of maintaining 

the status quo, we should be working together to put NREL on a path to double 

its budget—not because this is some arbitrary goal, but because NREL has the capacity to grow and provide even more new insights into our most pressing energy 

needs. 

Like several of my colleagues I am also disturbed by the proposed cancellation of 

EERE’s Weatherization Assistance program: Thousands of low-income families have 

benefited from this program over the years. Many such families live in older rental 

properties; I imagine it is not uncommon for landlords to be disinterested in making 

a major investment in new windows or insulation for example when they are not 

the ones paying the utility bills. 

At a time when energy costs are soaring, it is unconscionable to consider pulling 

the rug out from under the families that need help most. Around 4,000 homes in 

Colorado are weatherized under the program every year, and I intend to fight for 

this program’s survival. I am aware that DOE claims the program is outside EERE’s 

core RD&D mission, but that is scarcely reason to do away with it altogether. 

Unfortunately, I was also disheartened to see a proposed cut in the budget of the 

Office of Electricity Delivery and Energy Reliability funding: Achieving better energy efficiency in our electric infrastructure—from demand-response to transmission 

and distribution—should be a national priority. Instead of expanding this office’s 

vital work this budget takes a step backward. 

I am pleased that the Administration proposes to expand the Clean Coal Power 

Initiative and Carbon Sequestration budgets. The success of these programs will go 

hand-in-hand in transforming the environmental footprint of our nation’s coal industry. Achieving these goals is absolutely critical to our energy and environmental security, and to ensuring that the coal industry remains a workhorse of our economy 

well into the future. 

Finally, I am also pleased that the Administration is maintaining its commitment 

under the American Competitiveness Initiative to double the budget of the DOE Office of Science in the coming years. These programs are the bedrock of the Nation’s 

energy science enterprise. I was disappointed with the very late decision of the appropriators to roll back the widely-supported increase for the Office of Science in the 

last fiscal year. I understand that some programs were cut significantly, and I am 

hopeful that that will be an aberration. 

Each year the formulation of a budget is a painstaking process. I have appreciated 

the Secretary’s candor in the past, and I look forward to working with him to ensure 

that the American people get the most prudent investment in energy programs and 

research possible. 

Thank you, Mr. Chairman. 

STATEMENT OF HON. PETE V. DOMENICI, U.S. SENATOR FROM 

NEW MEXICO 

Senator DOMENICI. Mr. Secretary you have done an outstanding 

job in the time that you have been given the mantel of Secretary 

of Energy. But I don’t believe the American people or any of us 

have been successful in attacking the problem of our energy insufficiency and the fact that we must import so much. I don’t think we 

have attacked it with the sense of urgency that it’s entitled to. 

I really don’t think we know how bad the effect is on the United 

States of the billions of dollars that are sucked out of our economy 

every month to buy oil. It is making other countries rich. Therefore 

it seems logical to me that it is making us poorer. I can’t get any 

economist to produce a study on this. I’ve checked and they all 

aren’t sure. But I’m sure. We are becoming a weaker Nation by the 

day because of the tremendous amount of our own assets that are 

4 

getting removed from us every day and shipped to other countries 

who can only grow and prosper because they’re getting these high 

astronomical prices for oil. 

So I wish we had a bigger and stronger program, but we’ve all 

tried. I don’t think there’s much we’re doing that carries with it an 

absolute state of urgency where we say we must do this. It’s an 

American commitment to our own salvation. 

But we have done a lot of things and I do want to put in the 

record, Senator, Mr. Chairman, all of the things that we have produced in the past 3 years by way of energy bills starting with the 

Energy Policy Act of 2005 and then the Energy Independence and 

Security Act of 2007 and all the things that went with it. To the 

extent that we charged ourselves, we just about did everything we 

could and what we asked for in legislation. These two sheets of 

summary will show all of the things that have been accomplished, 

many of which are being run by the distinguished Secretary now. 

He knows there are many new things, some of which are truly 

marvelous and are achieving great things. 

Senator DOMENICI. First, I want to make a brief comment on National Laboratories funding. Overall this is a good budget for the 

National Laboratories. I hope we can avoid last year’s devastating 

scenario when the House acted as they did. You are not asking 

them to do that so they will have to do it of themselves because 

there is nothing in the budget asking them to do that. 

At the same time I’m concerned about the insufficient funding 

and the pace of certain projects such as the LANSCE Facility. I believe the pace proposed in these budgets is too slow. I intend to address that during the appropriations process to see if we can move 

those programs ahead a little faster. 

I’m pleased with our investment in nonproliferation including the 

MOX program. I think you will probably chalk that one up as a 

very, very big accomplishment of the Department if we can continue on course and get it done. It’s the one that President Carter 

decided to put away. He said if we don’t do it the others will follow 

us and not do it. You recall we didn’t do it, they all did. 

Now we didn’t do it because we were afraid of proliferation and 

other things. Now we’re the last one coming along with mixed oxide 

as a method for treating defense waste. Now I’d like to turn to a 

discussion of nuclear overall. 

I want to commend you for the considerable investment in nuclear energy. I believe that these nuclear power investments hold 

great promise for our efforts to produce greenhouse gas emissions. 

I remind the committee, and you, Mr. Secretary, that when we 

passed the 2005 Policy Act, we sent a message that the United 

States was serious again about nuclear power in this country. The 

message was heard around the world. Nuclear power is the largest 

source of carbon free energy on earth. 

I’m encouraged by the continued support of your Department of 

nuclear power. The Administration seeks to increase funding for 

nuclear energy science and technology by 37 percent to 1.42 billion 

for the NP 2010 Initiative. That’s increased by 80 percent. That 

shows we are concerned and that investment is probably one of the 

few that is up to the problem. It shows that there is a serious problem we are going to resolve. So we seek to address global climate 

5 

change. We must continue to invest even more in the promises of 

nuclear power which this budget request obviously acknowledges. 

Loan guarantees, Mr. Secretary. Now let me discuss the budget 

proposal on loan guarantees in title 17 of the Energy Policy Act of 

2005. I’m very pleased that the budget request reflects the agreement reached in the 2008 Omnibus Appropriations Act. 

Your proposal to extend the date authorized to issue loan guarantees to 2010 for non-nuclear projects, in 2011 for nuclear 

projects, will help ensure that the 38.5 billion you made available 

will be fully utilized. I hope that you will even be successful in 

issuing a loan guarantee before this Administration ends. I don’t 

know if that’s possible, but I watch a few and see that you might 

indeed be able to do that. 

As you know we passed the important bipartisan America Competes Act incorporating the view of the Augustine Report. The 

President and the Republicans and Democrats alike in Congress all 

worked on that. Your budget proposed an increase of 750 million 

rounding it to the Office of Science for a total of 4.7 billion. This 

proposal keeps funding available. We double the Office of Science 

in 10 years. I applaud you for that. That was the commitment and 

that was done. There were more commitments. They weren’t all 

done, but that one was. 

While I support this increase, I do plan on asking some questions 

about how your Department plans to integrate the America Competes Act with the budget. Not as easy as we thought when we 

were doing the work. Easy to draw one, hard to do the other. 

I share the same concerns on weatherization that my counterpart, the Chairman, does. It kind of looks to me, Mr. Chairman, 

that something happened. That they took it out here, but they 

planned it, expected it to show up somewhere else. I hate to ask 

the Secretary that, but that’s what it looks like to me. They got it 

out here and didn’t put it in where they expected. I haven’t seen 

him give any clues to whether that statement is correct or not, but 

I’ll ask him about it. 

I’m disappointed that the Future Gen project must take a different direction. The project had relevant, difficult, questions about 

the best way to advance clean coal with taxpayer’s dollars. We may 

find that restructuring Future Gen might be the right decision. 

However, the Department will have to fully digest feedback on 

their request for information and we have questions on that topic 

for you. People just still don’t know that we’re spending a lot of 

money on carbon capture and sequestration. We’re doing a lot of 

big science and big engineering. 

The 2009 budget marks a continuation of a dramatic funding increase for carbon capture and sequestration. Our effort to reduce 

greenhouse gases while sustaining an affordable energy supply 

hinges upon cost effective demonstrations is a huge sum. I want to 

say that the 648 million dollars for research and demonstration in 

that particular field seems to me to be another very positive reaction to a very serious problem in a way that makes sense. 

Mr. Secretary, I look forward to working with you in the limited 

time that we have this year which will be my last time, limited or 

otherwise, and we’ll try to get some things done. Thank you very 

much. 

6 

The CHAIRMAN. Thank you, sir. Mr. Secretary, why don’t you go 

right ahead with your testimony and then after that we’ll each 

have questions. 

STATEMENT OF HON. SAMUEL W. BODMAN, SECRETARY, 

DEPARTMENT OF ENERGY 

Secretary BODMAN. Mr. Chairman, Senator Domenici, members 

of the committee, I want to thank you all for giving me the opportunity to appear here before you for what is now the fourth time 

in order to discuss our Department’s budget request. I think it is 

safe to say that the goals of our fiscal 2009 budget are largely unchanged from our budget goals in previous years. This budget request provides us, in my judgment, the resources needed to continue to move forward on our five central missions and those are: 

the promotion and enhancement of energy security, nuclear security, scientific discovery and innovation, environmental responsibility and management excellence. 

Since 2001, this Administration has invested more than 180 billion dollars in the Department of Energy and its programs. These 

investments have been used to address the growing demand for affordable, clean and reliable energy. They have helped safeguard 

our national security and have enabled scientific research leading 

to significant improvements in our quality of life and the health of 

our people. 

The Department’s fiscal year 2009 request in the amount of 25 

billion dollars was developed with the need to continue these activities in mind and to address the energy challenges that confront us 

everyday. An investment of this size allows us to fulfill our central 

missions as well as advance the goals of the President’s Advanced 

Competitiveness Initiative and to ensure U.S. technological competitiveness and economic security. It also allows us to continue 

our progress toward the goals of the President’s Advanced Energy 

Initiative accelerating the research, the development and the deployment of clean, alternative energy technologies. 

The Department of Energy is responsible for promoting America’s energy security. We encourage the development of reliable, 

clean and affordable energy supplies and we strengthen U.S. competitiveness by leading in innovation and scientific discovery. At 

the same time we continue to ensure the security of the nuclear 

stockpile and we reclaim and restore the sites that are the Nation’s 

environmental legacy from those efforts to develop the nuclear 

chemistry and physics that I’ve just referred to. All of this is done 

under a rubric of sound management consistent with the President’s Management Agenda to improve performance and accountability. 

But this budget request also reflects our concerns about America’s energy future. The projected growth in global energy demand 

is a major challenge for us all. It is a challenge that must be met 

with responsible action. 

Global demand will continue to grow. We cannot depend solely 

on hydrocarbons to meet it. This is a problem for all nations, energy producers and consumers alike. I believe, therefore, that it is 

vital that the United States pursue policies that enhance global energy security not just our own. We need new energy options, cleanVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
7 

er more efficient technologies and alternative fuels and we must 

support fully the research and innovation necessary for their development. We must diversify our energy supplies, diversify our energy suppliers and establish and secure additional energy supply 

routes. 

This budget document should also be viewed as a road map 

showing the future course of America’s energy security. This course 

will not, in my judgment be an easy one, but I believe it is a necessary one. These efforts will require a sustained commitment on 

the part of government. It will require strong private sector investment and strategic collaborations between the government, the private sector and the research community including academia. Our 

goal is to foster continued economic growth and promote a sustainable energy future. 

Mr. Chairman, I believe the committee has a copy of my written 

statement which I now ask be included in the record so that in the 

interest of time we might move to any questions that you or members of the committee might have. Thank you very much. 

[The prepared statement of Secretary Bodman follows:] 

PREPARED STATEMENT OF HON. SAMUEL W. BODMAN, SECRETARY, 

DEPARTMENT OF ENERGY

Mr. Chairman and members of the Committee, I am pleased to be before you 

today to present the President’s fiscal year (FY) 2009 budget proposal for the Department of Energy. The strength and prosperity of America’s economy is built on 

the security of our nation and the reliability of energy sources. Since 2001, the Administration has committed $183 billion through the Department of Energy (DOE) 

to help drive America’s economic growth, provide for our national security, and address the energy challenges that face our nation. The Department of Energy’s FY 

2009 budget request of $25 billion stays on course to address the growing demand 

for affordable, clean and reliable energy; preserve our national security; and enable 

scientific breakthroughs that could have significant impacts on our quality of life 

and the health of the American people. The FY 2009 budget was developed to continue to meet these goals. 

In FY 2009, the Department will advance the President’s American Competitiveness Initiative aimed at ensuring U.S. technological competitiveness and economic 

security, and implement the Advanced Energy Initiative, to accelerate the research 

and development of clean energy technologies to diversify our nation’s energy supply. These efforts, combined with investments to meet our commitment to protect 

the United States as stewards of our nation’s nuclear weapons stockpile and to environmental cleanup, will foster continued economic growth and promote a sustainable energy future. 

This budget, while focused on delivering results to meet the nation’s priorities, 

also serves as the roadmap for the future of America’s energy security. The FY 2009 

budget request translates into investments that will: 

• Expand research, development, and demonstration of cost-effective carbon capture and storage, 

• Accelerate technological breakthroughs outlined in the Advanced Energy Initiative, 

• Provide enhanced energy security through the expansion of the Strategic Petroleum Reserve, 

• Continues to foster scientific leadership with the American Competitiveness Initiative, 

• Advance environmental cleanup and nuclear waste management, 

• Maintain the safety and reliability of the nuclear weapons stockpile and continue transforming the weapons complex, and 

• Work with other countries to prevent the spread of weapons of mass destruction. 

To highlight, in FY 2009 the Department of Energy continues to meet this vision 

and strengthen the framework built over the last eight years to ensure our national 

energy security and reliability. The FY 2009 budget request: 

8 

• Invests in Climate Change Technologies.—In support of the Administration’s 

initiatives that support climate change technology and to implement the U.S. 

Climate Change Technology Program’s Strategic Plan, the FY 2009 budget emphasizes a two-pronged strategy for its climate change technology programs: invest in carbon dioxide (CO22) mitigation technologies for coal with carbon capture and storage (CCS) and in nuclear power, and invest in near-term, CO22 

mitigation technologies focused on improving energy efficiency. The budget provides $407 million to research and $241 million to demonstrate advanced coal 

technologies which includes cost-effective CCS for coal-fired power plants. The 

Department also continues to help work with the Department of the Treasury 

to administer $1.65 billion in investment tax credits from the Energy Policy Act 

of 2005 that will accelerate commercial deployment of technologies that are central to carbon capture and storage. 

Through international collaboration, the United States strives to maintain a 

leadership role in promoting and deploying clean energy technology domestically and around the world. President Bush believes that the greatest progress 

will be assured by working together with other nations to advance the related 

objectives of improving economic and energy security, alleviating poverty, improving human health, reducing harmful air pollution, and reducing the growth 

of greenhouse gases. The United States, Australia, China, India, Japan, Canada, and South Korea work to implement the objectives of the Asia-Pacific Partnership (APP) on Clean Development and Climate. This Partnership is helping 

to advance the President’s goal of developing and accelerating the deployment 

of cleaner and more efficient technologies and practices. It builds on existing 

multilateral climate initiatives including the Carbon Sequestration Leadership 

Forum, the International Partnership for a Hydrogen Economy, and Methane 

to Markets. In FY 2009, the Department is requesting $15.0 million, evenly divided between the Fossil Energy Program and the Energy Efficiency and Renewable Energy Program, to continue to support this important initiative. 

• Advances the American Competitiveness Initiative.—In 2007, President Bush 

launched the American Competitiveness Initiative (ACI) to encourage innovation throughout the economy and to give America’s children a firm foundation 

in math and science. A request of $4.7 billion in FY 2009, $748.8 million above 

the FY 2008 enacted level, will increase basic research in the physical sciences 

that will have broad impacts on future energy technologies and environmental 

solutions. ACI funding will support the construction and operation of worldclass scientific facilities and will support literally thousands of scientists and 

students—our current and future scientific and technical workforce. Scientific 

and technological discovery and innovation are the major engines of increasing 

productivity—indispensable to ensuring growth, job creation, and rising incomes 

for American families in the technologically driven twenty-first century. This investment is essential if the United States is to maintain its worldclass, scientific 

leadership and global competitiveness. 

• Accelerates the Advanced Energy Initiative.—At a request of $3.2 billion, $623 

million above the FY 2008 enacted appropriations of $2.5 billion, the President’s 

Advanced Energy Initiative (AEI) will continue to support clean energy technology breakthroughs that will help improve our energy security through diversification and help to reduce our dependence on oil. The FY 2009 budget for AEI 

includes funding to promote the licensing of new nuclear power plants and research on an advanced nuclear fuel cycle. Also, AEI’s diverse energy portfolio 

includes investment in making solar power cost-competitive with conventional 

sources of electricity by 2015 and supports a robust vehicle technology program 

that includes developing lithiumion batteries, plug-in hybrids, and drive-train 

electrification. 

• Expands the Resurgence of Nuclear Energy.—Nuclear energy is an important 

source of energy in the United States and is a key component of the AEI portfolio. Nuclear energy is free of greenhouse gas (GHG) emissions, safe, and reliable, and currently supplies about 20 percent of the nation’s electricity. The Department is leading the Administration’s efforts to spur a nuclear renaissance 

in the United States to meet energy and climate goals. We continue to work 

with industry partners to promote the near term licensing and deployment of 

the first new nuclear plants in over 30 years, as well as to extend the life of 

current plants. Furthermore, the Department is developing advanced, more proliferation-resistant nuclear fuel technologies that will maximize energy from nuclear fuel. These technologies will further support the expansion of nuclear 

power as a safe, efficient, and cost-effective source of energy capable of supVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00012 Fmt 6633 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
9 

porting continued economic growth in the 21st century. In FY 2009, a total of 

$1.4 billion is requested for nuclear energy activities including $487 million for 

the Mixed Oxide Fuel Fabrication Facility. 

It is critical to note that the growth of nuclear power is only possible if we continue to develop a responsible path for disposing of spent nuclear fuel. Therefore, $494.7 million is requested in FY 2009 for the continued development of 

the geologic waste repository at Yucca Mountain, Nevada, and to support the 

defense of the License Application that we will submit in 2008 to the Nuclear 

Regulatory Commission for authorization to construct the repository. 

• Transforms Our Nuclear Weapons Complex.—The FY 2009 budget reconfirms 

the Department of Energy’s steadfast commitment to the national security interests of the United States through stewardship of a reliable and responsive 

nuclear weapons stockpile and by advancing the goals of global non-proliferation. Through the National Nuclear Security Administration (NNSA), the Department directs $6.6 billion in this request for Weapons Activities, a $320.6 

million increase from the FY 2008 enacted appropriation, to meet the existing 

requirements for stewardship of the nation’s nuclear weapon stockpile, technologies and facilities, as well as to continue to transform the nuclear weapons 

complex with the goal of a much smaller size by 2030. This transformation effort is structured to achieve President Bush’s vision to create a more efficient 

and less expensive nuclear weapons complex of the future that is able to respond to changing national and global security challenges. 

• Reduces the Risk of Weapons of Mass Destruction (WMD) Worldwide.—The Department has provided $1.8 billion in this request for detecting, securing, eliminating and disposing of dangerous nuclear materials around the world. The 

amount includes $1.2 billion within Defense Nuclear Nonproliferation, $487 million within the Office of Nuclear Energy, and $117 million funded in Weapons 

Activities. The Mixed Oxide (MOX) Fuel Fabrication Facility project remains a 

key activity of the nation’s nuclear nonproliferation efforts. The FY 2009 request for MOX is $ 208.2 million more than the FY 2008 enacted appropriation 

reflecting continued support for this project. Further, the request provides significant out-year growth to fulfill our international agreements and accelerate 

our work to reduce the risk of (WMD) threats. Among many advances, the FY 

2009 budget provides for the installation of radiation detection equipment at an 

additional 49 foreign sites in 14 countries and at 9 additional Megaports; continues to implement an aggressive, prioritized work schedule to complete all 

shipments of Russian origin spent highly-enriched uranium (HEU) fuel stored 

outside reactor cores by the end of 2010; and maintains a schedule allowing 

completion of the construction of the second of two fossil-fueled power plants located in Zheleznogorsk, Russia, in 2010. The Seversk project is scheduled for 

completion by the end of December 2008. 

• Meets Our Commitments to Public Health and Safety and the Environment.— 

During my first days at the Department of Energy, I announced safety as my 

top priority and the number one operating principle of the Department. To implement my vision, I created a new Office of Health, Safety and Security. Ensuring the safety of workers across the DOE complex is my top priority and this 

new office will go a long way in strengthening our safety and security organization. We must be world class not only in how we carry out our mission, but in 

the safe, secure, and environmentally responsible way in which we manage operations at our facilities across the country. The organization’s FY 2009 budget 

request of $446.9 million, builds on a number of actions the Department has 

taken over the past two years to increase safety of DOE workers. 

The FY 2009 budget includes $5.5 billion for the Environmental Management 

program to protect public health and safety by cleaning up hazardous, radioactive legacy waste left over from the Manhattan Project and the Cold War. 

This budget allows the program to continue to make progress towards cleaning 

up and closing sites and focuses on activities with the greatest risk reduction. 

By the end of 2009, cleanup projects at Sandia National Laboratory and Argonne National Laboratory will be finished. 

As the Department continues to make progress in completing clean-up, the FY 

2009 budget request of $186 million for Legacy Management supports the Department’s long-term stewardship responsibilities and payment of pensions and 

benefits for our former contractor workers after site closure. 

10 

In light of the increased number of sophisticated cyber attacks directed at all facets of our communities, from military to civilian to private users, the Department 

is taking significant steps to secure the virtual pathways and mitigate the threat 

from cyber intrusions. Implementing these steps will be seamless and will not interrupt the availability of information systems resources while preserving the confidentiality and integrity of the information and their contents. A budget request of $157 

million in FY 2009 supports the Department’s efforts to defend against emerging, 

complex cyber attacks. Through these efforts, the Department will be in a better position to effectively manage and monitor cyber risk across the complex. In FY 2009, 

DOE will increase support on a Department-wide basis to deploy new cyber security 

tools and cyber security management activities to detect, analyze, and reduce the 

threat across the complex. 

PROMOTING AMERICA’S ENERGY SECURITY THROUGH RELIABLE, CLEAN, AND

AFFORDABLE ENERGY

The FY 2009 request will deliver a balanced and diverse portfolio of solutions to 

strategically address the urgent energy and environmental challenges facing our 

country today. Our goal can be met by: 1) accelerating the development of clean and 

renewable energy technologies to dramatically increase the amount of clean energy 

produced in the United States; 2) advancing energy efficient technologies and practices that use less energy; and 3) providing information from research, development, 

and demonstration activities, which could help stimulate private sector choices that 

will drive change in our energy systems. DOE’s applied energy programs are taking 

pro-active steps to catalyze the advancement of these important technologies 

through research and development, innovative partnerships, international cooperation through the Asia Pacific Partnership, and collaboration with states, industry 

leaders, and other stakeholders. 

The budget lays the groundwork for implementing key elements of the Energy 

Independence and Security Act of 2007 (EISA). It contains elements that are unprecedented in size, scope and timeframe for increasing our energy security, diversifying our energy system and making America’s energy systems stronger, safer and 

cleaner for future generations. We can further advance the U.S. commitments made 

at the U.N. Climate Change Meeting in Bali and the Major Economies Meetings to 

employ clean energy technologies in the global effort to reduce greenhouse gas emissions. 

Consistent with the President’s initiatives and the EISA, the FY 2009 budget contributes to key elements of the American Competitiveness and Advanced Energy Initiative that will help reduce our dependence on foreign sources of energy, and 

change the way we power our homes, businesses, and automobiles. 

The proposed Office of Energy Efficiency and Renewable Energy (EERE) budget 

of $1.255 billion provides a diverse portfolio of solutions to our challenges, including: 

• Fuels and Vehicle Solutions (Biomass, Vehicles, and Hydrogen programs: $592.3 

million) 

—Advancing essential R&D projects to achieve cost competitive, commercial 

scale cellulosic ethanol production by 2012; 

—Conducting R&D on lithium-ion batteries, plug-in hybrids, and drive-train 

electrification to diversify and make our nation’s vehicles more efficient to reduce petroleum dependency; 

—Continuing to research and develop critical hydrogen technologies that enable 

a commercialization decision in 2015; and 

—Supports fuel testing and validating codes and standards that will help accelerate new fuel and vehicle solutions to the market. 

• Renewable Power Solutions (Wind, Solar, Geothermal, and Water Power programs: $241.6 million) 

—Integrating renewable energy technologies with energy storage technologies to 

resolve the intermittency challenge; 

—Supporting wind power R&D to enable wind turbines to produce an increasing amount of the nation’s electricity; 

—Investing in solar power to make photovoltaics widely available nationwide 

and commercially cost-competitive with conventional electricity by 2015; 

—Accelerating a refocused geothermal program that conducts enhanced geothermal systems R&D; and 

—Pursuing water power technologies as part of EERE’s R&D portfolio. 

• Efficiency Solutions (Buildings and Industrial Technologies programs: $185.9 

million) 

11 

—Reducing energy consumption and transforming the carbon footprint of the 

built environment through the development of zero energy buildings; and 

—Supporting the advancement of clean and efficient industrial technologies and 

processes that will drive a 25 percent increase in U.S. industrial energy productivity by 2017. 

Our energy portfolio also recognizes the abundance of coal as a domestic energy 

resource and remains committed to research and development to promote its clean 

and efficient use. Because coal in the U.S. accounts for 25 percent of the world’s 

coal reserves, the FY 2009 request focuses on carbon capture and storage. 

• Integration of advanced Integrated Gasification Combined Cycle (IGCC) coal 

technology with Carbon Capture and Storage remains the foundation of the Department’s clean coal research program to establish the capability of producing 

electricity from coal with near-zero atmospheric emissions. The Administration 

remains strongly committed to FutureGen and is requesting $156 million in FY 

2009. An additional $407 million is requested within the Coal program to support research and development on technologies that support the concept. 

• The Coal program continues to fund large-scale demonstrations through the 

Clean Coal Power Initiative (CCPI) with $85 million requested in FY 2009 to 

support a Round 3 solicitation which will focus on demonstrating carbon capture and storage technologies. 

• As part of the greenhouse gas mitigation strategy, the Department continues 

the Carbon Sequestration program through its large-scale field testing, and will 

inject carbon dioxide into several types of geological formations. Within the 

$407 million requested for coal research and development activities, the Department is requesting $149 million for continued work in this area. 

Consistent with the FY 2006, 2007, and 2008 budget requests, the FY 2009 budget request continues to shift resources away from oil and gas research and development programs, which have sufficient market incentives for private industry support, to other energy priorities. Federal staff, paid from the program direction account, will work toward an orderly termination of the program in FY 2009. 

To further assure against significant oil supply disruptions that could harm our 

economy, this budget also proposes $171.4 million for expanding the Strategic Petroleum Reserve (SPR) to an ultimate capacity of 1.5 billion barrels by 2029. In FY 

2008, DOE will use available balances for the purchase of additional SPR oil and 

will continue to fill using federal royalty oil until 727 million barrels is achieved in 

FY 2009. Capacity expansion from 727 million barrels to 1.0 billion barrels will 

begin in FY 2008 with land acquisition activities. The request also funds National 

Environmental Policy Act (NEPA) activities associated with the further expansion 

of SPR capacity to 1.5 billion barrels. 

The EPACT 2005 included authorization for a new Loan Guarantee Program. The 

Department requests $19.9 million in funding in FY 2009 for administrative expenses to operate the Office and support personnel and associated costs. This request will be offset by collections in the same amount, as authorized under EPACT 

2005. In addition, during fiscal years 2008 through 2011, commitments to guarantee 

loans under Title XVII of the EPACT 2005 will total $38.5 billion. In the Energy 

and Water Development and Related Agencies Appropriations Act of 2008, Congress 

authorized the Department to issue loan guarantees under the Title XVII program 

until September 30, 2009. The FY 2009 budget now seeks to extend that authorization through FY 2010 and 2011 and specifies amounts and uses of loan guarantee 

authority for those periods consistent with Congressional guidance accompanying 

the FY 2008 Appropriations Act. Of the total provided, $20.0 billion will be available 

through fiscal year 2010 to support projects such as Uranium Enrichment, Coal 

Based Power, Advanced Coal Gasification, Renewables, and Electricity Delivery. The 

remaining $18.5 billion will be available through FY 2011 to support nuclear power 

facilities. The $38.5 billion provided in FY 2008 through 2011 will be in addition 

to the $4.0 billion in authority provided in FY 2007 under P.L. 110-05 Section 

20320(a) for a total loan volume limitation of $42.5 billion. 

Reliable energy information plays a critical role in promoting efficient energy markets and informing the public and policy makers. This budget requests a total of 

$110.6 million for the Energy Information Administration to improve energy data 

and analysis programs, reflecting a 16 percent increase over the FY 2008 enacted 

level. 

The FY 2009 budget requests $301.5 million for the Advanced Fuel Cycle Initiative, the technology development element of the Global Nuclear Energy Partnership 

(GNEP). The request supports research and development activities focused on methods to reduce the volume and long-term toxicity of high-level waste from spent nuVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
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clear fuel, reduce the long-term proliferation threat posed by civilian inventories of 

plutonium in spent fuel, and provide for proliferation-resistant technologies to recover the energy content in spent nuclear fuel. 

Recognizing the potential of nuclear energy, the President announced GNEP in 

February 2006. GNEP seeks to bring about significant, wide-scale use of nuclear energy through the development of better, more efficient and proliferation-resistant 

nuclear fuel cycles while reducing the volume of nuclear waste requiring ultimate 

disposal. 

GNEP will build upon the Administration’s commitment to develop nuclear energy 

technology and systems and enhance the work of the United States and our international partners to strengthen nonproliferation efforts. The GNEP strategy will accelerate efforts to: 

• Provide abundant energy without generating carbon emissions or greenhouse 

gases (GHG); • Recycle spent nuclear fuel to minimize waste and reduce proliferation concerns; • Enable developing nations to safely and securely deploy nuclear power to meet 

their energy needs; • Increase energy recovery from spent nuclear fuel; and • Reduce the number of required U.S. geologic waste repositories to one for the 

remainder of this century. 

Through GNEP, the United States will work with key international partners to 

develop new recycling technologies. Improving the way spent nuclear fuel is managed will facilitate the expansion of civilian nuclear power in the United States and 

encourage civilian nuclear power internationally to evolve in a more proliferationresistant manner. The United States and other countries having the established infrastructure could arrange to supply nuclear fuel to countries seeking the energy 

benefits of civilian nuclear power, and the spent nuclear fuel could be returned to 

supplier countries for eventual disposal in international repositories. In this way, 

foreign countries could obtain the benefits of nuclear energy without needing to design, build, and operate uranium enrichment or recycling technologies to process 

and store the waste. 

GNEP would also help resolve America’s nuclear waste disposal challenges. By recycling spent nuclear fuel, the heat load and volume of waste requiring permanent 

geologic disposal would be significantly reduced, delaying the need for another repository in addition to the one at Yucca Mountain for the remainder of this century. 

Beginning in FY 2008 in accordance with the Consolidated Appropriations Act, 

2008, the Office of Nuclear Energy is funding the MOX Fuel Fabrication Facility, 

which was previously funded by the National Nuclear Security Administration’s 

(NNSA) Nuclear Nonproliferation program. In FY 2009, the Department funds the 

MOX Fuel Fabrication Facility program within the Office Nuclear Energy under the 

Other Defense activities account at a request of $487 million. 

To support the near-term domestic expansion of nuclear energy, the FY 2009 

budget seeks $241.6 million for the Nuclear Power 2010 program to support costshared, near term technology development and licensing demonstration activities 

with industry that focus on enabling an industry decision by 2010 to build a new 

nuclear plant. To this end, the program will continue to support industry interactions with the Nuclear Regulatory Commission on new plant license applications, 

as well as first-of-a-kind design finalization for standardized reactor designs. 

The technology focus of the Nuclear Power 2010 program is on Generation III+ 

advanced light water reactor designs, which offer advancements in safety and economics over older designs. If successful, this 7-year, 50–50 industry cost-shared program could result in a new nuclear power plant order by 2010 and a new nuclear 

power plant constructed by the private sector and in operation by 2015. EPACT 

2005 authorizes DOE to enter into contracts with the first six sponsors that are 

issued a license and begin construction of new nuclear facilities and meet all contractual conditions to provide risk insurance for certain regulatory and litigation 

delays in the full power operation of their facility. Up to $500 million in coverage 

is available for the initial two licensed plants for which construction is started and 

up to $250 million is available for the next four plants. The program will allow DOE 

to offer standby support/risk insurance to protect sponsors of the first new nuclear 

power plants against the financial impact of certain delays that are beyond the 

sponsors’ control. In FY 2009, the Department may issue conditional agreements for 

standby support to sponsors of new nuclear power plants. 

The FY 2000 budget request includes $70 million to continue the development of 

nextgeneration nuclear energy systems known as ‘‘Generation IV (GenIV).’’ These 

nextgeneration technologies will enhance the safety, cost-effectiveness, and 

proliferationresistance of nuclear power, while harnessing its potential to generate 

13 

hydrogen for use as a fuel. Gen IV’s FY 2009 resources will be primarily focused 

on long-term research and development of a gas-cooled very-high temperature reactor, the reactor technology of choice for the Next Generation Nuclear Plant (NGNP) 

project. 

STRENGTHENING U.S. SCIENTIFIC DISCOVERY, ECONOMIC COMPETITIVENESS, AND

IMPROVING QUALITY OF LIFE THROUGH INNOVATIONS IN SCIENCE AND TECHNOLOGY

Today our nation’s ability to sustain a growing economy and a rising standard of 

living for all Americans depends on continued advances in science and technology. 

Scientific and technological discovery and innovation are the major engines of increasing productivity and are indispensable to ensuring economic growth, job creation, and rising incomes for American families in the technologically driven 21st 

Century. Today it is especially vital that nations around the globe—not only the developed nations but also the largest developing ones—increase their strategic national investments in scientific research with an eye to global economic competition. 

The Science program at the Department of Energy delivers discoveries and scientific tools that transform our understanding of energy and matter and advance 

the national, economic, and energy security of the United States. Science is a primary sponsor of basic research in the United States, leading the nation to support 

the physical sciences in a broad array of research subjects in order to improve our 

energy security and address issues ancillary to energy, such as climate change, 

genomics, and life sciences. In FY 2009, the Department requests $4.7 billion, an 

increase of 18.8 percent over the enacted FY 2008 appropriation, to continue to invest in science research that supports the American Competitiveness Initiative. 

The High Energy Physics ($805.0 million) program conducts basic research on the 

nature of matter and energy at its most fundamental level, seeking to understand 

the universe by investigating the most basic constituents of matter and energy and 

exploring the nature of space and time, and probing the forces that bind them together. Support is provided for operation of the Tevatron and Neutrinos at the Main 

Injector (NuMI) beam line which are both located at Fermi National Accelerator 

Laboratory (Fermilab). In addition, the request supports the research of U.S. scientists at the Large Hadron Collider in Switzerland ($72.5 million) and the U.S. involvement in the global research and development effort for a potential International Linear Collider ($35 million). The program also funds non-accelerator physics to investigate dark energy and dark matter, supernovae, solar neutrinos, black 

holes, and other topics, including support for the Joint Dark Energy Mission 

(JDEM) in partnership with NASA. 

The Nuclear Physics ($510.1 million) program conducts research to understand 

the structure and interactions of atomic nuclei and the fundamental forces and particles of nature in nuclear matter in terms of their fundamental constituents. Support is provided for operation of the Relativistic Heavy Ion Collider ($161.00 million), which enables us to glimpse conditions of the very early universe, and the 

Continuous Electron Beam Accelerator Facility (CEBAF) ($106.4 million) which provides insight into the quark structure of matter. 

The Biological and Environmental Research (BER) ($568.5 million) program provides the environmental and biological knowledge that promotes national security 

through improved energy production and use, supports the President’s National Energy Plan, and conducts research to protect our environment. This research is focused in two areas: Biological Research and Climate Change. BER supports the 

Genomics: GTL program supports the most advanced biotechnology tools and techniques to probe for biological and biologically inspired solutions to Department mission challenges in energy, carbon sequestration, and environmental remediation. 

The FY 2009 request includes $75 million for three innovative Bioenergy Research 

Centers that will bring together multidisciplinary teams of some of the nation’s 

leading researchers in a mission-driven laboratory setting to probe plants and microbes at all levels (molecular, cellular, system) in an effort to crack nature’s code 

and achieve the breakthroughs that will make biofuels production truly cost-effective on a national scale. Climate change research includes the study of the scientifically-based predictions and assessments of the potential effects of greenhouse gas 

on climate and the environment, and funds DOE participation in the nation’s Climate Change Science Program ($145.9 million). 

