ENERGY AND WATER DEVELOPMENT 

APPROPRIATIONS FOR 2009 

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT 

PETER J. VISCLOSKY, Indiana, Chairman 

CHET EDWARDS, Texas 

ED PASTOR, Arizona 

MARION BERRY, Arkansas 

CHAKA FATTAH, Pennsylvania 

STEVE ISRAEL, New York 

TIM RYAN, Ohio 

JOSE ́ E. SERRANO, New York 

JOHN W. OLVER, Massachusetts 

DAVID HOBSON, Ohio 

ZACH WAMP, Tennessee 

JO ANN EMERSON, Missouri 

MICHAEL K. SIMPSON, Idaho 

DENNIS R. REHBERG, Montana 

KEN CALVERT, California 

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking 

Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. 

DIXON BUTLER, TERRY TYBOROWSKI, TAUNJA BERQUAM, 

ROBERT SHERMAN, and LORI MAES, Staff Assistants 

PART 7 

DEPARTMENT OF ENERGY 

Page 

Overview Hearing—Vehicle Technology and Gas 

Prices ....................................................................................... 1 

Bureau of Reclamation .......................................................... 97 

( 

Printed for the use of the Committee on Appropriations 


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PART 7—ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2009 


jlentini on PROD1PC65 with HROC
ENERGY AND WATER DEVELOPMENT 

APPROPRIATIONS FOR 2009 

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT 

PETER J. VISCLOSKY, Indiana, Chairman 

CHET EDWARDS, Texas 

ED PASTOR, Arizona 

MARION BERRY, Arkansas 

CHAKA FATTAH, Pennsylvania 

STEVE ISRAEL, New York 

TIM RYAN, Ohio 

JOSE ́ E. SERRANO, New York 

JOHN W. OLVER, Massachusetts 

DAVID HOBSON, Ohio 

ZACH WAMP, Tennessee 

JO ANN EMERSON, Missouri 

MICHAEL K. SIMPSON, Idaho 

DENNIS R. REHBERG, Montana 

KEN CALVERT, California 

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking 

Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. 

DIXON BUTLER, TERRY TYBOROWSKI, TAUNJA BERQUAM, 

ROBERT SHERMAN, and LORI MAES, Staff Assistants 

PART 7 

DEPARTMENT OF ENERGY 

Page 

Overview Hearing—Vehicle Technology and Gas 

Prices ....................................................................................... 1 

Bureau of Reclamation .......................................................... 97 

( 

Printed for the use of the Committee on Appropriations 

U.S. GOVERNMENT PRINTING OFFICE 

44–138 WASHINGTON : 2008 


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COMMITTEE ON APPROPRIATIONS 

DAVID R. OBEY, Wisconsin, Chairman 

JOHN P. MURTHA, Pennsylvania 

NORMAN D. DICKS, Washington 

ALAN B. MOLLOHAN, West Virginia 

MARCY KAPTUR, Ohio 

PETER J. VISCLOSKY, Indiana 

NITA M. LOWEY, New York 

JOSE ́ E. SERRANO, New York 

ROSA L. DELAURO, Connecticut 

JAMES P. MORAN, Virginia 

JOHN W. OLVER, Massachusetts 

ED PASTOR, Arizona 

DAVID E. PRICE, North Carolina 

CHET EDWARDS, Texas 

ROBERT E. ‘‘BUD’’ CRAMER, JR., Alabama 

PATRICK J. KENNEDY, Rhode Island 

MAURICE D. HINCHEY, New York 

LUCILLE ROYBAL-ALLARD, California 

SAM FARR, California 

JESSE L. JACKSON, JR., Illinois 

CAROLYN C. KILPATRICK, Michigan 

ALLEN BOYD, Florida 

CHAKA FATTAH, Pennsylvania 

STEVEN R. ROTHMAN, New Jersey 

SANFORD D. BISHOP, JR., Georgia 

MARION BERRY, Arkansas 

BARBARA LEE, California 

TOM UDALL, New Mexico 

ADAM SCHIFF, California 

MICHAEL HONDA, California 

BETTY MCCOLLUM, Minnesota 

STEVE ISRAEL, New York 

TIM RYAN, Ohio 

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland 

BEN CHANDLER, Kentucky 

DEBBIE WASSERMAN SCHULTZ, Florida 

CIRO RODRIGUEZ, Texas 

JERRY LEWIS, California 

C. W. BILL YOUNG, Florida 

RALPH REGULA, Ohio 

HAROLD ROGERS, Kentucky 

FRANK R. WOLF, Virginia 

JAMES T. WALSH, New York 

DAVID L. HOBSON, Ohio 

JOE KNOLLENBERG, Michigan 

JACK KINGSTON, Georgia 

RODNEY P. FRELINGHUYSEN, New Jersey 

TODD TIAHRT, Kansas 

ZACH WAMP, Tennessee 

TOM LATHAM, Iowa 

ROBERT B. ADERHOLT, Alabama 

JO ANN EMERSON, Missouri 

KAY GRANGER, Texas 

JOHN E. PETERSON, Pennsylvania 

VIRGIL H. GOODE, JR., Virginia 

RAY LAHOOD, Illinois 

DAVE WELDON, Florida 

MICHAEL K. SIMPSON, Idaho 

JOHN ABNEY CULBERSON, Texas 

MARK STEVEN KIRK, Illinois 

ANDER CRENSHAW, Florida 

DENNIS R. REHBERG, Montana 

JOHN R. CARTER, Texas 

RODNEY ALEXANDER, Louisiana 

KEN CALVERT, California 

JO BONNER, Alabama 

ROB NABORS, Clerk and Staff Director 

(II)


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ENERGY AND WATER DEVELOPMENT, AND 

RELATED AGENCIES APPROPRIATIONS FOR 

2009 

THURSDAY, FEBRUARY 14, 2008. 

OVERVIEW HEARING—VEHICLE TECHNOLOGY AND GAS 

PRICES 

WITNESSES 

DAVID L. GREENE, CORPORATE FELLOW, OAK RIDGE NATIONAL LABORATORY, CENTER FOR TRANSPORTATION ANALYSIS 

BOB DINNEEN, PRESIDENT AND CEO, RENEWABLE FUELS ASSOCIATION 

MARY BETH STANEK, DIRECTOR OF ENVIRONMENT AND ENERGY 

POLICY AND COMMERCIALIZATION, GENERAL MOTORS CORPORATION 

DON HILLEBRAND, DIRECTOR OF CENTER FOR TRANSPORTATION RESEARCH, ARGONNE NATIONAL LABORATORY 

LYNDA L. ZIEGLER, SENIOR VICE PRESIDENT OF CUSTOMER SERVICE, 

SOUTHERN CALIFORNIA EDISON 

TOM STRICKER, DIRECTOR, TECHNICAL AND REGULATORY AFFAIRS, 

TOYOTA MOTOR NORTH AMERICA 

CHAIRMAN VISCLOSKY’S OPENING STATEMENT

Mr. VISCLOSKY. Bringing the hearing to order. Sorry about our 

tardy beginning, but there was at least a chance we were going to 

have a new vote, and we are not. So we should have at least an 

hour uninterrupted. 

Before I do begin my opening statement, I want to welcome back 

home Mr. Rehberg to the subcommittee. And, Mr. Calvert, welcome 

to the subcommittee. I think you are going to enjoy it, and we will 

appreciate having your contribution as we proceed. 

As we begin today’s hearings, I, first of all, do want to thank 

Terry Tyborowski for all of her extraordinary effort. I think all of 

you have had some extended dealings and conversations with Terry 

for being the lead staff in today’s hearing. Time was short, our 

needs great, and all of us do expect a very informative and productive hearing. 

The Subcommittee on Energy and Water Development meets 

today to hear testimony on an energy issue, one that is impacting 

the wallets of every American, the rising price of gasoline. In January 2003, the average retail price of a gallon of gasoline in the 

United States was $1.50, roughly equal to the real inflation-adjusted price during much of the preceding half century. Since then, 

the price of gasoline has risen sharply. It was last below $2 in FebVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00001 Fmt 6633 Sfmt 6633 E:\HR\OC\A138P2.XXX A138P2

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ruary 2005, and for much of 2007, prices topped $3 a gallon. Dr. 

Greene, one of our witnesses today, includes in his testimony that 

households today are now spending $3,000 instead of $1,500 per 

year on fuel, a significant hit to the consumer’s pocketbook. 

The 100 percent increase in real U.S. Gasoline price since 2003 

and a growing consciousness of global warming of CO2 emissions 

has important implications for government policies that would reduce gasoline consumption. While there is no magic bullet in the 

government to immediately drop the price of gasoline, ongoing Federal research in vehicle technologies is starting to have a payoff 

through market introduction of automobiles utilizing technologies 

that will displace some portion of gasoline for power. Higher prices 

for gasoline have increased the market demand for vehicles that 

utilize biofuels and battery storage technology. 

The purpose of the hearing is to explore what the best options 

are for reducing oil consumption and decreasing CO2 emissions. 

What are the tradeoffs between these goals? If we are successful, 

can the technology involved drive down price, or can we expect the 

cost of a mile traveled in our private vehicle to continue to rise? 

Before introducing the panel, I would recognize my good friend, 

Ranking Member Mr. Hobson, for his opening remarks. 

MR. HOBSON’S OPENING STATEMENT

Mr. HOBSON. Thank you, Mr. Chairman. And I will try to keep 

my comments short today. As I drove in this morning, I put some 

gasoline in my car. It was $2.95 in Alexandria, so I became acutely 

aware of the hearing today. 

I wanted to thank the witnesses today for accommodating the 

schedule change for today’s hearing. As you know, we just attended 

a memorial service in the Capitol for our dear friend Tom Lantos. 

He was a good friend of all of us. I have traveled with Tom and 

his wife Annette, and I hope you understand the need to make that 

change. 

I really want to commend the Chairman for holding this hearing 

before we start our series of hearings on the agency budget request 

for fiscal year 2009. We all hear from the constituents about the 

pain they feel at the gas pump, and unfortunately we have to tell 

them that the energy and water appropriations bill has very little, 

if any, impact on gas prices, at least in the near term. 

The Department of Energy is primarily a research agency, and 

what we are talking about today are the new vehicle technologies 

that are on the horizon. I hope the horizon is closer than I think 

it is. Those alternative technologies may not drive down the cost 

of gasoline, but they are going to provide customers with more 

transportation choices and may ultimately reduce the cost that consumers have to pay for transportation. 

This hearing will also give us a useful perspective on what private industry is already doing pursuing—for vehicle technologies to 

know whether or not an additional Federal investment is necessary. 

Another thing I wanted to mention to you, that is not in my prepared remarks, is my wife was taking a golf lesson this week from 

a guy, a Brit. He said something that I had never heard before and 

I was astounded by. You know, the European prices are a lot highVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00002 Fmt 6633 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

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er than ours, but he said that the automobiles—the same foreign 

automobile that might be bought here—has a higher gas mileage 

rating in Europe than in the United States. I don’t know whether 

that is because we make manufacturers and dealers put extra 

things on them. I don’t want to single out any model. Well, I will. 

I guess I will have to today. A BMW. Let us say a 325 or whatever 

BMW, or the one that my staffer has, which is more expensive 

than mine. Something is wrong. But that same car in Europe will 

get a better gas mileage economy than it will here. I don’t understand how that can happen. 

So I am going to stop there, but I did want to thank the Chairman for doing this, and welcome all the Members to the committee. 

This is one of the finest committees to be on in this Congress 

whether in the Majority or the Minority. I liked it better in the Majority, but this is still a committee that is very bipartisan and will 

do its work in harmony. 

Mr. Chairman, I yield back. 

Mr. VISCLOSKY. Mr. Hobson, thank you very much. 

And I would like now to introduce our panel. First, Dr. David L. 

Greene is a corporate fellow at Oak Ridge National Laboratory, the 

Center for Transportation Analysis, and will provide an overview 

of gasoline prices and CO2 emissions and the impact that technologies such as biofuels and electric-powered vehicles can have in 

displacing gasoline. 

Mr. Bob Dinneen is president and CEO of the Renewable Fuels 

Association and will discuss the displacement of gasoline through 

the use of biofuels and the impact to gasoline prices and CO2 emissions. 

Our car manufacturers typically have not been involved in fuel 

supply, yet General Motors has recently announced the purchase of 

a company specializing in cellulosic ethanol production. Dr. Mary 

Beth Stanek, Director, Environment and Energy Policy and Commercialization for General Motors, will discuss this recent acquisition, GM’s vision for flex-fueled vehicles and other efforts to boost 

the availability of E85. 

Advocates for plug-in hybrid vehicles claim that 100 miles per 

gallon would be reasonable; however, current nickel-metal hydride 

batteries for conventional hybrids are not optimal for this application. Dr. Don Hillebrand, who appears to be a very fine gentleman, 

however, had a telling omission on his resume that was submitted 

to the committee. I noted that he was from Detroit, Michigan, but 

he failed to put the universities he attended, perhaps knowing that 

I went to Notre Dame. But I would for the record note that Dr. 

Hillebrand is a Michigan grad, among others. He is Director—and, 

of course, Mr. Hobson is an Ohio State grad, and we will leave it 

at that—the Director for the Center for Transportation Research at 

Argonne National Laboratory and will present the status of battery 

vehicle technology, what the limitations are, the outlook for the future for plug-in hybrid vehicles, and the impact plug-in hybrid electric vehicles can have on gas prices and CO2 emissions. 

A key component to the success of plug-in hybrid technology for 

vehicles is the role utilities play in providing the power. Lynda L. 

Ziegler, Senior Vice President, Customer Service, for Southern 

California Edison, will present the efforts Southern California EdiVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00003 Fmt 6633 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

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son is making to encourage the use of plug-in hybrids and other efforts in the transportation sector to reduce CO2 emissions. 

The most popular hybrid vehicle on the road today is the Toyota 

Prius, and Toyota has announced it will build a plug-in hybrid in 

2010. Mr. Tom Stricker, director of technical and regulatory affairs 

for Toyota Motors North America, will discuss Toyota’s strategy for 

hybrid vehicles and the battery technology necessary to carry the 

vision forward. 

If we could begin—and I would ask for a summary of your remarks. Your full written testimony will be entered into the record. 

If we could proceed in the order of introduction, that would be terrific. Dr. Greene. 

MR. GREENE’S OPENING STATEMENT

Mr. GREENE. Thank you. Good afternoon, Mr. Chairman, and distinguished committee members, and our guests. 

As you pointed out, since January 2003, the price of gasoline in 

the United States has doubled, and the principal driving force behind increasing gasoline prices has been the price of petroleum on 

world oil markets. The cost of the oil in a gallon of gasoline increased from 65 cents in 1998 to $2 today. The average American 

household is now spending $3,000 instead of $1,500 per year on 

fuel; $900 of that is a transfer of wealth from American consumers 

to oil-exporting countries. I estimate that in 2007 alone the economic costs of oil dependence to the U.S. exceeded $350 billion, and 

that cumulative costs over the past 5 years have exceeded $1 trillion. 

Following the oil price shocks of 1973–1974 and 1979–1980, the 

combination of worldwide market responses to high oil prices, 

strong policy actions like fuel economy standards, and technological 

advances in energy efficiency and energy supply brought down oil 

and gasoline prices. From 1977 levels, U.S. net imports of petroleum were cut in half by 1985. 

Unfortunately after oil prices collapsed in 1986, we stopped trying to control our oil dependence. With petroleum cheap and plentiful, it was easy to convince ourselves that the problem had been 

solved once and for all, or that there had never really been a problem. 

Now, several things are different today. The most important difference is the urgency of addressing climate change. Stabilizing atmospheric concentrations of greenhouse gases at levels that may 

avoid dangerous climate change will require deep, economywide reductions in greenhouse gas emissions on the order of 60 to 80 percent by 2050. 

Today our oil dependence problem is even more about transportation than it was three decades ago. Since 1973, transportation petroleum use has increased by more than 50 percent, while nontransportation oil use has decreased by more than 40 percent. 

Today oil markets are less sensitive to price increases than they 

were in the 1970s. The doubling of fuel prices we have just experienced had only half as much of an impact on vehicle travel as the 

doubling that occurred during oil crises of the 1970s and 1980s. 

Today it appears to be much more difficult for oil producers outside of OPEC to increase the supply of oil. The peaking of U.S. 


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crude oil production in 1970, up to which point we were the world’s 

largest producer of crude oil, was a key enabler of the ensuing oil 

price shocks. The International Energy Agency and ExxonMobil 

Corporation have both projected that world oil production outside 

of OPEC will reach a plateau around 2010. 

The need for more energy-efficient technology is also greater 

today. Proven, cost-efficient fuel economy technology for conventional gasoline vehicles allows only a 40 to 50 percent increase in 

miles per gallon by 2020—this is reflected in the Energy Independence and Security Act—as opposed to the almost 100 percent increase required of new passenger cars in the Energy Policy and 

Conservation Act of 1975. 

Advanced technologies will be needed to continue improving vehicle fuel economy. Researchers at MIT’s Sloan Automotive Laboratory estimate that fuel economy increases of 80 to 85 percent for 

internal combustion engine vehicles may be obtainable with advanced technologies by 2030, and that future hybrid vehicles could 

obtain almost three times the miles per gallon of today’s conventional vehicles. But even that will not be enough. 

If you can see the graphs here, this is an analysis I have done 

of the impact of fuel economy improvements on greenhouse gas 

emissions. That is the red line, fuel and greenhouse gas emissions. 

This is a base case that does not include the fuel economy improvements of the EISA Act. 

The next one shows that with those increases to 35 miles per gallon in 2020, we can almost hold fuel consumption and greenhouse 

gas emissions constant through 2025, but then they begin to increase afterwards. If we were able to double light-duty vehicle fuel 

economy by 2030, as the MIT studies suggest may be possible, we 

can hold those greenhouse gas emissions and fuel use constant 

through 2050. Then going beyond that and tripling fuel economy by 

2050 only achieves a 15 percent reduction from current levels. So 

to reduce carbon emissions by 60 to 80 percent by 2050 will require 

alternative low-carbon sources of energy for transportation vehicles. 

Biofuels can make an important contribution. It has become 

clear, however, that without breakthroughs in methods of producing biofuels, the levels of production envisioned by current policy will have serious impacts on food prices and may even increase 

net greenhouse gas emissions. However, this is not the time to give 

up on our biofuels goals; rather, this is the time to apply our best 

science and best policy analysis to ensure that we can use our biomass resources efficiently and with maximum environmental benefit. 

Avoiding dangerous climate change will ultimately require integrating electricity and/or hydrogen into the transportation sector’s 

energy mix in combination with policies to decarbonize electricity 

generation and hydrogen production. 

This graph shows another MIT study showing the total emissions, life cycle emissions here, tank-to-wheel and, in the blue, 

well-to-tank—that is the upstream emissions—for a conventional 

baseline vehicle; increasing efficiency of conventional vehicles, internal combustion engine vehicles and advanced hybrid electric vehicles with almost three times the fuel economy; and then plug-in 


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hybrid electric vehicles. And you can see, as the all-electric range 

of these vehicles increases, most of the emissions become upstream 

emissions. 