The Basic Energy Sciences ($1.568.2 billion) program supports research and operates facilities to provide the foundation for new and improved energy technologies 

and for understanding and mitigating the environmental impacts of energy use. The 

FY 2009 request enhances support in high priority research areas addressing both 

grand challenge science and basic research needs for energy-related science. One implementation strategy will be new Energy Frontier Research Centers, which will 

14 

bring together the skills and talents of multiple investigators to enable research of 

a scope and complexity that would not be possible with the standard individual investigator or small group award. The Materials Sciences and Engineering subprogram supports basic research to explore the scientific foundations for the development of materials that improve their efficiency, economy, environmental acceptability, and safety for energy generation, conservation, transmission, and use. Applications include lighter, stronger materials to increase fuel economy in automobiles, 

alloys and ceramics that improve the efficiency of combustion engines, and more efficient photovoltaic materials for solar energy conversion. Chemical Sciences, Geosciences, and Energy Biosciences support research crucial for improving combustion 

systems, solar photoconversion processes, and for applications to renewable fuel resources, environmental remediation, and photosynthesis. BES supports the Advanced Energy Initiative with solar conversion and biomass production research. A 

major part of the BES mission is to build and operate world-class user facilities including the Spallation Neutron Source at ORNL, the world’s most powerful neutron 

scattering facility. All five of the Nanoscale Science Research Centers, part of the 

National Nanotechnology Initiative, will be fully operational in FY 2009 with a total 

request of $101.2 million. 

The Advanced Scientific Computing Research ($368.8 million) program delivers 

forefront computational and networking capabilities to scientists nationwide that 

enable them to extend the frontiers of science. Leadership in scientific computation 

is a cornerstone of the Department’s strategy to ensure the security of the nation, 

and to succeed in its science, energy, environmental quality, and national security 

missions. 

Fusion is the energy source of stars, including our own sun. The Fusion Energy 

Sciences ($493.1 million) program is the national research effort to advance plasma 

science, fusion science, and fusion technology—the knowledge base required for an 

economically and environmentally friendly, carbon free energy. DOE is also one of 

seven international parties participating in the ITER project, an international burning plasma fusion experiment to be built in Cadarache, France. The FY 2009 request provides $214.5 million for the U.S. contribution to this international effort. 

ENSURING AMERICA’S NUCLEAR SECURITY

The National Nuclear Security Administration (NNSA) continues significant efforts to meet Administration and secretarial priorities, leveraging science to promote 

national security. The FY 2009 President’s budget request is $9.1 billion, essentially 

level with the FY 2008 appropriation, to meet defense and homeland security-related objectives: 

• Transforming the nuclear weapons stockpile and infrastructure while meeting 

Department of Defense requirements; 

• Conducting innovative programs in the nations of the former Soviet Union and 

other countries to address nonproliferation priorities; 

• Supporting naval nuclear propulsion requirements of the U.S. Navy; 

• Maintaining comprehensive physical and cyber security for facilities, employees 

and information by implementing and sustaining upgrades throughout the complex; 

• Providing nuclear counter-terrorism and emergency response assets in support 

of homeland security; 

• Reducing the deferred maintenance backlog and achieving facility footprint reduction goals; and 

• Providing corporate management and oversight for NNSA program operations. 

The United States continues a fundamental shift in national security strategy to 

address the realities of the 21st century. The FY 2004-directed reductions to the 

U.S. nuclear weapons stockpile were completed in 2007, five years early. Today’s nuclear weapons stockpile is now the size envisioned for 2012, and by 2012 it will be 

almost 15 percent less than that—a total that is just 25 percent of what it was at 

the end of the Cold War. Consistent with the Administration’s Nuclear Posture Review, the Department of Energy has created a vision for a revitalized nuclear weapons complex that is significantly more agile and responsive, and will allow further 

reductions in the nuclear stockpile by providing an industrial hedge against geopolitical or technical problems. 

In compliance with the National Environmental Policy Act, NNSA is preparing a 

Complex Transformation supplement to the 1996 Stockpile Stewardship and Management Programmatic Environmental Impact Statement. In January 2008, NNSA 

announced a preferred alternative for the future nuclear weapons complex infrastructure that identifies the proposed major facilities, and consolidations of misVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00018 Fmt 6633 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
15 

sions, capabilities, and special nuclear materials. The FY 2009 budget includes 

funding to pursue a program consistent with the preferred alternative, with NNSA 

planning to promulgate a Record of Decision in 2008. 

The FY 2009 budget request of $6.6 billion for Weapons Activities includes programs to meet the immediate national security requirements of the stockpile, including stockpile surveillance, annual assessment, life extension programs, and warhead dismantlement. The campaigns are focused on long-term vitality in science and 

engineering, and on R&D supporting current and future stockpile stewardship and 

DoD requirements. Readiness in Technical Base and Facilities supports facilities 

and operations across the governmentowned, contractor-operated nuclear weapons 

complex. A number of these NNSA programs and facilities also support scientific research users from other elements of the Department, federal government, and the 

academic and industrial communities. 

Growth areas in the Weapons Activities appropriation include Cyber Security and 

Nuclear Weapons Incident Response. The Cyber Security activities increase to support a major five-year effort focused on revitalization, certification, accreditation and 

training across the NNSA complex. The Nuclear Weapons Incident Response program increases due to functional transfers of emergency management and 

counterterrorism-related activities. Defense Nuclear Security activities focus on 

maintaining and implementing security upgrades needed to address the DOE Design Basis Threat. A new Transformation Disposition program is proposed at $77.4 

million to begin to eliminate excess NNSA facilities in concert with transformation 

activities. 

The FY 2009 budget request for the Defense Nuclear Nonproliferation appropriation totals $1.2 billion. The appearance of a significant decrease is due to the final 

FY 2008 enacted appropriations that added about $480 million in funding above the 

President’s request to programs in this account. In addition, the Consolidated Appropriations Act, 2008, (P.L. 110-161) shifted the funding for the Mixed Oxide 

(MOX) Fuel Fabrication Facility to DOE’s Office of Nuclear Energy and funding for 

the related Pit Disassembly and Conversion Facility/Waste Solidification Building 

(PDCF/WSB) project to the Weapons Account. This shift represents over $600 million in funding that would have been requested within the Defense Nuclear Nonproliferation appropriation in FY 2009. These shifts do not change or diminish in 

any way the importance of these projects to the nation’s nuclear nonproliferation efforts, and in total, the funding commitment to DOE’s nonproliferation activities is 

$1.8 billion in FY 2009. The budget describes a shift in emphasis from work completed under the Bratislava agreement to additional Second Line of Defense sites, 

including Megaports, and continued expansion of nuclear and radiological material 

removal under the Global Threat Reduction Initiative. 

In FY 2009, NNSA’s nonproliferation programs will complete major activities in 

the Elimination of Weapons Grade Plutonium Production program, as well as complete upgrades associated with the agreement from the Bratislava Summit. Our 

focus shifts to sustainability support to Russian warhead and material sites with 

completed upgrades, and acceleration of projects to assist the Russian Federation 

and other partner countries in establishing the necessary infrastructure to sustain 

effective material control operations. The budget request also provides for the installation of radiation detection equipment at an additional 49 foreign sites in countries 

and at 9 additional Megaports, for a total of 32 ports completed. 

The FY 2009 request also supports research and development on detection technology, and a new Next Generation Safeguards Initiative (NGSI), which aims to 

strengthen international safeguards and revitalize the U.S. technical base. The 

budget request supports continued significant expansion of nuclear and radiological 

material removal under the Global Threat Reduction Initiative; and initiates support of disablement, dismantlement, and verification of nuclear programs in North 

Korea. 

NNSA continues to support the U.S. Navy’s nuclear propulsion systems. The FY 

2009 request for Naval Reactors of $828 million is an increase of about 6.9 percent 

over the FY 2008 appropriation. These programs ensure the safe and reliable operation of reactor plants in nuclear-powered submarines and aircraft carriers, and fulfill the Navy’s requirements for new nuclear propulsion plants that meet future requirements. 

PROTECTING THE ENVIRONMENT BY PROVIDING RESPONSIBLE SOLUTIONS TO THE

ENVIRONMENTAL LEGACY OF NUCLEAR WEAPONS PRODUCTION

The federal government has the dual responsibilities of addressing the nuclear 

weapons production legacy of our past and providing the necessary environmental 

infrastructure for today that will ensure a clean, safe and healthy environment for 

16 

future generations. As such, the Department is committed to strategic acquisitions 

for long-term waste treatment projects and the implementation of sound project 

management principles to meet our long-term cleanup commitments. In FY 2009, 

a total of $6.2 billion is dedicated to supporting three key pillars that set the framework for the Department to reach these goals. The first pillar is to continue the environmental cleanup ($5.5 billion) of contaminated Cold War sites across the country. The second pillar is to continue to provide long-term stewardship and to carry 

out our responsibilities ($186 million) to our former contractor workforce. The third 

pillar completes the framework by working to construct a permanent nuclear waste 

repository at Yucca Mountain ($494.7 million) to address long-term nuclear waste 

disposal and to defend the License Application that we will submit in 2008 to the 

Nuclear Regulatory Commission for authorization to construct the repository. Secretary Bodman’s core principle of safe operations throughout the Department will 

be dynamically applied within this framework. 

To deliver on the Department’s obligations stemming from 50 years of nuclear research and weapons production during the Cold War, the Environmental Management program (EM) continues to focus its resources on those activities that will 

yield the greatest risk reductions, with safety as the utmost priority. To achieve a 

balance of risk reduction and environmental cleanup, the FY 2009 request of $5.5 

billion supports the following activities, in priority order: 

• Stabilizing radioactive tank waste in preparation for treatment (about 34 percent of the FY 2009 request); • Storing and safeguarding nuclear materials and spent nuclear fuel (about 20 

percent of the FY 2009 request); • Disposing of transuranic, low-level and other solid wastes (about 14 percent of 

the FY 2009 request); and • Remediating major areas of our sites and decontaminating and decommissioning excess facilities (about 23 percent of the FY 2009 request). 

The Administration recognizes that EM’s FY 2009 budget request of $5.528 billion 

is based on, and would implement, an environmental management approach under 

which the Department would not meet some of the milestones and obligations contained in all of the environmental agreements that have been negotiated over many 

years with regulators. It is also important to recognize that some upcoming milestones will be missed regardless of the approach that is chosen and its associated 

level of funding. Moreover, some of the relevant agreements were negotiated many 

years ago, with incomplete knowledge by any of the parties of the technical complexity and magnitude of costs that would be involved in attempting to meet the 

requirements. This incomplete knowledge, coupled with other issues including contractor performance, overly optimistic planning assumptions, and emerging technical barriers, also have impeded the Department in meeting all milestones and obligations contained in the environmental compliance agreements. 

In planning its environmental cleanup efforts and developing the budget for those 

activities, the Department seeks to focus on work that will produce the greatest environmental benefit and the largest amount of risk reduction. The Department 

strongly believes that setting priorities and establishing work plans in this way is 

the most effective use of taxpayer funds and will have the greatest benefit, at the 

earliest possible time, to the largest number of people. In determining these priorities, the Department works closely with federal and state regulators, and will seek 

the cooperation of those entities in helping evaluate needs and focus work on the 

highest environmental priorities based on current knowledge, particularly where 

doing so necessitates modification of cleanup milestones embodied in prior agreements with DOE. 

In FY 2009, EM is aggressively pursuing the consolidation and disposition of surplus plutonium and other special nuclear materials to enhance national security and 

to minimize the storage risks and costs associated with these materials. In addition, 

EM continues to make significant progress on the construction and operation of 

waste treatment and immobilization facilities across the complex. The budget continues shipments of remote-handled transuranic waste to the Waste Isolation Pilot 

Plant. 

The EM program has made great strides in achieving cleanup results. Since 2001, 

EM has cleaned up and closed 14 sites, including three former weapons production 

sites—Rocky Flats and Fernald, with Mound to be completed in FY 2008,—as part 

of its riskreduction cleanup strategy. In the fall of 2007, DOE transferred nearly 

4,000 acres of its former Rocky Flats nuclear weapons production site to the Department of Interior’s U.S. Fish and Wildlife Service for use as a National Wildlife Refuge. Additionally, the Rocky Flats Cleanup Team received the 2007 Service to America Medal for Science and Environment for completing the first successful cleanup 

17 

of a former nuclear weapons facility. In 2007, DOE’s Waste Isolation Pilot Plant in 

New Mexico celebrated its 6000th safely received shipment, reached a milestone for 

disposal of over 50,000 cubic meters of waste and began disposing of remote-handled 

transuranic waste. DOE’s Closure Project at Fernald, a 900-acre former uranium 

processing facility located in southwest Ohio—was named the 2007 Project of the 

Year by the Project Management Institute. 

Recognizing that cleanup completion dates at the majority of EM sites extend beyond 2013, EM is working to improve project and program management in a number of areas. EM is strengthening its project baselines, verifying the reasonableness 

of scope, cost and schedule of all environmental projects. These baselines will provide the basis for conducting credible analyses to better assess existing priorities 

and identify opportunities to accelerate cleanup work. Working collaboratively with 

the sites, EM is also continuing to seek aggressive but achievable strategies for accelerating cleanup of discrete sites or segments of work. In addition, functional and 

cross-site activities such as elimination of specific groundwater contaminants, waste 

or material processing campaigns, or achievement of interim or final end-states are 

being evaluated. Developing robust life-cycle planning capabilities, realistic nearterm baselines, as well as a focused technology program, a best-in-class project management system, an acquisition strategy that promotes performance and efficiency, 

and a proactive human capital plan allows EM to build a reliable, high-performing 

organization that will continue to advance risk reduction and cleanup across all EM 

sites. 

After the Environmental Management program completes cleanup and closure of 

sites that no longer have an ongoing DOE mission, post closure stewardship activities are transferred to the Office of Legacy Management (LM). Post closure stewardship includes long-term surveillance and maintenance activities such as groundwater monitoring, disposal cell maintenance, records management, and management 

of natural resources at sites where active remediation has been completed. At some 

sites the program includes management and administration of pension and benefit 

continuity for contractor retirees. 

Over the last 50 years, our country has benefited greatly from nuclear energy and 

the power of the atom. We need to ensure a strong and diversified energy mix to 

fuel our nation’s economy, and nuclear power is an important component of that 

mix. Currently more than 50,000 metric tons of spent nuclear fuel is located at over 

100 above-ground sites in 39 states, and every year reactors in the United States 

produce approximately 2,000 additional metric tons of additional spent fuel. In order 

to ensure the future viability of our nuclear generating capacity, we need a safe, 

permanent, geologic repository for spent nuclear fuel (SNF) and high-level nuclear 

waste (HLW) at Yucca Mountain. The FY 2009 budget of $494.7 million sets us on 

the path to meet that goal. The funding will support continued development of a 

repository including: 

• Robustly defending the License Application (LA) that we plan to submit to the 

Nuclear Regulatory Commission in 2008; 

• Progression of preliminary designs for facilities required for the receipt of SNF 

and HLW; 

• Continuing essential interactions with state, local, and tribal governments needed to support national transportation planning; 

• Completing the horizontal layout of the Right-of-Way application for the Nevada 

Rail Line; 

• Enhancing the design, staffing, and training of the OCRWM organization so 

that it has the skills and culture to design, license, and manage the construction and operation of the Yucca Mountain Project with safety, quality, and cost 

effectiveness; 

• Addressing the federal government’s mounting liability associated with unmet 

contractual obligations to move SNF from commercial nuclear plant sites; and 

• Planning a compliant and well-integrated safeguards and security, safety, and 

emergency management program for the disposal, transportation, and management of SNF and HLW. 

Designing, licensing and constructing a permanent geologic repository for spent 

nuclear fuel and high level waste will help resolve the challenge of safe disposal of 

these materials and make construction of new nuclear power plants more feasible, 

helping to expand our energy options and secure our economic future. In addition, 

a repository is necessary to support nuclear nonproliferation goals, contributing to 

national security objectives. 

In late 2006, the Department announced its ‘‘best-achievable schedule’’ to initiate 

repository operations was in 2017. The opening date of 2017 was predicated upon 

enactment of pending legislation and was developed without regard to budget conVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
18 

straints. Given the funding levels in FY 2007 and FY 2008, the ‘‘best-achievable 

schedule’’ of 2017 for the initial operating capability date is no longer possible. 

There is an immediate and strong need to address the funding of the repository construction program now for FY 2009 and beyond. To ensure program success it is 

critical that the Administration’s legislative proposal, the Nuclear Fuel Management 

and Disposal Act, be enacted to provide stability, clarity, and predictability to the 

Yucca Mountain repository project. Without funding reform, development of a credible schedule for the program is not possible. 

ENABLING THE MISSION THROUGH SOUND MANAGEMENT

The Department of Energy is committed to continuing the transformation of its 

management culture and increasing its focus on results. The Department has continued its efforts to improve in key functional areas and is using its strategic plan 

as the roadmap to instill management excellence. 

The Department’s human capital management efforts are focused on an integrated approach that ensures human capital programs and policies are linked to the 

Department’s missions, strategies, and strategic goals, while providing for continuous improvement in efficiency and effectiveness. The Department has revised its 

human capital management strategic plan to address future organizational needs, 

workforce size, skill gaps, performance management systems and diversity. In FY 

2009, the Department will implement key components of this strategic plan, especially critical efforts to ensure the Department’s workforce has the necessary skills 

to carry out its critical mission. To accomplish this goal, the Department will continue to implement strategies to attract, motivate and retain a highly skilled and 

diverse workforce to meet the future needs of the nation in such vital areas as scientific discovery and innovation. 

To continue to improve the Department’s stewardship of taxpayer dollars, the Department will continue to issue audited financial statements in an accelerated timeframe and provide assurance that the Department’s financial management meets 

the highest standards of integrity. The Department’s fiscal year 2007 financial 

statements were reviewed by independent auditors and received an unqualified 

‘‘clean’’ opinion. This was made possible by implementing an aggressive plan to mitigate and remediate a number of financial management challenges that were identified by the Department and its independent auditors. The Department in FY 2009 

will continue its effort to build and improve its integrated business management 

system, I-MANAGE, with the deployment of budget execution and formulation modules. 

The Department continues to make strides in improving performance. The Department and OMB have worked collaboratively to complete a Program Assessment 

Rating Tool (PART) review for 51 of the Department’s 56 programs (91 percent). 

Since 2002, the Department’s average PART score has steadily improved from Adequate to Moderately Effective. The Department is also leading the government in 

the number of Effective and Moderately Effective programs. 

In FY 2007, the Department improved the quality of its performance measures. 

This was accomplished by evaluating 30 percent of the Department’s FY 2008 performance measures against a standard set of criteria. This analysis identified a need 

for the Department to improve some of its performance measures to make them 

more outcome focused and trendable. 

In FY 2008, DOE will work with OMB to improve the quality of PART performance and efficiency goals. This initiative will support implementation of Executive 

Order 13450, Improving Government Program Performance. The quality review will 

result in improved goals, more consistency between performance information in the 

PART and the budget submission, and improved performance measures. 

To improve financial performance in project management, the Department enhanced the use of Earned Value Management (EVM) techniques that objectively 

track physical accomplishment of work and provide early warning of performance 

problems. A certification process was instituted for contractors’ EVM systems to improve the definition of project scope, communicate objective progress to stakeholders 

and keep project teams focused on achieving progress. Currently, 70 percent of the 

Department’s capital asset projects have certified EVM systems. In FY 2009, the 

Department will continue toward our goal of ensuring all projects have certified systems which will make projects far more likely to stay within planned cost and 

schedule. 

The Department continues to strengthen information technology management by 

consistent execution of robust IT Capital Planning and Investment Control oversight 

and reporting processes designed to ensure successful investment performance, including the use of EVM Systems as appropriate, and the remediation of poorly perVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
19 

forming investments. Through the establishment and use of an Enterprise Architecture that aligns to the Federal Enterprise Architecture, DOE has ensured that all 

IT investments follow a comprehensive Modernization Roadmap. 

The Department continues to take significant actions to improve its cyber security 

posture by implementing its Cyber Security Revitalization Plan to address longstanding, systemic weaknesses in DOE’s information and information systems. Specifically, the Department seeks to ensure that 100 percent of operational information technology systems are certified and accredited as secure and that the Department’s Inspector General has rated the certification and accreditation process as 

‘‘satisfactory.’’ Additional steps will be taken to ensure that electronic classified and 

personally identifiable information are secure. 

To manage the Department’s large real property portfolio requires reliable data. 

The Department has improved its Facility Information Management System and 

satisfied the Federal Real Property Council’s goal of 100 percent reporting of all 

data elements. Further, the Department implemented a statistical validation program to ensure the integrity of real property data and better support real property 

decision-making. To make continuous improvements, the Department will invest in 

its infrastructure to reduce overall facility square footage, improve energy efficiency 

and sustainability, and implement an active asset management plan to align resource needs with key Departmental goals. 

CONCLUSION

I appreciate the opportunity to appear before you to present the FY 2009 budget 

proposal for the Department of Energy. I will be happy to take any questions that 

members of the Committee may have. 

The CHAIRMAN. Thank you very much. Let me start with a couple of questions. This issue of funding on weatherization, I believe 

I’m correct that the Administration’s budget that was submitted 

calls for zero funding for continuation of that program. 

We received a report that McKenzie and Company prepared in 

December which tried to look at what the concrete steps were that 

could be taken to reduce greenhouse gas emissions. They looked at 

250 different opportunities to reduce or prevent greenhouse gas 

emissions and tried to list those in terms of which were the most 

cost effective, the least cost for the most benefit. Building insulation came out first on their chart of things that should be done to 

reduce greenhouse gas emissions and the only significant effort 

we’ve got at the Federal level to promote this building insulation 

or the, sort of, main effort is the Weatherization Program. 

In light of that, how is the Administration reaching the conclusion that we should eliminate the program? 

Secretary BODMAN. Mr. Chairman, this program resides in the 

office that we call EERE, Energy Efficiency and Renewable Energy. 

We’ve looked very hard at the array of activities that they undertake, particularly looking hard at the questions related to building 

codes with respect to the construction of new and different kinds 

of buildings. That is something that we have taken steps on in our 

own case at the NREL Operation out in Colorado. But more importantly we have worked hard to establish tighter and more effective 

building codes throughout the country. 

When we look at the effectiveness of the various programs and 

simply the Weatherization Program does not, in my judgment, 

stack up with the other things that they do. That is why it was zeroed out. It was simply a matter in tight budgets of looking hard 

at the array of things that are done in this particular office and 

it is not something that made it. 

20 

The CHAIRMAN. So your view is McKenzie and Company was 

wrong in identifying weatherization or building insulation as the 

highest payoff? 

Secretary BODMAN. No, I saw this when I walked in this morning. So, I have not studied it. But I would tell you that the design 

and construction of buildings so that they can be insulated more 

effectively and utilize the sunshine that we have with reflecting 

glasses and so forth, all of that is, I think, what is included in 

building insulation. It would be inappropriate, I think, to describe 

the building insulation as something that the Weatherization Program does in its complete program. 

The CHAIRMAN. Let me ask on this issue of improved efficiency 

building codes. We had a provision that we enacted in the 2005 legislation that authorized the establishment of a grant program to 

help states adopt the latest energy efficiency building codes, to improve code compliance. I can’t find anywhere in the budget where 

you’re proposing to fund that. Am I missing it there somewhere? 

Secretary BODMAN. No, I think we have small amounts that are 

in the EERE budget that are intended to help the states, but it’s 

a few million dollars. It’s not hundreds of millions of dollars. 

The CHAIRMAN. So there’s no real grant program that’s been established? 

Secretary BODMAN. No, sir—— 

The CHAIRMAN. What should Congress do since we’ve already authorized that. I guess we go through the appropriations process, if 

we want to see grants provided of that type we need to add funding 

to the appropriations. 

Secretary BODMAN. I think that’s right. I think it’s fair to say 

that the Administration looked at that and concluded that it was 

not something that was worthy of and competed effectively in looking at solar energy, wind energy, biofuels, all the other things that 

go on in EERE’s office. 

The CHAIRMAN. In the Office of Science one thing I would commend you on is I understand your proposal is to establish an applied hybrid vehicles program there and you’re requesting 33 million dollars for that in the Office of Science. I was told 3 years ago 

that you were intending to initiate a similar Office of Science Program on applied solid State lighting. I can’t find any evidence that 

that has been proposed for funding or has happened. Do you know 

what’s been done there or what you’re proposing to do there? 

Secretary BODMAN. I think it’s in there. We do have efforts that 

are underway. I don’t recall. I’d be happy to get you the numbers 

for the record, sir, but I do believe that it’s there. 

The CHAIRMAN. I would appreciate that. 

Secretary BODMAN. All right. 

[The information referred to follows:] 

In the Spring of 2006, we held a workshop on basic research needs for solid state 

lighting. Had the FY 2008 appropriation supported the requested level, we would 

have been able to initiate solid state lighting research during FY 2008; however, it 

did not. The FY 2009 budget request proposed Energy Frontier Research Centers 

which will bring together teams of investigators to address the grand challenges in 

basic research, asidentified in several grand challenges workshops, and could include both solid state lighting and electrical energy storage. These new activities 

will complement the core research programs in semiconductor physics, 

nanostructured materials synthesis and design, and fundamental light-matter interVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
21 

actions, which provide the underpinning knowledge base for a broad range of energy 

utilization and conversion applications. 

The CHAIRMAN. One other issue I wanted to ask about that’s not 

directly in your budget, but we passed as part of the 2005 legislation, various tax provisions to encourage development of alternative 

energy, to encourage more efficient use of energy and the production tax credit, section 45, the investment tax credit for solar energy. Those are scheduled to expire at the end of this year. There’s 

nothing in the budget, the overall budget, that the Administration 

that proposes to extend those. They’re all scheduled to expire before this Administration leaves office. 

I asked Secretary Paulson yesterday at our hearing in the Finance Committee if that was an indication that the Administration 

didn’t want those tax provisions extended. He said that it was not, 

but that he was not an expert on energy and I should ask you as 

to what the Administration’s position was on that subject. It struck 

me that those tax provisions were some of the most useful things 

we did in the 2005 bill to actually promote development of alternative energy. I think it would be unfortunate if we were to allow 

them to expire. But I would be interested in your view. 

Secretary BODMAN. No, this is not meant to indicate, you know, 

either support or opposition to the extension of the tax credits. I 

think it’s a question that I expected to be asked and we would be 

happy to work with you on that and to make a determination as 

to whether or not and if so, how long and how much the subsidies 

should be. 

The CHAIRMAN. Senator Domenici. 

Senator DOMENICI. Thank you very much, Senator Bingaman. 

Mr. Secretary, I think I indicated how happy I was after a couple 

of years of not being so happy when we finally got your office loan 

guarantees and you have experts there. It seems to me you’re up 

and at ‘em and that you’ve—we’ve got authorization for you for a 

very substantial amount, 18 plus billion for nuclear. I don’t remember the number for—— 

Secretary BODMAN. I think it’s two for the enrichment of the nonutility part of it and then there is an extent to the total is some, 

but it’s an additional 18 billion dollars or 18 1⁄2 billion dollars for 

presumably largely renewable energy. 

Senator DOMENICI. Right. I guess I’m asking do you really anticipate that the insurance of a loan guarantee before the end of this 

year could happen? 

Secretary BODMAN. Yes, sir. 

Senator DOMENICI. That’s terrific. 

Secretary BODMAN. I believe that it could. We have had 16 of the 

over 100 applications that were deemed to be worthy of further 

study. We have now met and completed meeting with all 16 companies and then we have asked them to deliver to us, which we expect to be here in the next couple of months, or that kind of timeframe, their formal applications. I would think that we would then 

go to work on them and I would expect that we would be in a position to issue loan guarantees, I hope, before the end of this year. 

Senator DOMENICI. Mr. Secretary, when we did this we were 

quite surprised to find the House with the interest that they had, 

but they wanted a very large amount of dollars for renewable, nonVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
22 

nuclear which we hadn’t looked at the big, big dollars. But we now 

have big dollars available for the non-nuclear renewables. What 

might that be as you see it? 

Secretary BODMAN. First of all, the Energy Policy Act of 2005 requires us to notify the appropriators of both the Senate and the 

House, I believe, of our intention to undertake a loan guarantee solicitation. I would expect that that notice would be made to you all 

sometime in the next couple of months. That means that this summer we would then there remains, I think, a 45 day period after 

we notify Congress. After that then we are free to proceed with the 

solicitation. 

I would expect that we would probably refer to both nuclear as 

well as renewable energy and undertake them both at the same 

time. It may not be that we can process them. Renewable energy 

projects tend to be smaller. They tend to be less expensive and 

therefore the care with which we need to study it and look at it 

would be greater, I would believe. So it may be that the renewable 

ones would get done faster, but we would therefore still be undertaking and looking hard at the nuclear side. 

Senator DOMENICI. I have one last question and then I’ll stick 

around and go a second round if the Chairman has one. Increasing 

the science investment in the NNSA Laboratories, I’d like to ask 

you, Mr. Secretary. You have spoken frequently about the need to 

support the investment in science to build science capabilities at 

Los Alamos. 

I believe it’s critically important that we initiate the process including providing sufficient funding for the refurbishment of the 

Los Alamos linear accelerator. You’re aware of what it would lead 

to? 

Secretary BODMAN. Yes. 

Senator DOMENICI. It could lead to a completely new process ending up at Los Alamos. This facility is badly needed and in need of 

an upgrade to sustain the laboratory scientific capability into the 

future. Since a new management team has been in place I’ve endorsed the laboratory and encouraged them to develop a new 

science plan. 

It is a conclusion of the laboratory leadership and cooperation 

with the Department that the lab should focus on building upon 

their expertise and materials under extreme conditions. LANL can 

use the refurbished accelerator to demonstrate and expand this capability for both the defense mission as well as open scientific research, they have come up with a scientific facility known as 

MARIE, Matter-Radiation Interactions in Extremes. You’ve got to 

have MRIE because nobody could possibly use the others. 

The first step in this process of refurbishment is LANSCE. Get 

Lance up to speed. The President’s budget seems to say we want 

to do this by MARIE, but then it provides a miniscule amount of 

money to support the study of the upgrade. What does that mean 

to you? 

Secretary BODMAN. I think it means that there are other ways 

of funding it. Within the Science Office there is a new program. I 

think that we’ve asked for 100 million dollars for the program that 

would be run on a competitive basis, but I would think that might 

23 

be a reasonable source of supply of funding for the work on 

MARIE. 

I don’t think there is any question that we’re serious about it. I’m 

pleased to be able to say that to you. 

Senator DOMENICI. Thank you very much. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Dorgan. 

Senator DORGAN. Mr. Chairman, thank you and Mr. Secretary, 

thank you for being here. I have a lot to ask you, but I won’t have 

the time with 5 minutes. I want to talk with you at some point 

about Future Gen and where we’re headed and the urgency of finding ways to continue to use coal without releasing CO22 into the atmosphere. If it’s not Future Gen what is the timing and the urgency to get this done. 

So there are a lot of issues and I will with—— 

Secretary BODMAN. In a quick word, sir, it is carbon capture and 

sequestration, I believe. But that’s the answer and that’s what the 

re-management of Future Gen is intended to do, to do it in multiple sites and so that in a simple way that’s the answer to your 

query. 

Senator DORGAN. On the appropriations side, Senator Domenici 

and I, Chair and Ranking Member, will, I assume, have the opportunity to ask at greater length on those issues. 

Secretary BODMAN. Right. 

Senator DORGAN. Other appropriations issues. I want to talk to 

you about SPR. I’ll be introducing today some bipartisan legislation 

that says let’s take a time out in putting oil underground. Let me 

just describe my strong feelings about this issue and have you respond to it. 

SPR is almost 97 percent full. Our international requirements 

are 90 days of strategic stocks. Your own Web site says that there’s 

118 days of public and private stocks for import protection in this 

country. That’s from your Web site. 

Now when oil is 90 and 100 dollars a barrel and the Department 

is taking 50,000 barrels a day and much of it sweet, light crude in 

royalty in kind payments and then sticking it underground. I just 

think it defies all common sense. You’ve got a half a billion dollars 

down at the Department from the exchange of oil from Katrina 

back in September and October. You’re not using that half billion 

dollars. You could to go out and buy in the market to fill SPR, but 

you’re not doing it. 

I understand why you’re not doing it. Why would you do this 

when prices are bobbing around 90 and 100 dollars a barrel? Yet 

when you take in the royalty-in-kind oil from the Gulf what you’re 

doing is just sticking that underground. 

Now this committee has testimony from Mr. Vergler who said 

this, let me just read it quickly. The rise in light, sweet crude 

prices to almost 100 dollars a barrel in November came about in 

part because the Department of Energy has been removing a significant share of the daily volume of this type of crude from the 

market for storage in SPR. The volumes have amounted to as much 

as three-tenths of a percent of the global supply of sweet, light 

crude available. The DOE’s action may have added as much as 10 

24 

percent to light, sweet crude price given the low estimated price 

elasticity of that kind of oil. 

So my question is with prices 90, 100 dollars a barrel, why on 

earth would we reduce the supply of oil available in the marketplace which clearly has the effect of driving up prices. Your position seems to be let’s top it off. My position is time out. 

Now I don’t know which is going to prevail, but I’m going to introduce bipartisan legislation today to say stop it. There’s an appropriate time to do this, but we have testimony before this committee 

saying your actions are driving up the price of gasoline. It’s just intuitive to me that we ought not to be doing this when prices are 

at their record highs. So Mr. Secretary, respond please. 

Secretary BODMAN. As I visited with you before the hearing 

started, sir, we are required to undertake a study before we initiate 

either the royalty in kind or the use of cash to purchase oil for the 

SPR. I would respectfully disagree with the testimony that you just 

cited. I’m an engineer and not an economist and that apparently 

this gentleman is an economist. But I would respectfully disagree 

with his conclusions. They certainly differ from the results of our 

work which is ongoing as we speak. 

We’re re-running it. We do this on an annual basis looking hard 

at whether the royalty in kind acquisition of oil would affect the 

price in any meaningful way. The conclusion is that it does not. 

Senator DORGAN. It clearly affects the price. You’re just saying 

it doesn’t affect the price in a meaningful way. 

Secretary BODMAN. It does not affect the price to any meaningful 

degree. It is less than one tenth of 1 percent of all of the oil that 

is used in the world everyday. We’re now using about 70,000 barrels a day. We use about 85 million barrels a day of oil. 

So it is simply that. It is the work that is done. We have by our 

accounts 58 days. That does not count the privately owned inventories, but I believe that we are correct in being conservative and 

looking just at the government owned inventories. That’s the reason that we do it. 

Senator DORGAN. Mr. Secretary—— 

Secretary BODMAN. There is room in my judgment for different 

opinions on this and that’s our view. 

Senator DORGAN. Mr. Secretary it’s not being conservative to go 

out and buy oil at the highest prices at this point. My only point 

is this. I used to teach some economics in college and I understand 

that you can make the point that there’s not a meaningful increase, 

but you can’t make the point that there’s not an impact on the 

price if you reduce supply. 

My point is simply that the sweet, light crude which has been 

referenced to us as much more important and different market. 

You take that portion of sweet, light crude off the market, 50,000 

barrels a day. The point is it does affect the price and you know, 

I mean, who’s right? 

Why not be cautious on the side of helping customers and consumers at this point who are out there driving up to the pumps 

and wonder why the Department of Energy’s taking 50,000 barrels 

of oil and sticking it underground. You’re not doing that with your 

own money that you got a half a billion dollars. I assume if you 

thought if it was a good idea to keep doing that you’d spend your 

25 

half billion dollars, but you know it’s not a good idea to take it off 

the market at a hundred dollars a barrel and stick it underground, 

so—— 

Secretary BODMAN. Senator, I just would say to you that the theory of your criticism and your comments are that these are very 

high prices. There is a reason that markets are and that people are 

buying oil at 88, 89 dollars a barrel. They think it’s going higher 

and so that’s what a market means. 

Senator DORGAN. Secretary, sure they do. We’ve got investment 

bankers and hedge funds buying. We have got, for the first time 

in history, investment bankers buying storage to keep oil off the 

market precisely because they believe they’re going to make money. 

The fact is every bubble bursts and this bubble will burst as well. 

I’ve gone far off field here but I do hope we can have continued 

discussions about whether we’ll end up with more oil on top. 

Secretary BODMAN. I’d be happy to talk about it, sir. Anytime. 

The CHAIRMAN. Senator Barrasso. 

Senator BARRASSO. Thank you, Mr. Chairman. I’d like to follow 

up a little bit on this one-tenth of 1 percent or less than one-tenth 

of 1 percent—maybe an insignificant or unmeaningful amount. I 

see that of this budget of 25 billion dollars less than one-tenth of 

1 percent or 22 million is going to be expended in Wyoming, in my 

home State. To me that is an insignificant amount in a State where 

we are right at the top in terms of coal, in terms of oil, in terms 

of natural gas, uranium, renewables, wind power and plus your 

budget would recommend a 36 percent reduction in expenditures in 

Wyoming and that is very concerning to the people of Wyoming. 

Specifically in a State where we have enormous energy resources 

and enormous amounts of coal I believe that the Department is not 

moving as expeditiously as it should with respect to clean coal research. Now, I notice that Future Gen was brought up and perhaps 

some time for additional questioning. Last year you said the foundation of the Department’s clean coal research program is the Future Gen project. Could you explain to me what has changed and 

if you’re going to be submitting a reprogramming request for perhaps a restructured Future Gen? 