Now, this study assumed that electricity in 2030 would be produced in much the same way it is today, but with any kind of carbon-constraining policy, the emissions in 2030 will, in fact, be much 

lower, half or so of what they are today. 

The energy challenges we face today appear to be greater than 

those of the 1970s. Today our solutions to the problem of oil dependence must also put us on a path to avoid dangerous climate 

change. Then we achieved a temporary solution; today the challenge of climate protection requires a sustainable solution. The 

same tools are available, market forces, government policies, 

science and technology, but today the challenge is greater. 

Thank you very much. 

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MR. DINNEEN’S OPENING STATEMENT

Mr. DINNEEN. Thank you, Mr. Chairman. Thank you for the invitation to be here, Congressman Hobson and members of the committee. I do appreciate on behalf of the U.S. ethanol industry, the 

fastest-growing renewable industry in the world, for the opportunity to come and talk to you about the growth of our industry 

and how it can have a tremendously positive impact in adding alternative fuel supplies and reducing consumer costs of gasoline. 

The ethanol industry, as many people know, is indeed growing 

extremely rapidly. We have 140 biorefineries in operation across 

the country today. This is not just your grandfather’s ethanol industry anymore. It is not just about Iowa. We have got ethanol 

plants virtually from coast to coast and border to border, and we 

are growing. 

Mr. Chairman, you know we have got six plants in operation 

today in Indiana. There are another five that are under construction. 

Congressman Hobson, there is one plant in Ohio in operation 

today, three under construction. We have got a plant in operation 

in Tennessee and another one under construction. There are five in 

Missouri. 

Mr. Simpson, there is one ethanol plant in operation in Idaho 

today, and the next generation of ethanol production from cellulose 

is likely to start in Ohio where a company, Iogen, is looking to 

build a facility. 

Mr. Calvert, we have got four plants in California and three 

under construction. 

Mr. Rehberg, you know, there are none in Montana today, but 

we are trying, and we will get there soon, I am sure. 

On the other side of the dais, let us see, there is indeed a plant, 

surprisingly, in Arizona that is in operation today. 

Mr. Berry, there is a great deal of biodiesel production in Arkansas; nothing on ethanol yet, but it is coming. 

There is indeed an ethanol plant in operation in New York today, 

and another one that is going to be opening up very soon. 

Mr. Olver, I am sorry. I can tell you, though, that the ethanol 

industry’s trade association head is from Massachusetts, if that 

gives you any consolation. And there are a number of companies 

in Massachusetts that are on the cutting edge, providing technology for the next generation of ethanol production. So Massachusetts will indeed help to lead the way there as well. 

The point is our industry is growing, and growing rapidly and 

evolving. There are 60 plants that are currently under construction. There is not a company that I represent that doesn’t have a 

very aggressive cellulose-to-ethanol research program underway, 

because, as Dr. Greene just noted, the ethanol industry is going to 

grow, but there are limitations to how much ethanol we can get 

from grain. Most people believe that that is about 15 billion gallons. And indeed the energy bill that passed in December essentially caps ethanol production from grain at that 15 billion gallons. 

The energy bill that passed, however, requires some 36 billion 

gallons of ethanol to be produced by 2022. Some would question 

whether or not that can be done. It can’t be done by grain; it has 


hsrobinson on PROD1PC76 with HEARING
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to be done by cellulose. That is why there are so many Massachusetts companies that are looking at cracking the code so that we 

can indeed produce ethanol from cellulose materials, whether it is 

woody biomass from upstate New York or municipal solid waste in 

California. There is a company in Los Angeles that is looking to 

build ethanol production capacity at a landfill right outside of Los 

Angeles. 

So the industry is evolving and evolving quite rapidly. The potential benefits are enormous. Already our industry is responsible for 

238,000 jobs. At a time when the rest of the economy is not as robust, the economy in agriculture, the economy in our industry is 

doing terrific. We have added $47 billion to GDP last year. We 

have replaced some 228 million barrels of oil. That is significant. 

That is money that is staying here at home and not being shipped 

overseas to countries that do not have our best interest at heart. 

From a climate change perspective, just the ethanol that was 

produced last year reduced greenhouse gas emissions some 10 million tons, the equivalent of taking 1.2 million vehicles completely 

off the road. This year we will produce more than 9 billion gallons 

of ethanol, the equivalent of taking, from a greenhouse gas emissions standpoint, almost 2 million vehicles off the road. It is the 

single most important strategy that we have today of addressing 

the challenge of climate change. And as the industry evolves, and 

as we begin to produce ethanol from cellulosic materials, those benefits are just going to get even better. 

I can’t tell you whether or not enzymatic conversion of woody biomass is going to ultimately be more efficient than gasification of 

municipal solid waste. I can’t tell you whether or not the feedstock 

of choice for cellulose will be switchgrass or wood chips or something else. But I can absolutely assure you that there will be cellulosic ethanol production in this country sooner than conventional 

wisdom believes now is possible. 

The signals that this Congress sent to our industry, to the marketplace, to the finance industry have been very clear. We are 

going to be investing. We are going to be commercializing cellulosic 

ethanol very, very soon. The markets are also evolving. Today ethanol is largely a blend component in gasoline. All of you, virtually 

all of you, are driving on 10 percent ethanol blends. All of the gasoline blended in the Washington metropolitan area is 10 percent 

ethanol. You may not know it because there aren’t big signs that 

say so, but it is there. Ethanol today is blended in 50 percent of 

the Nation’s fuel. 

But I drove over here today in a beautiful General Motors Avalanche that is fueled by E85. I was able to fill that vehicle up with 

E85 last week at an E85 refueling station across from the Pentagon. That infrastructure is developing. E85 will ultimately be a 

very important component of the U.S. motor fuel market. There are 

only 1,400 E85 refueling stations today out of 170,000 gasoline stations across the country. We need to grow that infrastructure, and 

we are doing so. 

As the market grows with the commitment that GM and others 

have made to flexible-fueled vehicles that can burn that fuel, there 

are only 61⁄2 million FFVs on the road today, but they committed 

that 50 percent of their production will be flexible fuels by 2012. 


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With that kind of a marketplace, the product will follow, and the 

opportunities to continue to grow this market to be a more ubiquitous component of the motor fuel market in this country will 

grow as well, and I look forward to working with this committee 

to make sure that that happens. 

Thank you. 

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Mr. HOBSON. Right on time. 

MS. STANEK’S OPENING STATEMENT

Ms. STANEK. Good afternoon, Mr. Chairman and committee 

members. It is great to be here today. 

As mentioned, I am involved in public policy, but also in R&D. 

Today I will focus on E85, and I am also going to talk about our 

other technologies just a little bit, our plug-in hybrid electrics and 

our fuel cell vehicles. 

Mr. HOBSON. Are you going to talk about a hybrid Tahoe? 

Ms. STANEK. We do. We have a two-mode hybrid, and I will be 

glad to talk—— Mr. HOBSON. I read the advertisement. You don’t advertise how 

much it gets. You say it is 25 percent better, and I read the whole 

ad trying to figure it out. 

Mr. EMERSON. On TV it said it was the same—— Mr. HOBSON. They don’t use a number. It is very interesting. 

Ms. STANEK. You know, I think one of the reasons why is in advertising if you put a hard number in, you know, people’s driving 

habits actually alter from that number. So you have to be careful 

from the personal user experience. But really you see a 40 percent 

in the city fuel economy and know that within that class of vehicle, 

it is the highest-rated fuel economy vehicle. So it is a combined average originally, before the hybridization, of 21. So you would add 

40 percent savings to that. And on the highway, where you also get 

hybrid savings, it is a different type of motor that is driving that. 

It is about 20 percent. So you would add 20 percent to—I wouldn’t 

say 20, but about 19 MPG. But again, if you drive hard, if you are 

carrying a heavy load, it is very different for you if you are on and 

off the brake. But that is why you are going to see it in advertising 

in terms of percentages as opposed to actual numbers. 

I will say that the EPA Web site has very good, reliable figures, 

although it is not easy to nest through Web Sites to find it, but 

they are posted and reliable. 

Mr. HOBSON. I just looked at the—— Ms. STANEK. Well, I will go through this a little bit, and I really 

want to emphasize our partnership with Coskata. This has been a 

wonderful cooperation between General Motors and this biotech 

firm in Warrenville, Illinois. And just to highlight a little bit why 

we looked into this firm, we have been working with biomass 

groups all over the world, and this firm has the ability to take 

waste materials, old tires, plastics, landfill items and biomass, convert it very efficiently using a very efficient process. We are getting 

7.7 times the energy out, getting CO2 reductions up to about 84 

percent at a production cost of what we anticipate to be about $1 

a gallon. So you can see why this is very interesting for us. 

In addition, I will talk a little bit about the readiness. The important thing is we learned a little bit more about enzymatic processes. There is more science, more work ahead. The Coskata process can start immediately. And, in fact, they just announced a partnership with ICM, which is the largest biorefinery builder. 

So before we launch into all that, in the automotive industry, 

this is a great time for us. There are a number of opportunities and 

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vanced technologies. The important thing is that we have to develop alternative sources of energy and propulsion. We have this 

chance right now to mitigate many of the issues surrounding energy availability, and we hope we can continue to do this with the 

cooperation of business and government. 

The first thing we have to do, and we are continuing to do, is 

really improving the internal combustion engine. You mentioned 

the Cobalt. That vehicle is a very affordable vehicle for about 

$10,000. It gets 34 miles per gallon. Now, this is important because 

General Motors is a full-line auto manufacturer. We provide vehicles to everyone. We have to ensure that we continue to have entrylevel buyers being able to buy our new products. These are very 

emission-efficient and very energy-efficient. We can still work on 

that through aerodynamics, more nanotechnologies, better use of 

materials, lighter-weight materials. So we are still focused in that 

area. It is still a very rich area to get fuel economy from. 

In addition, we are working on hybrids. We do have eight hybrids right now that are all being launched. We are going to double 

that to 16 in the next year or two. So in terms of General Motors’

portfolio, we have very good fuel efficient vehicles at an entry-level 

price, we are moving into hybrids and now we are also very, very 

active in E85 and flex-fuel technology. No secret here, our leadership worked in Brazil early on, saw the benefits of alcohol fuels, 

began to steer the ship down there more towards the flex-fuel technology; 95 percent of our product portfolio in Brazil now is flex-fuel. 

Those learnings were brought back to Detroit, and we are beginning to assess the entire portfolio to make them flex-fuel, and that 

is a global opportunity for us. As Bob mentioned, there are 6.5 million flex-fuel vehicles in the U.S.; 2.5, actually approaching 3 million, are General Motors vehicles. 

So again, we are expanding, and we are committing our product 

line to grow even more. Just last week in Chicago at the auto show, 

we announced our first four-cylinder flex-fuel vehicle. I think this 

has been something everybody has been waiting for not only on the 

larger engines, but on the smaller engines. 

Again, we feel E85 is important because you can address a number of things at once. You can address the energy issue, the CO2

issues, and you can certainly help with smog-forming emissions 

and help support job growth. So we think it attacks everything at 

once. We think it has a great opportunity to really address our energy issues in this country. 

Now, as Bob mentioned, we have announced that we would begin 

to convert 50 percent of our portfolio to flex-fuel, but we also need 

the infrastructure to grow. We realized we couldn’t make such 

statements unless we were doing something about that as well. My 

team and many others at General Motors have been working with 

many of you and others around the country to get E85 stations in 

States. Today we have over 300 stations that are in place, because 

we partnered with ethanol producers, with Governors, with agency 

heads, with Federal funding, with clean-city coordinators, and we 

haven’t lost one station, which is important. That means the fuel 

is selling well. The retailers are holding. You know, they are not 

backing out of the business. So if we can do that from a little 


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small-operations team to get that created, we believe that it needs 

to now grow to a national level. 

I would submit to you that it would be important, as you are considering different things, proposing more of a national target of stations. It is very, very easy to understand where these stations 

should go. It is certainly based on where fuel is consumed in population. We have done a lot of studies on that. And we absolutely 

have our flex-fuel vehicles, all the automakers, really following the 

same lines. So if you know where people live and where they consume fuel, it is pretty clear that you can put in these stations that 

will be successful. 

A little case in point. We opened a station in Miami, clearly out 

of the Corn Belt, very far away from where the fuel was produced. 

The fuel was selling very competitively. We reached out to our flexfuel owners within 5 miles of that station. We had 5,000 flex-fuel 

owners. We said, by the way, you have a flex-fuel product, and you 

now have fuel in your market. They literally were running out of 

fuel in days, and it made a lot of news, and it also led to the development of 25 new stations that will be going into the greater 

Miami area. 

So one of the goals we have been doing at GM is to seed these 

important markets, to ensure this expansion happens. And just to 

restate, we do not think it is difficult. We think it is very, very 

achievable. 

Continuing on just a little bit. I want to talk about Coskata. As 

I mentioned, the metrics are fantastic. Coskata is in Warrenville, 

Illinois. They have taken existing technology, and they have combined it with their microbes, which are patented microbes. And essentially the simplest way to think of this is they take the waste 

and they gasify it. The gas becomes hydrogen and carbon monoxide. Their microbes eat the gas, and they just gorge on it. In 

some of the technologies, the microbes are very sensitive, they don’t 

live long, they get ill. But they have really made them hearty. So 

they are consuming the gas. And what is the byproduct? They actually sweat ethanol in water. So these microbes take in the gas, they 

consume it and sweat ethanol in water. 

They then take that product and they put it through what they 

call membrane technology. It is used in dialysis right now. It is 

very mature. It is a very known process. And the membrane technology allows the separation of water and ethanol in a very, very 

energy-efficient method. Instead of having large spinning techniques and energy-demanding separation, it can be done very 

affordably. In fact, 50 percent less energy is consumed in the 

Coskata process in separating the fuel. The important thing, too, 

which I haven’t mentioned up to point, is their process creates 

water. It means that their per-gallon use of water for every gallon 

of ethanol is under a gallon. If this proves to be true in a largescale plant, this will be the most efficient use of water that we 

know of. 

Again, we believe they are ready to start now. The reason why 

they are ready to start now is because the gasification step and the 

membrane technology step have been known for some time. They 

have been known, and they have been used in other processes in 


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other industries. And now that they have their microbes healthy, 

hearty and patented, they are ready to go and connect all the dots. 

They announced that they will be putting up a demonstration 

plant. They haven’t announced the site, but it will be relatively 

soon when they do announce. They are going to be producing 

40,000 gallons of ethanol using this process. We will be the recipients of the first 40,000 gallons. We will take the ethanol back to 

our proving grounds and use our vehicles with that fuel out at Milford. 

From that we will continue to partner with them all over the 

country and encourage in each and every State biorefineries that 

adopt this process. We think it is energy-efficient. We think it is 

a great local adaptation, and it is a great use of science and regular 

matured commercialization techniques. 

Another thing we continue to do—I won’t spend too much time— but we continue to promote E85 and our products. Our products 

are going from 11 to 15 this year, as I mentioned, one being a fourcylinder. It is really important that we include the consumer in 

these discussions. Up until now they have a notion of biofuels. 

They don’t know if they are using them, where they are. So the 

more we can do locally to let people know that they have some 

choice in their markets, that they have vibrant competition, it will 

help get education up. 

So we had an E85 fall tour and an ‘‘85 days of summer’’ where 

we went out and engaged consumers, retailers. We went to editorial boards. We went to football games. And it worked very successfully. In those markets fuel sales are up. And, in fact, in one 

market where we did a lot of postcarding and did a lot of media, 

sales of E85 went up 30 percent, and they have remained up 30 

percent in those markets. 

When people say it doesn’t work, it does work, but it does take 

this coordinated effort. And we can never forget the communication 

of the marketing element because that is how consumers are made 

aware of this process. 

So in conclusion, I think there are a few things that we can work 

together on. I think we still need a strong and sustained push from 

Congress and the administration to support biofuel production, sustainable biofuel production, and next-generation cellulosic ethanol. 

In addition to supporting these efforts, we must include infrastructure, not just R&D. As I mentioned, we need a larger national 

goal. Probably it would be reasonable to be 6 percent of all stations 

or greater. That is where diesel started, and we have seen the diesel industry do very, very well. Biofuel infrastructure should be significantly expanded. 

We need the national goals as I mentioned, and we need a market response that is encouraging the use of these fuels and talking 

to the benefits. 

We should consider incentives for the manufacturer of biofuel-capable vehicles and increase support for broadbrand infrastructure 

conversion as well. 

The government should continue to purchase vehicles that are 

flex-fuel. Government fleets actually do help this process. When 

they purchase the vehicles, whether they be E85–capable vehicles 

or hybrids or hydrogen, it does help grow the market because we 


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are able to work on putting in fuel and infrastructure around those 

large fleets. 

Now, before I close, I wanted to talk about the other technologies. Right now we have 100 GMX vehicles. They are called 

GMX 101. They are actually Equinox vehicles that are being put 

in the hands of consumers right now. They are hydrogen vehicles. 

They are a demo fleet. They are not for sale. But we have hydrogen 

stations going up in California, New York and in D.C. And again, 

these folks will be able to experience hydrogen vehicles today. 

In addition, we talked a little bit about our efforts with the twomode and a little bit with some of our battery technology, but how 

we are very, very active in Detroit working on the Volt technology. 

This is a pure battery-operated vehicle with a range extender. 

So I thank you for your time and listening to our story, and I 

hope you have more questions after we hear from everyone. Thank 

you. 

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MR. HILLEBRAND’S OPENING STATEMENT

Mr. HILLEBRAND. Thanks for the chance to come here, Chairman, 

the committee, to talk about battery technology. It is a real honor 

for me. 

In the last 25 months, there has been a dramatic development 

in automotive and vehicle technology in North America. That has 

been the development of hybrid technology and the rapid introduction of plug-in hybrid technology programs with most of the Nation’s automakers. It has accrued for a variety of reasons; probably 

foremost is the growing dependence on imported oil and the cost 

of fuel. But it is also related to our clean air standards, what they 

do to diesels; improved battery chemistries; small businesses which 

are really kind of picking up the challenge; and the fact that the 

government has been funding a lot of this research for quite a long 

time. 

The reasons for this sudden interest for plug-ins are many. It is 

clear we are in the midst of a revolution that is probably comparable to what happened about 100 years ago when the automobile was first developed at the start of the last century. The first 

modern hybrid vehicles were developed through U.S. Government 

research programs in the start of the 1990s. There was no commercialization because fuel prices were low, so there wasn’t a whole lot 

of demand. Battery technology was not very well developed, and 

the power electronics were not very sophisticated. So it made the 

vehicles expensive and inefficient. 

But in the late 1990s, Toyota produced the first successful hybrid 

using the new nickel-metal hydride batteries, and Toyota currently 

manufactures the hybrid vehicles in Japan and exports those to 

North America. The hybrid vehicle market is about 500,000 vehicles in 2007 worldwide, but that is less than 1 percent of the total 

vehicle market. Its share, though, is projected to grow 30 percent 

over the next 4 years, and it could reach as many as 2 million vehicles in 2015. 