Secretary BODMAN. Yes, I think we have attempted to do that 

Senator. I think the goal of the revised Future Gen project should 

be the carbon capture and sequestration program. Without that, 

the use of coal in at least the near term, for the next five to 10 

years, is going to be in question. 

So we have got to demonstrate that and we’ve got to demonstrate 

it in a variety of ways. So we are working very hard, everything 

from the Office of Science to the Fossil Fuel Office which has a programming war. I’ve just been handed a note, so I’m now trying to 

read and talk at the same time. 

Senator BARRASSO. Take your time, Mr. Secretary. 

Secretary BODMAN. No, no. But our goal is to try to sequester the 

carbon dioxide and to undertake it in a variety of ways and so that 

we can do it in multiple sites. That’s really what the goal is going 

to be. I am hopeful that we will be programming that. 

I have not, I guess—the note that was handed to me says that 

we have, that in terms of reprogramming, we have not decided 

whether a formal reprogramming is going to be required or not and 

26 

so that we’re not using that term as such. But I just wanted to say 

that I think that the heart and soul of using coal which we are 

great believers in, is going to be using carbon capture and sequestration and that’s exactly what we’re trying to accomplish. 

Senator BARRASSO. I suggest that perhaps Montana, Colorado, 

North Dakota or Wyoming could be helpful to you as you look to 

develop some of those projects. Will you today commit to some 

progress being made during this Administration on this specific 

area which is so crucial to our future? 

Secretary BODMAN. To? 

Senator BARRASSO. Carbon capture and sequestration. 

Secretary BODMAN. I will commit to you that we are very motivated to try to look very hard at this. We have now undertaken a 

request for information coming from the industry, from companies, 

largely utilities that may have an interest in an integrated gasification and combined cycle process. Then at the same time whereby 

we would then fund the establishment of, I think it’s a million tons 

a year of carbon capture and sequestration for that unit. That 

would be our funding. So I can easily commit to you that we are 

heavily motivated and we will work very hard on it. 

Senator BARRASSO. We certainly believe that clean coal research 

is going to be crucial to the future needs of our Nation and the 

world, and we need to be a leader in that, Mr. Secretary. 

Secretary BODMAN. Yes, sir. 

Senator BARRASSO. Thank you. 

Two other quick issues, one is the Western Research Institute 

which has a relationship with both the University of Wyoming and 

the University of North Dakota. That has been zeroed out in its appropriation line. 

I think these two locations have been a real success story in energy innovation in terms of research, in terms of leveraging private 

funds, and in terms of coming up with patents and technologies. 

I’m sort of curious why the Department of Energy would decide to 

walk away from this endeavor. 

Secretary BODMAN. I can’t really respond. I’d be happy to respond for the record. I’ve got books full of things that I’ve been informed about, but that isn’t one of them. 

[The information referred to follows:] 

The Western Research Institute (WRI) located in Laramie, Wyoming is a de-federalized institution that has been part of the Cooperative R&D budget line in the 

Fossil Energy R&D Program since 1983. The Coopertive R&D Program supports activities of Federal, Industry and research institute endeavors and partnerships. A 

new solicitation was issued in FY 2007 and WRI was selected along with the University of North Dakota Energy and Environmental Research Center (UNDEERC) 

in December 2007 for the continuation of their cooperative agreement for the next 

five years with a requirement for private sector cost sharing of 20%. 

The Department did not request any funding for this program because we believe 

that WRI and UNDEERC can apply for funding on a competitive basis for awards 

from various programs in Fossil Energy and the rest of DOE. The centers perform 

valuable research; however, the taxpayers will benefit more if these institutions 

were selected for awards on a competitive basis. 

Senator BARRASSO. The other is a testing site called the Rocky 

Mountain Oil Testing Site. 

Secretary BODMAN. That one I know about. 

Senator BARRASSO. There’s a producing component as well as a 

testing component. 

27 

Secretary BODMAN. Right. 

Senator BARRASSO. I toured there within the last month. They do 

remarkable work. They’ve been very significant from both a research as well as a production standpoint and I’d commend you for 

keeping that, at least at your level, and would recommend that you 

continue to support such a productive program. 

Secretary BODMAN. Thank you. 

Senator BARRASSO. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Tester. 

Senator TESTER. Thank you, Mr. Chairman. I want to thank you 

for being here today, Sam. 

Secretary BODMAN. Yes. 

Senator TESTER. I want to step back a little bit just to clarify 

what you said that deals with the weatherization assistance grants. 

What I thought I heard you say to the chairman was that in the 

overall budget there wasn’t the cost benefits to that program to 

even flat line the funding and that’s why you took—that’s why it 

was reduced by some 220 million dollars. 

Secretary BODMAN. That’s correct, sir. 

Senator TESTER. That’s a bit confusing because I think this book 

is one that you guys put out, right? 

Secretary BODMAN. I don’t know. 

Senator TESTER. I think it is. It’s your energy budget request. It 

says in here that by 2030—— 

Secretary BODMAN. Oh, then we did put it out, yes. 

Senator TESTER. So this is your language not mine. By 2030 this 

program could provide cumulative consumer’s savings of 2.5 billion 

and roughly the same savings to electric power industry. Consumer 

savings would grow to more than 200 billion by mid century. Additionally if you want to talk about carbon sequestration and capture 

this will help eliminate that. Carbon savings could be 250 million 

metric tons more than 500 metric tons down the line. 

That tells me that you’re justifying this program here in your 

language. Yet you’re pulling the money out over here and—— 

Secretary BODMAN. All I can tell you is sir, I don’t have that document in front of me, but I can tell you that when we looked at 

the effectiveness and the financial returns from the efforts to 

weatherize homes they did not match up with the cost. I think the 

return on it was between five and 10 percent. That was viewed on 

our terms as being less than we could accomplish by working on 

zoning, working on energy star appliances, working in a variety of 

ways that that office does. 

Senator TESTER. Ok. I can just tell you that this is exactly the 

opposite of everything I’ve heard. The low hanging fruit in energy 

and energy security for this country, I’ve always read and I would 

frankly believe is conservation and efficiency. 

Secretary BODMAN. I agree with that. 

Senator TESTER. This tends—this seems to be pulling away from 

that heading in a different direction. But I think we’ve made the 

point. My only concern is I hope that this particular line item in 

the budget was put forth in good faith. I’m not assuming that. This 

is a good enough program with the legislature the Congress will 

put it back in. 

28 

Secretary BODMAN. Sir, it was done for the reasons that I mentioned. 

Senator TESTER. Ok. Thank you. It is my understanding that the 

Department of Energy is committed to funding several regional carbon sequestration partnerships, phase three partnerships, and if 

you’re not familiar with these let me know. I think there’s seven. 

Secretary BODMAN. That’s correct. 

Senator TESTER. That will be funded and I believe that’s still the 

intent, correct? 

Secretary BODMAN. That is correct. We have issued funding for 

four of the seven. 

Senator TESTER. When will the other three be funded? 

Secretary BODMAN. I don’t know. I think it’s going to be a question of and I’d be happy to give you more something more specific, 

but the question has been posed. 

Senator TESTER. Ok. 

Secretary BODMAN. How effective is going to be the scientific 

study of making sure that if you do put the carbon dioxide beneath 

the surface of the earth that it stays there? How do you instrument 

it? That’s the question. 

Senator TESTER. That absolutely is the question and I applaud 

the agency’s investment in this technology. As Senator Barrasso 

pointed out, it’s critically important if we’re going to have coal in 

the future. I think most people we talk to think that coal is going 

to be part of the energy portfolio for quite a while to come. 

So if you could get back to me and tell me there’s a project in 

Montana and Wyoming, Big Sky Sequestration Project and tell me 

when that will be funded. 

Secretary BODMAN. I’d be happy to do that. 

Senator TESTER. I would certainly appreciate it. 

Secretary BODMAN. Sure. 

[The information referred to follows:] 

DOE has made awards to four of the Regional Carbon Sequestration Partnerships 

(RCSP) for Phase III Large Volume Sequestration Testing. The remaining three 

Phase III projects are in the process of being negotiated. The negotiation process 

requires finalizing the technical scope of the project along with undertaking an evaluation and cost analysis of the proposed costs to verify their appropriateness. Independent cost verification is being undertaken by DOE to ensure the project costs are 

adequate prior to award. Independent technical review will be conducted at the end 

of March 2008. This technical review, conducted by an internationally renowned 

group of experts, will ensure that science plans are adequate. DOE is conducting 

reviews concurrently with negotiations and plans to award the remaining RCSP 

Phase III Projects when completed. The estimated time-frame for the remaining 

awards, including the Big Sky Regional Partnership is the summer of FY 2008. 

Senator TESTER. Just a side—I know that I’ve only got about 30 

seconds left—the Future Gen project is a little bit confusing to me. 

That is it was recently scrapped because, the information I got, it 

cost too much money. 

Secretary BODMAN. That’s right. 

Senator TESTER. Now we’re coming back with another program, 

another Future Gen program that has what, three or more. I think 

three facilities, right? 

Secretary BODMAN. We don’t know. 

Senator TESTER. This is going to add money to the budget now 

for this and it looks to me like last week it cost too much. Next 

week it looks like a good project so we’re shifting gears. That kind 

29 

of bothers me because particularly in energy policy we ought to be 

looking out 3 to 5, 10, 20, 50 years from now. So I don’t get that 

part. 

Secretary BODMAN. Let me try to explain it to you. That project 

was originally 950 million dollars. That’s what I was told when I 

came into this job. It was re-estimated at being a billion eight. 

That was last summer. 

It was at that point in time that I blew the whistle on the project 

and with the management of the companies that were involved 

here and said look, this meant that the government was going to 

have a billion three of funding that we were required to put up and 

they were going to have the remaining 500 or 400 million dollars. 

Senator TESTER. Who’s they? 

Secretary BODMAN. This is the called the Future Gen Alliance. 

It is a group of utilities, coal companies—— 

Senator TESTER. Ok. 

Secretary BODMAN [continuing]. That operate. It’s international. 

Senator TESTER. It’s the private sector. 

Secretary BODMAN. It’s the private sector and we asked them. I 

said look, we’re going to live with this billion three. We’ll do that 

and we will go to bat with OMB to try and get the money for it, 

but I want you to sign up for a different split. If the cost goes beyond the billion eight, I think the cost is going to go much higher. 

Senator TESTER. What did they say? 

Secretary BODMAN. Eventually they said they would do it, but 

they would fund it by being able to borrow against it and thereby 

increasing the risk of the, in my view, of the entire project. So, that 

is the reason that I felt, that it didn’t make sense to go forward. 

That is the reason that we have focused on trying to identify those 

utilities that have an interest in building an IGCC plant and that 

we would then fund the carbon capture and sequestration. 

We hope it will be a multiple of units. That is to say it would 

be three or four units. I don’t know that because I don’t know how 

much it’s going to cost. 

Senator TESTER. Ok. Thank you, Mr. Chairman. Thank you. 

The CHAIRMAN. Senator Craig. 

Senator CRAIG. Thank you very much, Mr. Chairman. Mr. Secretary, again welcome to the committee. I know this is your last 

time presenting a budget before this committee. 

Secretary BODMAN. Yes, sir. 

Senator CRAIG. So let me say at the onset how much I’ve appreciated working with you on a tremendous number of issues and I 

think the legacy that you’ve helped us establish through the Energy Policy Act of 2005 and the one we passed last year. The chairman, the ranking member and others that have participated in this 

is a positive one for our country. 

Secretary BODMAN. Thank you, sir. 

Senator CRAIG. I think history will recognize the sense of urgency that we’ve developed in the last decade on a need for new 

energy technologies, independence, all of those kinds of things that 

lead us where we are headed. 

Let me turn parochial though in my last time before the committee. In working with you over the next many months to solve 

some problems and look and recognize the future of the National 

30 

Lab in my State that is now the lead nuclear lab doing really some 

phenomenally positive things as many of our labs do for our country. I want to talk about our need to spend valuable dollars for revitalizing infrastructure, the R and D to support our Nation’s nuclear renaissance that is so important and what I believe in part 

is a waste. A waste of money as it relates to waste. 

Do you know the status and if not can you get back to me within 

a week regarding the request I made that the Legacy Waste liabilities currently under the INL responsibility be transferred to the 

ENM program this year. That helps us sort out the money so that 

money can flow to infrastructure while keeping our clean up on 

track on program. 

Secretary BODMAN. I don’t see how that is going to help the problem. We’ve got issues in Idaho with enough funding. I admit that. 

But I don’t know how moving money around within the Department. It’s all one budget. 

Senator CRAIG. We divided the contract out there. We’ve redirected, as you know, during your tenure and others to reshape 

that. Let me work with you in that arena. There are many who disagree with your assumption as it relates to how best to spend the 

money. 

Secretary BODMAN. I’d be happy to work with you, sir, under any 

circumstances. 

Senator CRAIG. The National Academy of Sciences report laid out 

a number of recommendations on how DOE working with the INL 

could fix the ailing infrastructure at the lab. How are these recommendations considered when compiling the FY2009 budget request? Were they used as a template of any kind? 

Secretary BODMAN. This is with respect to the two buildings that 

were to be? 

Senator CRAIG. That is certainly a part of it. 

Secretary BODMAN. That’s a part of it? They were looked at by 

the NNSA and their recommendations to me and to the deputy who 

did the work on the budget were that it was very expensive. That 

it was going to be a very expensive undertaking. That we had better uses for the money in Idaho. 

Senator CRAIG. Buildings 651 and 691 are the ones we are talking about in part. 

Secretary BODMAN. Right. 

Senator CRAIG. As it relates to upgrades needed for the special 

nuclear materials issues, the GNEP issues that are still on course, 

I think. 

Secretary BODMAN. Right. 

Senator CRAIG. My staff requested a briefing with NNSA on 

these upgrades and we are still waiting for a response. Are you 

aware of DOE NNSA’s intent at the time? Obviously you are by the 

recommendations that were made. 

Secretary BODMAN. Yes. 

Senator CRAIG. Is there a need for clarification from Congress on 

this issue? 

Secretary BODMAN. I think that we will apply for a reprogramming of the funds. I think there’s some 14 million dollars that were 

put in the budget in fiscal year 2008 and we will be asking for a 

reprogramming of those funds because it was viewed that neither 

31 

of the two buildings for which this money was intended made any 

sense, at least as we saw it. So, I would be happy to encourage you 

to encourage the NNSA to make sure that they meet with your 

staff. 

Senator CRAIG. Yes. Ok. I’d like to sit down with you on those 

at least to understand what you and your people are seeing that 

we’re not. 

Secretary BODMAN. All right, sir. I’d be happy to do it. 

Senator CRAIG. The Idaho Clean Up Project could well be the 

next Rocky Flats type success. We’re just on the verge of that opportunity. 

Secretary BODMAN. Yes. 

Senator CRAIG. What is the logic of reducing funding and delaying clean up when the end is in sight and the DOE can hang on 

their chalkboard another major clean up success? That’s my next 

question. 

Secretary BODMAN. We have within the Department, this has 

been a very—each year is a challenging budget year. We have a 

number of sites where we are not going to be able to meet milestones and legal agreements that we have signed on to because we 

simply don’t have the funds as we have looked at it and Idaho is 

one of them. Because the view is that we have other sites where 

there is much greater danger to the environment and much greater, much more serious problems. 

Therefore we have reduced the funding for Idaho. We’ve reduced 

it at Oak Ridge. We’ve reduced a number of places in order to focus 

on Hanford and on Savannah River and other sites. We’ve reduced 

it in part at Oak Ridge and increased the funding elsewhere at Oak 

Ridge. 

Senator CRAIG. Mr. Chairman, I know I’m out of time. One very 

quick followup. By your answer are you telling me that you’re 

going to miss milestones at Idaho this year by the reduced funding? 

Secretary BODMAN. I don’t know the answer to that. 

Senator CRAIG. Because if that’s happening or if that’s the intent 

of the budget process that you’re laying before us. 

Secretary BODMAN. Yes. 

Senator CRAIG. Then you’d better begin dialogs with the State in 

rapid succession. 

Secretary BODMAN. I think that we are. We have begun dialogs 

with all of the State governments of which where we will be falling 

short in terms of milestones. 

Senator CRAIG. Thank you. 

The CHAIRMAN. Senator Akaka. 

Senator AKAKA. Thank you very much, Mr. Chairman. I want to 

say good morning and hello to all here. 

Secretary BODMAN. Yes, sir. 

Senator AKAKA. I want to commend and thank Chairman Bingaman for all of his hard work throughout 2007 to ensure the passage 

of the Energy Independence and Security Act, and also thank 

Ranking Member Domenici for his efforts, as well. I want to welcome Secretary Bodman; and, thank you for the work you do—— 

Secretary BODMAN. Thank you, sir. 

Senator AKAKA [continuing]. For our country. I’m happy to see 

that you have brought some good news to our meeting today and 

32 

that there has been an overall growth in the Department of Energy 

budget. I’m pleased to see this overall increase as well as the increase in the budget for research and development of biofuels and 

geothermal technology. I’m so glad that you are focusing on global 

energy security in the future. 

Secretary, it is my understanding that you’ve increased the budget for biofuels R and D by 26.82 million dollars while reducing the 

budget for hydrogen fuel R and D by 64.84 million dollars. My 

question to you—is there a particular feedstock you’re pursuing 

more than others? Specifically I’m serious and curious about your 

research in the use of algae as a feedstock and how much progress 

has been made in this regard? 

Secretary BODMAN. With respect to algae, as it turns out, algae 

has the ability to manufacture a fuel that can be withdrawn from 

the algae merely by pressing it. That it is a diesel fuel. We are 

making, as you know, good progress on that. 

In addition, a lot of that is going on in the private sector. There 

is a lot of work going on both in what the government is working 

on as well as the private sector. 

Senator AKAKA. Since you are cutting your hydrogen fuel research moneys, are you currently taking any action in the area of 

methane hydrate research and exploring its potential as a fuel 

source in the future? 

Secretary BODMAN. No, we are not funding methane hydrates 

within the Department. That is being done in other parts of the 

government. NOAA being one I believe. So that it is something 

that, at least as we viewed it, methane and the production of natural gas with eight dollar natural gas which is today’s price, we 

think it’s difficult to warrant or to justify spending taxpayer money 

on the production of methane hydrate. 

Senator AKAKA. Secretary, I’m pleased to see that you’ve increased your funding for geothermal technology—— 

Secretary BODMAN. Yes, sir. 

Senator AKAKA.[continuing]. By 51.4 percent. As you know, we 

have a geothermal plant on the Big Island of Hawaii, which supplies about 20 percent of that island’s total electricity needs. There 

are other countries, such as Iceland, that have not only become energy independent largely because of geothermal, but have also 

turned it into a successful economic venture. Do you have plans to 

work collaboratively with other countries that have taken the lead 

in geothermal energy? If so, what are they? 

Secretary BODMAN. You know I don’t know the answer to that 

question. I do know that the work that we are doing on geothermal 

energy is intended to be in a new research direction that actually 

came out of MIT. The faculty up there wrote a report and recommended that a substantial increase in geothermal energy could 

be accomplished by this government by the, what they call enhanced geothermal systems. 

That means breaking up the rock. What they used to call 

fracking in the oil business. Breaking up the rock beneath the surface of the earth and thereby producing more steam and more energy. So, I do know that. That’s what motivated, I think it’s an increase of substantial sum, the 30 million dollars of funding for that 

we’ve asked for in this budget. 

33 

But in terms of what work we are doing with foreign governments, I don’t know our foreign companies. But I’d be happy to get 

back to you on that. 

[The information referred to follows:] 

In 1997, the Department of Energy was an original signatory of the Geothermal 

Implementing Agreement, administered under the auspices of the International Energy Agency. Today, the Department is active in the Agreement, which includes 12 

countries and 3 private companies working in cooperation to share information 

about geothermal energy development around the world. The opportunity identified 

by MIT, Enhanced Geothermal Systems (EGS), has spurred renewed interest in geothermal energy in many countries, and within the past few months the Department 

has been in discussions with officials from Iceland, Australia, and New Zealand 

about stronger collaborative ties. At this year’s Washington International Renewable 

Energy Conference, we met withinterested parties from those countries and others 

to discuss how we might form a partnership to work more closely on EGS technology 

development. 

Senator AKAKA. Thank you. I look forward to that. Let me finally 

say, regarding the decrease in funding for water power—you mentioned that current funds are sufficient. As this new program gets 

underway and a program road map is established, I just want you 

to know that I’m interested to know what type of road map you envision, as well as a timeline. 

Secretary BODMAN. When you say water power what is it that 

you mean? Do you mean hydro power or do you mean tidal power? 

Senator AKAKA. Tidal power. 

Secretary BODMAN. Tidal power. Yes, that’s something that I 

think the Congress put into the budget in fiscal year 2008 and 

we’ve added another three million dollars to it in order to get it got 

done late in the year. So we will not have spent the whole ten million dollars. So we will have 13 million dollars that we will make 

available to basically do a study of what’s available. Where’s the 

work that’s going on and where might we be funding? What kind 

of research might we fund? That’s the mission. That’s the program. 

Senator AKAKA. Thank you very much for your responses. 

Secretary BODMAN. Yes, sir. 

The CHAIRMAN. Senator Corker. 

Senator CORKER. Mr. Chairman, thank you. I’m certainly delighted to have the opportunity to talk with our great leader at the 

Department of Energy. I’m glad you brought up Oak Ridge and I 

notice there was a reduction in Environmental Management funding that we can talk with on the phone or in some other setting. 

I don’t want to waste everybody’s time on a parochial issue that I’m 

sure we’ll talk about in due time. 

I appreciated Senator Tester’s line of questioning in particular. 

But Senator Dorgan has talked to you a little bit about an issue 

today that I know we’ll be taking a vote on at some time. He’s an 

outstanding promoter of his ideas on the Senate floor and I just 

wondered what your response would be if his bill were to pass. 

Talk about the flip side of that, if in fact his bill passed. 

Secretary BODMAN. This is the bill related to strategic petroleum 

reserves? 

Senator CORKER. That’s right. 

Secretary BODMAN. Sure. 

Senator CORKER. What impact would that have on our country 

strategically? What would you argue? I know you all mostly talked 

about economics. 

34 

Secretary BODMAN. Right. 

Senator CORKER. But from the standpoint of our country’s strategic interest what impact would that have? 

Secretary BODMAN. The way I look at life we’ve got about 57, 58 

days of protection in, right now as of today. That if we’re successful 

in getting the SPR filled to its 727 million barrel capacity as it now 

exists, we’ll be at 60 days of protection. We really need to be higher 

than that. 

So that the idea would be by going to a billion barrels which is, 

as I see it, part of what the Congress has approved and that we’ve 

asked for funds in the budget that is before you for that. That 

would get us roughly to 75 days looking at an increase in the imports that is expected over the next seven or 8 years, I believe it’s 

by 2017. The President has proposed going to a billion and a half 

barrels. That would get us up to the 90 day level of protection by 

the year 2025. So those are the steps that we would expect there 

to be. 

Senator CORKER. Now the President’s proposal, is that based 

upon input from people looking at our strategic interest? Where did 

this designated goal, if you will, come from? 

Secretary BODMAN. The 90 days came from the agreement that 

we have entered into as a part of our membership in the International Energy Agency, IEA, which is in Paris, France. It’s part 

of the OECD and so that is a commitment that we have to have 

90 days worth of protection. 

Senator CORKER. The President in his State of the Union talked 

about a Clean Technology Fund. I know that’s not part of your particular budget directly. 

Secretary BODMAN. Right. 

Senator CORKER. But I assume that that’s something you were 

highly involved in creating. 

Secretary BODMAN. Yes. 

Senator CORKER. Could you expand a little bit on what in essence we’re talking about there and what the objectives are? 

Secretary BODMAN. The goal, I think it started off with a request 

in the Treasury. This is a program that has been run in the Treasury, I believe that Secretary Paulson is responsible for. I think the 

goal would be to have up to two billion dollars made available by 

the United States. I think in the budget for this, for fiscal year 

2009, I think it’s 400 million dollars. So the idea would be that over 

a 5-year period we would increase the commitment to it. 

I do know that he has been busy working with finance ministers 

around the world to encourage them to participate in it. So it 

would be a, I don’t know, 5 to 10 billion dollar program. The idea 

would be that those would be funds that would be made available 

to the developing nations to use more efficient technology, more effective technology in the expansion and in dealing with their energy problems. 

Senator CORKER. So the parameters really are not yet truly set. 

It’s sort of being developed. 

Secretary BODMAN. It’s going to be a function of how much 

money we, you know, how effective Secretary Paulson is in getting 

contributions from other countries. 

35 

Senator CORKER. Mr. Chairman, I know my time is up. I would 

love at some point to, Mr. Secretary, talk about carbon sequestration. I know how important that is to the coal industry and to our 

country, actually, with all the reserves that we have. 

I guess we’ve had testimony regarding that. There still seems to 

be a lot of issues to be resolved, many, many issues. At some point 

I hope we can talk more about the actual, practical ability to be 

able to use that in a way that’s going to make a difference with 

cap and trade bills that we’re going to be talking about in the very 

near future. 

Mr. Chairman, thank you for the time. 

The CHAIRMAN. Thank you. 

Senator Salazar. 

Senator SALAZAR. Thank you very much, Senator Bingaman and 

Ranking Member Domenici. It has indeed been a pleasure to be a 

member of this committee now and hearing you, Secretary 

Bodman, for the fourth year in a row. It just reminds me of how 

fast time flies around here. 

Secretary BODMAN. It does happen fast. 

Senator SALAZAR. It does happen fast. I very much want to get 

a copy of Senator Domenici’s two pages of some of the work that 

we’ve done out of this committee over the last several years because I think it’s important for the committee to remind itself of 

some of the work that we’ve been able to do with you. 

Let me also thank you, Secretary Bodman, for your interest and 

your support of the National Renewable Energy Lab. I think the 

scientists who work there in Golden, Colorado really do hold the 

keys to our clean energy future. The support that you’ve shown 

with your physical presence there and your financial support is 

something that we very much appreciate. I know a number of my 

colleagues have been a part of tours that we’ve had there on the 

site. 

I also want to just make a quick comment on the energy efficiency and renewable energy budget, the EERE. That is I appreciate what you’re doing on geothermal. You know I think geothermal is one of those technologies, one of those realities. It’s been 

around forever. 

I remember our potato cellars essentially used to take advantage 

of geothermal in order for them to be able to keep the potatoes 

through the winter. So it’s been around forever. I think it is one 

of the essential components of how we deal with our energy future. 

So I appreciate the mark up significantly that you have for geothermal technology in your budget request. 

I would only note that I also think solar is a very important aspect of how we move forward with harnessing the power of the sun. 

You do have a 7.4 percent decline in that in your budget request. 

I’m hopeful as we work through the budget process we might be 

able to wrap up what we do with respect to solar. So I may have 

some more questions that I may ask of you later on if I get an opportunity on that part of the budget. 

I want to take off on what Senator Corker was speaking about 

and that’s the Clean Coal Power Initiative. I appreciate you funding up that aspect of our programs here. Senator Bingaman and I 

worked very closely on getting the carbon sequestration program 

36 

included in the last energy bill that was signed. So if you can take 

just a minute, minute and a half, and kind of describe for us as 

a committee where you see us going with respect to coal and carbon sequestration as we authorized in the 2007 bill. 

Secretary BODMAN. If you will forgive me I’ve got a sheet here 

with the numbers on it. In terms of carbon sequestration and the 

Future Gen project we have requested 156 million dollars and that 

is going to be working on what they call pre-combustion carbon 

capture and sequestration. This is in after you gasify the coal you 

then can remove the carbon dioxide from the stream and that will 

help. 

Second the CCPI which is the initiative that is intended for both 

pre and post combustion CCS in plants that already exist and so 

that that’s 85 million dollars. The sequestration program is the 

partnerships. That’s 149 million dollars. 

Senator SALAZAR. Let me just ask you this question. 

Secretary BODMAN. Yes. 

Senator SALAZAR. With respect to all of those amounts relating 

to coal and carbon sequestration, do you think those are the 

amounts of money needed for us to be able to stand here a year 

from now saying that we’re making some progress on carbon sequestration. 

Secretary BODMAN. Yes, I think so. I do believe it, yes, because 

the total of all of this is 648 million dollars. That’s a 25 percent 

increase. That’s more money then it’s been asked for and most of 

it, most of it, is headed toward carbon capture and sequestration 

one way or another. 

Senator SALAZAR. At some point I think it would be important, 

Senator Bingaman, for us to have a hearing that just focused in on 

what’s happening with carbon sequestration. Maybe that’s something that we can do as a committee. 

I have a question concerning the finance package that Senator 

Bingaman and I and others worked on this last year which didn’t 

quite receive enough votes. The energy package that the President 

signed in December was a very good movement forward. But I 

think that one of the legs of that tripod that was missing was a 

finance committee component that would have moved forward with 

production tax credits and all the rest of the incentives that we 

need for the renewable energy economy. 

Just without taking up a political point of view on that finance 

package, is that something that would help us ultimately achieve 

the missions that you have laid out for the Department of Energy 

if we could get that passed through the United States Congress? 

Secretary BODMAN. I think so. I think we’d be happy to work 

with the Congress on that. As I’ve said to the chairman earlier in 

the day, I’d be happy to work with you on that question. 

Senator SALAZAR. Thank you very much, Secretary Bodman. 

Secretary BODMAN. Thank you. 

The CHAIRMAN. Senator Murkowski. 

Senator MURKOWSKI. Thank you, Mr. Chairman and thank you, 

Secretary. I’m sorry that I was not able to hear most of your testimony. We had other committee hearings this morning, but I have 

had a chance to look through the Department of Energy budget. 

37 

There are some good things, from my perspective, particularly 

the increases that we saw in funding for the applied sciences, the 

added funding for climate change research and for biofuels. I certainly support the proposals for nuclear energy development and 

the efforts to implement the Energy Loan Guarantee Program, 

some good things. The Senator from Colorado just mentioned the 

plus up, if you will in geothermal. That’s something that as you 

know we have been pushing on and I am pleased to see that you 

have kind of backed out of zeroing out the Office of Geothermal and 

have proposed the increase. 

I would like you to consider, however, funding some additional 

research and some development money for the technology to further the traditional service—surface hydrothermal technology. I 

know the direction that the Department is going on. We certainly 

have a host of different projects throughout the State of Alaska 

that are, I guess you’d describe them as just more traditional in nature, that could truly benefit from some assistance from the Department. 

So I would hope that we would be able to have some discussions 

as to how we might consider some funding for these traditional 

technology advances. There’s some exciting things that are happening out there, and we’d like to think that we could work with 

you on that. 

Secretary BODMAN. Is this surface? Is this steam at the surface 

of the earth? Is that what it is? 

Senator MURKOWSKI. Correct, as opposed to the hot rocks. 

Secretary BODMAN. As opposed to below. 

Senator MURKOWSKI. Below the surface, but not the hot rocks 

technology. 

Secretary BODMAN. I see. 

Senator MURKOWSKI. As you know we’ve got the project up in 

Chena Hot Springs. 

Secretary BODMAN. Right. 

Senator MURKOWSKI. That is utilizing the low temperature geothermal and we’ve seen great success there. We think we have potential for similar type projects out in Western Alaska, in South 

Central, but a different technology than perhaps you would see advancing in, for instance, the State of Colorado. 

Secretary BODMAN. Ok. 

Senator MURKOWSKI. I want to ask you about the Renewable Energy Deployment Fund. In the energy bill that we just passed we 

included a provision that would create the Renewable Energy Deployment Fund to provide for Federal grants to provide up to 50 

percent aid for the construction projects for these renewable energy 

projects in Alaska. Things are tough right now in the State. 

As you know, we’ve always had very high energy costs, but with 

the price of oil as it is we’re seeing gas selling for seven bucks a 

gallon at Arctic Village. Home heating fuel is at about 4.99 a gallon 

in the village of Atka. We’ve had these conversations in my office, 

but electricity, as you know, ranges from anywhere from 40 cents 

a kilowatt hour to 91 cents per kilowatt hour in the community of 

Lime Village. 

If we can figure out how we can get renewable energy technologies out in these villages, we can make an absolutely incredible 

38 

difference. So my question to you at this time is whether or not the 

Department is prepared to go to work in writing the regs so that 

we can breathe the life into this program that we authorized 

through the energy bill last year. 

Secretary BODMAN. The question of grants from the Federal Government is an issue that I can’t be very encouraging with you on. 

I’d be happy to talk to you about writing regulations and we’ll get 

people to do that, but—— 

Senator MURKOWSKI. Right. We need to get that first step in 

place which is the regs written. We appreciate that we’ve got to get 

the appropriations on for the grants. 

Secretary BODMAN. Yes. 

Senator MURKOWSKI. But we need to know that in fact those regulations are in place so we can move forward with that step. We 

want to work with you on that. 

Secretary BODMAN. We’d be happy to try to do that. 

Senator MURKOWSKI. Then I understand that the issue of weatherization has been brought up by some of my other colleagues and 

the cut in the Department’s budget on weatherization. But it goes 

back to my comments about what we’re paying in whether it’s Lime 

Village or Arctic Village or Atka. Those energy costs are incredibly 

high. 

We can continue to try to give them a little bit of financial help. 

Whether it’s through the LIHEAP Program or the PCE which is 

our in State funding assistance for high energy costs, but if we 

haven’t done anything to help them get to the core of the problem 

which is weatherization. If we can continue to do more, I think that 

allows us a little more bang for the buck. 

So I would just like to put in my two cents on that aspect of the 

budget, recognizing that it’s not just an Alaska issue. It is certainly 

an issue throughout the entire country as we’re trying to lower energy costs. Mr. Chairman, my time is out. 

I look forward, Secretary to working with you on a whole host 

of these issues as we move through the budget process. Very important. Some good news in the budget, some not so good news in the 

budget so I guess that’s the status quo. Thank you, Mr. Chairman. 

Secretary BODMAN. Thank you. 

The CHAIRMAN. Thank you very much. 

Senator Menendez. 

Senator MENENDEZ. Thank you, Mr. Chairman. Thank you, Mr. 

Secretary for your testimony. I want to pick up where Senator 

Murkowski just left off. I heard you in response to one of our colleagues questioning say well this was a challenging year and we’re 

always faced with challenging years. 

Secretary BODMAN. That’s right. 

Senator MENENDEZ. It’s a question of priorities and values. 

Secretary BODMAN. Right. 

Senator MENENDEZ. I think the budget that is before the committee in the Senate on some issues lacks its priorities and its values. Weatherization is one. It’s not just a cut. It eliminates the 

Federal Weatherization Program. 

I’m not quite sure the time with oil is, you know, 90 something 

plus a barrel when we’re talking about climate change, fears of the 

39 

economy. Why would we eliminate, eliminate, not cut, eliminate 

the Weatherization Program? 

Secretary BODMAN. It’s simply as I have stated before. It is simply looking at all of the things that are done in the Energy Efficiency and Renewable Energy Office, that’s where the Weatherization Program resides. The returns that we get from the Weatherization Program do not compare with the returns that we get from 

building technologies or efforts on creating new kinds of building 

codes throughout the country as well as solar and wind and biofuel 

type technologies that they are also responsible. 

Senator MENENDEZ. I’m glad you said that because first of all of 

those things are prospective. We’re trying to deal with housing that 

exists and that obviously we’re trying to maximize its energy efficiency. Your own Department in the study said that for every dollar spent by the Weatherization Program is a two dollar and seventy cents of lifetime energy and non-energy benefits. 

In your Web site it’s listed as cost effective. Your own Department describes it as cost effective. Then if I add that to what you 

just said, not only do you seek to eliminate the Weatherization Program, but the President’s budget also seeks to cut the Low Income 

Home Energy Assistance Program by 22 percent. 

According to the National Energy Association’s Director’s Association the impact on low income households would be severe. You 

could cut 1.2 million from the assistance. In my own home State 

of New Jersey, 150,000 families would have to forego 17 million 

dollars in home heating assistance. 

We’re going to be voting on an economic stimulus plan that includes a billion dollars for LIHEAP in order to jump start our economy. Another side benefit and very significant side benefit and why 

is that in there? Because studies show that LIHEAP is a proven 

dollar multiplier. Each LIHEAP dollar generates more than five 

dollars of economic activities and these funds have an effect quickly. 

So at a time in which and you know we find people in these set 

of circumstances. We eliminate the Weatherization Program. We 

have a 22 percent cut in the LIHEAP Program and finally you 

mentioned that other, more efficient opportunities of investment, 

solar. 

I’m all for solar. As a matter of fact, New Jersey happens to be 

second only to California in pursuit of that, but even under the 

solar aspect, the President I thought had recognized the importance of solar when he announced the establishment of The Solar 

American Initiative. Yet the President’s 2009 budget proposal cuts 

12 million dollars in funding for solar research programs at DOE. 

I have been informed by some sources that the cut is actually 21 

million dollars because the Administration looks to siphon off nine 

million from the solar R and D program and use it at its National 

Renewable Energy Laboratory. So what gives? 

Secretary BODMAN. First of all, on solar energy I think you’ll find 

that the request that we made is greater than the request we made 

a year ago. What we have in the renewable energy situation is that 

Congress was very generous with adding additional funds and so 

there was more money appropriated last year than we asked for. 

So we are asking for, not all of that back, but some of it. So that 

40 

and I don’t know where you would get the information that you got 

on the additional whatever you said. 