The growth is dramatic in automotive terms and the competition 

between the manufacturers is intense. Toyota produces more than 

80 percent of the hybrids that are sold right now, but that is not 

likely to change soon. Ford and GM have both produced viable hybrids, but the production of these is slowly ramping up because of 

limitations in materials and the high costs. The GM two-mode hybrid, which we have been talking about today, is probably arguably 

the most advanced in the world right now, but the Toyota system 

is more mature, and it is more available. It is available in more 

models. Ford has——

Mr. HOBSON. Excuse me. Is the Toyota different than the Honda 

system? 

Mr. HILLEBRAND. Yes. The Honda system is a very mild——

Mr. HOBSON. You mentioned Honda, and Honda is in Ohio. So 

I thought——

Mr. HILLEBRAND. Yes. There is a slight difference. Ford has a hybrid system similar to Toyota’s, but they publicly stated that they 

are severely hampered by a lack of access to advanced battery technology and to high battery costs. 


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The potential for hybrid technology to reduce fuel usage is very 

high. Hybrids can improve fuel economy around 25 percent. And 

testing at this point indicates that plug-in hybrids can improve fuel 

economy substantially more. The fuel economy of a plug-in hybrid 

prototype, as we have measured it at our lab at Argonne, has exceeded 100 miles per gallon. That is without being optimized. 

Now, this number sounds a bit sensational. And I am hesitant 

to use fuel economy when I am talking about plug-in hybrids because the concept of fuel economy doesn’t really apply when you 

are talking about plug-ins. But we have to give it some sort of a 

metric. Suffice it to say that plug-in hybrid potential is very high, 

and right now we have programs in place to actually determine 

how to properly compare plug-in hybrid fuel economy with existing 

conventional fuel economy so that we have a good back-to-back 

measurement. 

In all cases, whether it is hybrids or plug-ins, batteries are the 

key enabling technology. Lithium-ion battery chemistries are the 

leading candidate for solving automotive battery issues. The U.S. 

is dominant in the development of battery materials and chemistries, and although many of the fundamental breakthroughs in 

battery technology have occurred in the U.S., they have been subsequently licensed and commercialized overseas. 

The DOE battery research program has sponsored small businesses, it has pushed applied development of promising battery 

chemistries to a very high level. But the U.S. is behind the rest of 

the world in the adoption of battery-manufacturing capability. 

Many small American companies are planning to build their factories in China right now. The nickel-metal hydride automotive 

technology was initially developed in the U.S. It has been commercialized by Panasonic and Sanyo, and it is mainly manufactured in 

Japan and Korea and is sold on the Toyota hybrids. 

Several countries have advanced battery research capability. 

Japan—I was at a conference there about a year ago in Tokyo, and 

it was a very eye-opening experience. They recognize advanced battery technology as the key driving force behind competitiveness. 

And the actual quote I heard at that conference through the translator box was that battery technology manufacturing capability is 

a matter of national survival. Strong statement. The Japanese Government is very supportive in funding research programs. They 

have committed to a 20-year research program, about 50 million a 

year in U.S. dollars. 

China is the planned location for many new American manufacturing facilities. Their battery-manufacturing methods are labor-intensive and are not really refined at this point. But China will develop capability quickly, and they will keep low costs. That is why 

most American companies are attracted to that location. 

Korea has low-cost and aggressive companies, makes a lot of batteries, but they are more of a follower than a leader in chemistries. 

And last month, 2 months ago, Germany announced the German 

Battery Alliance. They see the importance of getting battery-manufacturing capability on shore. They have the intent to develop a 

homegrown capability to increase the energy and performance of 

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lion, and it is mainly funded—it is coshared, but it is mainly funded by Federal Ministry of Education and Research. 

Now, the U.S. is supreme in battery materials and chemistry development. It also leads start-up activities and innovation. But the 

major problem is that we don’t have manufacturing or prototyping 

capability. Battery manufacturing and know-how and capability 

are developed over time. They require huge capital investments. 

Toyota invested a lot of this money in the past. It has developed 

this capability, and it can produce batteries. Estimates of costs 

vary, but studies indicate that Toyota probably pays one-third less 

for its batteries than do the American-owned companies. 

Beyond manufacturing, the two biggest concerns with the lithium-ion technology are safety and cost. Now, safety is a concern, 

but looking at it from an engineer’s perspective, most of those problems are solvable, meaning the limiting factor for plug-in hybrid introduction is likely to be cost. 

The estimates for the battery pack for a plug-in hybrid, look at it being between 3,000 and $12,000 per car per pack. At these levels, the major hurdle to introducing the plug-in hybrid technology 

is that the projected fuel dollar savings are considerably lower than 

the cost of the battery. In other words, there is no payback on the 

technology right now. 

Now, to get a payback, you either need to lower the battery cost, 

or you need a bigger difference between gasoline and electricity 

price. Battery costs can be lowered by looking at funding materials, 

research in batteries. You can do tax policies, R&D tax credits. You 

could look at incentives. There are ways to do it, because from the 

automaker’s point of view, with batteries not really ready for commercial introduction, the business risk of introducing a plug-in hybrid is really tremendous, especially because automotive battery 

warranties have to be for the life of the vehicle. So the automaker 

takes all the risk, and it decides and commits to making these, it 

could commit to really losing an awful lot of money. 

Specific-focus North American battery-manufacturing incentives 

could spur further progress. A SEMATECH-type program focused 

on battery manufacturing in North America might be a big help to 

help jump-start a homegrown battery industry. 

The government should continue to support the hybrids the way 

they have. That has been very helpful with respect to pushing 

them into the market, and maybe we should look into expanding 

those into plug-in hybrids as well. Government funding for advanced vehicles should also better reflect a likelihood of success, 

which might be an important thing now that we have higher fuel 

prices. A sustained effort to develop a domestic battery-manufacturing capability will also be very important because ultimately we 

haven’t accomplished much if we have transferred our dependence 

on imported oil for an addiction to foreign batteries. 

Thank you. 

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MS. ZIEGLER’S OPENING STATEMENT

Ms. ZIEGLER. Thank you, Chairman Visclosky and Ranking Member Hobson. My name is Lynda Ziegler, and I am the senior vice 

president of customer services at Southern California Edison. I 

very much appreciate the opportunity to lend Edison’s support 

today to your important efforts promoting sustainable alternative 

transportation technologies for this country. 

My company has been committed to leading the way in responsible electricity generation for many years now. Today 17 percent 

of the energy that we provide our customers comes from renewable 

generation. We purchase on behalf of our customers one-sixth of 

this Nation’s wind-generated energy and 90 percent of the solar. 

Over the last 5 years, our nationally recognized energy-efficiency 

programs have delivered enough energy savings to power 500,000 

homes. 

And finally, we are very proud of our 20 years of electric transportation leadership. Today we operate the Nation’s largest fleet of 

electric vehicles that have traveled over 15 million miles on electric 

fuel. Our Electric Vehicle Technical Center, unique in the utility 

industry, evaluates all forms of electrodrive technology. We have 

ongoing evaluation and demonstration programs supporting airport 

and seaport electrification, truck stop electrification, battery electric vehicles, plug-in hybrid electric vehicles and fuel-cell electric 

vehicles. 

A good example of our leadership, we just recently announced a 

Ford-FCE partnership to develop and deliver PHEV and grid solutions to help accelerate commercialization of PHEV so that breakthrough improvements in fuel economy and energy security can be 

realized. The partnership will demonstrate 20 plug-in hybrid electric vehicles, examine new business models, research customer 

needs, and work on development of open architecture standards 

and specifications. 

We believe that with continued engineering advances and appropriate public policy support, the widespread use of plug-in transportation technologies will become one of this Nation’s most effective strategies to address energy security, reduce greenhouse gas 

emissions and reduce air pollutants. In fact, a recent study by the 

Electric Power Research Institute and the Natural Resources Defense Council found that widespread adoption of plug-in hybrids 

versus today’s gasoline hybrids could reduce annual emissions of 

greenhouse gas by more than 450 million metric tons by 2050, the 

equivalent of removing 82 million passenger cars off the road. 

These reductions are obviously a long way off, but it provides us 

all the more incentive to begin today. 

Enhanced use of electric transportation has other important benefits as well. A recent DOE study estimated there was enough excess capacity in the U.S. Electricity grid to fuel a little over 70 percent of all the light-duty cars and trucks on the road today without 

building a single new power plant. 

Using electricity to fuel transportation will also reduce our dependence on foreign oil. The study I just mentioned found that 

PHEVs by 2050 could reduce petroleum consumption by 3 to 4 million barrels of oil per day. 


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And finally, electricity cost is also cost-effective at about 25 to 50 

percent the cost of a gallon of gasoline equivalent. And of all of the 

popular fuels today, from ethanol and biodiesel to hydrogen, electricity is the only one with a national infrastructure already in 

place. 

So if we have this alternative fuel, what products and technologies can use it today and in the future? In the near term, we 

are seeing rapid development and deployment of port electrification, truck stop electrification, next-generation electric forklifts, 

and battery electric and plug-hybrid light and medium and heavyduty vehicles. 

Based on a number of major manufacturer announcements, we 

should be seeing plug-in vehicles and technology on our driveways 

and roads within the next 5 years; however, there are still significant challenges yet to be solved on the road to electrifying our 

transportation. I am primarily referring to the energy storage battery. Today there is impressive progress being made on the lithium 

battery; however, we still have not achieved a reliable, safe, durable and cost-effective advanced battery for automotive applications. 

In addition, as we heard from Dr. Hillebrand, there are no domestic battery material suppliers or domestic battery production capacity in place today. 