Senator MENENDEZ. The nine million to ENREL. That is irrelevant. 

Secretary BODMAN. That’s where solar energy is done. 

Senator MENENDEZ. Is that going to be done to support solar programs or do you find—— 

Secretary BODMAN. I don’t know. Senator, I don’t. I did what—— 

Senator MENENDEZ. Could you get back to me? 

Secretary BODMAN. I would be happy to get back to you. 

[The information referred to follows:] 

The Administration continues to recognize the importance of solar energy, con- sistent with the goals of the President’s Solar America Initiative (SAI). The $12 million reduction in the FY 2009 request compared to the FY 2008 appropriation is 

based on the following factors: 

• The $10 million decrease in concentrating solar power research and development reflectsa down-selection of industry projects in trough manufacturing and 

thermal storagetechnologies, allowing only the most promising contracts representing the best use of thetaxpayer dollar to move into the second phase of 

funding in FY 2009. • The remaining $2 million decrease in the Solar Heating and Cooling Systems 

is the resultof a transfer of this activity from the Solar Program to the Buildings Program. Under theBuildings Program, funding for this activity is actually 

increasing to $3.7 million. 

• The actual funding decrease in the Solar Program FY 2009 request is only $12 

million.The $9 million that was referenced as part of the $21 million was not 

funding for solarR&D, but rather for solar capital equipment purchases at 

NREL to complete the build-outof equipment for the Science and Technology 

Facility, which opened in July 2006. TheNational Research Council and the U.S. 

solar power industry identified the facility as acritical need for the nation, particularly to achieve the goals of the SAI. 

Senator MENENDEZ. Because I hear it’s for new copy machines. 

So if it’s for new copy machines and the bottom line is and you’re 

asking for less than the Congress obviously had a reason why it 

plused up solar because it believes it is an important renewable energy source. You chose to not to seek that again even though the 

Congress had a clear direction last year. 

So in my mind you take that. You say that’s where we want to 

go to renewable sources. That’s where we get the better bang for 

our buck, yet you cut LIHEAP so significantly after you eliminate 

weatherization. So in my mind you leave people in the cold, those 

who are least capable of being able to be left out in the cold. I think 

you’re wrong for—— 

Secretary BODMAN. LIHEAP is not my budget, sir. LIHEAP is in 

the Health and Human Services Department. It is not in the Energy Department. 

Senator MENENDEZ. I’m putting it together because of all the 

facts at the same time. 

Secretary BODMAN. I understand that, but I’m just pointing that 

out. I don’t have any influence over or knowledge of LIHEAP. 

Senator MENENDEZ. Thank you, Mr. Chair. 

The CHAIRMAN. Thank you. 

Senator Smith. 

Senator SMITH. Thank you, Mr. Chairman. Secretary Bodman, 

welcome. 

Secretary BODMAN. Thank you. 

Senator SMITH. It’s good to see you. 

41 

Secretary BODMAN. It’s nice to see you as well. 

Senator SMITH. It’s my understanding that the reference in the 

budget documents to the proposal to have the Bonneville Power Administration use net secondary revenues in excess of 500 million 

dollars to repay its Treasury debt was mistakenly left in the budget. Is that correct? 

Secretary BODMAN. That is correct. 

Senator SMITH. Ok. I apologize if you already answered that. 

Secretary BODMAN. No, I didn’t answer it. I’m happy to. 

Senator SMITH. We don’t have to have that fight again. So I 

thank you, sir. 

BPA, I’m told, is still on track to be able to sign new long-term 

contracts with all its customers, including investor-owned utilities 

that receive benefits under the Residential Exchange Program. I’m 

told this is to be done before the end of the year. Is that your understanding? 

Secretary BODMAN. I don’t know, sir. I’d be happy to respond for 

the record with you personally, but I don’t know. 

[The information referred to follows:] 

Bonneville’s Regional Dialogue policy, which grew out of discussions with the region’s utilities and other stakeholders over the past five years, defines Bonneville’s 

electrical power supply role in the Pacific Northwest after 2011, when its current 

power sales contracts expire. The policy will be mplemented through new, long term 

contracts that will give BPA’s regional customers the certainty they need about 

their responsibilities for meeting load growth beyond 2011. Although it is on an ambitious schedule, Bonneville is on track to meet its goal of signed contracts by year 

end and is planning to conduct the formal rate processes and offer the actual contracts as part of that effort. 

BPA also expects to offer interim payments to Northwest public and investorowned utilities for FY 2008 while continuing to work with the region to reestablish 

a long-term Residential Exchange Program. 

Senator SMITH. Senator Craig assures me that is correct. 

Secretary BODMAN. Ok. 

Senator SMITH. Mr. Secretary, I was one of the Senate sponsors 

of provisions in the Energy Independence and Security Act of the 

last year that directs the Department of Energy to establish at 

least one ocean energy research center at an institute of higher 

learning. Can you tell me the progress the Department’s making on 

this directive? Where are we? Where will it be located? 

Secretary BODMAN. First of all I don’t have an answer on that. 

I can tell you that this is with respect to tidal energy. Is that right? 

That’s the question? 

Senator SMITH. Yes, basically it is about tidal and ocean renewable energy. 

Secretary BODMAN. In addition, I think last year the Congress 

was generous and gave us ten million dollars which we got whenever the continuing resolution was finally enacted. We have then 

added three million dollars to that in the request this year. That’s 

the budget that’s before you. 

I am hopeful that the results of that will be the evaluation of all 

the different programs. It may well lead to the establishment of a 

university center. I just don’t know where and when, but that is 

work that is underway at this time. 

Senator SMITH. If I’m wrong let me know, but I understand the 

budget does cut the appropriated amount or the requested amount 

from 9.9 million to 3 million. 

42 

Secretary BODMAN. That’s correct. No, that’s all true. 

Senator SMITH. Ok. 

Secretary BODMAN. But we haven’t spent the 9.9 is my point. 

Senator SMITH. Ok. Alright. I got it. 

Secretary BODMAN. So that the 3 and the 10 are going to add up 

to 13 million dollars that we’ll spend over the next 18 months 

working on this matter. 

Senator SMITH. What do you see in terms of tidal energy? Do you 

like it? Does it have some prospect? Can it be commercialized? 

Secretary BODMAN. I think it has some commercial aspects, sure. 

I know less about it frankly. 

Senator SMITH. Who are the opponents? 

Secretary BODMAN. I don’t think anybody is an opponent. I think 

the question gets to be how serious are we about it? Is it—will the 

oceans, which are pretty hospitable places, or pretty inhospitable 

places for human beings to function. Will the oceans accommodate 

this kind of program? But I don’t know of anybody or any organization that’s against it of which I’m aware. 

Senator SMITH. I’ve seen these devices, specifically at Oregon 

State University. I mean they’ve actually quite simple mechanisms 

that simply bob up and down and produce unending amounts of energy that emit no CO22. It just seems to me to be a renewable 

source of energy that we ought to be putting the accelerator to. If 

we’re going to meet the energy demands of the future, we’re going 

to have to find some new sources. If all the old coal burning facilities are off limits, I just think there needs to be a real focus on 

ocean energy. 

Secretary BODMAN. I would generally agree with you, sir. 

Senator SMITH. Oregon is a State where about half the land is 

owned by the Federal Government. Now the developers of renewable energy, particularly wind and biomass, have ongoing frustration with the actions of the Forest Service. The Forest Service has 

been very slow to develop policies to provide the materials off forest 

lands that could supply biomass generation and reduce fire hazards 

on those lands. 

I know this isn’t your Department, but it does effect your Department. 

Secretary BODMAN. Sure. 

Senator SMITH. Now that the Forest Service seems poised to 

enact regulations that are going to discourage the development of 

wind facilities on Federal lands, can the Department of Energy 

work with the Forest Service to ensure that our national goals on 

the development of renewable energy can be met in an environmentally sound manner? 

Secretary BODMAN. Sure. 

Senator SMITH. That’s the answer. I mean when it comes to 

siting energy sources, it’s always not in my backyard and I understand that. But if we’re serious about wind and the Federal land, 

which is half of Oregon, is taken off the map, then that is a problem. Maybe the Forest Service can work with your Department to 

get some of the biomass materials to clean up our forests and turn 

on some of these other types of facilities that provide a natural renewable source of energy. 

Secretary BODMAN. We’d be happy to do that. 

43 

Senator SMITH. Thank you very much. 

Secretary BODMAN. Thank you, sir. 

The CHAIRMAN. Senator Sanders. 

Senator SANDERS. Thank you very much, Mr. Chairman. Mr. Secretary, thanks very much for being with us. I apologize for not 

being here earlier. I couldn’t be in three places at the same time. 

I’m not going to say a whole lot about the budget or the elimination of the weatherization program. I’m a member of the budget 

committee. I happen to think that the overall budget is an absurd 

document that’s not going to go anyplace. 

Giving tax breaks to billionaires and cutting back on the needs 

of low and moderate income people is beyond my comprehension. 

So I’m not going to talk about it a whole lot other than to say it’s 

going to be completely rewritten. In Vermont and cold weather 

states is going to be, I hope, increased and certainly not eliminated. 

I wanted to ask you a question though. As you know in the energy bill that was recently passed, Senator Menendez and I and the 

chairman and many others worked on an Environmental Block 

Grant Program which authorizes two billion dollars a year to go to 

cities and towns and states in order to move us forward on energy 

efficiency and sustainable energy. 

Secretary BODMAN. Right. 

Senator SANDERS. Senator Menendez and I had written to you 

requesting strong, aggressive action on developing rules so that 

when that money is appropriated we can get that money out as 

quickly as possible. We have not yet gotten a response from your 

office. I would like very much the opportunity of perhaps sitting 

down with you and maybe lighting a fire on you right now to move 

forward on these rules. Is that ok? 

Secretary BODMAN. I’d be happy to meet with you, sir. 

Senator SANDERS. Ok. So the goal here is to have rules for the 

Environmental Block Grant Program so that when money gets appropriated we can be off and running. Is that—that will be the goal 

of the meeting. Is that all right? 

Secretary BODMAN. That’s—I understand what your goal is. 

Senator SANDERS. Can I look forward to your cooperation of writing the rules that the U.S. Congress past and present have signed? 

Secretary BODMAN. I don’t have an answer to you, sir. I would 

be happy to meet with you. I would be happy to talk with you 

about that subject, but as to what position I will or won’t take on 

it, I cannot respond. 

Senator SANDERS. I look forward to meeting with you, but I hope 

that your agency will enforce the law of the land. I trust that it 

will. 

Secretary BODMAN. We will certainly enforce the law of the land. 

Senator SANDERS. That’s legislation that’s passed that needs 

rules. 

Secretary BODMAN. But it has not been appropriated. 

Senator SANDERS. That’s right. It has not been appropriated and 

we want to make sure that the ground framework is there when 

it is. 

I wanted to ask you, I understand this issue came up earlier and 

I apologize for not having been here. As you know some of us think 

that passing tax credits for wind and solar are enormously imporVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
44 

tant, not only to deal with global warming, but to create a whole 

lot of jobs, stimulate. How do you feel about that? 

Secretary BODMAN. As I said before I’m happy to work with the 

chairman and other members of your committee if there is desire 

of multiple members toward that end. So—— 

Senator SANDERS. I’m sure that there is and we would like. You 

know we had, was it 57 votes last year? I think we’re trying to get 

the 60 votes to do that. 

I wanted to ask you another question. 

Senator DOMENICI. What was that? 

Senator SANDERS. That was for the tax credits for wind and 

solar. 

Senator DOMENICI. That’s right. 

Senator SANDERS. I wanted to ask you. I happen to think and tell 

me what you think that there is enormous potential for solar-thermal plants. My understanding is that in a couple of years specific 

gas and electric is going to be breaking ground in the Mohave 

Desert for a plant which would provide over 500 megawatts of electricity. I am told that there is potential for large numbers of these 

plants which could provide up to 30 percent of the electricity in the 

United States at a very, very cost effective rate. What do you think 

about that? 

Secretary BODMAN. I am told by venture capitalists that what 

you say is true. 

Senator SANDERS. That they’re prepared to invest. 

Secretary BODMAN. They are invested. 

Senator SANDERS. They are investing? 

Secretary BODMAN. Yes. 

Senator SANDERS. But, I am told by utility people that the potential in the southwest in this country, California, Nevada and elsewhere is just huge. It’s just a very good area for sun. So do you 

see potential for solar-thermal? 

Secretary BODMAN. I see potential for solar-thermal. Sure. 

Senator SANDERS. Ok. Mr. Chairman, thank you. 

The CHAIRMAN. Thank you very much. Now we have some questions on a second round. I’m informed Senator Domenici has some 

questions, go ahead. 

Senator DOMENICI. Are you running—are we keeping you over 

time? 

Secretary BODMAN. No, no. That’s alright. Whatever. 

Senator DOMENICI. Look, I lodged an informal complaint with the 

chairman about how he’s treating me on my second round. 

[Laughter.] 

Senator DOMENICI. He has all these guys sneaking in, you know 

their staff tells them well you don’t have to go right now and you 

won’t waste any time like this fellow and this fellow. 

[Laughter.] 

Senator DOMENICI. I’m sitting here this whole time waiting for 

a second turn and I want to establish a rule that if they don’t come 

for the whole hour and a half that they ought not get called on 

first. Those who’ve been here the hour and a half should get the 

second round. Mr. Chairman, I wanted to tell you I asked this guy, 

Smith and he said if you’d just suggested it, he’d have been glad 

to accept that as a working rule. 

45 

[Laughter.] 

Senator DOMENICI. Then I would have been finished instead of 

having to stay around to listen to these guys who came 2 hours 

late. 

[Laughter.] 

Senator DOMENICI. As much as I like this Senator, this new Senator. 

The CHAIRMAN. They all say they would have been glad to defer 

to you after the fact. 

[Laughter.] 

Senator DOMENICI. I know they defer to me for a lot of things, 

but it turns out that in this case I had a couple of questions and 

I’m going to just try real quick to ask them. 

First there’s a New Mexico problem that I want to put on the 

record and get you to understand it. In your clean up budget it appears that there’s insufficient money to meet the agreed upon milestone that the Department negotiated with the states including 

New Mexico, Los Alamos. Can you tell me whether or not you believe you can have the 164 million in this budget request? Will it 

provide sufficient funding to meet the negotiated clean up milestones for 2009 and beyond? 

Secretary BODMAN. We will miss a number of milestones. 

Senator DOMENICI. Alright. 

Secretary BODMAN. We will have some layoffs, two. 

Senator DOMENICI. Alright. 

Secretary BODMAN. It’s as a general matter. I mean applied to 

all the States as to the specific. Specifically, Los Alamos, I simply 

don’t know, but I—— 

Senator DOMENICI. Alright. Can you find out and submit it for 

the record? 

Secretary BODMAN. Sure. 

[The information referred to follows:] 

There can be a number of reasons why compliance obligations are in jeopardy, including unanticipated or especially complex technical challenges. In addition, compliance agreements negotiated several years ago may in some cases contain nearterm milestones that do not entirely reflect the highest environmental priorities. 

Consequently, some milestones may be at risk not simply because of a shortage of 

funding, but because theDepartment has decided to shift available funding to higher 

priority work that will contribute more to the protection of human health and environment. At Los Alamos, we currently anticipate that three milestones are at risk 

in Fiscal Year 2009 based on complex-wide priorities, however, Los Alamos is currently talking with its regulators to mutually resolve these potential issues. 

Senator DOMENICI. Alright. You’re going to have to explain them, 

the milestone misses. You know in our State they have a kind of 

a habitual cure to these problems by fining us you know. They 

have—— 

Secretary BODMAN. No, no. I know. 

Senator DOMENICI. Somebody up there fines us all the time. I 

hope you’ll be tough when they fine you a million dollars for little 

things. We have pretty tight budgets for them to be sticking you 

that way. So I hope you’re tough with them. I’ve already told the 

Governor. Kind of unreasonable, some of the fines. But anyway the 

milestones will be something you’ll have to work hard on. 

Secretary BODMAN. That’s right. 

46 

Senator DOMENICI. Now WIPP down there in Carlsbad. You 

know WIPP has a great history. 

Secretary BODMAN. Yes, sir. 

Senator DOMENICI. It’s the committee—community has put together and performed as a support group for WIPP. They are recognized in the country as probably the best informed and prepared 

and active group that produces a support group that ends up getting the right facts to the right citizens. It turns out that reality 

is faced instead of what people throw around as things that are 

just untrue. 

So we’ve got an underground storage facility, the only one in the 

world and it’s in sand that will never move. You know the facts. 

It’s something like 240 million years without moving. So it’s probably the best place we could ever pick. 

Now this year we’ve got a 23 million dollar cut on this project 

to these people that I just described in terms of what they do. I 

think they’re going to be hard pushed and hard pressed and I don’t 

know exactly why that cut is there. If you don’t know, we’ll just ask 

you to put it in the record and just note that I—— 

Secretary BODMAN. I’d be happy to get to respond for the record, 

sir. I don’t know about that. 

[The information referred to follows:] 

The Department must achieve a balance that allows the Office of Environmental 

Management (EM) to continue to achieve risk reduction and pursue its cleanup 

goals.The Department’s priorities for risk reduction and regulatory activities are 

stabilizing radioactive tank waste in preparation for treatment, and storing and stabilizing, and safeguarding nuclear materials and spent nuclear fuel, followed by disposing of transuranic waste. 

Funding for WIPP will continue to support receipt of up to 21 contact-handled and 

5 remote-handled transuranic waste shipments per week. The $23 M decrease reflects adeferral of some groundwater well drilling and plugging activities, and deferral of site equipment replacements and maintenance/reliability projects. While these 

activities are important, they are not needed for immediate risk reduction. 

Let me assure you that disposal of contact- and remote-handled transuranic waste 

remains a high priority within the Department, and we appreciate the support we 

receive from the WIPP community and the elected leadership from New Mexico. 

Senator DOMENICI. I want to know it and want you to know that 

I object and think that it isn’t right. The problem is the, way we 

do the budgeting around here. If I’m deemed right by the appropriators I got to take it out of something else. 

Secretary BODMAN. No, no. I understand. 

Senator DOMENICI. Because nobody adds to the budget. They just 

say yes, yes, you won. Now you find the money. 

This year I’m going to try to convince them that things we add 

they’ve got to increase the budget by that amount. I don’t know 

that I’ll succeed. But I used to do some increases when I was chairman, when I could get a feel that you couldn’t expect them to do 

that much cutting. But we haven’t been doing that of late. 

Now I’m going to jump over to something that’s been considered 

a little bit already and that’s Future Gen. I want to tell you about 

Future Gen and restructuring that. DOE has gone for a single R 

and D facility to a larger number of cost share demonstrations. 

That’s one thing. 

I’m not questioning the propriety. I am suggesting that after 

waiting so long and working hard and getting a lot of promotional 

pluses, the concern that’s generated when it’s canceled is truly 

47 

powerful. All kinds of things begin to worry people about the Department and have they given up on this kind of ultimate accomplishments of this project. Are they really important? 

A large portion of the fiscal year 2009 clean coal funding is derived from appropriated funds previously funded. 149 million of the 

156 requested for restructuring Future Gen is not new money as 

you—well if you don’t know I can tell you. That money is available 

because projects have faltered. Future Gen is another and more 

troubling example of this trend. 

People wonder when are we going to get something done. So am 

I. So I want you to know that I really think there’s a job of telling 

the people. Not you, but you’ve got a lot of people working for you, 

that what you’re doing is going to accomplish the end you intended 

better than Future Gen when you stopped it. Is that not correct? 

Secretary BODMAN. That’s correct. 

Senator DOMENICI. You think you’re going to get better results? 

Secretary BODMAN. We certainly intend to get better results. 

Senator DOMENICI. You’re not going to be so far off the mark? 

Secretary BODMAN. That’s correct. 

Senator DOMENICI. What we really worry about when you have 

a big project is that the Departments never come in anywhere near 

the mark. This one was coming in 80 percent overruns. That’s the 

kind of thing you hope you don’t get when you piece it out. 

Secretary BODMAN. What I was worried about was that this 

might become a sort of super collider type problem. 

Senator DOMENICI. Right. 

Secretary BODMAN. You know, that it might escalate so high in 

cost that Congress just would turn its back on it 3 years from now. 

That’s my concern. 

Senator DOMENICI. Ok. The renewable biomass. I’m going to 

jump to that fuel standard. I’m pleased that the biomass and the 

bio-refinery R and D is increased by 13 percent. Clearly this is important. 

This is the follow on to ethanol and then the next one and we 

have this and we need it. So will the increased program allow the 

Department to expand work on alternative feedstocks available in 

different regions of the Nation? I’m particularly interested in knowing if greater research will be allocated to develop algae based 

biofuels. I’ve read about it recently. I’m sure you could not have 

missed your eye in your training. 

Secretary BODMAN. Yes. 

Senator DOMENICI. It’s important stuff. It’s got great, great potential. Would that be part of this research? 

Secretary BODMAN. I don’t know, but I’d be happy to get you the 

answer. 

[The information referred to follows:] 

DOE is committed to targeting its R&D as effectively as possible to develop cost 

effective, clean renewable fuels. To that end, we are investigating the potential of 

a wide range of feedstocks, including algae, to synthesize alternatives to petroleumbased fuels. The Department is preparing a report for Congress, as required under 

the Energy Independence and Security Act of 2007, to assess the use of algae as 

a renewable (biofuels) feedstock. In preparing the report, the Department has discussed ongoing algae research with other Federal Agencies, including the Environmental Protection Agency, and the Departments of Defense and Agriculture. 

The objective would be to demonstrate that algae can be grown for their lipid (and 

therefore hydrocarbon) content and used in diesel engines. Oilseed crops such 

48 

assoybean are similar to algae in that they are also lipid producers that can be used 

in diesel fuel applications. Currently, biodiesel produced from oilseed crops such as 

soybeans is commercially produced on arable land, while algae is still in the research and development stage. Because of their potential high yields, small land requirements and their ability to utilize CO22 (in co-production with coal-fired plants, 

for example), algaemay warrant further investigation even though they will not contribute to our fuel mix in the short-term. 

Senator DOMENICI. It’s important and I suggest to you that we 

should. Now I want to tell you another one that has occurred in 

appropriations that—I’m not telling you how to do your work but 

I would really be upset if I were you, at the Interior Appropriation 

bill. Not your jurisdiction you would say, but they chose in that bill 

to put a 1-year moratorium on oil shale rule writing. 

Now the oil shale, you know there are people that just don’t want 

us to produce oil in this country. When we are being sucked dry 

by the money we have to pay to other countries to buy their oil. 

In fact we don’t know how badly we are being hurt because there’s 

no economic consequences model for how many times for how many 

years you can pay this much money and not be hurt. 

It looks to me like we’re getting poorer when we pay that many 

billions out for oil. That’s at least one fact you can write down. We 

surely are not getting richer, right? 

Secretary BODMAN. That is correct. 

Senator DOMENICI. It looks to me like if you’re not, you’re getting 

poorer and I begin to think we’re going to begin seeing the poor 

mess in America visibly if this goes on for 10 or 12 years at 80 or 

90 dollars a barrel. I really do. That’s why oil shale ought to be 

looked at. 

It really does upset me that at the Appropriations Committee 

that nobody who understands is working on Interior, and puts a 

moratorium on oil shale when we worked very hard on the bill that 

Senator Bingaman and I put together. It was the first one in 17 

years. It provided to move ahead, not quickly, but very slowly, but 

dedicated, with oil shale. Here’s one major American company 

ready to spend four billion dollars on it set to experiment. 

Secretary BODMAN. This is Shell. 

Senator DOMENICI. Shell. 

Secretary BODMAN. Yes. 

Senator DOMENICI. Big project. How do you think their board 

feels? They get a report that they’re in for 500 million into the 

project or whatever and along comes a subcommittee and puts a 

moratorium on regulation. Nobody knows what it means. 

Secretary BODMAN. I didn’t know it existed until I walked in 

here, so. 

Senator DOMENICI. You didn’t, so that’s another one. Somebody 

should know that from your Department and give it to you. You 

should probably be telling somebody that this is truly your business. You know it is funded in that committee but it is your business. If ever we’re going to get out of this we’ve got to act like Canada at least with reference to getting production that’s totally appropriate within the law, if that’s what we had. 

Secretary BODMAN. Right. 

Senator DOMENICI. I’m just dumbfounded that we would take a 

company that’s willing to spend four billion dollars to show us how 

49 

they can do that and slow them up instead of doing whatever we 

can to give them an opportunity to proceed? Do you agree with me? 

Secretary BODMAN. Yes. 

Senator DOMENICI. Isn’t it true that there is a chance that shale 

will work? 

Secretary BODMAN. Yes. 

Senator DOMENICI. A version of shale and its inset too or something like that. 

Secretary BODMAN. That’s why Shell is spending half a billion 

dollars on it. 

Senator DOMENICI. Because they too—— 

Secretary BODMAN. They think that it’s got a good shot. You 

know, it’s far from clear that it’s going to work, but it’s—— 

Senator DOMENICI. They’ve got four billion committed. 

Secretary BODMAN. Oh, I understand. 

Senator DOMENICI. That’s a pretty big commitment. 

Secretary BODMAN. Yes, it is. 

Senator DOMENICI. You know we can throw it around up here, 

but you don’t have very many big companies doing that. My last 

observation and I’m sure my friend on my left knows a lot about 

it and he’s probably going to add in, chime in. But I want to talk 

a minute for the record and to you about Mid Atlantic. 

Senator CRAIG. Mid America. 

Senator DOMENICI. Mid America, which we’re in the early stages 

of developing a plan for a nuclear power plant. Indicated to the 

world that they the board had pulled back and said they weren’t 

going to proceed. Some people thought that—— 

Secretary BODMAN. That who had? That the board had? 

Senator DOMENICI. The Board of Directors said we’re not going 

on with the project. 

Secretary BODMAN. Right. Ok. 

Senator DOMENICI. You should know that. That now I’m telling 

you if you don’t. 

Secretary BODMAN. I didn’t know. 

Senator DOMENICI. It’s not one that was moving ahead rapidly. 

They were just starting. But I tell you what we get as the principle 

reason. They’re looking around to see how they’re going to get the 

material, the people and engineering services and the like that are 

needed to build and design a nuclear power plant. 

They find there is total instability in that part of the market. 

You can’t get bids. You can’t get timely commitments. You can’t 

find the workers. They’re not going to expect to build within any 

limits that are reasonable so that they’re not going to get in and 

play ball in that field. They’re not poor. They wouldn’t need your 

loan guarantee I wouldn’t think. 

You and I and Senator Bingaman and Senator Craig and others 

have been saying this is a mess and we don’t know that there’s 

going to be enough workers, enough commitments to build these 

plants, right? 

Secretary BODMAN. Right. That’s right. 

Senator DOMENICI. Now we have one company that very early on 

says we can get out of this game. Now we still have some that are 

steeped in it and they’re going ahead. 

Secretary BODMAN. That’s right. 

50 

Senator DOMENICI. From what we know there may be jitters, but 

that’s because this is very, very long term, organized chaos to get 

one of these bills. Do you see us overcoming this problem and getting some of these major projects built? 

Secretary BODMAN. I do. That’s what we’re about. That’s, you 

know, whether it’s the nuclear power 2010 where, on all fronts, 

there is a big push on getting all this done. I believe it. I don’t 

know how much more I can say other than that. 

Senator DOMENICI. Yes, sir. 

Secretary BODMAN. That we’ve asked for a big increase in the 

GNEP funding which will spread this internationally. So I’m a believer in it. 

Senator DOMENICI. I would say a number of people including 

these two Senators, the chairman and I have gone down to a little 

town, Eunice. That where it is? In New Mexico, near Hobbs, where 

they’re building a two billion dollar modern uranium enrichment 

plant. 

Secretary BODMAN. This is the LES? 

Senator DOMENICI. LES. 

Secretary BODMAN. LES, good. 

Senator DOMENICI. Coming up out of the desert is this fantastic 

project. They are—be interesting for you at some point to sit down 

in your office and talk to you about how they go about finding the 

workers they need, the supplies they need. 

Secretary BODMAN. That’s a good idea. 

Senator DOMENICI. I think you’d learn from them. 

Secretary BODMAN. I’m sure I would. 

Senator DOMENICI. It’s very, very interesting. There—because 

they have committed to get it done. They spare nothing. They fly 

people in from far places and they put them down there and this 

is where you’re going to live because we need you on this job for 

6 years. 

People are building houses and that’s what’s changing lifestyles. 

Things are happening. It’s begun to think there might be a second 

one that might come to that area too. Could be good, that wouldn’t 

be bad. 

I thank you. Senator Bingaman, thank you. 

The CHAIRMAN. Thank you very much. Senator Craig, how long 

did you want to go on here? I was wondering if we should take a 

short break and then come back for your questions. 

Senator CRAIG. A couple of minutes at the most, probably, a couple of questions. 

The CHAIRMAN. Ok. Why don’t you go ahead and do your questions then. 

Senator CRAIG. Mr. Secretary let me pick up where Senator 

Domenici has left off because in Idaho last week Mid America announced that it was terminating its effort to site and build a new 

nuclear reactor. They’d acquired the land. They’d acquired the 

water and they entered this looking at the future, looking at the 

stability of supply of fuel, of looking at the efficiency of operation, 

after build and all of those kinds of things. 

As you know Mid America is 80 percent owned by Berkshire 

Hathaway so they’ve got very deep pockets. 

Secretary BODMAN. Yes. 

51 

Senator CRAIG. They’ve just acquired Pacific Corp which has 

owned Utah Power and Light, Pacific Power and Light. So they 

have a footprint in our State and across the Midwest. So they were 

attempting to site a reactor that wouldn’t just be a merchant reactor, but a supplier to their system. 

They certainly did their due diligence. Their CEO came into to 

see me yesterday. I asked simply out of the curiosity of our involvement in this issue what went wrong there. Why did they pull back? 

He gave me a long litany of very thoughtful reasons why they 

did. Senator Domenici has mentioned some of them. The market of 

talent, the market of supply, the market of engineering is saturated at this moment. They really did not believe that they could 

bring it to production on a timely basis with any guarantees for a 

much longer period of time than they thought when they entered 

it. 

I will not speak for the environmental community but the environmental community was kind of standing back. As we know 

those who once were anti-nuclear are now at least, neutral and are 

recognizing the need to bring base load on line. They could not get 

a supplier to guarantee anything to speak of in any timeline that 

fit them or fit their needs. The costs were constantly escalating at 

a very, very rapid rate. So they withdrew. 

They’re going to hold the land. They’re going to hold the water. 

Sometime in the future they may get there, but it was an interesting reality check for me, someone who’s been deeply involved 

with these two Senators in crafting the policies within EPACT 

2005 to get us to where we thought we were going to get. 

Then we passed the America Competes Act. I offered an amendment that Senator Bingaman and Senator Domenici supported that 

allowed provisions for nuclear science at our universities. That’s all 

part of what Mid America ran into, a lack of talent and a lack of 

supply and a lack of capability. 

We understand that. That’s why we put that language in there 

and I’m looking at it now. I’m looking at this budget hoping we 

would find some money in 2009 for it. It isn’t there. It appears that 

those areas that the President liked he had a little funding for or 

you put some money in. But in the area of nuclear science and new 

technologies within that area, it appears to be dry. 

I’m only saying that in passing. But that’s a reality check for our 

country because we’re now, as you know better than anybody else, 

Mr. Secretary. We’re not competing with ourselves to build nuclear 

facilities. We’re competing with the world market. 

Secretary BODMAN. No, no. That’s right. 

Senator CRAIG. Our companies are in the world market, but Mr. 

Chairman, the CEO of Mid America also said something else that 

I think was very, very significant. He said there are about three 

models or about three designs of white water reactors currently 

being built in the market. He said we can’t understand why it 

takes the NRC 5 to 6 years to license. He said why don’t we license 

these models and have them ready on the shelf for utilities who 

want to come along and pick one off the shelf and build it? 

Of course taking to diligence and siting and all that’s necessary 

to do that outside the actual model itself because that 5-year window is phenomenally costly, we all know that. I thought, hmm, inVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00055 Fmt 6633 Sfmt 6602 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
52 

teresting suggestion that we ought to be looking at. He said when 

we deal with FERC in siting anything else major, we don’t have 

to wait 5 years. 

I suggested that that might be a cautious legacy of the past. I 

don’t know that to be the case, but I think it probably is. Foot dragging a decade ago on nuclear was the name of the game. If your 

foot drug long enough you cost them their business. They never 

came. 

I don’t know those things today because I don’t think that mentality exists. But the legacy of the past just might in some of our 

bureaucratic processes around here. Anyway—— 

Secretary BODMAN. Could I just respond? 

Senator CRAIG. Please do. I’m at the end of my dissertation. It’s 

a bit frustrating. 

Secretary BODMAN. Yes, yes, I’m sure. 

Senator CRAIG. In a world that you and I and the chairman and 

others are attempting to advance. 

Secretary BODMAN. Right. 

Senator CRAIG. Yet we see these holes in it at which major developments might be falling through. 

Secretary BODMAN. Yes. I don’t have a quick answer for you, but 

I can tell you that the NRC is trying to license a unit that is going 

to be replicable and therefore it will be able to be certified. If the 

utilities buy that unit, the problem has been in the past, every utility has wanted their own thing. We’ve got 105 nuclear reactors in 

this country and they’re all different. 

Senator CRAIG. I know. 

Secretary BODMAN. It’s just absurd. As opposed to having one, 

why it takes them 5 years, I don’t pretend to know. I mean that’s 

not my—— 

Senator CRAIG. Question we’ll all be asking. 

Secretary BODMAN. It’s a fair question I think. 

Senator CRAIG. Yes. 

Secretary BODMAN. But I do believe that they’re going to speed 

it up. That is to say the second one will be a lot faster than the 

first one assuming that they are the same and that’s the issue. 

Senator CRAIG. Yes. Mr. Chairman, I’ll stop here because you’re 

obviously thinking about the time limit. We’ve got to get out of 

here. 

I think that is the question and the thing that is important it 

probably needs to be more than one because if you’re designing or 

licensing only one you’re probably showing preference toward a certain company. 

Secretary BODMAN. No, you’d need more than one. 

Senator CRAIG. Yes, you do. 

Secretary BODMAN. Each time that they’re going to need three, 

probably three, if not four, but the idea is that they would be the 

same. 

Senator CRAIG. Oh, no. I hear you each one would be the same. 

I thought it was important and I thought I might suggest to you 

that you had a similar conversation like I had. It was most enlightening. 

Secretary BODMAN. Yes. 

53 

Senator CRAIG. Because these folks did their homework. They 

spent a lot of time and a lot of money trying to find a way into this 

market and finally backed away. Thank you. 

Secretary BODMAN. Thank you, sir. 

The CHAIRMAN. Mr. Secretary, thank you very much. You’ve been 

very generous with your time and we appreciate it. 

Secretary BODMAN. Thank you very much, Mr. Chairman. 

[Whereupon, at 12:12 p.m. the hearing was adjourned.] 

[The following statement was received for the record.] 

DEPARTMENT OF ENERGY, 

Washington, DC, February 4, 2008. 

Hon. JEFF BINGAMAN, 

Chairman, Committee on Energy and Natural Resources, United States Senate, 

Washington, DC. 

DEAR MR. CHAIRMAN: Thank you for your December 20, 2007, letter regarding the 

fiscal year (FY) 2008 appropriations for the Department of Energy’s (DOE) research 

and development missions. I am concerned about the funding levels provided to support DOE’S scientific research missions, and I am particularly concerned about the 

levels provided to the Office of Science. The cuts made to the Administration’s FY 

2007 and FY 2008 funding requests will have real consequences at many of our National Laboratories; some of those consequences are outlined in the points below. In 

addition, the diminished opportunity for research funding will be felt at more than 

300 public and private research universities supported by the Office of Science 

across the country. 

As you are aware, in 2006 President Bush proposed the American Competitiveness Initiative and in 2007 the Congress passed and the President signed into law 

the America COMPETES Act. The goal of both is to double funding for basic research in the physical sciences over the next decade, and both have enjoyed substantial bipartisan support. I would like to thank you for your active and effective partnership with the Department to help secure our country’s scientific future. 

To meet our national objectives for scientific leadership for energy, environment, 

and economic competitiveness, annual appropriations for basic research in the physical sciences would have to increase roughly an average of seven percent per year, 

with more substantial increases at the fiont-end and more modest increases in the 

later years. Both the House and Senate Appropriations Committees passed initial 

FY 2007 and FY 2008 funding measures that would have provided substantial funding increases; however, in both years those critical increases did not materialize in 

the final enacted appropriations. 

Nearly flat appropriations levels mean that we must forego important new and 

upgraded facilities and hold back on promising avenues of research; appropriations 

growth below the rate of inflation will mean a reduction in the number of scientists 

and amount of basic research the Department can support. Science is a very competitive and dynamic enterprise—lost funding means lost opportunities for breakthroughs and discoveries that would give the U.S. a competitive advantage in the 

global economy and perhaps bring us greater energy security. 

The current levels of funding will mean scaling back efforts across the spectrum 

of use-inspired basic energy sciences; ceding to Europe our global leadership in high 

energy physics; hindering the Department’s ability to meet our international commitment to Japan, China, South Korea, India, Russia, and the European Union to 

cooperate in a large-scale fusion experiment known as the International Thermonuclear Experimental Reactor (ITER); directly eliminating hundreds of research jobs 

at National Laboratories in 2008; and reducing research opportunities for the best 

and brightest at universities across this Nation. 

Below is a summary of the direct and immediate effects that we expect to see in 

basic research at the major laboratories. 

OVERALL

The Department estimates that about 625 existing scientist, student, and technical staff positions will be negatively impacted in various labs and disciplines 

across the country. Approximately 100 reductions are planned to take place in FY 

2008 with the remaining 525 as a result of the reduction to the FY 2008 enacted 

54 

appropriation. Layoffs will occur in areas funded by the Basic Energy Sciences, High 

Energy Physics, and Nuclear Physics programs in the Office of Science (SC). The 

total decrease in employment will be less than this, because there will be increases 

in employment in other areas, such as in those supported by the Office of Science’s 

Biological and Environmental Research and Advanced Scientific Computing Research programs. SC-wide, the net impact to overall scientific employment levels 

under the FY 2008 appropriation is a reduction of about 224 positions. Please see 

the attached table for an overview of where the layoffs described below are projected 

to take place. The effect is most pronounced in the following programs, in which existing researchers will be laid off and planned opportunities for new researchers will 

be terminated: 

• Fusion Energy Sciences.—Fusion occurs when forms of the lightest atom, hydrogen, combine to make helium in a very hot (100 million degree centigrade) ionized gas, or plasma. A small amount of matter involved in the reaction is converted to a large amount of energy. When developed, fusion will provide a virtually inexhaustible, safe, environmentally benign, and affordable energy 

source. In FY 2008: 

—No funding was provided for ITER construction; the U.S. will lose credibility 

as a partner in large-scale international research projects. 

—The U.S. ITER project has been forced into a survival mode, using existing 

prior year funds to maintain a minimal core team. 

• Basic Energy Sciences.—Fundamental chemical and materials research may 

lead to methods to split water with sunlight for hydrogen production; technologies for harvesting solar energy with greater power efficiency and lower 

costs; super-strong lightweight materials to improve efficiency of vehicles; 

‘‘smart materials’’ that respond dynamically to their environment; and low-cost 

fuel cells, batteries, supercapacitors, and thermoelectronics. In FY 2008: 

—Approximately 50 existing, permanent PhDs, 30 postdoctoral fellows, 20 students, and 10 operations, support and other personnel will be lost from ongoing research programs in basic energy sciences, whereas, at the FY 2008 

request level funding in this program would have allowed substantial hiring, 

including about 400 new permanent PhDs, 120 additional postdoctoral fellows, and 240 more students. 

—Of the basic energy sciences facilities not terminated entirely, BES facilities 

will be operated at only 80 percent of maximum available hours. By comparison, these facilities were able to deliver 95 percent of their maximum available hours in FY 2007. 

—No funding was provided for any new basic energy sciences research initiatives in the use-inspired energy research areas such as advanced materials 

for solar power, hydrogen storage, carbon sequestration, or electrical energy 

storage underpinning the scalability of renewable sources of energy such as 

wind and solar. More than 700 proposals from laboratories and universities 

across the country, already peer reviewed, have been cancelled. 

• High Energy Physics and Nuclear Physics.—The Department coordinates these 

programs that seek to develop the far-reaching physical theories that explain 

the behavior of matter and the nature of the universe. Deeper understanding 

of nuclear matter and its interactions will continue to be invaluable to research 

in energy, nuclear medicine, materials science, and national security. In FY 

2008: 

—In High Energy Physics (HEP), cuts will result in the loss of existing support 

for 340 Engineering, Technical, and Administrative positions, 100 permanent 

PhDs, 10 postdoctoral fellows, and 10 graduate students for a total reduction 

of 460. Of this total, approximately 100 reductions were planned to take place 

in FY 2008, with the remaining 360 resulting from appropriations at a level 

12 percent below the President’s FY 2008 request. 

—In Nuclear Physics, loss of support across the program will result in reductions of 14 to 20 permanent PhDs and postdoctoral fellows; 10 to 12 students; 

and, approximately 30 operations, support, and other personnel. 

The impacts listed above will likely have the following geographic distribution: 

• Argonne National Laboratory (ANL), Argonne, Illinois 

—The Intense Pulsed Neutron Source at ANL will be closed immediately and 

permanently, resulting in approximately 50 layoffs. 

—The Building Electrical Services Upgrade project at ANL will be cancelled. 

55 

• Brookhaven National Laboratory (BNL), Upton, New York 

—Construction funding for the National Synchrotron Light Source-I1 at BNL 

was cut by 33 percent, which will cause significant project delays and escalate 

total project cost, possibly exacerbating budget shortfalls in future years. 

—Relativistic Heavy Ion Collider (RHIC) operations at BNL will be reduced 

from a planned 30 weeks to 19 weeks. 

—Funding for the PHENIX Forward Vertex Detector and the PHENIX Nose 

Cone Calorimeter at RHIC will be reduced and the schedules will be delayed 

by one year. 

• Fermi National Accelerator Laboratory (FNAL), Batavia, Illinois 

—About 200 layoffs of existing science employees are expected at FNAL. Additionally, the laboratory will be forced to institute a ‘‘rolling furlough’’ of two 

days each month of leave without pay for all remaining FNAL employees. 

—There will be major, indeterminate delays in construction of the NOVA research project at FNAL. 

—The U.S. will lose its leadership role in the global design effort for the next 

major international HEP project, putting the selection of FNAL as a potential 

site for the International Linear Collider in jeopardy. 

• Lawrence Berkeley National Laboratory (LBNL), Berkeley, California 

—Delivery of the Advanced Light Source User Support Building at LBNL will 

be delayed by more than one year because funding was reduced by 70 percent 

below the President’s FY 2008 Request. 

—Funding for the Gamma Ray Energy Tracking In-Beam Nuclear Array Major 

Item(s) of Equipment (ME) is reduced in FY 2008, causing increases in project 

risks and delays in schedule; impacts to project cost are being evaluated. 

• Oak Ridge National Laboratory (ORNL), Oak Ridge, Tennessee 

—Basic energy sciences instrument projects for the Spallation Neutron Source 

at ORNL will be reduced, delaying completions by at least one year. 

—Funding for the joint DOENSF neutron Electric Dipole Moment Experiment 

MIE is reduced in FY 2008, causing increases in project risks and delays in 

schedule; impacts to project cost are being evaluated. 

—The U.S. ITER Project Office will be reduced to a minimum level. Up to 40 

staff may be reassigned. 

• Stanford Linear Accelerator Center (SLAC), Menlo Park, California 

—There will be about 225 layoffs and negotiated early retirements of existing 

employees at SLAC (100 were planned to take place in FY 2008 and 125 resulting from appropriations made at a level below the President’s FY 2008 request). 

—B-factory research operations at SLAC will be reduced by 75 percent compared to the 5,720 hours planned in the FY 2008 request. 

—Instrument projects for the Linac Coherent Light Source Ultrafast Science at 

SLAC were reduced 40 percent below FY 2008 President’s Request, delaying 

completions by at least one year. 

• Thomas Jefferson National Accelerator Facility (TJNAF), Newport News, Virginia 

—Operations of the Continuous Electron Beam Accelerator Facility at TJNAF 

will be reduced from a planned 34 weeks to 24 weeks. 

As described above, most of the Department’s basic research portfolio will qot receive the funding we believe that it needs in FY 2008. Nevertheless, I want to thank 

Congress for its strong support for Biological and Environmental Research and Advanced Scientific Computing Research at DOE. I look forward to working with Congress to ensure that we keep America competitive through strong support for science 

that will provide transformational solutions for our most pressing national needs. 

Sincerely, 

SAMUEL W. BODMAN, 

Secretary. 

56 


bodman020608.eps
(57) 

1 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29). This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 

APPENDIX 

RESPONSES TO ADDITIONAL QUESTIONS

QUESTIONS FROM SENATOR BINGAMAN

WEATHERIZATION

We hear a lot of talk about energy efficiency being the low hanging fruit for climate change mitigation. I have a graph that has been passed out to all the members 

and Secretary Bodman that illustrates the importance of programs like weatherization. 

This chart shows a global cost curve for greenhouse gas abatement measures beyond ‘‘business as usual’’. 

(The McKinsey Quarterly, 2007 Number 1, ‘‘A cost curve for greenhouse gas reduction’’, Per-Anders Enkvist, Tomas Naucler and Jerker Rosander, Exhibit 1). 

The Consulting firm McKinsey & Co., released a report in December titled ‘‘Reducing US Greenhouse Gas Emissions: How much at what cost?’’ This report is 

based on a Greenhouse Gas Abatement Mapping Initiative undertaken by McKinsey 

in collaboration with leading U.S. companies and environmental NGOs. 

McKinsey analyzed resource costs and abatement potential for more than 250 opportunities to reduce or prevent GHG emissions. They found that almost 40 percent 

of abatement could be achieved at ‘‘negative’’ marginal costs—meaning that investing in these options would generate positive economic returns over their life cycle. 

Building insulation is the first item on the chart—with a positive return of 150 

Euros per ton of CO22 abated—lighting systems, air conditioning and water heating 

and standby power (all related to building energy use) also have significant positive 

returns. This analysis shows we can take cost effective measures to abate climate 

change, and that programs like weatherization are a part of the solution. 

Your budget materials say that the Department is terminating the Weatherization program to focus EERE on its core R&D mission which is expected to provide 

‘‘greater benefits’’. The committee has requested a copy of the analysis supporting 

this statement. 

Question 1. Rather than eliminating the weatherization program, it seems to me 

that the DOE should be expanding and revitalizing the program? 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

than the cost of the investment.1 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

58 

2The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10- 05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 3 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29) . This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 4The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10- 05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.2

Question 2. According to Oak Ridge National Labs, the most recent national evaluation of the Weatherization program was conducted in the early 1990’s. The DOE 

budget justification states that the Weatherization program has a benefit /cost ratio 

of 1.53. 

What study is the basis of this benefit /cost ratio and how was it calculated? 

Answer. The energy savings benefit/cost ratio for the Weatherization Assistance 

Program of 1.53 to 1 is from a 2007 assessment by Oak Ridge National Laboratory 

(ORNL). The calculation is based on five factors: average annual Mbtu energy savings per home, projected energy prices, average weatherization retrofit cost per 

home, a discount rate, and an estimate of the useful life of the weatherization measures. The methodology is described in ‘‘Estimating the National Effects of the U.S. 

Department of Energy’s Weatherization Assistance Program with State-Level Data: 

A Metaevaluation Using Studies From 1993 to 2005,’’ ORNL-493. 

Question 3. The weatherization program is not an R&D program. What is the rationale for comparing the weatherization program to R&D? 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

than the cost of the investment.3 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.4

Question 4. It is our understanding that from FY2005 to FY2007 funds were requested and appropriated for a national evaluation of the Weatherization program 

and a contractor was selected. Why was the evaluation cancelled in 2007? 

Answer. The Weatherization evaluation was not cancelled. At this time, it has 

been delayed pending the results of a more strategic analysis of ways of improving 

the delivery of the program to make it more cost-effective. Once the results of the 

analysis are obtained, it may inform a revised approach to evaluating the program. 

APPLIANCE STANDARDS

EPAct 2005 required the Department to address a significant backlog in appliance 

efficiency standards and the issue is currently under the supervision of a federal 

court. EISA 2007 added some additional work in the area. However, your budget 

request is lower this year. 

Question 5. Where do you stand on addressing the backlog of efficiency standards 

and do you have sufficient resources to meet your deadlines and new assignments? 

(Request DOE to provide for the record.) 

Answer. The President’s budget adequately funds DOE’s commitment to existing 

appliance standards requirements. In January 2006, the Department released its 

plan to eliminate a 30-year backlog on appliance standards by issuing one new or 

amended standard for each of the 18 products in the backlog over the next five 

years. Since committing to this schedule for the standards program, the Department 

has met 100 percent of its targets, a new trend we intend to maintain. In less than 

two years, DOE has completed four energy efficiency standards, six test procedure 

rulemakings, and begun eight standard-setting rulemakings. Additionally, while adVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00062 Fmt 6601 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
59 

dressing the products in the backlog, the Department’s multi-year schedule addresses the first cycle of standards that DOE must develop to comply with EPACT 2005. 

The Energy Independence and Security Act of 2007 (EISA 2007) amended the Energy Policy and Conservation Act of 1975 to give DOE authority to allow the Department to accelerate the rulemaking process where consensus among stakeholders and 

industry already exists; this would eliminate approximately ten months from the 

timeline for each consensus rule, usually a three-year process. In addition, EISA 

2007 added new test procedure, standards and reporting requirements for certain 

appliances and equipment. DOE is currently evaluating the impacts of EISA 2007 

to determine the additions and deletions from our list of required rulemakings, and 

DOE is developing plans for implementing the new requirements, all of which we 

expect to complete in a timely manner. 

LIGHTING STANDARDS

I am particularly interested in the new efficiency standards for general service incandescent lamps. EISA authorized a $10 million national campaign to improve the 

labeling on the light bulbs and to educate consumers on the transition to more efficient bulbs in 2012. 

Question 6. Is the Department requesting any funds to begin the implementation 

of this campaign? What does the Department plan to do to ensure a smooth transition for consumers in 2012 through 2014? 

I look forward to an ongoing dialogue with your research teams to discern the 

technologies that will be commercially available when DOE conducts its rulemaking 

on second tier standards for lighting. 

Answer. The Department regularly conducts and funds education and outreach 

campaigns for consumers that are expected to assist in the transition to more efficient bulbs. These activities are included in the FY 2009 budget request and are 

consistent with the goal of the EISA legislation. The Department will work closely 

with the Federal Trade Commission as they update labeling requirements for lighting products. The Department has already undertaken a variety of consumer education outreach efforts related to lighting, including partnerships with 18seconds.org 

and Disney’s Ratatouille. In addition, the Department is currently working with the 

Ad Council on a national energy efficiency campaign, consistent with Energy Policy 

Act of 2005 (EPACT) and EISA direction. Section 134 of EPACT requires the Department to carry out a comprehensive national public information initiative, including advertising and media awareness, to inform consumers about practical, costeffective measures that consumers can take to reduce consumption of electricity, including purchasing energy efficient products such as compact fluorescent lamps 

(CFLs). Likewise, Section 321 of the EISA requires DOE to carry out a proactive 

national program of consumer awareness, information, and education that broadly 

uses the media and other effective communication techniques to help consumers understand lamp labels and make energy-efficient lighting choices. 

Activities beyond 2009 will be determined through annual budget development 

processes. If determined to be cost-effective, efficient, and in line with established 

goals and priorities, activities could include web campaigns; direct mail through 

utilities; work with major home improvement stores and homebuilders and remodelers; or the development of computer tools. 

The determination to consider whether to amend the energy conservation standards for general service lighting is scheduled to begin by January 1, 2014, and be 

completed by January 1, 2017. 

INCENTIVES FOR STATE ENERGY EFFICIENCY BUILDING CODES

EPAct 2005 authorized a grant program to help states adopt the latest energy efficiency building codes and to improve code compliance. 

Question 7. Is that program funded in your budget? What are your plans in this 

area? 

Answer. EPACT Section 128 authorized additional funding to States for implementation of a plan to achieve and document at least a 90 percent rate of compliance with residential and commercial building energy efficiency codes, based on energy performance. To date, Congress has not appropriated funding for implementation of this Section, but DOE is supporting States’ building code efforts through its 

State Energy Program. The Department did not request FY 2009 funding for the 

implementation of EPACT 2005 Section 128. However, DOE operates successful programs that provide technical assistance to the States in the form of a variety of 

tools, materials, and training to support implementation and documentation of their 

code adoption and enforcement plans. 

60 

5This is from a 2006 Report by the Consortium for Energy Efficiency called ‘‘U.S. Energy Efficiency Programs: a $2.6 Billion Industry,’’ p. 6. (www.cee1.org/ee-pe/cee—budget—report.pdf). 

Question 8. I commend you for requesting increased funding for building energy 

codes programs this year. 

Will DOE work with the voluntary codes organizations to meet the goal of increasing energy efficiency in the residential building code by 30% in 2008? If the voluntary codes organizations fail to adopt a 30% enhancement, will DOE develop a 

separate specification? What resources will you devote to providing technical assistance to the states for updating and implementing the model codes? Will the EPAct 

2005 grant program be funded from this increase? 

Answer. In FY 2009, DOE will complete analyses and support for the upgrading 

of ASHRAE 90.1-2010 that will have code stringency effects of approximately 30 

percent compared to ASHRAE 90.1-2004. DOE will also conduct the R&D needed 

to support an increased code stringency of 30 percent in the next residential model 

building energy code (the 2010 International Energy Conservation Code (IECC)). 

This year, DOE is actively involved in developing and supporting code proposals for 

consideration by the International Code Council. 

DOE will continue to provide technical assistance to the States in the form of a 

variety of tools, materials, and training to support updating and implementation of 

model codes. States have the discretion to apply State Energy Program formula and 

special project grants to implement their plans to achieve and document at least a 

90 percent rate of compliance with residential and commercial building energy efficiency codes, based on energy performance. 

INCENTIVES FOR ENERGY STAR APPLIANCES

Another EPAct program that you have not funded is a rebate program for consumers who purchase Energy Star appliances. Like weatherization—this program 

would improve the efficiency of existing (and new) buildings. Page 312 of your budget justification (regarding strategic goals for the building technologies program) 

states ‘‘in the near term, widespread areas of energy use—space heating, lighting, 

water heating and air conditioning.’’ On page 324, the budget justification goes on 

to say that DOE might not meet its strategic goals for buildings due to ‘‘external 

factors’’ i.e., that consumers are typically reluctant to pay for higher cost equipment, 

even when they will save money in the long run. 

Congress included a rebate program in EPAct 2005 to specifically address this 

‘‘external factor’’. The program is modeled on a successful initiative in New York 

state. 

Question 9. How does DOE plan to incent consumers to upgrade their inefficient 

appliances? 

Answer. Through the joint DOE-EPA ENERGY STAR Program, significant utility 

and State-based rebate programs have been and will be made available to consumers. The ENERGY STAR Program has a significant and productive partnership 

with the Consortium for Energy Efficiency (CEE), whose members are major utilities across the nation. CEE relies upon ENERGY STAR specifications and criteria 

to help establish performance thresholds for utility efficiency rebate programs for 

major appliances, residential lighting fixtures, and many more products. NonCEE 

member utilities also have provided rebates to consumers for various Energy Star 

products. 

Based on preliminary reports by utilities, utility residential efficiency spending for 

2006 is estimated at over $560 million.5 The Department believes the established 

infrastructure of utility rebate programs, while providing individual consumer benefits, are paid for through system-wide benefits accruing to utilities and all ratepayers; and represent an economically efficient and effective means for providing incentives for both utilities and consumers. This balance allows DOE to properly 

prioritize investments into technology research, development, and deployment that 

brings down the cost and increases the availability of energy efficient technologies, 

benefiting all consumers. 

Question 10. Another EPAct program that you have not funded is a rebate program for consumers who purchase Energy Star appliances. Like weatherization— 

this program would improve the efficiency of existing (and new) buildings. Page 312 

of your budget justification (regarding strategic goals for the building technologies 

program) states ‘‘in the near term, widespread areas of energy use—space heating, 

lighting, water heating and air conditioning.’’ On page 324, the budget justification 

goes on to say that DOE might not meet its strategic goals for buildings due to ‘‘external factors’’ i.e., that consumers are typically reluctant to pay for higher cost 

equipment, even when they will save money in the long run. 

61 

6This is from a 2006 Report by the Consortium for Energy Efficiency called ‘‘U.S. Energy Efficiency Programs: a $2.6 Billion Industry,’’ p. 6. (www.cee1.org/ee-pe/cee—budget—report.pdf). 

Congress included a rebate program in EPAct 2005 to specifically address this 

‘‘external factor’’. The program is modeled on a successful initiative in New York 

state. 

How does DOE plan to incent consumers to upgrade their inefficient appliances? 

Answer. Through the joint DOE-EPA ENERGY STAR Program, significant utility 

and State-based rebate programs have been and will be made available to consumers. The ENERGY STAR Program has a significant and productive partnership 

with the Consortium for Energy Efficiency (CEE), whose members are major utilities across the nation. CEE relies upon ENERGY STAR specifications and criteria 

to help establish performance thresholds for utility efficiency rebate programs for 

major appliances, residential lighting fixtures, and many more products. NonCEE 

member utilities also have provided rebates to consumers for various Energy Star 

products. 

Based on preliminary reports by utilities, utility residential efficiency spending for 

2006 is estimated at over $560 million.6 The Department believes the established 

infrastructure of utility rebate programs, while providing individual consumer benefits, are paid for through system-wide benefits accruing to utilities and all ratepayers; and represent an economically efficient and effective means for providing incentives for both utilities and consumers. This balance allows DOE to properly 

prioritize investments into technology research, development, and deployment that 

brings down the cost and increases the availability of energy efficient technologies, 

benefiting all consumers. 

Question 11. What is your timeline for establishing the Commercial Green Buildings office, as required by the Energy Independence and Security Act (EISA)? 

Answer. The Department’s Office of Energy Efficiency and Renewable Energy, 

through the existing Building Technologies Program, is accountable for the functions described in Sections 421 and 422 of EISA. 

Activities in the FY 2009 budget request consistent with these sections of EISA 

include research and development of cost-effective technologies, integrated design 

strategies, and operating procedures for commercial buildings such that they 

produce as much energy as they use on an annual basis; as well as public-private 

partnership work with the retail, office, and school building segments of the commercial building market. 

COMMERCIAL BUILDINGS INITIATIVE

EISA authorized funding for a Zero Net Energy Commercial Building Initiative 

(CBI) within the Department and also authorized the establishment of a private sector consortium to work with the Department on the Commercial Buildings Initiative 

and other related buildings programs. 

Question 12. When will the CBI be established and what funding will be allocated 

to the CBI in FY2009? When will the Consortium be selected? 

Answer. The Department has made significant progress in FY 2008 in establishing the procedures for competitively selecting a Consortium. For example, in FY 

2008, the DOE Commercial Buildings Integration sub-program has initiated plans 

to create three new Commercial Building Alliances that are designed to minimize 

the energy consumption and environmental impacts of commercial buildings. The 

Alliances focus on the following sectors: retail; commercial properties (leased space, 

office, shopping malls and hospitality); and institutions (including colleges and universities, hospitals and health care facilities). On February 21, 2008, DOE held an 

executive roundtable discussion as a first step in forming the Retailer Energy Alliance (REA), which promotes the use of energy-efficient technologies and management practices for retail operations. DOE provides technical support to help meet 

the goals of the different Alliances. The REA is the first of several initiatives and 

DOE’s Building Technologies Program plans to launch similar initiatives for the 

other sectors identified above. Additionally, a majority of the $13 million requested 

in FY 2009 for the Commercial Buildings Integration sub-program will be focused 

on activities consistent with Section 422 of EISA. 

Question 13. In December 2006, Congress passed a pipeline safety reauthorization 

bill (Pub.L no. 109-468), a few months after BP had been forced to shut down some 

of its oil pipelines in the Prudhoe Bay area due to leaks. 

The Energy Committee held hearings on the BP pipeline issues. Many of us were 

concerned that a vital part of our oil transportation system had not been adequately 

regulated. 

62 

We worked with the Senate Commerce Committee to mandate DOT and DOE to 

conduct periodic analyses of the adequacy of the nation’s pipeline infrastructure and 

determine if the current level or regulation is sufficient to minimize the potential 

for unplanned losses of pipeline capacity. 

The report is due in June of this year. Are you on track to get this report to us? 

Answer. Yes, the referenced study is the ‘‘Petroleum Transportation Capacity and 

Regulatory Adequacy Study,’’ which is mandated in section 8 of the Pipeline Safety 

Improvement Act of 2006 (P.L. 109-468). The Department of Energy’s Office of Fossil Energy has a subordinate role in the preparation of this report by providing technical assistance and support to the Department of Transportation’s Pipeline and 

Hazardous Materials Safety Administration (PHMSA). PHMSA is the Federal government entity responsible for the oversight of safety for pipelines that transport 

gas or hazardous liquids and provides grants to states for programs to ensure pipeline safety. PHMSA currently is in ongoing discussions with the Transportation Security Administration (TSA) about funding a comprehensive study. Meanwhile, 

PHMSA is conducting an in-house analysis to provide a responsive scoping document. We anticipate that PHMSA will soon be sharing the scoping document with 

DOE and TSA for comment and concurrence with the intent to finalize it this 

spring. 

BIOFUELS

Question 1. While cellulosic ethanol is being pursued aggressively by DOE and 

private industry, what are you doing to develop biobutanol and algal biocrude, either of which can be shipped in our existing pipeline infrastructure? 

Answer. There are a number of other advanced biofuels that have promising potential as gasoline and diesel substitutes. In recent years, DOE’s Office of Energy 

Efficiency and Renewable Energy has focused almost exclusively on cellulosic ethanol primarily due to the relative volumetric substitution available and the fact that 

cellulosic ethanol demonstrates the greatest potential for significant near-term commercialization. 

However, DOE is increasing and broadening its efforts on next-generation biofuels 

using a variety of feedstocks and conversion technologies. For instance, on January 

29, 2008, DOE announced $114 million in awards for small scale biorefineries that 

use next generation technologies. 

DOE is reviewing a wide range of potential alternative fuels beyond cellulosic ethanol, including algae and biobutanol. 

Biobutanol is a liquid alcohol fuel that can be used in today’s gasoline-powered 

internal combustion engines. The properties of biobutanol make it highly amenable 

to blending with gasoline. For example, recently, DuPont and British Petroleum, 

among others, have begun investing in R&D to develop more cost-effective biobutanol production processes. 

Question 2. Does the Department plan to establish more Bioenergy Research Centers? The Department currently has three centers, and EISA requires at least four 

additional centers. 

Answer. The Department’s Office of Science does not currently plan to issue a 

funding opportunity announcement requesting applications for additional Bioenergy 

Research Centers. As reflected in the GTL Bioenergy Research Center white paper 

(http://genomicsgtl.energy.gov/centers/smGTLBRCWhitepaper.pdf, on page 17)), future GTL centers would be anticipated to address DOE environmental missions in 

environmental remediation and carbon cycling and sequestration. The Department 

does, however, intend to continue supporting fundamental and applied bioenergy research through standard merit-reviewed procurement processes. For example, the 

Department’s Office of Science has issued a joint USDA-DOE program solicitation 

for research on plant feedstock genomics for bioenergy and is strongly encouraging 

proposals not only from individual investigators but also from interdisciplinary 

teams comprising a range of expertise. Pending the outcome of the merit review 

process, awards are expected to be made in FY 2008. 

Question 3. How does the Department plan to support localized production of 

biofuels in regions not currently associated with large volumes of biofuel production, 

such as the Northeast and Southwest? 

Answer. Biomass resources are distributed throughout the country and their variety necessitates research and collaboration in all parts of the nation. To take advantage of this geographically diverse resource, the Department of Energy (DOE), over 

the last two years, has co-funded with industry six commercial-scale biorefinery 

plants, seven 10 percent-scale biorefinery plants, three Office of Science Bioenergy 

Research Centers, five university-based regional feedstock partnerships under the 

Sun Grant Initiative, and thirteen applied science projects. These projects span 

63 

across twenty-one states and are focusing on multiple feedstocks and technologies 

that once proven will provide information useful to all regions of the nation. The 

five regional feedstock partnerships were established through the Sun Grant Initiative land-grant universities and involve other key stakeholders to identify the biomass resource potential in every region of the U.S., including the Northeast and 

Southwest. Last August, Oregon State University, the Western Sun Grant Center, 

in partnership with DOE, hosted a workshop to identify the best biomass resources 

for that region to produce liquid transportation fuels. Last November, a similar 

workshop was hosted by Cornell University, the Northeast Sun Grant Center, with 

comparable goals for that region. Workshop participants anticipate that agricultural 

and forest residues will be significant biomass resources in the Southwest and that 

forest resources will be dominant in the Northeast. In terms of potential energy 

crops, sorghum may be pursued under irrigated conditions in the Southwest and hybrid willow, a short rotation woody crop, will likely be developed in the Northeast. 

Question 4. How do you see the Energy Frontier Research Centers contributing 

to biofuels research and commercialization? What portion of the grants made 

through this program will be focused on biofuels? 

Answer. The Energy Frontier Research Centers (EFRCs) will cover a wide range 

of research areas, and may include biofuels research. EFRC proposals will be solicited through open, competitive Funding Opportunity Announcements (FOA), with 

the goal of reaching the broadest range of researchers and attracting the very best 

ideas to pursue the scientific breakthroughs needed to create truly transformational 

new energy technologies. No specific amounts of funding are set aside in the ERFC 

competition for biofuels or any other research area. Funding will go to the highest 

quality proposals, as determined by peer review. The EFRCs will not contribute directly to commercialization, but they could provide new understanding critical to 

commercial success—for example, advances in our understanding of how biological 

feedstocks are converted into portable fuels could one day lead to economic cellulosic 

biofuel production. 

COAL/FUTUREGEN

Question 1. As I understand it, one of the chief benefits of the FutureGen approach was that it would demonstrate an integrated design, optimized to maximize 

CO22 capture overall plant efficiency. How are you going to insure we receive this 

same benefit from a substantially smaller federal investment in a commercial facility? 

Answer. The FutureGen program remains a vital component of the Administration’s plan to make coal part of a cleaner, more secure energy future for America. 

The Administration is restructuring the FutureGen program to accelerate commercial use of carbon capture and storage technology and expand the program from one 

project to multiple demonstration projects. 

Rather than investing in the total cost of an experimental facility integrated with 

carbon capture and storage, the restructured FutureGen approach will invest in the 

carbon capture and storage portion of commercial power projects, capturing and sequestering at least double the amount compared to the FutureGen concept announced in 2003. This will also limit taxpayers’ financial exposure to only a portion 

of the cost of the carbon capture and storage portion of the plant. Furthermore, this 

new approach will allow us to accelerate nearer-term technology deployment in the 

marketplace faster than the timetable for the previous approach. In order to be successful in competitive power markets (not to mention in the Department’s competitive proposal evaluation process), the underlying power plant projects will still need 

to be efficient, competitive, and environmentally sound. 

Question 2. I have heard estimates that including large-scale carbon capture and 

sequestration on a typical power plant will increase costs by roughly a third. What 

assurance do you have that the amounts you propose to distribute under this program will be sufficient incentives to lead to commercial-scale demonstration of the 

technology? Will other federal incentives be available to the applicants, and are 

more necessary? 

Answer. Approximately thirty commercial integrated gasification combined cycle 

(IGCC) projects are in various stages of planning, permitting, and design across the 

Nation, which is evidence that a commercially viable basis for IGCC technology already exists. Some are stalled because of uncertainty regarding CO22 emissions requirements. Federal funding under the restructured FutureGen program may help 

fund the carbon capture and storage part of some of these projects. Federal incentives, such as loan guarantees and tax credits, may also be available to some of 

these projects. This provides additional incentives for such projects. We have considVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00067 Fmt 6601 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
64 

ered the need for further incentives, but believe that none are necessary at this 

time. 

Question 3. In recent months we have seen proposed commercial IGCC plants significantly delayed or cancelled. What assurance do you have that there will be sufficient commercial interest in building these plants to give us the demonstrations we 

need? 

Answer. At the present time, over 30 integrated gasification combined cycle 

(IGCC) power plants are in various proposal stages and major barriers to their deployment include the uncertainties regarding future CO22 emissions regulations and 

the actual costs of constructing and operating IGCC-carbon capture and storage 

(CCS) power plants. The restructured FutureGen program is designed to help understand, address, and solve technical, siting, permitting, regulatory, and financial 

aspects of CCS deployment. Through its Request for Information, DOE expects to 

identify power producers who would consider participating in the restructured 

FutureGen initiative. 

Question 4. The 4 phase-3 large-scale CO22 sequestration tests that have been 

awarded thus far are all expected to inject less than 1 million tons (approx 500,000) 

of CO22 per year—will there be an effort to increase those amounts so that we can 

have information more in line with that FutureGen would have produced? 

Answer. In addition to the four large-scale tests awarded to three of the Regional 

Carbon Sequestration Partnerships (RCSP) in October 2007, a fifth test was awarded in December 2007 to a fourth RCSP. Three of the tests (in the Alberta Basin, 

Lower Tuscaloosa Formation, and Entrada Formation) individually are expected to 

inject at least 1 million tons of CO22 per year for at least one year. Two other tests 

(in the Williston Basin and Mount Simon Sandstone Formation) will inject greater 

than 1 million tons in total, though at a rate of less than 1 million tons of CO22 

per year. The injection rates will be at a scale that demonstrates the ability to inject 

and sequester several million metric tons for a large number of years. This operation at commercial-scale may be as significant as that of higher injections of 1 million metric tons per year. DOE is developing a peer-reviewed plan to be completed 

this spring that will identify the scientific and engineering test parameters to guide 

design and selection of large-scale tests. It is our intention to confirm the soundness 

of the design of these injections, including the applicability of the injection scale proposed for the demonstrations to operations at commercial scale, as well as the duration of injections, and number and phasing of injections. 

Question 5. The competition for FutureGen between Texas and Illinois led both 

states to examine the policy framework that would be necessary for CO22 sequestration. How will the new program create similar incentives for states in which the 

projects will be located? What can we do here to accelerate this deployment? 

Answer. There are major technical and regulatory hurdles to overcome before coal 

with carbon capture and storage (CCS) can be commercially deployed; however, it 

is in the best interest of states to adopt a posture that would help enable ultra-low 

criteria pollutant emissions integrated gasification combined cycle (IGCC) plants 

with CCS, like FutureGen, to provide stable power supplies at affordable prices. 

FutureGen will provide early CCS demonstration experience in a commercial setting, which is aimed at accelerating deployment and advancing carbon capture policy. The restructured approach will sequester at least double the amount of CO22 

of the previous approach and have the potential of demonstrating CCS in multiple 

states. FutureGen will help to establish commercial feasibility and a model that industry could use to deploy commercial-scale plants that each sequester at least one 

million metric tons of carbon dioxide annually. 

Question 6. Could you comment on whether you believe that future disruptions 

will be more about price spikes than physical shortage in the United States? 

Answer. Regarding crude oil, in the long-term, world oil prices are driven by market fundamentals, principally the balance between world oil supply and demand. In 

the next several months, EIA expects world oil markets to remain tight due to rising 

world oil demand and low surplus oil production capacity. EIA expects this situation 

to improve in the later part of this year, when growth in oil production from outside 

OPEC should exceed world oil demand growth, leading to world oil prices that are 

lower than current levels. At the same time, disruptions in oil markets, which often 

result in price spikes, can be triggered by a range of factors including political unrest and weather. Future disruptions in oil markets are very difficult to predict but 

can result in both physical shortages and price increases. 

Question 7. Could you clarify the Administration’s policy on when the SPR will 

be used? 

Answer. The Administration is committed to complying with the requirements of 

the Energy Policy and Conservation Act (EPCA), the authorizing legislation for the 

SPR. Section 161 of EPCA requires that, before crude oil from the SPR can be 

65 

drawn down and sold, the President must find that ‘‘drawdown and sale are required by a severe energy supply interruption or by obligations of the United States 

under the international energy program.’’ 

EPCA defines ‘‘severe energy supply interruption’’ as a national energy supply 

shortage that: ‘‘(A) is, or is likely to be, of significant scope and duration, and of 

an emergency nature; (B) may cause major adverse impact on national safety or the 

national economy; and (C) results, or is likely to result, from (i) an interruption in 

the supply of imported petroleum products, (ii) an interruption in the supply of domestic petroleum products, or (iii) sabotage or an act of God.’’ 

The Administration’s policy is that the U.S. will only sell oil from the Reserve in 

the event of an emergency caused by a severe supply disruption. The Department 

of Energy monitors daily United States petroleum inventories, refinery utilization 

rates, and domestic and international production. We also follow very closely geopolitical events that may impact petroleum supplies and, if there is a disruption 

that causes, or is likely to cause, a significant supply disruption, the SPR stands 

ready to be used to help mitigate the impacts. 

The SPR can act quickly to fortify efforts by producers to offset any severe disruption in supplies of crude oil and, upon consultation with our International Energy 

Agency (IEA) partners, would coordinate the United States’ response with actions 

taken by the IEA. 

NUCLEAR

In the President’s FY 09 budget request, the Nuclear Power 2010 program has received $241.6 million, this is consistent with the recommendations of the National 

Academies from reviewing the Office of Nuclear Energy. This is just one aspect of 

the nuclear fuel cycle—reactors. 

Question 1. Do you think it’s important the department work to address the needs 

of enrichers and convertors? 

Answer. Several commercial enrichers have indicated that their decisions to build 

new plant construction are supported by current market conditions. The Department of Energy encourages the efforts by the private sector to build new uranium 

enrichment capacity to help maintain a viable, competitive, domestic nuclear fuel 

industry. DOE is working with all private enrichers to assist companies in understanding and complying with U.S. laws and regulations regarding the protection of 

proliferation-sensitive enrichment technology. 