The new energy bill authorizes a broad range of incentives and 

policy initiatives designed to encourage near-term and long-term 

solutions and address some of the challenges I have mentioned 

here. Specifically it authorizes 95 million in new grant deployment 

programs for qualified electric transportation projects, section 131, 

part 6, such as electric forklifts, shoreside electrification of ships, 

electric airport ground support, and truck stop electrification. In 

addition, H.R. 6 authorized a 90-million-per-year plug-in electric 

vehicle demonstration program and several programs encouraging 

manufacturing, sections 132 through 136, which are not currently 

in the administration’s budget. H.R. 6 also authorizes six programs on battery RD&D at $295 million a year. But unfortunately, the 

administration’s budget in fiscal year 2009 remains at just 50 million, about the same as the previous years. We respectfully ask 

that appropriations ramp up to the fully authorized levels as soon 

as possible in all of these critical areas. 

Mr. Chairman and members of the committee, we stand committed to partnering with Congress, manufacturers, battery suppliers, utility and industry stakeholders to help realize the full potential of electrifying this Nation’s transportation future. The first 

and critical step is to appropriate adequate and sustained funding 

of the near and midterm programs identified in H.R. 6 and to find 

the right balance between programs with near-term and long-term 

benefits. 

Thank you for this opportunity. 

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Mr. VISCLOSKY. Mr. Stricker. 

MR. STRICKER’S OPENING STATEMENT

Mr. STRICKER. Rearranging the cookies up here. 

Good afternoon, Mr. Chairman and members of the committee. 

I thank you for inviting me here today to speak about Toyota’s perspective on hybrid vehicles and our strategy. 

Working and living in the Washington, D.C., area, as I guess 

most of us do, we are all well aware, too aware I would say, of the 

number of vehicles that are out on the road today. There are about 

850 million vehicles globally right now, and we are adding as an 

industry about 20 million vehicles a year to the car park. 

As a result, we are faced with three key challenges. One is the 

need to reduce greenhouse gas emissions; two, the need to reduce 

emissions that lead to local air pollution; and three is the need to 

reduce dependence on petroleum. 

All auto companies, and you heard from GM today as well, are 

working on a variety of solutions to solve these challenges, but as 

much as we like to pick winners and losers, there is not going to 

be just one solution. The conventional gasoline and diesel vehicles, 

biofuels, hydrogen, hybrids are all going to play a role in the future 

vehicle makeup. 

At the committee’s request, I am going to focus my remarks primarily on hybrids and what Toyota is doing. And I would like to 

start by making two key points up front. One, build it, and they 

will come only works for Kevin Costner in the Field of Dreams. We 

have to be able to sell vehicles to customers, and not just 500 customers, not 5,000 customers, and not even 50,000 customers. We 

have to have widespread mass-market adoption of advanced technologies in order for there to be a substantial impact on either petroleum or on CO2. 

The second key point, and I even have to emphasize this within 

Toyota sometimes, is that hybrid is not a technology that necessarily competes with other technologies. Hybrid is a system that 

can be applied to any power train and utilizing virtually any fuel. 

It is a system of battery, electric propulsion, regenerative braking, 

capture of energy. And we can apply these kinds of technologies to 

any kind of fuel and engine system, not just what you see today 

in terms of a gasoline hybrid vehicle. 

The most apparent benefits of hybrids certainly are increased 

fuel economy and low emissions. What is often overlooked is the 

flexibility to tailor the system to achieve different goals, both performance and fuel economy or a combination of both. For example, 

Prius maximizes fuel economy while achieving a class average acceleration performance. On the other hand, the Lexus LS600–H 

provides V–12 performance out of a V–8 hybrid engine with classleading fuel economy. And as more hybrids enter the market, and 

as the market evolves, you are likely to see some different tradeoffs between these two attributes over time. 

Currently Toyota offers six hybrid models for sale in the U.S., 

and I would point out that we do actually manufacture the Camry 

hybrid in the U.S. in our Georgetown, Kentucky, plant. Today we 

sold nearly 750,000 hybrids in the U.S. alone, and globally we sold 


hsrobinson on PROD1PC76 with HEARING
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about 1.25 million. We estimate that these vehicles have saved 

about 3.3 million metric tons of CO2. Our goal is to sell a million vehicles a year globally within the 

next decade, with a longer-term vision of having a hybrid offering 

in each market segment where we compete. Our development goal 

is to reduce the power—sorry—to increase the power and capability 

of the hybrid system while at the same time reducing its size and 

cost. 

This progress that we have made can be seen in the history of 

the Prius. With each new vehicle generation, we have increased the 

fuel economy, we have improved the 0-to-60 acceleration time, we 

have lowered the tailpipe emissions, and we actually made the vehicle larger. We have been able to do this largely by reducing the 

weight and size of the electrical components and steadily improving 

the battery technology. Our next goal is to reduce the cost of the 

hybrid system by another 50 percent by early next decade. 

During the past year, any time I mention I work for Toyota on 

environmental issues, people want to ask me about plug-in hybrids. 

We believe the plug-ins are appealing technology for reducing petroleum, and, depending on how the electricity is produced, may 

also reduce greenhouse gas emissions. You have seen some data already, but I will present a little bit. 

In the U.S., using the average U.S. grid mix, a plug-in Prius 

would actually achieve about the same CO2 reduction as a conventional Prius nonplug-in. In China, where they have substantially 

higher coal use, a plug-in Prius would actually emit more CO2 on 

a well-to-wheel basis than a conventional Prius. In France, where 

it is 80 percent nuclear, it is a much different story. There is substantial CO2 benefits that can be achieved there. So this clearly 

speaks to the need for clean electricity production or other kind of 

technology to mitigate CO2, such as carbon capture and sequestration. 

On the vehicle side, as you heard, the key challenges of battery 

technology, we are extremely active in this area. The majority of 

the current plug-in conversions that you hear about use deep 

charging and discharging cycles to improve the all-electric range. 

But battery life is adversely impacted by large swings in the battery’s state of charge. The primary reason we have been able to 

offer the long warranties we do on our current Prius battery is that 

the battery management system restricts the state of charge to a 

narrowly defined window in order to ensure the durability. It is 

clear, and you have heard today, that lightweight, higher-energydensity lithium-ion batteries will undoubtedly be needed if we want 

to increase the all-electric operating range of hybrids. 

While we are actively developing lithium-ion batteries, we are 

also concurrently placing plug-in hybrid vehicles in test programs 

in order to gain real-world feedback on what the customers want 

and need. 

We began road testing plug-in hybrids in the U.S., Europe and 

Japan in the fall of last year. First-generation prototypes are 

equipped with nickel-metal hydride batteries, two of the current 

Prius packs, we call them double nickels, which allows us to use 

a proven technology that is reliable and durable. In 2010, this was 

mentioned, I think, by the Chairman at the beginning of the hearVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00060 Fmt 6633 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

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ing, we will expand this demonstration phase by delivering a significant fleet of plug-in hybrids to a variety of global fleet customers, including many here in the U.S. These plug-ins will be 

powered by Toyota’s first-generation lithium-ion batteries. 

Looking to the future, some have characterized hybrid as an interim approach, a bridge to future technologies like fuel cells. But 

we see hybrids not as an interim step, but actually as an integral 

step to the future of fuel cells. In the case of our fuel-cell hybrid 

vehicle, which is a Highlander, the main difference between it and 

our hybrid Highlander is that you take out the gasoline combustion 

engine, and you replace it with a fuel-cell stack. All of the other 

battery, motor, power electronics, control systems, software is 

largely transferable to the fuel-cell vehicle. 

So we think that all of the investments that we are making in 

that technology will not be for naught when it comes to a future 

that might have fuel cells. While more work is needed, one of the 

key challenges that we see is hydrogen supply and distribution and 

infrastructure. At this point, the vehicle development seems to be 

advancing a little bit faster than investments and infrastructure. 

So in conclusion, the energy and environmental challenges that 

we face are going to require an array of solutions. Many of these 

alternatives face challenges in one form or another that must be 

overcome in order to provide consumers with vehicles that meet 

their needs and that they are actually going to be willing to buy. 

We believe hybrid is a key technology. It can provide significant 

benefits while maintaining key attributes that customers demand, 

and it can be applied to a wide variety of technologies. 

Thank you once again, and I look forward to any questions you 

have. 

[The information follows:] 


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Mr. VISCLOSKY. I want to thank the panel. Mr. Hobson and I will 

defer our questions for the moment. I will recognize Mr. Pastor, 

and then we will alternate. There may be a vote or series of votes. 

What we’ll try to do on the dais here is split our time, having some 

Members go right away and others—so we can be as efficient as 

possible. So kind of like being in school, as I think all of you appreciate. 

Mr. Pastor. 

Mr. PASTOR. Thank you, Mr. Chairman. And I welcome the panel 

members and thank you for your testimony. 

ALGAE

I would only tell Mr. Dinneen that in Arizona, in cooperation 

with MIT, we think that the biofuel that is going to be probably 

the most rewarding is algae. We are currently in the deserts of Arizona working with a gas-powered company, APS, taking the 

algae—the carbon dioxide, growing the tanks of algae, and then 

taking the algae out and using it as biofuel. So we think there is 

a great honeymoon with corn, another strawgrass and whatever, 

but we think that algae is going to be the one we are going to do. 

Mr. DINNEEN. Just quickly. There are synergies there as well. 

We produce CO2. And, in fact, there are some ethanol companies 

that are looking at using the CO2 from our production process to 

make algae for biodiesel production. So it is a brave new world we 

are all entering. Thank you. 

LITHIUM-ION BATTERY

Mr. PASTOR. It is interesting because when we started with Dr. 