HEU PURCHASE AGREEMENT

Question 2. In 1992 [correction: Agreement was signed in 1993] the U.S Government signed The Highly Enriched Uranium Purchase Agreement, or ‘‘HEU deal,’’ 

with Russia to blend down 500 tons of highly enriched uranium (HEU) to low enriched uranium (LEU). The Russian Federation has signaled that they have no interest in continuing this program post 2013 when it is set to end. Do you consider 

it in the national security interests of the United States to continue blending down 

HEU to LEU for feedstock for commercial nuclear power plants beyond the 2013 

time period? 

Answer. The 1993 HEU Purchase Agreement has been an extremely important 

and successful effort in our bilateral nonproliferation partnership with Russia. This 

joint effort prevents large amounts of weapons material from being at risk for theft 

or diversion. This Agreement ensures that 500 metric tons of HEU from dismantled 

Russian nuclear weapons (the material equivalent of 20,000 nuclear weapons) will 

be eliminated by the end of the Agreement. To date, the U.S. has monitored the 

elimination of 325 metric tons of Russian HEU (approximately 13,000 nuclear weapons-worth of material). 

Certainly it is in the U.S. national security interest that excess weapons material 

continue to be dispositioned in a transparent manner consistent with U.S. nonproliferation goals. The U.S. raised the possibility of extending the HEU Agreement 

for additional downblending on several occasions. However, Russia has been clear 

during these discussions that its intention is to transition to normal commercial activity, and therefore it has no interest in extending the Governmentto-Government 

HEU Agreement beyond 2013. 

OFFICE OF SCIENCE

Question 1. I commend you for initiating a program in the Office of Science on 

energy storage to support the applied hybrid vehicles program, I understand the request is $33M. 

I was told 3 years ago you were initiating a similar Office of Science program in 

lighting to support the applied solid state lighting program—where is it? 

66 

Answer. In the Spring of 2006, we held a workshop on basic research needs for 

solid state lighting. Had the FY 2008 appropriation supported the requested level, 

we would have been able to initiate solid state lighting research during FY 2008; 

however, it did not. The FY 2009 budget request proposed Energy Frontier Research 

Centers which will bring together teams of investigators to address the grand challenges in basic research, as identified in several grand challenges workshops, and 

could include both solid state lighting and electrical energy storage. These new activities will complement the core research programs in semiconductor physics, 

nanostructured materials synthesis and design, and fundamental light-matter interactions, which provide the underpinning knowledge base for a broad range of energy 

utilization and conversion applications. 

OFFICE OF SCIENCE

At the start of this administration, the Department initiated three large billion 

dollar ‘‘game changing R&D programs’’, hydrogen, FutureGen, and reprocessing 

with milestones in many cases out to 2020. Here we are at the last year and where 

as best as I can see all three programs will be left up to the next administration 

to sort out. 

Question 2. I’d like your opinion if you had to do it over again knowing what you 

do today—would you have initiated these programs? 

Answer. I am proud of our accomplishments during this administration and the 

many advances in research and development that we have funded. The Department’s research and development programs have been managed in a manner that 

is fiscally sound, and accomplishes what we need to achieve on behalf of the Nation 

and, indeed, the world. In the case of FutureGen, the restructured approach to the 

program will offer an opportunity to focus on accelerating near-term technology deploying multiple projects integrated with carbon capture and storage technologies. 

Hydrogen has the potential to significantly reduce oil use, criteria pollutants, and 

greenhouse gas emissions. Through the Hydrogen Fuel Initiative, major progress 

has been made. Based on modeling, DOE estimates that projected high-volume cost 

of automotive fuel cells has been reduced from $275/kW to $94/kW. Similarly, DOE 

estimates that the cost of producing 5,000 psi hydrogen from natural gas has been 

reduced from $5.00 per gallon of gasoline equivalent (gge) to a projected $3.00 per 

gge (untaxed) today, and progress has been made in reducing the cost of renewable 

hydrogen production pathways. Many new materials have been identified with the 

potential to achieve the hydrogen storage capacities required onboard a vehicle in 

order to have an acceptable driving range. Over 90 fuel cell vehicles and 15 hydrogen stations are operating in real-world environments and providing performance 

data to validate the technology. The Department has requested $266 million in the 

FY 2009 budget for its Hydrogen Fuel Initiative programs. This funding continues 

the R&D needed to reduce fuel cell cost to $30/kW to help enable fuel cell vehicles 

to compete with conventional vehicles, to reduce the cost of other domestic pathways 

for hydrogen production, including hydrogen from coal (with carbon sequestration), 

biomass, renewable and nuclear energy sources and to achieve the hydrogen storage 

technology targets. 

The nuclear fuel recycling program is part of the Global Nuclear Energy Partnership (GNEP)/Advanced Fuel Cycle Initiative. GNEP is an international effort to increase the use of nuclear energy throughout the world in support of economic development without increasing greenhouse gas emission or nuclear proliferation. Twenty 

countries have joined the U.S. in this important endeavor, including all fuel cycle 

nations who are participants in the Nuclear Non-Proliferation Treaty (NNPT). 

Under GNEP, fuel cycle nations would assist other countries through the provision 

of smaller, grid appropriate nuclear power reactors and fresh fuel and waste management services. The U. S. pioneered both fast reactors and reprocessing as critical 

features of advanced nuclear fuel cycles, and the Department seeks to maintain and 

build on this expertise in the United States in partnership with industry. 

QUESTIONS FROM SENATOR DOMENICI

COMPETES PROGRAMS

Question 1. The Office of Science budget (on page 454) refers to ‘‘implementation 

of several new initiatives in the outyears consistent with recommendations WDTS 

stakeholders and the ACI.’’ It seems significant that the America COMPETES Act 

was not specifically referenced here as well. Does this signal the Administration is 

less committed to the DOE provisions of the COMPETES Act? 

Answer. The Department certainly supports many of the underlying goals of the 

America COMPETES Act. The Administration’s view of the DOE provisions of the 

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COMPETES Act was addressed in full in Office of Science and Technology Director 

Dr. Jack Marburger’s statement prepared for his February 14, 2008, hearing before 

the House Committee on Science and Technology: 

Consistent with the Administration’s approach to support the focused priorities of 

the ACI the DOE Office of Science analyzed the provisions of the COMPETES Act 

and determined that the Office is already supporting several programs which are 

consistent with the intent of the COMPETES Act. These include the DOE Academies for Creating Teacher Scientists (DOE ACTS) program which is comparable to 

the summer institutes authorized in the COMPETES Act; the Outstanding Junior 

Investigator award programs and the Office of Science Early Career Programs 

which are consistent with the early career award programs authorized; the Faculty 

and Students Teams Program which is consistent with the programs for minority 

students authorized; and such research centers as the DOE Bioenergy Research 

Centers and SciDAC Centers for Enabling Technologies at national laboratories 

which are consistent with the discover research centers authorized. These ongoing 

DOE programs are all supported in the FY 2009 budget request. 

In addition to the programs identified above, the Office of Science Office of Workforce Development for Teachers and Scientists, working with the other Office of 

Science Program Offices and the national laboratories, continues to build the Office 

of Science’s efforts in increasing participation of historically underrepresented populations, and improving the laboratories’ capacity to bring experiential learning opportunities to the educational institutions in their respective regions. 

Question 2. Do the ACTS and FaST programs encompass any of the specific programs authorized in COMPETES? If so, which ones, and how will the funding by 

allocated between these efforts? 

Answer. The Faculty and Student Teams (FaST) Program is consistent with the 

intent of Section 5003(d) of America COMPETES Act to provide experiential-based 

learning programs for minority students. 

The FaST program pairs college/university faculty and undergraduate students in 

teams with mentoring scientists at the DOE national laboratories for research intensive experiential-based learning opportunities. To qualify for the FaST program, 

an applicant’s college/university must be below the 50th percentile in receipt of federal research funding. The majority of participants in the FaST program come from 

under-represented colleges/universities. This is one of the key programs in the Department of Energy/National Science Foundation partnership and encourages underrepresented minority students to pursue careers in science, engineering, and mathematics. The Office of Workforce Development for Teachers and Scientists (WDTS) 

is currently developing a tracking and evaluation process for all of its programs, including the FaST program. 

The DOE Academies Creating Teacher Scientists (DOE ACTS) program, carried 

out at the DOE national laboratories, is consistent with the summer institutes authorized in Section 5003(d) of the COMPETES Act, which calls for the establishment 

or expansion of programs of summer institutes at each of the DOE national laboratories to provide additional training to strengthen the science, technology, engineering, and mathematics (STEM) teaching skills of teachers employed in public schools 

for K-12 students. FY 2008 is the fourth year the DOE ACTS program will bring 

K-12 teachers into the national laboratories for research intensive experientialbased opportunities to build their content knowledge in STEM fields—knowledge 

which they then bring back to their classrooms. The teachers selected for the program participate in research at the DOE national laboratories for three consecutive 

summers. 

Funding allocated to the FaST and DOE ACTS programs is summarized in the 

following table: 

STRATEGIC PETROLEUM RESERVE (SPR)

Question 1. The Department’s FY 2009 budget requests $344 million, an 84.2% 

increase for SPR expansion. Please explain the current SPR status and purpose, and 

the reasons for an expansion of 727 million barrels to 1.5 billion barrels. 


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Answer. The SPR currently holds approximately 701 million barrels of crude oil 

to carry out its mission to provide the United States energy security and to help 

meet the country’s obligations under the International Energy Program (IEP). While 

the U.S. meets its IEP stockholding obligation through a combination of government-owned SPR oil and privately-held commercial stocks, the current SPR inventory alone provides about 58 days of net import protection. The SPR plans to increase its inventory to 727 million barrels in 2008 to provide about 60 days of protection. The proposed expansion to 1.0 billion barrels will increase the import protection to 90 days in 10 years (i.e. 2019). The proposed expansion to 1.5 billion barrels will increase the import protection to 124 days. 

Question 2. What is the current vulnerability of the United States to petroleum 

supply disruptions? Is the current SPR inventory and import protection enough to 

sustain a major supply disruption? Please compare our import protection today with 

past decades. 

Answer. The current SPR inventory of 701 million barrels provides about 58 days 

of net import protection. However, it is unlikely that a supply disruption would result in a 100% cutoff of imports due to the continued supplies from historically stable sources in the Western hemisphere. In addition, through our membership in the 

International Energy Agency, we participate in coordinated response measures to 

severe global supply disruptions. 

The current sustained SPR drawdown capability rate of 4.4 million barrels per 

day would replace approximately 45% of crude oil imports for a 90-day period, and 

the entire Reserve can be drawn down in 180 days in response to a very severe supply disruption. The drawdown can be sustained at lower rates for a much longer 

period. 

As the Nation’s import volumes have increased, the days of the SPR’s net import 

protection have ranged from a high of 118 days in 1985 to a low of 52 days in 2000. 

The days of import protection provided by SPR oil will increase to 60 days when 

the SPR is filled to the current 727 million barrel capacity, to 90 days with 1 billion 

barrels in storage, and to 124 days with expansion to 1.5 billion barrels. 

Question 3. What are the Department’s current drawdown capabilities and what 

will be the drawdown capabilities as a result of the expansion? 

Answer. The Department has current drawdown capability of 4.4 million barrels/ 

day and expansion to 1 billion barrels will increase SPR drawdown capability to 5.9 

million barrels/day. 

Question 4. Will the United States’ import protection increase as a result of the 

expansion? Or will our import protection decrease if we do not expand or stop filling 

the SPR? 

Answer. The SPR has been increasing its inventory in a moderate and transparent manner. During Spring 2008, its level of about 701 million barrels will provide 58 days of import protection. The SPR plans to increase its inventory to 727 

million barrels, providing 63 days of protection in 2009. 

However, the proposed expansion to 1.0 billion barrels will increase the import 

protection to 90 days in 10 years (i.e. 2019). The proposed expansion to 1.5 billion 

barrels will increase the import protection to 124 days. 


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Question 5. What are the Administration’s acquisition procedures for the SPR and 

does the Administration evaluate the potential market impact of filling the SPR? 

Answer. The Energy Policy Act of 2005 (EPAct 2005) requires acquisition of petroleum to fill the Strategic Petroleum Reserve to its authorized one billion barrel capacity ‘‘as expeditiously as practical without incurring excessive costs or appreciably 

affecting the price of petroleum products to consumers’’; and directs the Secretary 

of Energy to promulgate procedures for the acquisition of petroleum for the Reserve. 

Section 301(c) of EPAct 2005 directs that the acquisition procedures: 

1. Maximize overall domestic supply of crude oil; 

2. Avoid incurring excessive cost or appreciably affecting the price of petroleum products to consumers; 

3. Minimize the costs to the Department of the Interior and the Department 

of Energy in acquiring such petroleum products; 

4. Protect national security; 

5. Avoid adversely affecting current and futures prices, supplies, and inventories of oil; and, 

6. Address other factors the Secretary determines to be appropriate. 

After consideration of public comments, the Department of Energy promulgated 

Procedures for the Acquisition of Petroleum for the Strategic Petroleum Reserve (10 

CFR 626), effective December 8, 2006. 

The Procedures establish the rules and procedures for acquisition of SPR crude 

oil by direct purchase or royalty-in-kind (RIK) transfer. The Procedures also specifically address deferrals of contractually scheduled deliveries. Since their publication, 

the Procedures have been closely followed in all crude oil acquisition activities. 

The Procedures require a complete market analysis be performed prior to any oil 

fill activities to ensure that Strategic Petroleum Reserve acquisition activities will 

not unduly affect current market conditions adversely. Since the beginning of 2007, 

three separate market assessments have been performed prior to initiating activities 

to attempt acquisition by direct purchase and for the two RIK exchange cycles. 

Question 6. What is the United States’ obligation as a Member Country of the 

International Energy Program? Is the United States currently meeting those obligations? 

Answer. Under the International Energy Program (IEP), the United States is obligated to hold emergency oil stocks equivalent to at least 90 days of net oil imports 

and to release stocks, restrain demand, switch to other fuels, increase domestic production or share available oil, if necessary, in the event of a major supply disruption. 

The United States meets its IEP obligations through a combination of SPR and 

non-compulsory industry stocks. The SPR provides 58 days of import protection; the 

remaining portion is satisfied through industry stocks. 

Question 7. Please explain how filling the SPR at a rate of 45,000 barrels day 

(.05% of world supply), or 15,000 barrels per day of light sweet crude (.075—.10% 

of world light sweet supply) would impact crude oil market prices when world oil 

consumption is reaching approximately 90 million barrels per day. 

Answer. Oil received by the SPR represents a very small fractional amount of 

global demand. The Office of Petroleum Reserves conducted an analysis before the 

present round of Royalty-in-Kind acquisition activity commenced. This analysis 

found that market conditions were such that the acquisition of this small amount 

of oil would not appreciably impact oil market prices. 

WATER POWER

For the past three years, the Administration has requested zero funding for hydropower R&D as it sought to eliminate its conventional hydropower program. Due 

to promising ocean and tidal technology, DOE seeks $3 million in FY 2009. In FY 

2008, Congress appropriated about $10 million for the water power program. 

Question 1. While $3 million is a start after three years of zero funding, it is still 

significantly less than the FY08 level of $10 million. How does the Department propose to reestablish the hydro program? Along with new initiatives for ocean, tidal 

and in-stream hydrokinetic technologies, as authorized by last year’s Energy bill, 

will R&D for conventional hydropower be continued? 

Answer. The Department no longer has a research and development program exclusively devoted to hydropower. However, the Office of Energy Efficiency and Renewable Energy has established a new Water Power Program, in accordance with 

the FY 2008 omnibus appropriations bill, to begin research on a variety of 

hydrokinetic technologies. Although conventional hydropower is not entirely exVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00073 Fmt 6601 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
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cluded in FY 2008, the new Program’s focus will be on new, innovative, and advanced hydrokinetic technologies. 

The FY 2009 Water Power program will initially focus on (1) resource assessments in order to identify the prime domestic resource areas and based on these 

results, (2) technology characterizations of the various water power energy conversion technologies, with the goal of determining cost, performance and reliability 

characteristics, and (3) industry partnerships to take advantage of early industry 

demonstration projects to assess the performance and cost of real projects in the 

ocean. 

Question 2. In the recently enacted Energy bill, Congress authorized the establishment of National Marine Renewable Energy Research, Development, and Demonstration Centers for the purposes of advancing commercial application of marine 

renewable energy. 

How does the Department intend to proceed with the establishment of these Centers? How many Centers do you anticipate and what timetable are you envisioning? 

Answer. With authority provided in the Energy Independence and Security Act 

of 2007 and earlier energy legislation, the Department of Energy has requested proposals for water power projects in three areas: 

• Topic Area 1: Advanced Water Power Renewable Energy In-Water Testing and 

Development Projects 

• Topic Area 2: Marine and Hydrokinetic Renewable Energy Market Acceleration 

Projects 

• Topic Area 3: National Marine Renewable Energy Centers 

The National Marine Renewable Energy Research, Development, and Demonstration Centers would perform research on emerging marine and hydrokinetic technologies. The solicitation is seeking proposals for Centers that will be established 

and operated by university-led consortia, with an initial focus that includes characterizing water power technologies. DOE would provide up to $500,000 annually up 

to three years (with optional two year extension), subject to appropriations, with at 

least a 50 percent cost share from the chosen Center(s). The awards may be used 

for research and major equipment purchases, but not for infrastructure development 

(buildings, wave simulation facilities, etc.). DOE reserves the right to make one 

award, multiple awards, or no awards in any given topic area. 

SMART GRID

Question 1. Do you anticipate any problems or delays in your agency meeting its 

responsibilities in the area of encouraging infrastructure build out of smart grid? 

Answer. No. Our Fiscal Year 2009 budget contains a $5 million request for Smart 

Grid Development and Implementation activities. This will enable the Department 

to carry out its responsibilities without major problems or delays. 

Question 2. Have you made final decisions on the Smart Grid Advisory Committee 

and/or the task force? 

Answer. Establishment of the Smart Grid Task Force is another effort that OE 

is leading on the Department’s behalf. Assistant Secretary Kolevar has appointed 

a Director for the Smart Grid Task Force and has invited participation from Department of Energy’s Office of Energy Efficiency and Renewable Energy, as well as 

other Federal agencies, including, the Federal Energy Regulatory Commission, the 

National Institute of Standards and Technology, the U.S. Departments of Agriculture (Rural Utility Services), Homeland Security, and Defense, and the Environmental Protection Agency. The initial meeting of the Task Force is planned for 

March 2008. 

POWER MARKETING ADMINISTRATIONS—WAPA

The FY 2009 budget request for the Western Area Power Administration assumes 

an unprecedented increase in advanced customer funding—over $116 million. In 

particular, the budget assumes $72.6 million in advanced customer funding for 

WAPA’s construction fund, while the Administration would fund only $1.8 million 

for construction. 

While Western’s customers can and do provide some advanced funding, there is 

a limit to the amount they can fund. If customers cannot advance the funds, WAPA 

must curtail its construction program which, in turn, could impair the reliability of 

its power and transmission systems. 

Question 1. Why is the Administration assuming WAPA’s customers can advance 

the necessary funding? What kind of analysis did OMB conduct to reach this conclusion? 

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Answer. Based on our longstanding working relationships with our customers, the 

Western Area Power Administration believes that advance funding from our customers for construction and rehabilitation projects will allow for additional transmission system improvements to proceed, ultimately improving system reliability. In 

fact, many of Western’s customers continue to be supportive of the advance funding 

concept for construction and rehabilitation (C&R) projects. Such funding allows the 

distribution of responsibility for project funding to those customers who directly benefit from Western’s activities. Although Western’s customers have not previously 

provided advanced funding at the levels assumed in the FY 2009 C&R budget, 

Western will continue to work with its customers during the year to achieve the 

level assumed in the budget request. Western will of course also continue to identify 

those C&R projects most critical to system reliability to allow for their completion 

on a priority and timely basis within the available amount of appropriations and 

customer advanced funding. 

Question 2. The FY 2009 budget request for the Western Area Power Administration assumes an unprecedented increase in advanced customer funding—over $116 

million. In particular, the budget assumes $72.6 million in advanced customer funding for WAPA’s construction fund, while the Administration would fund only $1.8 

million for construction. 

While Western’s customers can and do provide some advanced funding, there is 

a limit to the amount they can fund. If customers cannot advance the funds, WAPA 

must curtail its construction program which, in turn, could impair the reliability of 

its power and transmission systems. 

Does Western need to have generic authority to borrow funds from either the 

Treasury, like BPA, or from private parties? 

Answer. Western does not have general authority to borrow from either the Treasury or private parties, and such borrowing authority is not needed. As discussed in 

the answer to the previous question, Western will continue to work with its customers to achieve $116 million of customer advances assumed in the FY 2009 Budget request for its construction program and operating costs. However, the Administration supports an alternative approach to financing Western’s operating costs that 

would reduce the need for a portion of customer advances. Included in the $116 million of assumed customer advances for FY 2009 are $44 million of customer advances for operating costs, including $12 million for purchase power and wheeling 

costs. The Budget also includes an appropriation request of $132 million for operating costs. However, A ‘net zero’ appropriation for these annual operating costs 

would allow Western to meet its program requirements within its appropriation targets, with less reliance on customer advances for this purpose. Specifically, net zero 

appropriations would provide funding for Western’s annual expenses and would be 

offset on a dollar-for-dollar basis by receipts to result in an annual net appropriation 

of $0 for Western’s operating expenses. Western’s other expenses, such as capital 

investments and the purchase power and wheeling program, would continue to be 

financed using current financing methods rather than net zero appropriations. Although the FY 2009 budget does not include a ‘net zero’ proposal, the Administration continues to support this approach through the reclassification of receipts from 

mandatory to discretionary for Western’s annual operating expenses—a necessary 

step to adopting net zero appropriations without adverse scoring implications for the 

appropriations bill. Reducing the need for customer advances for operating costs 

would provide customers with additional financial flexibility that could be helpful 

in funding customer advances for Western’s construction costs. 

ENERGY SAVINGS PERFORMANCE CONTRACTING (ESPC) 

Question 1. Has the Administration taken advantage of the permanent ESPC reauthorization in the Energy bill? 

Answer. Yes. DOE is promoting the use of ESPCs to implement energy management projects in Federal facilities government-wide as one way to help agencies 

meet energy efficiency goals set out in Executive Order and statute. The use of 

ESPCs, a form of performance-based contracting, is being tracked and encouraged 

by the Federal Energy Management Program (FEMP). 

FEMP’s FY 2008 budget of $19.8 million includes $8.6 million to support Project 

Financing, which includes the following key ESPC-related activities: 

• ESPC Federal Financing Specialists and Federal Project Facilitators to provide 

individual facility management and procurement teams with ESPC, UESC, and 

other project implementation guidance. 

• Outreach and marketing programs to educate Federal agencies on the costs and 

benefits of ESPCs and other third-party financing tools. 

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• DOE’s TEAM (Transformational Energy Action Management) Initiative to ensure that all DOE facilities meet or exceed EPACT, E.O. 13423, and EISA Federal energy management goals and comply with EISA training requirements. • DOE’s efforts to franchise the TEAM initiative as a model for other Federal 

agencies. 

In addition, DOE and DOD jointly chair the Interagency ESPC Steering Committee to identify and resolve issues inhibiting the implementation of ESPC-financed projects government wide. 

Question 2. What are your plans for engaging those agencies that are not currently using ESPCs to improve their energy performance? 

Answer. DOE’s Federal Energy Management Program (FEMP) supports activities 

designed to encourage agencies to use ESPCs and Utility Energy Service Contracts 

(UESCs) to finance facility energy management projects to help achieve Executive 

Order and statutory energy efficiency goals. 

The Transformational Energy Action Management (TEAM) Initiative, established 

to implement the provisions of the Executive Order 13423 on an accelerated basis, 

is foremost among these efforts. DOE has formalized the TEAM Initiative planning, 

implementation, data collection, and analysis process within a Departmental order 

(Order 430.2B) to institutionalize this effort. The Department is documenting an implementation model that can be adopted by other agencies and tailored to meet their 

facility and mission needs. 

Another important effort is the DOE Super ESPC contract, which promotes region 

and technology-specific energy service company (ESCO) contracts and is available 

for use by all Federal agencies. Agencies can take advantage of Super ESPC training provided by FEMP. Super ESPC workshops are taught in various DOE regions 

each year for agency acquisition teams embarking on energy improvement projects. 

Telecourses and FEMP-sponsored symposia are other ways that the Department informs Federal agencies about Super ESPCs. 

DOE is also using staff to assist other agencies. FEMP maintains a staff of four 

Federal Financing Specialists, and each is assigned to a region of the country to provide individual facilities and agency sites with guidance on the most appropriate financing tool to fund their energy management projects. FEMP also contracts Federal Project Facilitators who are experts in the field and guide agencies through the 

ESPC process. Project facilitators and others on FEMP’s team provide consultation 

to agency customers on contracting and financing issues, measurement and 

verification, and technology and engineering issues. 

Question 3. As DOE moves forward with its ESPC solicitation, does the Department share the Defense Department’s goal to include one or more small businesses 

as a prime contractors [sic]? 

Answer. DOE is very interested in small business participation in the Energy 

Savings Performance Contracting (ESPC) program and all of its other programs as 

well. The ESPC solicitation, issued on October 11, 2007, contains language to promote small business plans and did not restrict any business from competing for an 

award of a contract. DOE will ensure that contractors are selected based upon the 

merits of their proposals (a process that is required by law and DOE policy). DOE’s 

approach to this procurement is consistent with, and has been reviewed by, the 

United States Small Business Administration. 

FUTUREGEN REQUEST FOR INFORMATION

In restructuring FutureGen, DOE has issued a Request for Information with draft 

project guidance, some of which appear to have not been very carefully developed. 

At the end of the 109th Congress and during the 110th, the President has signed 

into law two pieces of legislation to amend Section 1307 of EPACT 05 and Section 

402 of EPACT 05 so that sulfur removal criteria are based on a pounds per BTU 

measurement rather than a percentage. 

Question 4. Why does your Request for Information not account for this important 

change? 

Answer. The FutureGen Funding Opportunity Announcement, which will be released after comments to the RFI are addressed, will include a pounds per BTU 

measurement for the sulfur removal criteria. 

CARBON CAPTURE AND STORAGE

In attempting to expedite demonstration of carbon sequestration’s viability, DOE 

is poised to drill for and release naturally occurring CO2 in one place only to reinject it at another location. We want to reduce man-made CO2 emissions, but our 

ability to do so hinges upon whether or not CO2 can in fact be economically captured 

at industrial facilities in the first place. 

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Question 5. Why does the Department not wait until plants capable of capturing 

CO2 are successfully demonstrated before devoting resources to the injection of CO2? 

Answer. The Department has efforts underway to successfully demonstrate CO2

capture and to reduce its cost while simultaneously working to demonstrate storage 

of CO2 in deep geologic formations. Waiting for plants capable of economically capturing CO2 to be successfully demonstrated and not simultaneously focusing on CO2

storage will significantly delay the entire carbon capture and storage effort. Plants 

that can capture large volumes of CO2 will not be demonstrated for several years, 

which will delay critical near-term advancements in CCS to prove successful. Studies are being done to determine the extent to which CO2 moves within the geologic 

formation, and what physical and chemical changes occur to such formations when 

CO2 is injected. This information is key to developing technologies and processes 

that could ensure that sequestration will not impair the geologic integrity of an underground formation and that CO2 storage is secure and environmentally acceptable. Demonstrating that geologic storage of CO2 can be done safely and effectively 

will advance public acceptance of CCS technology for mitigating greenhouse gas 

emissions. Waiting for large volumes of CO2 to be available from commercial plants 

before working on the remaining research, development, and demonstration of storage technology will cause significant delays in the commercial deployment of CCS. 

Successfully demonstrating capture of CO2 without having the ability to store the 

significant volumes of CO2 that will be captured will not help in reducing CO2 emissions. Parallel paths of research and demonstration of CO2 capture along with that 

of research in geologic formations to understand the behavior of CO2, is the best 

course to advance CCS technologies. 

BIOMASS/RENEWABLE FUELS STANDARD

I am pleased that Biomass and Biorefinery R&D is increased by 13.5 percent 

($26.8 million) to $225 million. The program includes feedstock resource assessment 

and infrastructure development, conversion R&D, commercial scale biorefinery demonstration projects, and addressing barriers to biofuels distribution and end use. 

Question 1. Will the increased program allow the department to expand work on 

alternative feedstocks available in different regions of the nation? I am particularly 

interested to know if greater research will be allocated to develop algae-based 

biofuels. 

Answer. DOE is committed to targeting its R&D as effectively as possible to develop cost effective, clean renewable fuels. To that end, we are investigating the potential of a wide range of feedstocks, including algae, to produce alternatives to petroleum-based fuels. The Department has discussed ongoing algae research with 

other Federal Agencies, including the Environmental Protection Agency, and the Departments of Defense and Agriculture. 

Currently, biodiesel produced from oilseed crops such as soybeans is commercially 

produced on arable land while algae are still in the research and development stage. 

Due to their potential high yields, small land requirements, and their ability to absorb vast amounts of CO2 (in co-production with coal-fired plants, for example, algae 

may warrant further investigation even though they will not contribute to our fuel 

mix in the short-term. 

Question 2. Will this increased funding support the establishment of additional 

bioenergy centers, as authorized in the Energy Policy Act of 2007? 

Answer. The increased funding for EERE’s Biomass and Biorefinery R&D will not 

support the establishment of additional Bioenergy Research Centers in the Office 

of Science. 

Congress appropriated $75 million ($25 million per BRC) for the Office of Science 

in FY 2008 to operate these three Centers, and the President’s FY 2009 Budget Request includes $75 million to support their continued operation. The Department’s 

Office of Science does not plan to issue a FOA requesting applications for additional 

Bioenergy Research Centers, but the Department does intend to continue supporting 

fundamental and applied bioenergy research through standard merit-reviewed procurement processes. For example, the Department’s Office of Science has issued a 

joint USDA-DOE program solicitation for research on plant feedstock genomics for 

bioenergy and is strongly encouraging proposals not only from individual investigators but also from interdisciplinary teams comprising a range of expertise. Pending 

the outcome of the merit review process, awards are expected to be made in FY 

2008. 

The additional funds requested for EERE’s Biomass Program will be directed to 

the already announced pilot and commercial-scale biorefineries. 

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MOX FACILITY

Question 1. Can you tell me how the program will be impacted as a result of the 

deep cuts imposed by the FY’08 bill and how this will impact the cost and schedule? 

Answer. The total project cost to design, construct, and complete cold start-up activities for the MOX Fuel Fabrication Facility is $4.8 billion, including contingency 

and escalation. This estimate assumed Congressional appropriation of the President’s FY2008 and outyear budget requests without significant reduction or restriction. The Department currently is evaluating the potential effects of the Consolidated Appropriations Act 2008, on the cost and schedule for the MOX facility, while 

continuing to explore ways to reduce delays. However, due to the funding reductions 

contained in the Consolidated Appropriations Act, 2008, we are revising the cost and 

schedule baseline for the MOX Fuel Fabrication Facility. Although DOE is committed to constructing and operating the MOX facility as expeditiously as possible 

and will use best efforts to mitigate any potential delays, we expect that the revised 

baseline, when completed and independently validated, may extend the MOX construction schedule and increase the total project cost. 

Question 2. Can you please explain the challenges and costs the Department is 

facing in transferring this activity from the Office of Nuclear Nonproliferation to the 

Office of Nuclear Energy? 

Answer. As a threshold matter, it does not appear that the Consolidated Appropriations Act, 2008, actually transferred the MOX program from NNSA to the Office 

of Nuclear Energy, and there is a significant question as to whether the Secretary 

has the legal ability to effectuate the transfer contemplated by the accompanying 

committee report. This circumstance is described more completely in the attached 

memorandum by the General Counsel dated February 22, 2008. 

Furthermore, dividing the responsibilities for and the funding of three inter-related projects (the MOX Fuel Fabrication Facility, the Pit Disassembly and Conversion Facility, and the Waste Solidification Building) complicates effective project 

management, and increases program risks, including cost and schedule risks. We 

believe that it is not an optimum way to fund or manage these projects. 

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NUCLEAR WASTE/YUCCA MOUNTAIN

The 2009 Budget Request indicates that, despite a funding cut in 2008, the Nuclear Waste program still plans to file a license application for the Yucca Mountain 

repository this summer. DOE estimates that between $1.5 and $2 billion per year 

will be required to open the repository by 2017. 

Question 3. However, if the funding for the program continues at the current 

level, what is the projected opening date for the repository? 

Answer. The Department is unable to project an opening date for the repository 

if the funding for the Program were to continue at the 2008 funding level. The Administration has proposed funding reform legislation for the Program to facilitate 

more direct access to Nuclear Waste Fund annual receipts. Until funding reform is 

enacted, the Department will not be able to project a credible opening date for the 

repository. 

Question 1. The Federal Government is on the hook for paying for on-site storage 

costs for nuclear plants as a result of its failure to meet its contractual commitment 

to begin moving spent fuel in 1998. Previously, DOE estimated that the government’s liability would be $7 billion IF Yucca Mountain were to open in 2017 and 

$11 billion if it were to open in 2020. So, at that point, the liability is growing at 

$1.3 billion per year. This is money that is paid out directly from the judgment 

fund. 

Has DOE calculated the cost to the taxpayer if the Government doesn’t move 

spent fuel by 2030, 2040, 2050, etc? 

Answer. No. The Department has not calculated these costs. The Department 

notes, however, that calculation of potential costs is a complex matter and that it 

cannot be assumed that liability will grow at $1.3 billion or more per year in the 

period after 2020. On average, the liability will grow by $500 million annually. 

Question 2. In the past, DOE has estimated that, if it starts moving spent fuel 

in 2020, it would take 20 years to work off the ‘‘backlog’’ of spent fuel that it is contractually obligated to take. Have you done the calculations on how long it would 

take if spent fuel begins to move in 2030, 2040, 2050 etc. Is it possible that, if the 

government starts taking fuel late enough, that it may be virtually impossible to 

ever catch up? 

Answer. The Department is contractually obligated to accept all the spent nuclear 

fuel generated by the commercial nuclear power reactors covered by Standard Contracts for disposal of spent nuclear fuel. As of the end of 2007, the Department estimates that the inventory of spent nuclear fuel discharged from these reactors was 

approximately 58,000 MTHM. The current fleet of reactors will continue to discharge about 2,000 MTHM of spent nuclear fuel each year. If all the 104 operating 

reactors receive and utilize a 20 year license extension, the Department estimates 

that, at the end of operations, the current nuclear power reactor fleet will have discharged about 130,000 MTHM of spent nuclear fuel. When fully operational, the 

Yucca Mountain repository is expected to be able to receive about 3,000 MTHM annually. Accordingly, assuming the statutory limit of 70,000 MTHM is lifted, it would 

take about 40 years from the time it begins operation for the Yucca Mountain repository to receive the approximately 130,000 MTHM of spent nuclear fuel that will 

have been generated by the nuclear power reactors covered by the Standard Contract. 

Question 1. Current law imposes a 70,000 metric ton limit on spent fuel that can 

be placed in Yucca Mountain. Even if Yucca Mountain were to open, by 2010, there 

will be enough spent fuel in the U.S. to fill Yucca to its statutory capacity. Current 

law also requires DOE to start thinking about a second repository. 

Are you doing this, and are you considering the uses of recycling technologies to 

reduce the need for a second repository? 


doe5.eps
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Answer. The Department by statute (P.L. 102-486) is preparing the Second Repository Report that will assess the need for a second repository and make recommendations for action. The Department expects to issue this report to Congress 

this summer. The Department has stated that if the 70,000 MTHM statutory limit 

were lifted legislatively, a second repository would not be needed for a significant 

amount of time. The Department also supports the exploration of the recycling technologies which could reduce the volume and radiotoxicity of the amount of spent nuclear fuel destined for permanent disposal. 

Question 2. If Yucca Mountain doesn’t open, what happens to the defense waste 

currently stored at Hanford, Savannah River and other DOE sites? 

Answer. If Yucca Mountain does not open, the defense waste currently stored at 

Hanford, Savannah River and other Department of Energy sites will remain at 

those sites until a final disposition path is determined. 

Question 3. Please explain your plan for deploying the $38.5 billion in loan guarantees and how this can change our energy markets. 

Answer. The Department’s authority for loan guarantees to be issued under Title 

XVII of the Energy Policy Act of 2005 (EPAct 2005) in FY2008 is established in the 

Consolidated Appropriations Act, 2008 (Act). The Act itself does not set a dollar 

limit on the authority of DOE to issue loan guarantees. However, the Committee 

Report accompanying the Act indicated that a total of $38.5 billion of loan guarantees could be extended on or before the end of FY2009. 

The Act requires that before executing a new solicitation, DOE must submit to 

the Committees on Appropriations an implementation plan that defines the proposed award levels and eligible technologies, and wait at least 45 days. The Department plans to submit an implementation plan, pursuant to this requirement, as 

soon as possible. 