Hillebrand, Lynda Ziegler and Mr. Stricker, we either talk about 

the lithium-ion battery, if we make it sturdier, it produces double 

the power and energy of nickel and—that development is very important for the development of the hybrid. But Mr. Stricker says 

it is only an integral step because it is going to be where once you 

get to the hydrogen fuel cell, we will probably be storing the power. 

And all three of you say that one of the problems is that even 

though the chemistry is in this country and—the materials are in 

this country, that the lack of manufacturing processes are keeping 

us from going forward. 

And we are investing as a policy—the subcommittee is investing 

a lot of money in the hydrogen fuel cell. I think the President himself several years ago said that is where the money was going to 

go. 

But yet, if we don’t solve the problem of storage—so what do you 

recommend to this subcommittee in terms of the lithium ion battery development and possibly to more R&D and eventually into 

the manufacturing? 

Because your comment was, we may become less dependent on 

foreign oil but we will become dependent on foreign countries in 

terms of the manufacturer of batteries. So the three of you, if you 

would like to comment—what do we need to do in terms of DOE 

involving ourselves in the lithium ion batteries, either R&D or production? 

Mr. HILLEBRAND. Very good points that you are making. 


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You talked a little bit about hydrogen research versus the battery research, kind of the balance between those two things. That 

is sort of a policy question in that it is longer term versus the 

shorter-term issue. The plug-in hybrid and the lithium ion technology are very short-term solutions in that we can see application 

very quickly. Within the next couple of years, we will probably see 

products out there, although the companies are a little nervous, 

whereas hydrogen is definitely more of a long-term sort of solution. 

And the trade-off between those, obviously that is a question of national interest. 

Mr. PASTOR. But to the point that I was getting at, the short 

term and the long term require a battery storage capacity that 

maybe the lithium ion battery has, but yet we are not able to solve 

that problem, and yet it is a problem we need to solve. 

BATTERY MANUFACTURING

Mr. HILLEBRAND. We do—I mean, we see chemistries. There are 

a lot of different chemistries on the table right now that solve portions of the problem, with respect to transportation, but no single 

chemistry does it all. We have 150 cycle. We do ones that will 

produce enough power, ones that are safe. But there is no chemistry that does them all. So they do need to continue to push forward material and chemistry research to come up with that, the 

one that will answer all those questions. So that is one piece of it. 

Battery manufacturing, once again, as I said, manufacturing follows where there are products. And part of the reason there is no 

manufacturing capacity in North America is no American company 

right now wants to lay down a big order right now for a lot of these 

batteries. If they could do that or if they felt comfortable doing 

that, that would pull the industry more onshore to North America. 

But, at this point, nobody is at the point where they are ready to 

make that decision. So it stays in Japan and Korea, where they are 

making consumer electronics, which is really what caused that industry to go there in the first place. 

So it is a combination. You have to keep pushing the chemistry 

forward, and then you have to encourage one of the automakers to 

make a big order to help bring the chemistry manufacturing capability to North America. 

Mr. STRICKER. I would just add to that. Toyota has a joint venture with Panasonic—PEVE is the company name—and that is 

where we manufacture our battery, nickel metal hydride batteries. 

We have announced that we are exploring how we would expand 

that production to include a line for lithium ion batteries for the 

future. 

And Dr. Hillebrand is correct. Basically, the manufacturing follows where the demand is. And when we first launched the hybrids 

as a company, we launched them in Japan. It made sense that 

manufacturing would start in Japan. And that was not an easy 

start-up, by the way. You know, there was a little back-and-forth 

about whether there was going to be enough demand for the vehicles to make the investment in the production of the batteries, or 

a large investment in the production, as opposed to hand-building, 

you know, a couple hundred a month, for example. 


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But we obviously now are at a point, at least for Toyota, where 

we are reaching some volume numbers. We have been able to meet 

that demand for battery production out of our current investment 

with Panasonic. 

Who knows what the future holds in terms of if the hybrid market continues to grow? We certainly hope it will. If hybrid production moves to the U.S., whether through Toyota or through one of 

the other manufacturers, then that would signal the demand that 

may compel an investment in manufacturing in the U.S. 

Mr. PASTOR. Can I ask one more question? 

Ms. ZIEGLER. Could I add something to that? 

Mr. PASTOR. Sure. 

Ms. ZIEGLER. I think from a public policy perspective, you can 

help bridge the gap. We are talking about the economics for the 

manufacturers. And Government policy and supporting R&D, providing loan guarantees for start-up companies that are going to do 

battery, I think is very critical. 

And I would also echo what Dr. Hillebrand said, in terms of 

short term and long term. Because, short term, the plug-in hybrid 

technology—and we talk about infrastructure, we talk about adding stations for ethanol. The electric infrastructure is there today, 

and it doesn’t require anything other than a plug to plug in. So I 

think for short term, the plug-in hybrids, technology being available, being able to deploy shortly, while we continue to work on the 

fuel cells for the longer term. 

CHEMISTRY RESEARCH

Mr. PASTOR. It is my opinion that what you are telling me is that 

it is worth the effort to have public monies invested in the R&D, 

in the chemistry, so that we can find as best we can the chemistry 

that will give us the ability to improve the plug-in hybrid because 

it will minimize the surges, it will have a longer life, and it will 

be able to drive a longer distance. And so, I guess the—and what? 

Mr. HILLEBRAND. And cheaper. 

Mr. PASTOR. And it would minimize the carbon dioxide emissions, et cetera. 

So maybe I should frame the question, do you feel that through 

Department of Energy and other efforts, are we investing enough 

money into the R&D of the development of the chemistry to improve the lithium ion or whatever other element ion you want to 

include? 

It is a short-term solution and a long-term solution, because 

eventually if we developed the hydrogen fuel cell where it is effective, you are going to have to store the power. And so I am still 

trying to find the answers for that. 

Mr. HILLEBRAND. My answer would be self-serving about chemistry, because our lab does chemistry research. But I don’t. So I 

won’t answer that portion of it. 

But I am still seeing—there is a massive move in battery chemistry in technology right now. I have been doing this for about 25 

years. Unlike anything I have ever seen in the years that I have 

been on, we are actually, year by year, almost month by month, 

seeing the technology shift smaller, more powerful, cheaper, better. 

And that, in itself, it is impressive to see that. So you are actually 


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getting a return on what you are putting in. So I think it is worth 

putting more in. 

Disclaimer, though: I mean, our lab does this type of research at 

the same time. But I would rather have them talk a little bit more 

about the chemistries. But if you poured into the start-up companies, like A123 or—I can’t think of any of the companies right now, 

but there is some very interesting work on their part, as well. And 

encouragement on their part would also be very valuable. 

Mr. STRICKER. I am actually not a battery chemistry expert, but, 

I guess, two points. 

One, on the chemistry/science side, if you will, I mean, obviously, 

I can’t speak to how many dollars DOE ought to spend or ought 

to be funded. But that is clearly a Government role, to assist with 

that kind of basic R&D. 

There is also—and Dr. Hillebrand may be more familiar—the 

next-generation battery technologies beyond lithium ion, even, that 

are probably worth a look as well. 

And the manufacturing side, at least from Toyota’s perspective, 

what we think would probably compel manufacturing investment, 

as we see it, would be consumer incentives to spur demand. We 

wouldn’t see necessarily basing an investment decision in manufacturing on the existence of a manufacturing incentive, for example, 

that is not a business plan. You know, you can’t have a long-term 

strategy that you are going to get Government money so you go 

ahead and invest in manufacturing. You need a customer demand. 

So, in terms of that kind of money, we think, you know, the consumer-side incentives might make a little bit more sense. 

Mr. PASTOR. Thank you very much. 

Mrs. Emerson. 

Mrs. EMERSON. Thank you, Chairman. 

Mr. Dinneen, I want to ask you something. You mentioned in 

your long testimony here—I found it kind of piqued my interest, 

about your E–20 utilization study. And after finding those kinds of 

positive results, what do you think the next step is? Do you all 

have further projects, pilot projects, planned that might broaden 

the scope of that a bit? Or where are you going from here? 

Mr. DINNEEN. Well, certainly, more work needs to be done. The 

analysis that we have already done with the State of Minnesota to 

evaluate the efficacy of using a higher-level blend of ethanol in existing fleets, it was a scoping study. And we did look at materials 

compatibility, we looked at drivability, and we looked at emissions. 

There is a lot more work that needs to be done, particularly with 

respect to durability and potentially some small engines. The Department of Energy is doing some of that work. We are working 

with DOE and we are working with other stakeholders to identify 

what additional research needs to be done to answer the questions 

whether or not a higher-level blend would indeed be appropriate 

for use in today’s automotive fleet. There are some legitimate questions out there as to whether or not higher-level blends would be 

appropriate, but I think we are answering those. 

We have not seen any show-stoppers thus far. But, again, I 

would stress that our analysis was a scoping study to identify 

whether or not there were really big issues out there. We hoped to 

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termine whether or not some level higher than 10 percent would 

be useful. The reason this is important is because while E85 is a 

market that is growing and growing rapidly, our industry is growing probably faster than the E85 infrastructure is coming online. 

And we will very soon be at the point where we will saturate the 

existing blend market for gasoline. And in order to maximize the 

amount of ethanol that is used in U.S. motor fuels, having some 

flexibility to increase that blend level would be helpful. 

It needs to be done with all stakeholders agreeing to the science. 

EPA, ultimately, would have to approve a waiver from Clean Air 

Act levels. That is really the next step that you asked about. We 

would have to assemble all of the tests that had been done, go to 

the agency and file for a 211(f) waiver from existing limitations on 

the blend level. That will likely occur, and we hope that it occurs 

with the support of other stakeholders. 