Consistent with the statutory purposes of Title XVII of EPAct 2005, the loan guarantees to be issued there under are intended to help change our energy markets by 

encouraging early commercialization in the United States of new or significantly improved technologies that avoid, reduce, or sequester air pollutants or anthropogenic 

emissions of greenhouse gases. The Department is moving forward in this regard 

with each of 16 projects invited to submit full loan guarantee applications in October 2007 in response to DOE’s initial solicitation in 2006. The Department is working to ensure that the first loan guarantee agreements will be executed before the 

end of 2008. 

ENERGY STORAGE DEVICE R&D

I was pleased to see the request for the vehicle technologies program increases 

to $221.06 million for vehicle technologies R&D, an increase of $8.04 million from 

the FY 2008. The budget summary indicates this will focus core R&D activities to 

support accelerated development of plug-in hybrids, including development of lithium ion batteries. 

I am concerned that the Department is focusing so narrowly on lithium ion batteries. Recent advances in lead acid battery technology, for example, may make this 

chemistry a viable candidate for vehicle applications. 

Question 4. Does the Department have any plans to review progress in other battery chemistries, and possibly expand its research portfolio if appropriate? 

Answer. DOE routinely benchmarks state-of-the-art battery technology to gauge 

performance and maturity, and guide R&D planning. Benchmark testing of emerging technologies is important for remaining abreast of the latest industry developments. DOE regularly purchases advanced battery hardware (cells and modules) 

and independently tests these battery systems against the most applicable advanced 

vehicle battery performance targets. In addition, DOE provides funding support 

(through the Advanced Lead Acid Battery Consortium, ALABC) for support of advanced lead acid batteries technology development. 

METHANE HYDRATES

Question 5. Could you please clarify the remarks you made during the hearing 

regarding the Department’s support for methane hydrate research? 

Answer. The Administration does not support spending Department of Energy 

funds for research and development (R&D) on safety or production of methane hydrates, given the economic incentives industry has to pursue this R&D on its own. 

This is consistent with its position that oil and gas are mature industries and both 

have every incentive, particularly at today’s prices, to enhance production and continue research and development of technologies on their own. There is no need for 

taxpayers to subsidize oil and gas companies in these efforts. However, several other 

government agencies support methane hydrate research where it fits their missions, 

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including the U.S. Geological Survey (USGS), the Bureau of Land Management 

(BLM), and Minerals Management Service (MMS) within the Department of Interior; the National Oceanic and Atmospheric Administration (NOAA); the National 

Science Foundation; and the Naval Research Laboratory. 

POWER PLANTS—COOLING TOWERS

There has been concern about how the federal government may deal with the potential retrofit of cooling towers at power plants that are currently equipped with 

once-through cooling technologies. As you may know, EPA is currently engaged in 

a rulemaking evaluating appropriate standards associated with cooling water intake 

structures at power plants. 

Question 6. Please provide an assessment of the reliability and cost impacts that 

could likely result from a requirement to install cooling towers or similar systems 

at all power plants. 

Answer. There are very significant potential impacts associated with retrofitting 

the 500-plus existing plants using once-through cooling facilities ranging from the 

capital cost of the retrofit to the lost power during the conversion to the permanent 

energy capacity reductions (‘‘penalties’’). The Department of Energy has not performed recent detailed studies on this issue; The estimates for capacity reductions 

(or ‘‘penalties’’) range from around 3 percent to 13 percent depending on site conditions and the cooling tower technology selected. Closed-cycle cooling tower technology can result in an energy penalty of 8.8 to 13.1 percent over once-through cooling since the cooling water is warmer, and pumps and fans associated with cooling 

towers require energy to operate. For wet cooling towers, the peak summer energy 

penalty ranges from 2.4% to 4.0% and wet cooling towers are not practical where 

water consumption is a concern. 

Older, less economical facilities, especially those used for supplying peak power 

demand, would likely not be able to bear the cost of retrofits and be forced to retire. 

There are also some facilities that it will not be possible to retrofit. These include 

facilities that simply do not have adequate space to install closed-cycle cooling systems or may not be able to obtain permits for such systems due to local laws and 

regulations. 

QUESTIONS FROM SENATOR AKAKA

DNN BUDGET CUTS

I see that a number of important nuclear security programs have had their budgets cut. For example, The Defense Nuclear Nonproliferation appropriation has been 

reduced by $88.9 million as compared to FY 2008. However, many experts agree 

that the threat of nuclear and radiological terrorism continues to increase, not decrease. In fact, the Director of National Intelligence, Michael McConnell, stated earlier this week that ‘‘al-Qaida and other terrorist groups are attempting to acquire 

chemical, biological, radiological, and nuclear weapons and materials. 

Question 1. Given this looming threat, why are these programs being cut? Many 

of these programs have been funded for nearly seven years or more. 

Answer. The Department remains committed to deterring, detecting, and preventing the spread weapons of mass destruction (WMD) material and technology 

around the globe. The appearance of a large reduction in this program in 2009 results from two actions taken by the Congress in FY2008: the appropriation transferred funding of about $600 million in construction activities (the MOX project and 

the Pit Disassembly and Conversion Facility) out of Defense Nuclear Nonproliferation to other DOE programs, and the Congress added over $480 million in additional 

FY 2008 funding to the remaining programs in the Defense Nuclear Nonproliferation account. 

The FY 2008 and FY 2009 programs will continue the Administration’s acceleration of nonproliferation efforts as noted in four specific exampled. 1) We have accelerated our nuclear materials security work in Russia by two years, completing 85% 

of the Bratislava work with the balance of sites to be complete in calendar year 

2008. 2) We have signed an agreement with Russia to accelerate the completion of 

all land border crossings by 6 years. 3) We are hopeful that we will be able to accelerate our Elimination of Weapons Grade Plutonium Producing Reactors work in 

Russia by one year. 4) We have accelerated our work to convert or shutdown research reactors using Highly Enriched Uranium. Moreover, our strong commitment 

to nonproliferation leads us to seek other ways to continue acceleration in these programs. 

Question 2. What kinds of benchmarks do you use to measure success in them? 

Can you do more with less, and, if so how? 

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Answer. We use different benchmarks for each of our programs, because their 

missions vary widely. Our mission is to detect, secure and dispose of dangerous nuclear and radiological materials around the globe. Recognizing the global and evolving nature of the nonproliferation threat, we have expanded our work to over 100 

countries. This includes work to secure nuclear materials, such as in Russia, where 

we have secured 85% of nuclear weapons sites and concern, and across the globe 

where we have repatriated over 1,730 kgs of highly enriched uranium (enough for 

nearly 70 nuclear weapons). We have secured over 600 vulnerable radiological sites 

overseas. We worked to dismantle Libya’s program, and are continuing to oversee 

the disablement of North Korea’s nuclear program. We have trained over 5,600 domestic and nearly 8,000 international officials on export controls and WMD identification, and trained over 1,000 foreign nuclear facility operators on nuclear safeguards. We have also worked to accelerate the shutdown of 3 Russian plutonium 

production reactors, which will prevent the production of about a ton and a half of 

weapons grade plutonium annually. 

To answer the second question, we also measure our success by how quickly and 

smartly we undertake our global mission to reduce and eliminate these dangerous 

nuclear and radiological materials. To that end, we will continue to accelerate our 

nonproliferation efforts, emphasize cost-sharing and sustainability of these efforts 

with international partners, and strengthen our project management. 

QUESTIONS FROM SENATOR BARRASSO

The Cooperative Research and Development program within the Office of Fossil 

Energy supports activities of federal, industry, and research institute endeavors. It 

is a joint program with the Western Research Institute and the University of North 

Dakota. Your budget explanation suggests this program can compete for other 

grants. I, too, am confident that this program can, will, and has successfully competed for other grants. That fact does not take away from its core mission historically supported by Congress for many years. By all accounts, this is a success story 

in terms of research, in terms of leveraging private funds, and in terms of obtaining 

commercial patents and technologies. 

Question 1a. What Department metrics of success did DOE use to judge this program? 

Answer. Based on past successful performance, the Department anticipates that 

these centers would compete successfully for Fossil Energy funding through the 

competitive solicitation process. 

Question 1b. The Cooperative Research and Development program within the Office of Fossil Energy supports activities of federal, industry, and research institute 

endeavors. It is a joint program with the Western Research Institute and the University of North Dakota. Your budget explanation suggests this program can compete for other grants. I, too, am confident that this program can, will, and has successfully competed for other grants. That fact does not take away from its core mission historically supported by Congress for many years. By all accounts, this is a 

success story in terms of research, in terms of leveraging private funds, and in 

terms of obtaining commercial patents and technologies. 

On what assessment areas did the Cooperative Research and Development program fail to perform adequately against other Department of Energy funding priorities? 

Answer. The Cooperative R&D program did not fail to perform adequately against 

any DOE funding priorities. However, since this program does not compete for funding, it is not considered the best way to approach DOE’s funding priorities. 

Question 1c. The Cooperative Research and Development program within the Office of Fossil Energy supports activities of federal, industry, and research institute 

endeavors. It is a joint program with the Western Research Institute and the University of North Dakota. Your budget explanation suggests this program can compete for other grants. I, too, am confident that this program can, will, and has successfully competed for other grants. That fact does not take away from its core mission historically supported by Congress for many years. By all accounts, this is a 

success story in terms of research, in terms of leveraging private funds, and in 

terms of obtaining commercial patents and technologies. 

What is the rationale for discontinuing this longstanding program? 

Answer. DOE has not requested funding for several years and this is strictly a 

matter of requiring these institutions to compete for any funding they receive in 

order to ensure that the best performers are selected. The Western Research Institute (WRI) and University of North Dakota Energy and Environment Research Center (UNDEERC) organizations are welcome to bid on all solicitations issued by DOE. 

Title 10 Section 600.6 of the Code of Federal Regulations states that DOE shall use 

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competition to the maximum amount feasible in its solicitations for financial assistance projects. 

Question 1d. The Cooperative Research and Development program within the Office of Fossil Energy supports activities of federal, industry, and research institute 

endeavors. It is a joint program with the Western Research Institute and the University of North Dakota. Your budget explanation suggests this program can compete for other grants. I, too, am confident that this program can, will, and has successfully competed for other grants. That fact does not take away from its core mission historically supported by Congress for many years. By all accounts, this is a 

success story in terms of research, in terms of leveraging private funds, and in 

terms of obtaining commercial patents and technologies. 

What program or programs did DOE select to fund in lieu of the Cooperative Research and Development program? 

Answer. DOE did not select to fund any programs in lieu of the Cooperative R&D 

program. All funding requested in our FY 2009 budget was based on programmatic 

priorities. The performers in these programs will be selected on a competitive basis. 

Should the Western Research Institute (WRI) and the University of North Dakota 

Energy and Environmental Research Center (UNDEERC) elect to submit proposals 

on any activities, then they will be judged fairly with all other performers. 

Question 2. Will DOE be submitting a reprogramming request to Congress for 

your restructured FutureGen Program? 

Answer. On June 9, 2008, the President forwarded to Congress a language 

amendment that would revise appropriation language to the Fossil Energy Research 

& Development appropriation, allowing the Department to revise the approach used 

to fund the restructured FutureGen program. Under this revised approach, the 

amendment would eliminate the requirement that projects funded in the FutureGen 

program have the Federal share of project funding appropriated in full at the time 

of selection. This provision would provide the Secretary of Energy with the discretion to fully fund FutureGen projects or to fund them incrementally. If the Department of Energy decides to fund them incrementally, the Department’s program regulations and contracts will ensure that the Department does not incur obligations 

in excess of the appropriated amounts that are available to cover those obligations. 

In light of the budget amendment there would be no need to reprogram funds. 

Question 3. What is the content and timing of any and all pending DOE plans 

to support carbon sequestration research or demonstration projects in Montana or 

Wyoming? a. What is the time line for any plans identified in the above question? 

Answer. The Department of Energy has seven Regional Partnerships that are undertaking field tests for CO2 storage across the country. One of the Regional Partnerships, Big Sky, is managed by the Montana State University. The Big Sky Regional Partnership includes the states of Montana, Wyoming, Idaho, Washington, 

Oregon, and South Dakota and has over 60 partners. Big Sky has proposed an effort 

for a large-scale sequestration test in its Partnership area. 

The Zero Emission Research and Technology Center, managed by the Montana 

State University and funded by the Department of Energy, is also conducting collaborative research in carbon sequestration. This research is focused on understanding the basic science of underground (geologic) carbon dioxide storage to mitigate greenhouse gasses from fossil fuel use and to develop technologies that can ensure the safety and reliability of that storage. 

Large-scale sequestration tests may be awarded in FY 2008, depending on the results of a scientific needs assessment being conducted in a March 2008 technical 

peer review and the ability of the project proposal to meet those needs. 

Question 4. The DOE budget proposal asks for an increase of funding for Yucca 

Mountain and an indication that DOE will be submitting a license to the Nuclear 

Regulatory Commission to construct a repository. What level of federal funds has 

been expended to date on this effort? 

Answer. Approximately $10 billion has been expended on the Program since its 

inception in 1983; $7 billion of the total was funded by the Nuclear Waste Fund 

and $3 billion by appropriations in the Defense Nuclear Waste Disposal account. 

Question 4a. The budget also indicates that given funding levels, a ‘‘development 

of a credible schedule for the program is not possible.’’ Using the best available data, 

how long are Americans, consumers, and industry going to have to wait to obtain 

a resolution to the storage of nuclear waste? 

Answer. The Nuclear Waste Policy Act, as amended, authorizes the Department 

of Energy to develop a permanent repository for the disposal of the Nation’s spent 

nuclear fuel and high-level radioactive waste. Last year the Department provided 

a schedule and supporting funding profile that would have had the repository at 

Yucca Mountain commence operations in 2017. Due to Congressional reductions in 

the funding for the Program in 2008, however, that schedule is no longer viable. 

82 

Once Congressional action is taken on funding reform proposed by the Administration, which would provide consistent and sufficient funding for the Program, the Department would be able to provide a credible schedule to begin operations at Yucca 

Mountain. 

Question 5. What is DOE’s long-term plan to extend the operation and production 

of the Rocky Mountain Oilfield Testing Center and ensure its continued success as 

a resource to small, independent oil and gas companies that cannot afford to conduct 

research larger companies can, particularly if its production budget continues to decline? 

Answer. DOE retains the Naval Petroleum Reserve No. 3 (NPR-3) in Wyoming 

(Teapot Dome field). The NPR-3 Program’s primary focus has been to apply conventional oil field management and operations to produce the stripper field to its economic limit. The President must authorize continued production every three years, 

with production currently authorized through April 2009. Co-located with NPR-3, 

the Rocky Mountain Oilfield Testing Center (RMOTC) provides opportunities for 

field-testing and demonstration of upstream oil and gas technologies, environmental 

products, and energy efficient, geothermal, and other renewable technologies as they 

relate to oil and gas operations. Funding of the overall program has been relatively 

flat for the past three fiscal years and the FY 2009 request is in line with past appropriations. 

QUESTIONS FROM SENATOR CANTWELL

SMART GRID

Question 1. Mr. Secretary, as you know, our nation’s electricity grid is vital to our 

economy and way of life. However, it currently uses outmoded technology which cannot record and communicate valuable information on conditions of supply, consumer 

loads, or system performance. This means our grid is less reliable than it could be 

and requires greater generation resources than it should. Modern technology is 

available that could provide significant efficiency savings, reduce peak power demands, and save tens to hundreds of billions in outage costs and avoided generation 

investments. For example, new technologies could allow appliances to automatically 

avoid costly demand periods and consumers to schedule their power consumption 

around periods when the grid is stressed. In order to help facilitate the national 

transition toward development and use of smart grid technologies, I championed 

provisions in the Energy Independence and Security Act of 2007 that provide DOE 

authority and guidance for moving ahead in creating a more flexible, more reliable 

and responsive U.S. electricity grid. These included research, development and demonstration programs; studies and reports on implementation; and a grant program 

for smart grid technology investment. 

Although it appears the Office of Electricity Delivery and Energy Reliability has 

established goals to lead national efforts to modernize the electric grid, enhance security and reliability of the energy infrastructure, and facilitate recovery from disruptions to the energy supply, I am concerned that this FY09 budget request may 

hinder the DOE from accomplishing necessary work toward these important goals. 

Mr. Secretary, after review of the Fiscal Year 2009 budget it is not apparent 

which program will be managing the DOE’s Smart Grid obligations under the Energy Independence and Security Act of 2007. It is also noted that the budget of the 

Office of Electricity Delivery and Energy Reliability (OE) has been reduced $4.6 million due mainly to zero funds requested to support congressionally directed activities. Can you please tell me how much it will cost OE to implement the smart grid 

provisions of the Energy Independence and Security Act of 2007, which program will 

have management oversight, and why this information was not included in the Department’s FY09 budget request? 

Mr. Secretary, the President has only requested $5 million for Smart Grid projects 

in the FY 2009 budget to complete several smart grid initiatives such as implementation at the utility and state levels, development of a smart grid architecture and 

framework, and better integration of the smart grid and plug-in hybrid electric vehicles (PHEVs). Can you please discuss why the funding requests in this area have 

continued to decrease over past years? Has the Department completed and achieved 

its goals in this area? If not, what are the future priorities? 

Answer. The Office of Electricity Delivery and Energy Reliability (OE), under the 

leadership of Assistant Secretary Kolevar, has the responsibility to carry out the 

Smart Grid provisions (Title XIII) of the Energy Independence and Security Act of 

2007. 

Our Fiscal Year 2008 appropriation and our Fiscal Year 2009 request do contain 

a variety of activities that are related to the development of Smart Grid systems 

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which include sensors, control systems, and communications strategies that provide 

real-time information to grid operators. Therefore, OE provides far more funding in 

our Fiscal Year 2009 request devoted to smart-grid related activities than is immediately apparent. For example, the Visualization and Controls subprogram contains 

several Smart Grid-related activities, including those aimed at wide area measurement, real-time data and analysis, and applications software for automatic grid protection and control. 

In addition, our Energy Storage and Power Electronics subprogram also contains 

Smart Grid-related technologies such as development and testing of power electronics devices, which are crucial for faster response times, and greater precision 

and control, which are essential for Smart Grid systems. 

Finally, there are other activities in our Renewable and Distributed Systems Integration subprogram that are relevant for the advancement of Smart Grid systems. 

For example, work to advance the integration of renewable electric systems, energy 

storage, energy efficiency, and demand response is planned to address issues in 

interoperability and the optimization of distributed systems, topics which are vital 

in advancing Smart Grid technologies, practices, and services. 

Question 2. Mr. Secretary, Section 1303 of the Energy Independence and Security 

Act of 2007, requires that the Department establish a Smart Grid Advisory Committee. Given the 90-day time frame stipulated in the energy bill, what progress has 

your office made in establishing both the Smart Grid Advisory Committee and the 

Smart Grid Task Force? 

Answer. The Energy Independence and Security Act of 2007 contains two provisions which call for the creation of advisory committees to guide our activities in 

electric power. As you point out, Section 1303 calls for the creation of a Smart Grid 

Advisory Committee. In addition, Section 641 calls for the creation of an Energy 

Storage Advisory Council. Both are to operate under the provisions of the Federal 

Advisory Committee Act. The Office of Electricity Delivery and Energy Reliability 

(OE) is moving swiftly to meet both the Section 1303 and 641 requirements. We 

have decided to combine the groups under an Electricity Advisory Committee (EAC), 

which will tackle the legislated duties of the Section 641 and 1303 groups, as well 

as take on other matters for which the Department needs advice from outside experts. The formal announcement of the EAC was made on February 20, 2008. 

Question 3. Mr. Secretary, how much communication has your office had with the 

Federal Energy Regulation Commission (FERC) regarding the establishment of the 

Smart Grid Regional Demonstration Initiative? Have there been any discussions, either internally or with other government/industry entities as to where these demonstration projects would occur? 

Answer. Our communication with FERC to date has focused on assembling the 

Smart Grid Task Force. The 2009 Budget request doesn’t include funds for this initiative, nor were any appropriated in the Fiscal Year 2008 budget, which we are 

currently in the process of carrying out. 

Nevertheless, the Office of Electricity Delivery and Energy Reliability has been 

actively engaged in the development of Smart Grid and related technologies, practices, and services for many years. The Department has supported the development 

of in-house expertise in Smart Grid systems, and also at the national laboratories, 

universities, and consulting firms. Informal discussions about strategies for advancing Smart Grid technologies, through research, development, demonstration, analytical, and technology transfer activities, have been occurring for several years. 

Question 4. Mr. Secretary, is your office aware of the National Institute of Standards and Technology (NIST) efforts to coordinate the development of a framework 

that includes protocols and model standards for information management to achieve 

interoperability of smart grid devices and systems? 

Answer. Yes, and the Office of Electricity Delivery and Energy Reliability has recently held several meetings with appropriate personnel at NIST to discuss how to 

coordinate our efforts. Section 1303 of the Energy Independence and Security Act 

of 2007 calls for the establishment of a Federal Smart Grid Task Force. Assistant 

Secretary Kevin Kolevar has formally invited NIST and several other Federal Departments and agencies to participate on this task force. One of the top priorities 

of the task force is to coordinate activities across the Federal Government to assist 

NIST in the development of a framework that includes protocols and model standards for information management to achieve interoperability of Smart Grid devices 

and systems. The initial meeting of the Smart Grid Task Force is scheduled for 

March 2008. 

Question 5. Mr. Secretary, would you please describe any progress made (or reasons why there has been no progress made) in establishing the Smart Grid Investment Matching Grant Program? 

84 

Answer. Defining both the scope and the procedures necessary to implement the 

Smart Grid Investment Matching Grant Program will be one of the primary tasks 

that the Smart Grid Task Force will be charged with completing over the next several months. The Office of Electricity Delivery and Energy Reliability is moving 

swiftly to assemble this Task Force. Assistant Secretary Kolevar has appointed a 

Director for the Smart Grid Task Force, and the task force includes participation 

from DOE’s Office of Energy Efficiency and Renewable Energy, as well as other Federal agencies, including the Federal Energy Regulatory Commission, the National 

Institute of Standards and Technology, the U.S. Departments of Agriculture (Rural 

Utility Services), Homeland Security, and Department of Defense, and the Environmental Protection Agency. The initial meeting of the Task Force is planned for 

March 2008. 

No funds were requested in the 2009 Budget for the Smart Grid Investment Matching Grant Program. However the budget does include $5 million for Smart 

Grid Development and Implementation which will focus on several activities, such 

as projects for Smart Grid Advancement, the development of Enabling Functions 

and Services, the development of Smart Grid Architecture and Standards, and System Simulation and Analysis efforts. 

Question 6. Mr. Secretary, DOE and the Pacific Northwest National Laboratory 

recently published results of a year-long study in the Seattle area regarding the 

benefits of smart grid technology. The study showed that consumers saved nearly 

10% on their electricity bills by using internet-connected thermostats and other 

smart appliances. Are there any plans to build upon the success and the findings 

of this study? What kinds of funding and/or programs would be helpful to do this? 

Answer. We are very encouraged by the results of the Pacific Northwest National 

Laboratory study and will continue activities in this fiscal year. Additionally, in our 

Fiscal Year 2009 budget request, the Department included $5 million for Smart 

Grid Development and Implementation which will focus on several activities. One 

involves projects for Smart Grid Advancement, including development of a technology roadmap, and definition of performance metrics. A second involves Enabling 

Functions and Services which focuses on the Smart Grid needs of building the electric infrastructure to support plug-in hybrid electric vehicles. A third is furthering 

the development of Smart Grid Architecture and Standards, which will involve a variety of stakeholder outreach activities including an ‘‘interoperability forum,’’ which 

will provide an opportunity for developers to meet and share lessons learned about 

the relative merits of alternative smart grid technologies, practices, and services. 

And fourth is System Simulation and Analysis which includes analysis of life-cycle 

system costs and benefits and the development of simulation tools for modeling 

Smart Grid applications at the transmission, substation, and distribution feeder levels. 

Question 7. Mr. Secretary, in discussing the challenges posed by the implementation of a national ‘‘Smart Grid,’’ would you say that a critical first-order need is the 

development of new algorithms for grid management to replace the nearly 40-year 

old ones that are now the backbone of grid management and control? And would 

you concur that a modern grid physical infrastructure will be seriously handicapped 

in it’s functioning without first designing and incorporating the software necessary 

to manage modern grid system capabilities and demands? And finally, does the Department have as a priority task the development of such software and control algorithms? 

Answer. As you may know, the Office of Electricity Delivery and Energy Reliability (OE) has been actively engaged in the development of Smart Grid and related technologies, practices, and services for many years. The Department has supported the development of in-house expertise in Smart Grid systems, and also at the 

National laboratories, universities, and consulting firms. In addition, the Department conducted technology development, analysis, and technology transfer activities 

related to smart grid systems. As a result of the preliminary work that we have conducted so far, we have determined that there are a number of ‘‘first order’’ needs 

involved in addressing the challenges posed by the implementation of a national 

‘‘Smart Grid.’’ We agree with you that new algorithms for grid management is one 

of the top priority needs. 

Smart Grid systems can be applied to both electric transmission and distribution. 

Our Fiscal Year 2009 budget submission contains a $25.3 million request for Visualization and Controls, which is a subprogram of the Office of Electricity Delivery and 

Energy Reliability, and is focused on the development of tools and algorithms to improve the response time of the transmission system to disturbances to reduce the 

number and spread of outages, reduce the operating margins by allowing the system 

to operate closer to its loading limits, and to harden the transmission system’s digital control, communications, and computing systems. For the distribution system, 

85 

our $5 million request under the Renewable and Distributed System Integration 

subprogram includes Smart Grid efforts focused on advanced simulation and modeling techniques. One of the primary objectives of this research is to explore advanced operational control strategies for more effective grid operations resulting in 

increased reliability and efficiency. 

All of these efforts aim to equip grid operators with better and more real time 

information to improve the reliability of electricity supply. Software, algorithms, 

tools, and techniques are among the products and services which the Visualization 

and Controls and the Renewable and Distributed Systems Integration subprograms 

will address. 

Question 8. Mr. Secretary, there is a great deal of support and appreciation in 

Congress for the need and promise of making our electricity grid more intelligent 

and we look forward to continuing to collaborate with the Department on this issue. 

Are there specific ways you believe that Congress can continue to be helpful to 

achieve these priorities? 

Answer. We appreciate the opportunity to ask Congress for further assistance. 

The helpful step that Congress can take to assist the Department in pursing Smart 

Grid technologies, practices, and services is to fully fund the Fiscal Year 2009 funding request for the Office of Electricity Delivery and Energy Reliability. 

HANFORD

Question 1. Mr. Secretary, I am pleased that the proposed Hanford cleanup budget adds funding for the adoption of a ‘risk-based’ approach to cleanup priorities and 

groundwater contamination to better protect the Columbia River. With that said, 

this budget still falls far short. Your Department specifically acknowledges that this 

underfunded budget is non-compliant with the Tri-Party Agreement milestones. 

This non-compliant budget could logically result in legal action by any of the parties, and I urge DOE to take every possible step to reduce this risk. Completing the 

work at Hanford in a timely manner is extremely important. Hanford is the most 

contaminated site in the Western hemisphere and retrieval of buried waste is critical to protecting the groundwater that flows into the Columbia River and reducing 

the footprint of contamination at Hanford. 

In your budget request, the Department acknowledges that at least eight milestones will be missed due to budget reasons, including milestones for Single Shell 

Tank waste retrieval and ground waste retrieval. The budget for the Richland Operations Office, which oversees groundwater contamination and buried waste retrieval, faces $45 million in proposed cuts. The DOE has routinely acknowledged 

that its fiscal year 2009 budget request is not enough to meet previously agreed 

upon milestones associated with the Hanford Cleanup. 

Mr. Secretary, why is the Department proposing a budget that will delay milestones and risk further litigation? 

Answer. The Administration recognizes that EM’s FY 2009 budget request is 

based on, and would implement, an environmental management approach under 

which the Department would not meet some of the milestones and obligations contained in the Tri-Party Agreement and other environmental agreements that have 

been negotiated over many years with regulators. It is also important to recognize 

that some upcoming milestones will be missed regardless of the approach that is 

chosen and its associated level of funding. Moreover, some of the relevant agreements were negotiated many years ago, with incomplete knowledge by any of the 

parties of the technical complexity and magnitude of costs that would be involved 

in attempting to meet the requirements. This incomplete knowledge, coupled with 

other issues including contractor performance, overly optimistic planning assumptions, and emerging technical barriers, also have impeded the Department in meeting all milestones and obligations contained in the Tri-Party Agreement and environmental compliance agreements at other sites. 

To achieve a balance that allowed EM to continue to achieve risk reduction and 

pursue its cleanup goals, the Department prioritized its risk reduction and regulatory activities. Environmental compliance activities have been given high priority, 

but cannot in all cases be fully implemented without jeopardizing other highly critical activities necessary to avoid unreasonable risk to human health and/or national 

security. 

Question 2. Mr. Secretary, I am pleased that the proposed Hanford cleanup budget adds funding for the adoption of a ‘risk-based’ approach to cleanup priorities and 

groundwater contamination to better protect the Columbia River. With that said, 

this budget still falls far short. Your Department specifically acknowledges that this 

underfunded budget is non-compliant with the Tri-Party Agreement milestones. 

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This non-compliant budget could logically result in legal action by any of the parties, and I urge DOE to take every possible step to reduce this risk. Completing the 

work at Hanford in a timely manner is extremely important. Hanford is the most 

contaminated site in the Western hemisphere and retrieval of buried waste is critical to protecting the groundwater that flows into the Columbia River and reducing 

the footprint of contamination at Hanford. 

In your budget request, the Department acknowledges that at least eight milestones will be missed due to budget reasons, including milestones for Single Shell 

Tank waste retrieval and ground waste retrieval. The budget for the Richland Operations Office, which oversees groundwater contamination and buried waste retrieval, faces $45 million in proposed cuts. The DOE has routinely acknowledged 

that its fiscal year 2009 budget request is not enough to meet previously agreed 

upon milestones associated with the Hanford Cleanup. 

Mr. Secretary, what is the DOE’s plan for solving the technical hurdles that are 

causing the routine slippage of milestone dates? 

Answer. The Department’s fiscal year (FY) 2009 budget increases the amount 

spent on Technology Development and Deployment (TDD). The overall goals of this 

program are to eliminate technical barriers to cleanup by reducing technical uncertainty, improving safety performance by applying improved or new technologies, increasing confidence in achieving long-term cleanup goals, addressing emerging 

issues, among other goals. Efforts with a particular focus on Hanford cleanup include work on several supplemental waste treatment options, improved glass waste 

loading, advanced melter designs and improved waste retrieval options-funded both 

through the TDD program and Office of River Protection. 

There is an increased emphasis on soil and groundwater remediation activities in 

the Department’s Hanford FY 2009 budget, which will focus on technical solutions 

to cleanup problems. The increased activities in the Soil and Groundwater Remediation Project (increase of $65 million) are for installation and operation of several 

new innovative groundwater treatment systems, expansion of the monitoring well 

network, performance of in situ remediation activities, and characterization of soil 

contaminants. This additional funding increases the focus on improving groundwater remediation systems for key plumes adjacent to the Columbia River. 

These funding increases will support, in the long-term, compliance with Tri-Party 

Agreement milestones at the Hanford site. 

Question 3. I am very concerned about the continued clean-up of America’s nuclear legacy at Hanford in my State. I believe the federal government has a moral 

and legal obligation to cleanup the site. I am disappointed that the Hanford budget 

proposed no increase for addressing waste remaining in single shelled tanks, and 

deeply concerned that your Department’s budget acknowledges that tank waste retrieval milestones will be missed. 

This budget only supports retrieval of one tank per year. This is simply unacceptable. The Inspector General has found that the Department is missing deadlines because the Department relied on unrealistic cost and schedule assumptions. The reality is Single shelled tanks are beyond their design life, and double shelled tanks 

are nearly full. 

Given these facts, what is the Department’s plan to advance single-tank waste retrieval and build capacity for and treat that waste? 

Answer. The safe storage, retrieval and treatment of tank waste at Hanford continue to be one of the Department’s highest priorities. The Department has removed 

the pumpable liquids from the single-shell tanks (SSTs), as confirmed by State of 

Washingtion regulators, and transferred the liquids to double-shell tanks (DSTs), 

significantly reducing the risk of waste leakage. The Department monitors the tanks 

for leaks on an ongoing basis and is evaluating SST structural integrity to ensure 

the safety of ongoing storage. To date, the Department has also completed the retrieval of waste from seven SSTs using a variety of technologies specifically developed and suited for the Hanford tanks. 

The rate at which waste can be removed from the SSTs will continue to be limited 

by DST space until the Waste Treatment and Immobilization Plant (WTP) begins 

operations. Design and construction of the WTP continues; by the end of fiscal year 

(FY) 2009, the plant will be more than 50 percent complete overall. At the same 

time, the Department continues to evaluate options for the potential early treatment 

of low-activity waste retrieved from the tanks. 

The Department is continuing efforts to make additional space available in the 

existing DSTs through ongoing space savings initiatives, and to retrieve waste from 

SSTs in the most efficient manner. 

Question 4. Many of the aging, single shell tanks holding radioactive waste at 

Hanford are located a mere 7 to 10 miles from the Columbia River. The emptying 

of 149 leak-prone single shell tanks holding radioactive waste at a rate of about one 

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a year is unacceptable and puts the groundwater that flows into the Columbia River 

unnecessarily at risk. 

When can we expect the Department to come clean, no pun intended, with the 

State of Washington on a tank cleanup deadline? 

Answer. The Tri-Party Agreement (TPA) establishes tank farm cleanup milestones at the Hanford Site. The Department has already met a number of milestones including the completion of interim stabilization of the single-shell tanks 

(SST), i.e., removing pumpable liquids from the SSTs and transferring those liquids 

to double-shell tanks (DSTs). The Department has also completed the retrieval of 

seven SSTs, and is currently retrieving waste from an additional three tanks. 

Question 5. Many of the aging, single shell tanks holding radioactive waste at 

Hanford are located a mere 7 to 10 miles from the Columbia River. The emptying 

of 149 leak-prone single shell tanks holding radioactive waste at a rate of about one 

a year is unacceptable and puts the groundwater that flows into the Columbia River 

unnecessarily at risk. 

What does your budget request do to continue, and accelerate, efforts to fund new 

technologies to mitigate groundwater contamination at Hanford? 

Answer. There is an increased emphasis on soil and groundwater remediation activities in the Department’s Hanford Fiscal Year 2009 budget. The increased activities in the Soil and Groundwater Remediation Project (increase of $65 million) are 

for installation and operation of several new innovative groundwater treatment systems, expansion of the monitoring well network, performance of in-situ remediation 

activities, and characterization of soil contaminants. This additional funding increases the focus on improving groundwater remediation systems for key plumes adjacent to the Columbia River. In addition, the budget request includes an increase 

of more than 50 percent for the Technology Development and Deployment Program. 

This increase includes additional funding for advanced groundwater remediation research, development, and deployment. 

Question 6. For the third year in a row, there is no funding for bulk vitrification 

or any other supplemental technology in the budget. With the waste treatment plant 

not ready to start until 2019, there must be some type of supplemental technology 

used in order to continue moving waste out of the tanks. Otherwise, liquids will be 

left in tanks that are far past their lives and susceptible to failure and leakage. 

What are the Department’s plans for proceeding with supplemental treatment 

technology to avoid the higher cost options, such as installing a second low-level 

waste melter? 

Answer. The Environmental Management’s (EM) budget request for fiscal year 

(FY) 2009 supports the continued development of the demonstration bulk vitrification system as a candidate supplemental treatment. This will allow the Department 

to continue cold system testing to demonstrate readiness for deployment. In addition, the budget request includes funding for conceptual planning and technology development to evaluate an interim pre-treatment system that could supply low-activity waste to a supplemental treatment immobilization system or an ‘‘early’’ Waste 

Treatment Plant Low Activity Waste (LAW) Facility operation. In addition, EM continues to study the feasibility of adding a 3rd melter to the two melters to be installed in the LAW Facility which is under construction. All of these tests, studies, 

and planning efforts will allow the Department to finalize its business case on if, 

how, and when to proceed with pre-treatment and immobilization capability in addition to the Waste Treatment Plant. EM has recently initiated an independent study 

that will lead to identification of an optimized path forward in the June 2008 timeframe. 

Question 7. Three major contract procurements are currently underway at Hanford. The first in sequence to be awarded, the Mission Support contract, is behind 

schedule, and the other two, Tanks and Central Plateau, will presumably follow 

thereafter. With these delays, it appears that DOE may be pushing right up at 

against the fiscal year, which will cause transition problems at the site. 

What are DOE’s plans to ensure a smooth process for the award of these contracts 

and transition to new contracting teams? 

Answer. The three awards were planned in an integrated manner to ensure 

smooth transition of services as current contracts end. As a result, there was early 

attention to avoiding transition problems. The Request for Proposals for each of the 

three procurements required that each of the offers being submitted include a transition strategy as part of the proposals for evaluation by the Government. The Government also is requiring that the two incumbent contractors submit detailed 

‘‘phase out’’ transition plans, and will require that each of the three contract awardees submit a detailed transition plan at the start of the 90-day transition period between the old and new contracts. The contractor-prepared plans will be compared 

to the Government’s Integrated Transition Plan for the three procurements to enVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00091 Fmt 6601 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
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sure that all the Government’s transition requirements have been met. This detailed 

transition process and the 90-day transition process between the old and new contracts should ensure minimum disruption to the existing workforce and the work 

activities at the site. 

Each of these contracts is being pursued aggressively for award this fiscal year 

(4th quarter FY2008 as noted on DOE’s public acquisition forecast website). Our internal schedules indicate a timely award for each of the Mission Support Contract, 

Plateau Remediation, and Tank Operations Contracts. Every major acquisition presents challenges. We have added resources where needed and the Assistant Secretary for Environmental Management personally reviews the progress of these procurement actions. The awards or post-award transition may occur near or at the end 

of this fiscal year, but each action is planned for orderly transition from the projected award date. 

Question 8. The budget request suggests a possible early start of the Low Activity 

Waste (LAW) Treatment facility at Hanford. 

What is the impact of the early start of LAW to construction costs of the Waste 

Treatment Plant as a whole? 

Answer. No increase to the total project costs for the Waste Treatment Plant is 

expected as a result of an early start-up of LAW. 

Question 9. This budget request points to reducing the size of Hanford from 586 

square miles to some 75 square miles by 2015. This is a substantial amount of land 

to be transferred to a government agency or regional entity in the not too distant 

future. 

What are the planned steps/milestones for this land transfer? 

Answer. Completing cleanup of the Columbia River Corridor would enable us to 

shrink the active Hanford cleanup operations to the 75-square-mile area near the 

center of the Hanford Site and to reduce overall site ‘‘mortgage’’ costs associated 

with infrastructure services (water, power, roads). There are no current plans for 

transferring the land to another government agency or regional entity at this time. 

However, about 235 square miles of the Hanford Site not affected by plutonium production operations, including the Arid Lands Ecology Reserve and the North Slope, 

are being managed in consultation with the U.S. Fish and Wildlife Service as part 

of the Hanford Reach National Monument. 

WEATHERIZATION ASSISTANCE

Mr. Secretary, I am deeply concerned that your FY09 budget terminates the 

Weatherization Assistance program. Not only is the DOE’s weatherization assistance program essential to some of society’s neediest citizens, but it also benefits our 

nation by reducing our energy dependency, improves the environment, and stimulates economic development in low-income communities. Providing weatherization 

services free of charge to approximately 100,000 low-income households every year, 

the Weatherization Assistance program is this country’s longest running, largest 

and perhaps the most successful energy efficiency program, and is one of the few 

government activities that saves more money than it costs. 

During the last 30 years, the weatherization program has provided energy savings 

to more than 5.5 million low-income homes, reducing heating bills by 31% and overall energy bills by up to $358 per year. My own state of Washington will receive 

enough weatherization funds this year to assist 1,300 households. These energy savings have spurred low-income communities toward job growth and economic development, and these weatherization projects have created an energy efficiency industry for residential housing. Nationwide, weatherization supports 8,000 technical jobs 

in low-income communities, which represents about 52 jobs for every $1 million of 

DOE investment. In his FY2002 budget, President Bush proposed to increase DOE’s 

Weatherization Assistance Program (WAP) funding by $1.4 billion over the next 10 

years. 

Question 10. Why then have we seen flat and mostly decreasing weatherization 

requests since 2003, culminating in the program being zeroed out in the President’s 

FY09 request? 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

89 

7 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29) . This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 8The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10-05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 9 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29) . This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 10The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10-05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 

than the cost of the investment.7 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.8

Question 11. Given that the DOE reports the Weatherization Assistance Program returns $3.71 for every dollar invested by tax payers, is there any other program 

managed by the DOE that has such positive investment returns for tax payers? 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

than the cost of the investment.9 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.10

RELIABLE REPLACEMENT WARHEAD

Question 12. In the FY 2009 Budget Highlights, the DOE reports that work continues of the Reliable Replacement Warhead (RRW) in three areas: Directed Stockpile Work, Science Campaign and Enhanced Surety. Although $10 million is called out under the Directed Stockpile Work, how much 

money is specifically tied to RRW under the Science Campaign and Enhanced Surety? Answer. NNSA has requested $10 million for RRW Phase 2A study in FY 2009. 

The funding in the Science Campaign/Advanced Certification and Enhanced Surety 

is not limited to the RRW application, but addresses issues concerning warhead certification without underground nuclear tests and the technology development for improved surety systems of the existing nuclear weapon systems as well. 

The RRW funding in Directed Stockpile Work is to advance the RRW Phase 2A 

design study definition so that questions on RRW certification raised by the JASON 

review can be answered. Specific activities will include: 1) refinement of the enhanced surety features within the design and identification and assessment of certification issues; 2) definition of potential fabrication and material selection effects 

on certification; and 3) more in-depth analysis to strengthen and refine the design 

definition through inter-laboratory peer review. 

To continue to address the issues associated with certification of warheads without underground nuclear tests, NNSA has requested funding for the Advanced Certification activity, created consistent by the Consolidated Appropriations Act , 2008. 

The goal is to provide the tools and methodology to support the certification and assessment of significant changes to the stockpile beyond ‘‘as tested.’’ Each weapon repair or refurbishment introduces change because legacy materials and some processes no longer exist. These changes require careful examination and analysis to enVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00093 Fmt 6601 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
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sure they do not degrade weapon performance. These changes could include component re-use, life extension programs, and future systems, especially where surety or 

safety features are added to the weapon design. 

Additionally, NNSA will continue to incorporate enhanced surety into warheads, 

a key aspect of the RRW program. The Enhanced Surety activity will develop multiple technologies as options for improved surety systems for future use in existing 

warheads through evolutionary modifications or for use in future systems. 

BROWNFIELDS TO BRIGHTFIELDS

I understand that former Secretary Bill Richardson established a ‘‘Brownfields to 

Brightfields’’ program that funded the establishment of solar power systems on 

Brownfields. Despite a successful application of this program in the Chicago area, 

it appears that the department did not continue this program and it may have been 

folded into the broader Brownfields program at the Environmental Protection Agency. 

Question 13. Since the Department of Energy has substantial surplus property, 

much of which qualifies as Brownfields, and the Department has a mission to promote solar power, I believe it may be time to consider reinvigorating the 

Brownfields to Brightfields program. What can the Department do to accomplish 

this, and what steps might be required by Congress? 

Answer. Under Executive Order 13423, released by President Bush in January 

2007, Federal agencies must obtain at least half of their required renewable energy 

levels (7.5 percent by 2013) from new renewable sources. Reflective of the environmental leadership required by this Executive Order, DOE established the Transformational Energy Action Management (TEAM) Initiative in August 2007. The 

TEAM Initiative calls for all DOE facilities to examine their potential for use of onsite renewable energy, including solar technologies. Through the TEAM initiative, 

and bound by the President’s Executive Order, DOE will thoroughly examine the 

‘‘substantial surplus property’’ that you mention as potential areas of clean, renewable power production. 

QUESTIONS FROM SENATOR DORGAN

Question 1. The Energy Policy Act of 2005 provides guidance to expand the Strategic Petroleum Reserve (SPR) to the level of 1 billion barrels but only ‘‘without incurring excessive cost or appreciably affecting the price of petroleum products to 

consumers.’’ Do you believe that removing oil from the market in today’s environment, when prices are high and global supplies tightening, is not causing oil prices 

to increase? Can you provide a copy of your economic analysis that demonstrates 

how this is not having an impact on price or supply? 

Answer. As required by the SPR acquisition procedures, the Office of Petroleum 

Reserves conducts an economic analysis of the crude oil market before engaging in 

acquisition activity. Since the beginning of 2007, two separate market assessments 

have been completed prior to initiating activities for the two RIK exchange cycles. 

These analyses found that market conditions were such that the small amount of 

oil being acquired (less than one-tenth of one percent of global demand) would not 

appreciably impact the price of oil. 

Question 2. You stated to me in a letter dated Jan. 8, 2008, that one of the reasons to increase the capacity of the SPR is that it only contains 57 days of import 

protection. However, this is only part of the story. The requirement to meet U.S. 

treaty obligations with other OECD countries is for 90 days, and your web site said 

that the U.S. has 118 days of public and private strategic stocks for import protection. How does this square with the Bush Administration’s rationale for continuing 

to fill the SPR through royalty-in-kind contracts or any other means? 

Answer. During the mid-1980s, the SPR inventory was sufficient to provide the 

required 90 days of import protection and more. However, since 1988, the U.S. has 

satisfied its IEA stockholding obligation through its reliance on a combination of 

SPR and commercial industry stocks. Congress discontinued funding for SPR oil acquisition in the early 1990s; however, U.S. petroleum consumption and corresponding import dependence have increased substantially since that time. Today 

the SPR’s import protection level stands at approximately 58 days. U.S. industry 

stocks make up a significant portion (one-third) of the U.S.’s IEA emergency reserve 

stockholding obligation. 

The Administration’s objectives for the SPR oil fill and energy security are to 

achieve an inventory of 727 million barrels in 2008—providing approximately 60 

days of import protection; expansion of the Reserve to 1.0 billion barrels in 2019— 

providing approximately 90 days of import protection; and additional expansion of 

91 

the Reserve to 1.5 billion barrels by 2029—providing approximately 124 days of import protection. 

Question 3. On December 11, 2007, in a joint Energy / Homeland-Government Affairs Subcommittee hearing, we heard testimony from Dr. Philip Verleger that the 

Department of Energy has taken as much as 2.9 million barrels highly valuable 

light sweet crude off the market in the last six months. He stated that removing 

even small supplies of this highly valuable crude oil could have raised the overall 

price of oil as much as $10 per barrel. As you know, refiners prefer this higher quality light sweet crude. Do you think that it’s a good policy to for the U.S. Government 

to be competing with private industry for limited supplies of light sweet crude that 

if left on the market could increase supply and help lower prices? 

Answer. In January 2008, the Office of Petroleum Reserves presented its analysis 

of Dr. Verleger’s claims to the staff of the Senate Energy and Natural Resource 

Committee. Dr. Verleger’s assertion that DOE’s recipt of such a small amount of oil 

(less than one-tenth of one percent of global demand) could increase the price of 

crude oil by as much as $10 is not supported by widely accepted market theories 

or transparent economic analysis. 

The Department of Energy strongly disagrees with these statements and finds 

fault with the analysis used to support them. There are many factors in oil markets 

that affect supply and demand balances by a much greater proportion than the 

SPR’s RIK oil acquisition program. Dr. Verleger’s testimony disregards these factors 

as inconsequential. The Office of Petroleum Reserves conducted an oil market analysis before initiating the RIK fill program and found that the small amount of oil 

being received in the reserves would not appreciably affect the price of oil. 

Question 4. Why is it that the Department is recommending zeroing out the Oil 

and Natural Gas R&D programs for the third year in a row? The Congress provided 

$24.7 million for these programs in FY 2008. Small and independent producers and 

academic institutions benefit from these programs, not the five largest integrated 

oil companies. Last year, I asked the GAO to look into this issue and they showed 

that there was value to these programs. 

Shouldn’t the Department be supporting efforts to develop next generation oil and 

gas recovery technologies and programs that benefit our independent, domestic producers and thus reduce our dependence on imported energy? 

Answer. Oil and gas are mature industries and both have every incentive, particularly at today’s prices, to enhance production and continue research and development of technologies on their own. There is no need for taxpayers to subsidize oil 

companies in these efforts. Although independent operators may not have the resources to fund technology development directly, the service industry that supplies 

them with equipment funds significant development of applicable technologies. The 

Department expects the service industry to continue to provide technological innovations for use by major and independent producers. 

The November 6, 2007 GAO report entitled, ‘‘Oil and Natural Gas Research and 

Development Activities’’ found: ‘‘Some industry economists and experts argue that 

a federal government role is needed because industry may underinvest in oil and 

natural gas R&D. However, the extent to which industry is underinvesting in this 

area is unclear because comparable data are not readily available and much of these 

data are proprietary.’’ It also recommended certain factors to be considered in evaluating the federal role in oil and natural gas R&D. The Administration’s proposal to 

make the R&D investment tax credit permanent and its environmental regulations 

address potential market failures identified in the GAO report. 

INTEGRATION OF COAL AND CARBON CAPTURE AND STORAGE PROGRAMS

Question 5. The Department has a number of important clean coal and carbon 

capture and storage programs under way. This includes requests for FutureGen 

($156 M), the Clean Coal Power Initiative ($85 M), and the Carbon Sequestration 

Regional Partnership program $149 M) for FY 09. Also in FY 2008, the Appropriations Committee included $6 billion in budget authority for the DOE Loan Guarantee program for coal-based projects that included carbon capture and storage. 

With all of this money directed toward clean coal and carbon capture and storage 

activities, I want to know that it is well coordinated, and there is an integrated government/private sector plan in place to take these efforts from the laboratory to the 

commercial market. 

Can the Department explain what it is doing to develop and implement an integrated action plan? 

Answer. There are several elements of DOE’s Sequestration Program for carbon 

capture and storage (CCS). They include the core research and development (R&D) 

programs, which fund applied and basic research for CCS technologies. The projects 

92 

funded through these R&D programs are bench-top-scale research and represent innovative approaches that can significantly reduce the cost and demonstrate the safety and effectiveness of CCS. The second part of the program consists of large-scale 

CO2 injection projects, which are designed to take the technologies developed in the 

core R&D programs and deploy them in the field through programs like the Regional Carbon Sequestration Partnerships. This part of the program is also responsible for developing the infrastructure technologies and information, such as CCS 

best practices that could help form a basis for regulations, for CCS deployment 

through the involvement of representatives from industry, non-governmental organizations (NGOs), universities, and Federal and state partners. The final piece of the 

DOE CCS Program will be implemented through the Clean Coal Demonstration Program (such as the Clean Coal Power Initiative and FutureGen), which will take the 

technologies developed from the core R&D and large-scale injection projects and implement them in full-scale power plants that include CCS. Early commercial deployment of plants with CCS can benefit from FutureGen and other deployment incentives. The Sequestration Program, which is managed by the Office of Fossil Energy, 

also coordinates with DOE’s Office of Science to enhance the scientific learning and 

understanding in the field demonstration projects. The Regional Partnerships have 

over 350 distinct organizations as part of the effort thus making efficient technology 

transfer from the laboratory to the commercial market. 

All of the projects awarded through these DOE programs are based on cooperative 

agreements with industry and/or research institutions. Therefore, the success of 

these programs depends upon the success of our partners and DOE’s continued efforts to promote technology transfer. 

DOE is also supporting working groups through other Federal agencies, NGOs, 

and industry that are working to develop regulations and liability frameworks, and 

to educate stakeholders about the benefits of CCS. 

Question 6. Despite extending a five-year contractual cooperative agreement with 

the Energy and Environmental Research Center in North Dakota and the Western 

Research Institute in Wyoming, the Department is not supporting funding for the 

cooperative agreement program. 

Can you explain why this program was not funded even though the Department 

signed an extension of the agreement last year? 

Answer. The Department has not requested funding for this program for several 

years. The Department signed an extension to the current cooperative agreement so 

that FY 2008 funding provided in the Consolidated Appropriations Act 2008 could 

be sent to WRI and UNDEERC. The Department believes that the competitive process for awarding competitive agreements provides better projects and better research results. 

ENVIRONMENTAL CLEANUP

Question 1. In FY 2005, the Environmental Cleanup programs had a budget of 

$7.9 billion. Only four fiscal years later we get a fiscal year 2009 budget request 

of only $5.9 billion for the same programs. That is a $2 billion reduction in a very 

short time frame. Over the last four years, the Department has completed cleanup 

at Rocky Flats, which could explain a reduction of $650 million from the budget, 

but not the entire $2 billion. 

Please explain the reason you are requesting so little funding for the Cleanup program in FY 2009, especially in light of the budget’s admission that the request is 

insufficient to meet ‘‘ ...milestones and obligations contained in all of the environmental agreements ... ’’ made with regulators? 

Answer. The Environmental Cleanup program is one of many important national 

priorities to which the Administration must allocate resources. In planning its environmental cleanup efforts and developing the budget for those activities, the Department seeks to focus on work that will produce the greatest environmental benefit 

and the largest amount of risk reduction. The Department strongly believes that 

setting priorities and establishing work plans in this way is the most effective use 

of taxpayer funds and will have the greatest benefit, at the earliest possible time, 

to the largest number of people. In determining these priorities, the Department 

works closely with federal and state regulators, and will seek the cooperation of 

those entities in helping evaluate needs and focus work on the highest environmental priorities based on current knowledge, particularly where doing so necessitates modification of cleanup milestones embodied in prior agreements with DOE. 

Question 2. We all understand that some cleanup projects are behind due to technical issues that funding cannot solve, but a reduction in funding also contributes 

to delay. In October 2007, four short months ago, the Weapons Complex Monitor 

reported a statement made by an Environmental Cleanup program budget officer 

93 

that the cleanup programs required nearly $8 billion to maintain regulatory compliance and cleanup schedules. Do you disagree that the environmental cleanup programs would need $8 billion per year to be in compliance? 

If so, what it is the basis for your disagreement? 

Answer. As you noted, there can be a number of reasons why compliance obligations are in jeopardy, including unanticipated or especially complex technical challenges. Until those challenges are solved, no amount of funding would guarantee 

that the Department can maintain compliance with all of its regulatory commitments. To achieve a balance that allowed EM to continue to achieve risk reduction 

and pursue its cleanup goals, the Department prioritized its risk reduction and regulatory activities. Environmental compliance activities have been given high priority, but cannot in all cases be fully implemented without jeopardizing other highly 

critical activities necessary to avoid unreasonable risk to human health and/or national security. Site managers will engage their regulators to discuss compliance 

issues and the available alternatives for achieving shared goals. 

Question 3. The Department’s FY 2009 request for the National Nuclear Security 

Administration proposes new funding of $77 million to begin tearing down 

uncontaminated excess facilities across the weapons complex. At the same time, 

your budget proposes to reduce the Environmental Management’s decontamination 

and decommissioning program, which tears down radioactively contaminated excess 

facilities that pose a threat to human health, safety, and the environment, by $184 

million. Can you please explain why you have chosen to fund lower-risk cleanup activities under the NNSA while ignoring regulatory agreement to fund similar, but 

higher-risk cleanup activities within the Environmental Cleanup program? 

Answer. The National Nuclear Security Administration’s (NNSA) Transformation 

Disposition (TD) program proposes to fund the TD Program from within the target 

request to eliminate a total of five million gross square feet of excess facilities across 

the weapons complex from FY2009—FY 2017. TD Program proposes to fund the disposition (demolition, sale, or transfer) of 430,000 gross square feet across the NNSA 

complex with the $77M request. The TD program directly supports NNSA’s vision 

of a smaller, safer, more efficient, and more secure enterprise and NNSA’s commitment to reduce the footprint from greater than 35 million to less than 26 million 

square feet by FY 2018. The TD program will follow the successful management 

construct of the Facility Disposition subprogram (from within the Facilities and Infrastructure Recapitalization Program) which will conclude in FY 2008 after eliminating three million gross square feet of excess facilities. 

The EM budget request funds ongoing environmental management activities focused on balancing risk reduction and regulatory requirements within the fiscal constraints, whereas, the proposed TD program budget will focus on aggressive and 

cost-effective footprint consolidation for a finite period of time in support of NNSA 

transformation. Both of these programs address projects selected on the basis of integrated priority lists to ensure that the highest priority projects are identified for 

funding across the DOE complex. 

Question 4. Over the past few years, the Environmental Cleanup program has 

made great strides in improving its project management. According to the FY 2009 

Budget, most of the cleanup projects are now baselined under your Department’s 

Project Management Qrder. This means that Cleanup projects have established firm 

scope, schedule and cost data to support the program’s funding request. In spite of 

this good news, you have chosen to reduce the program $167 million from the FY 

2008 enacted level. Can you explain why you have reduced a program that appears 

ahead of other programs in the Department in terms of project management? 

Answer. The Environmental Cleanup program is one of many important national 

priorities to which the Administration must allocate resources. The goal is to fund 

those cleanup activities that present the greatest risks to the workers, the communities and the environment while maximizing compliance with regulatory agreements. The project management system established within the EM program assists 

in making decisions in consultation with its regulators and other stakeholders, that 

can then be effectively and efficiently implemented. 

QUESTIONS FROM MENENDEZ

WEATHERIZATION

Question 1. Secretary Bodman, this budget proposal would eliminate federal 

weatherization programs. In a time when oil is at $90 a barrel, when action on climate change is urgently needed, and there are growing fears about the health of 

the economy, why would you propose to eliminate this program? 

94 

11 11 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29) . This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 12The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10-05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 13 13 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29) . This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 14The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10-05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

than the cost of the investment.11 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.12

Question 2. In my home state, the New Jersey Department of Community Affairs 

estimates that federal weatherization programs allow for the weatherization of 

about 1400 units per year. Low income families, seniors, and those with disabilities 

depend on these funds to lower their energy payments. So please explain why this 

Administration wants to take money out of the pockets of low-income families, harm 

the environment and possibly further jeopardize our shaky economy by cutting this 

essential program. 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

than the cost of the investment.13 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.14

Question 3. In your response to questions at the hearing you indicated that it was 

being cut because it is less cost-effective than other programs in the Office of Energy 

Efficiency and Renewable Energy. But according to a comprehensive study commissioned by the Department of Energy in 2003, for every dollar spent by a weatherization program there are $2.70 of lifetime energy and non-energy benefits. (See Linda 

Berry & Martin Schweitzer, Metaevaluation of National Weatherization Assistance 

Program Based on State Studies, 1993-2002. February 2003. Prepared by Oak Ridge 

National Laboratory for the U.S. Department of Energy). 

In fact if you go to the DOE’s website and look at how your department describes 

the Weatherization Assistance Program it states: 

In the Weatherization Assistance Program, weatherization services are 

cost-effective energy efficiency measures for existing residential and multifamily housing with low-income residents. 

(See http://www.eere.energy.gov/weatherization/what—is.html) 

95 

15 ‘‘Energy Research at DOE: Was It Worth It?’’ National Research Council (http:// 

www.nap.edu/openbook.php?isbn=0309074487). This study, published in 2001, analyzed investments in 17 energy efficiency R&D activities between 1978 and 2000 costing a total of $1.566 

billion (p.23) and representing about one fifth of energy efficiency program spending in that time 

frame. The NRC found overall net economic returns of about $30 billion (p.29) . This is a public 

return 20 times greater than the cost of the investment within the time period considered. In 

addition, the NRC calculated net environmental benefits worth $3-20 billion for these activities. 

As is the case with many diverse R&D investment portfolios, most of the benefits were generated by few—in this case, three of 17—activities assessed (p. 29). 16The ORNL analysis can be found on the web (http://weatherization.ornl.gov/pdf/CON493FINAL10-10-05.pdf). The benefit/cost ratio in the study is 1.34—the 1.53 ratio cited above 

uses the same calculations with energy cost data updated for 2006. 

Your own department touts the program as cost effective, but you now say the 

program should be cut because it is not cost effective. How do you explain these discrepancies? 

Answer. The program is not completely aligned with DOE’s core mission. Weatherization Assistance is an important goal, but is an anomaly because it addresses 

social welfare goals in addition to energy efficiency improvement. Prudent portfolio 

management requires DOE to focus available resources on its core areas of expertise 

and mission consistent with the DOE Strategic Plan. 

Based on a study by the National Research Council, investments in some energy 

efficiency applied R&D between 1978 and 2000 resulted in returns 20 times greater 

than the cost of the investment.15 In contrast, the energy savings from Weatherization Assistance Program grants result in a significantly lower benefit/cost ratio of 

1.53 to 1. This ratio was calculated by Oak Ridge National Laboratory based on past 

evaluation efforts and Energy Information Administration projected energy prices.16

SOLAR RESEARCH AND DEVELOPMENT

Support for research and development is crucial for achieving cost-effective solar 

power, job creation, and, more broadly, increased renewable power production. Solar 

power aids our national energy security and reduces greenhouse gas emissions. 

Many are surprised to learn that my home state of New Jersey is a leader in solar 

energy second only to the state of California in the number of solar installations. 

In his 2006 State of the Union address, the President seemed to recognize the importance of solar when he announced the establishment of the Solar America Initiative and set forth the ambitious goal of making solar power cost competitive with 

other renewable fuels by 2015. Yet the President’s FY09 budget proposes a $12 million cut in funding for solar research programs at DOE. I have been informed by 

sources within the DOE that the cut is actually $21 million because the Administration plans to siphon off $9 million from the solar R and D program and use it at 

the National Renewable Energy Laboratory (NREL). 

Question 4. My first question on solar energy research is whether this $9 million 

going to NREL is actually going to be used to support the solar program or whether 

it is just going to be used to [sic] in the lab’s general account? Answer. Yes, the $9 million is for capital equipment purchases at NREL that fully 

support the goal of the Solar America Initiative. A list of the equipment to be purchased by the laboratory is presented below: 

Dynamic Secondary Ion Mass Spectroscopy (SIMS) System, $919,000; High-Reso- lution Electron Microscopy Sample Preparation Sputtering System, $154,000; 

Spectro-Radiometer for Pulsed Light Sources (covering 300-2000 nm range), 

$80,000; Humidity Calibration System, $68,000; Precision Cell Area Measurement 

System, $84,000; 6-Source Component and Deposition System with In-Situ 

Diagnostics, $688,000; Combination PLD/PED System with In-Situ Diagnostics, 

$606,000; Excimer Work Station for Laser Processing, $289,000; Single Crystal Diffractometer, $585,000; PV Materials Lamination/Water Vapor Permeation Test System $249,000; 3D Semiconductor Device Simulation Package, $135,000; Proximal 

Probe Workstation, $350,000; Electron Probe Microanalysis System (EPMA), 

$853,000; Far-Infrared FTIR Spectrometer $209,000; X-ray Photoelectron Spectrometer/Inverse Photoemission System $1,511,000; Silicon Wafer Wet Chemistry Station, $510,000; Surface Science Cluster Tool Component Replacements, $297,000; 

Semilab Scanning 6-inch Wafer Analyzer $423,000; Microwave Reflection Based 

Lifetime Scanner, $323,000; Tunable Pulsed Laser $208,000; FT-Raman Mapper 

$303,000; Large Area Mask Aligner; $156,000. 

Question 5. Given the President’s personal commitment to the Solar America Initiative, how can you justify cutting more than $21 million in solar R&D funding this 

year? Are you concerned about the macro effects this funding cut may have on the 

economy? A study published this week by Navigant Consulting shows the value of 

96 

solar-related jobs in manufacturing and construction—two industries hit hard in the 

current recession/economic slowdown. Is now really the time to be decreasing federal 

support for solar R&D programs? 

Answer. The Administration continues to recognize the importance of solar energy, consistent with the goals of the President’s Solar America Initiative (SAI). The 

$12 million reduction in the FY 2009 request compared to the FY 2008 appropriation is based on the following factors: 

The $10 million decrease in concentrating solar power research and development 

reflects a down-selection of industry projects in trough manufacturing and thermal 

storage technologies, allowing only the most promising contracts representing the 

best use of the taxpayer dollar to move into the second phase of funding in FY 2009. The remaining $2 million decrease in the Solar Heating and Cooling Systems is 

the result of a transfer of this activity from the Solar Program to the Buildings Program. Under the Buildings Program, funding for this activity is actually increasing 

to $3.7 million. The Solar Decathlon activity is also transferred to the Buildings Program, where it is more aligned with the mission of the Zero Energy Buildings effort 

within the program. Transferring the Solar Decathlon to the Buildings Program allows more funding to be dedicated to the Solar America Cities, Solar America Showcases, and Government Solar Installation Program activities within the Solar Program budget. The actual funding decrease in the Solar Program FY 2009 request is only $12 million. The $9 million that was referenced as part of the $21 million was not funding for solar R&D, but rather for solar capital equipment purchases at NREL to replace aging equipment. 

Question 6. Why is the solar heating and cooling budget zeroed out? Will that 

level of funding continue as part of the Building Technologies Program? Given the 

extensive use of solar heating and cooling technologies on homes and businesses in 

Europe and elsewhere, is the Department planning to support the increased use of 

solar heating and cooling in the US? 

Answer. The Solar Heating and Cooling (SH&C) budget continues to be funded 

within the Department’s Office of Energy Efficiency and Renewable Energy (EERE) 

under the Buildings Technologies Program at a request level of $3.7 million. Since 

SH&C technology has primary applications in residential and commercial buildings, 

management of this sub-program will be transferred from the Solar Technologies 

Program to the Building Technologies Program within EERE, beginning in FY 2009. 

This realignment is intended to provide a more direct and efficient coordination of 

RD&D activities by combining SH&C energy supply and energy efficiency load reduction technology options for building applications. 

DOE recognizes that the SH&C technology is an important contributor to the development of successful integrated pathways to Zero Energy Homes (ZEHs). In collaboration with the Building America (BA) Program partnerships, the goal is to 

achieve technically feasible and economically viable ZEHs by 2020. This goal cannot 

be accomplished without renewable energy supply technologies like SH&C. 

Question 7. Is the development and deployment of cost-effective solar water heating products a near-term goal for the Department? 

Answer. Yes. In collaboration with the building industry and stakeholders, DOE 

is supporting the research and development (R&D) of cost-effective Solar Heating 

and Cooling (SH&C) energy supply and energy efficient load reduction technology 

options for building applications, which includes R&D on cost-effective solar heating, 

solar cooling, and solar water heating (SWH) products for residential and commercial applications. SH&C is also expected to contribute to achieving technically feasible and economically viable Zero Energy Homes (ZEHs) by 2020. Successful pathways towards the ZEH goal cannot be accomplished without renewable energy supply technologies, including cost effective solar water heating products. 

Question 8. Will solar heating and cooling product rating and personnel certification be a priority for the Department? 

Answer. The Department’s Solar Heating and Cooling Technology (SH&C) provides technical and financial support to the Solar Rating and Certification Corporation (SRCC) and the North American Board for Energy Practitioners (NABCEP). 

SRCC and NABCEP certification of the solar products and practitioners are considered critical to the widespread utilization and mainstreaming of these important renewable energy supply technologies. The successful development and implementation of effective certification procedures provide enhanced consumer confidence and 

assurances leading to an expanded market demand for residential and commercial 

building applications. These certifications are being adopted as requirements by 

Federal, State and local incentive programs and utility initiatives for solar heating 

and cooling technologies. 

97 

GIPP AND BUSHEHR

Question 9. Are these press reports [regarding GIPP and the Bushehr nuclear reactor] accurate? If so, why would the Department of Energy subsidize the building 

of a nuclear power plant I and many of my colleagues have worked so hard to prevent from being built? Why would the Department take these actions that run completely contrary to our nonproliferation goals? Finally, why now when our relations 

with Iran have been greatly strained would we be funding a program such as this? 

Answer. The Global Initiatives for Proliferation Prevention (GIPP) program funds 

individuals in an attempt to direct those with weapons of mass destruction expertise 

to approved projects for peaceful purposes. These individuals tend to work at Russian institutes that undertake a wide variety of work by the Russian nuclear complex. 

To ensure consistency with U.S. policy and regulations, GIPP vets each project 

proposal with U.S. agencies and the intelligence community. The purpose of this review is to eliminate from consideration institutes that are under U.S. sanctions or 

investigation for proliferation-related activities. Because the United States does not 

sanction Russian institutes that also support Bushehr, no U.S. agency raised an objection to GIPP projects involving such Russian institutes. Final decisions on these 

few projects will be made following consultation with U.S. agencies and others, a 

process we expect to complete in the near future. Consultations with Congress and 

other stakeholders are also anticipated before the Department implements more significant changes to GIPP. 

We have no information suggesting that Russian scientists receiving funds 

through GIPP were also working on nuclear projects in Iran. To reconfirm this, we 

have undertaken an exhaustive check of GIPP project records and intelligence information covering the program’s 14 years of existence. 

QUESTIONS FROM SENATOR WYDEN

The Administration has announced that it intends to expand the capacity of the 

Strategic Petroleum Reserve to 1.5 billion barrels, apparently with an increase to 

1 billion barrels—project 09-FE-100, ‘‘SPR One Billion Barrel Expansion.’’ Please 

provide the following and describe the method used for each calculation: 

Question 1a. Total estimated construction cost for the ‘‘SPR One Billion Barrel Expansion.’’ 

Answer. The total estimated construction cost for the expansion of the SPR from 

its current capacity of 727 million barrels to one billion barrels, is estimated at $5.1 

billion. This is based on conceptual design estimates which were prepared in 2006. 

Question 1b. The Administration has announced that it intends to expand the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels, apparently with an 

increase to 1 billion barrels—project 09-FE-100, ‘‘SPR One Billion Barrel Expansion.’’ Please provide the following and describe the method used for each calculation: 

Total estimated cost to the Federal Government of the additional oil which would 

be added in the ‘‘SPR One Billion Barrel Expansion.’’ 

Answer. DOE anticipates the continuation of the current DOE/DOI program to 

use Federal Royalty oil from the Outer Continental Shelf for the fill of the SPR to 

one billion barrels. As such, there is no acquisition cost for this oil as the Federal 

Royalty oil is owned by the Government, although it does reduce receipts to the U.S. 

Treasury, thereby increasing the deficit. This oil would be transferred to DOE for 

SPR storage directly or exchanged for oil of equivalent value meeting SPR specifications prior to SPR storage. However, assuming a maximum Royalty oil fill rate of 

100,000 barrels per day and 2009 budget price projections for imported oil, the value 

of the oil that would be added to increase the SPR inventory from 700 million barrels to one billion barrels, is estimated at about $23 billion. 

Question 1c. The Administration has announced that it intends to expand the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels, apparently with an 

increase to 1 billion barrels—project 09-FE-100, ‘‘SPR One Billion Barrel Expansion.’’ Please provide the following and describe the method used for each calculation: 

The estimated additional annual maintenance and operations cost associated with 

the ‘‘SPR One Billion Barrel Expansion’’ (1) during the period the expansion is taking place, and (2) once it is complete. 

Answer. There would be no additional maintenance and operations cost associated 

with expansion during the period the site expansions are taking place. The expanVerDate Aug 31 2005 13:31 Aug 21, 2008 Jkt 043391 PO 00000 Frm 00101 Fmt 6601 Sfmt 6621 G:\DOCS\41830.TXT SENERGY2 PsN: MONICA
98 

sion costs for each of the three sites include all maintenance and operations costs 

associated with the expansion efforts until the site’s expansion has been completed. 

Once expansion has been completed, we project an increase of approximately $40 

million per year based on costs at current sites. The increase includes $30 million 

associated with the maintenance and operations of the new 160 million barrel site 

and an incremental increase in costs of $5 million for each of the two existing site 

expansions. 

Question 1d. The Administration has announced that it intends to expand the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels, apparently with an 

increase to 1 billion barrels—project 09-FE-100, ‘‘SPR One Billion Barrel Expansion.’’ Please provide the following and describe the method used for each calculation: 

Total estimated construction cost for the additional expansion to 1.5 billion barrels. 

Answer. The Department has not finalized its expansion plan, nor selected the 

sites for the expansion of the SPR from 1.0 billion to 1.5 billion barrels. The DOE 

has requested $13.5 million in FY 2009 to prepare its expansion plans and complete 

a NEPA environmental review. However, if two additional new salt dome storage 

sites of 250 million barrels each-that would be similar to the existing SPR sites-were 

developed in the Gulf Coast region, the total estimated construction cost for the expansion of the SPR from 1.0 billion to 1.5 billion barrels is about $6.5 billion based 

on the construction costs for existing SPR sites. 

Question 1e. The Administration has announced that it intends to expand the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels, apparently with an 

increase to 1 billion barrels—project 09-FE-100, ‘‘SPR One Billion Barrel Expansion.’’ Please provide the following and describe the method used for each calculation: 

Total estimated cost to the Federal Government of the additional 500 million barrels of oil. 

Answer. DOE anticipates the continuation of the current DOE/DOI program to 

use Federal Royalty oil from the Outer Continental Shelf for the fill of the SPR to 

1.5 billion barrels. As such, there is no acquisition cost for this oil as Federal royalty 

oil is owned by the Government, although it does reduce receipts to the Treasury, 

thereby increasing the deficit.. This oil would be transferred to DOE for SPR storage 

directly or exchanged for oil of equivalent value meeting SPR specifications prior to 

SPR storage. However, assuming a maximum royalty oil fill rate of 150,000 barrel 

per day and 2009 Budget oil price assumptions, the value of the oil that would be 

added to increase the SPR inventory from 1.0 billion to 1.5 billion, is estimated to 

be more than $40 billion. 

Question 1f. The Administration has announced that it intends to expand the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels, apparently with an 

increase to 1 billion barrels—project 09-FE-100, ‘‘SPR One Billion Barrel Expansion.’’ Please provide the following and describe the method used for each calculation: 

The estimated additional annual maintenance and operations cost associated with 

the additional expansion to 1.5 billion barrels (1) during development, and (2) once 

complete. 

Answer. There would be no additional maintenance and operations cost associated 

with expansion during the period the site expansions are taking place. The expansion cost includes all maintenance and operations costs associated with the expansion efforts until the site’s expansion has been completed. Since the Department has 

not finalized its expansion plan, nor determined the number or locations of the sites 

to be developed for the expansion from 1.0 billion to 1.5 billion barrels, the additional annual maintenance and operations cost associated with the additional expansion to 1.5 billions barrels once complete, has not been estimated. 

Æ