Mrs. EMERSON. How long would that take just to get through the 

EPA process? 

Mr. DINNEEN. EPA is required, under the act it just passed, the 

energy bill that just passed, to respond to a waiver request within 

270 days. 

Mrs. EMERSON. Okay. It is not a short period of time. But all 

right, I appreciate that. Thanks. It is just another interesting piece 

of this very complex and multifaceted puzzle that we have to deal 

with. 

Dr. Greene, let me ask you, in your testimony you really do mention several new and emerging technologies to not only help reduce 

our dependence on foreign oil but also our CO2 emissions. 

You may not want to answer this, but I would like you to try. 

Is there a most promising technology that could become a reality 

for the United States? In other words, what do you believe might 

be the most promising technology? 

Mr. GREENE. Well, this depends on the time frame. If you are 

looking for the next few years, then I think energy efficiency, followed by biofuels. If you are looking for further out than that, then 

I think plug-in hybrids provide that. If we can get the cost of the 

batteries down mainly and solve some of the technical problems associated with deep discharges. 

CO2 EMISSIONS

Mrs. EMERSON. CO2. 

Mr. GREENE. I think we should not worry about CO2 emissions 

upstream from electric vehicles and electricity use in transportation, because if we have a meaningful climate policy, then the 

quickest sector to decarbonize will be the electric utilities. There 

are any number of studies that indicate that is the case, including 

several by the Energy Information Administration. 

I think, in the longer run, we may find that hydrogen vehicles 

are preferable. The biggest issue there is, I think, the storage onboard the vehicle, followed by developing the infrastructure. I think 

we will find that if we have a compelling fuel cell vehicle, that 

building the infrastructure is not anywhere near as hard as we 

seem to think it is. 

Our analyses for the Department of Energy indicate that if you 

have a compelling fuel cell vehicle, that is, one that is as cheap or 


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cheaper than an internal combustion engine vehicle, that the cost 

of making a transition is on the order of tens of billions of dollars, 

which sounds like a lot of money, but for the whole U.S. transportation system it is not much at all. 

Mrs. EMERSON. Okay. I appreciate it. Thank you very much. I 

just got told I have 3 minutes to go vote, so I will yield back for 

the moment anyway. 

Mr. PASTOR. Probably the Chairman and other members are on 

their way back, so we are going to go head out and vote. So if you 

could just eat your cookies and enjoy. 

[Recess.] 

Mr. VISCLOSKY [presiding]. We will reconvene the hearing. 

And if it is okay with Mrs. Emerson, I will recognize the gentleman from New York. 

Mr. ISRAEL. Thank you very much, Mr. Chairman. 

PLUG-IN-HYBRIDS READINESS

I would like to ask a question of the representatives from General Motors and Toyota. 

Mr. Stricker, I think you had said ‘‘if you build it, they will come’’ only works for Kevin Costner. My question to you and to Ms. 

Stanek is, if the Federal Government—and let me back up, actually. 

I am not sure that regulation will compel the research, development and investment and deployment of plug-in hybrids. I am not 

sure that legislation will do it. I am pretty sure that purchase orders will do it. 

And so, if the Federal Government were, as a matter of policy, 

to say that as soon as the Secretary of Energy and the Secretary 

of Transportation certify that plug-in hybrids are commercially feasible and viable, that the Federal Government would swap out 

100,000 of the gas-guzzlers in its huge Federal auto fleet for 

100,000 plug-in hybrids, would that be at all an incentive for your 

company—or your company, Ms. Stanek—to, in fact, accelerate 

their research and development or their own investments in those 

technologies, or would it be completely irrelevant to you? 

Mr. STRICKER. That is a good question. Thank you. 

One point to keep in mind, particularly as far as lithium ion battery technology, from our viewpoint, we are selling 500,000 hybrids 

a year right now, 450,000, something like that. We are looking to 

sell a million a year next decade. We are looking for batteries, 

plug-in or no plug-in. Okay? So we are going to be putting the effort into looking at next-generation batteries with or without plugin. 

So, you know, the joke I wanted to make was, well, the Government can be a fickle customer, because it changes very frequently. 

But that was kind of why I mentioned in my testimony not 500, 

not 5,000, and not 50,000. I don’t know what kind of numbers you 

would be talking about if the Federal Government wanted to belly 

up and buy these vehicles. 

Mr. ISRAEL. Has anybody in the industry done an analysis of 

what kind of purchases it would take in order to accelerate the research and development and deployment of those vehicles? Dr. 

Stanek? 


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Ms. STANEK. I think everyone has researched it. It isn’t so much 

a desire. We, too, see the volumetric issues. We are certain that 

even on the commercial side, customers, real customers, they would 

buy 100,000, 200,000, 300,000 of these vehicles if we had them 

ready today. When we announced our Volt, that was exactly the 

kind of stir and amplification we wanted. The question comes down 

to what Dr. Hillebrand says is the cost of the battery. 

Our vehicles are on target; things are looking great. I also agree 

that the infrastructure is in place. There is some metering we can 

talk about and different applications, but I don’t think that is going 

to be mainstream. But it will be interesting. I do agree all those 

things are working well. But if the price point continues to be 

$10,000 more, even from a purchase standpoint, you know, we have 

a show-stopper. 

Mr. ISRAEL. Okay. 

Ms. STANEK. So I would say focus on the loans—all the things 

necessary to commercialize battery development of the country, and 

then we are half-way home. That is where I see the focus. But 

volumetrically, interest, desire, we are there, because we see the 

end user very excited about it. 

Mr. ISRAEL. Thank you. 

COST FOR LITHIUM ION BATTERY RESEARCH & MANUFACTURING

Dr. Hillebrand, I want to follow up on a question that I think Mr. 

Pastor was developing. In your testimony, you say a sustained effort to develop battery manufacturing capability will be important. 

If the President of the United States called you and said, ‘‘I want 

to develop an Apollo project-magnitude effort to research, develop 

and manufacture lithium ion batteries and I need to know how 

much it is going to cost and how much it would take to get there,’’ what would the figure be? 

Mr. HILLEBRAND. As an engineer, it is difficult for me to come 

up with an answer for you as to what it really should be. I know 

there is substantial funding for battery research right now. We are 

talking about branching into areas that, at this point, we really 

don’t do a lot of work on. I have been talking about manufacturing, 

which is a different type of technology and a different type of area 

than where we are right now. So it is a new area, it is a new program. 

You would want to pull together the A123s, JCI, Johnson Controls, the U.S.-based battery manufacturers, and pull them together to get some coordination of their different activities. And I 

know I was talking about SEMITECH, which I am not that familiar with, but I know essentially what the approach was on that—

pull those groups together, and then you would want to look and 

see the end user, which would probably be GM and Toyota and 

some of those companies, and find out what it would be from them 

that would specifically make them order the batteries, and in the 

volume necessary to make the manufacturing happening. 

I am hesitant to put a number on what that is, because it is beyond what I have looked into. But, you know, the $50 million I 

think that is spent on battery research right now, certainly a large 

proportion of that would be necessary to look at battery manufacturing. 


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Mr. ISRAEL. $50 million per year? 

Mr. HILLEBRAND. Per year in the U.S. 

Mr. ISRAEL. In the U.S. 

In two separate meetings, General Electric and General Motors 

both told me that it would take about $500 million a year, over 5 

years, to get us exactly where we need to be. 

Mr. HILLEBRAND. I wouldn’t think that is that outrageous an estimate. 

Mr. ISRAEL. My final question, Mr. Chairman, if I may, is to Mr. 

Dinneen. 

Mr. VISCLOSKY. The gentleman has all the time he wants. 

Mr. ISRAEL. Thank you. 

Mr. Dinneen, I have tried to help designate the Long Island Expressway in Long Island as an alternative fuels corridor, and spoke 

to the Governor’s office and brought my county executives together. 

And we talked about E85. There are only, I believe, four service 

stations in the entire State of New York where you can get E85, 

and nowhere near Long Island. 

And as I delved into this, I learned that it is not a matter of profitability. In fact, my service station owner said that they could 

make a lot of money with the different tax incentives and rebates 

and NYSERDA grants; they could make a lot of money. There were 

two issues that were holding them up that I never expected to 

hear. One was it takes 2 years to get different State and county 

environmental and health permits to put an above-ground tank at 

a gas station that holds E85. The second was contracts with oil 

companies that specifically prohibit the service station from selling 

E85 because it competes with the oil that they are selling to the 

service station. 

And I am not sure, you may not have experience with the first 

problem; maybe that is just unique to New York. But I am wondering if you can comment on the second issue, where oil companies actually write into their contracts, ‘‘You cannot sell a competing product with ours.’’

Mr. DINNEEN. They deny that, of course. But there was a provision included in the energy bill that just passed that amends the 

Petroleum Marketing Practices Act that specifically prohibits refiners from engaging in that kind of activity, if it ever did. And so I 

believe that we now have a mechanism to assure that that type of 

thing doesn’t happen. 

We ought to be maximizing E85 infrastructure. I can’t comment 

on the permitting issue. I could look into it and get back, if you 

would like. But I do believe that we are on the threshold of seeing 

a tremendous expansion of E85 infrastructure. 

Mr. ISRAEL. Thank you. And just so you know, we have brought 

in all of our local officials, and we have actually started an initiative where they are going to streamline the permitting process, so 

that if a service station wants to sell E85, they can get their health 

and environmental permits expeditiously. 

Mr. DINNEEN. Fabulous. 

Ms. STANEK. May I comment on the New York E85? Do you mind 

if I jump in here? Because we do work on E85 in New York, and 

the NYSERDA has done a wonderful job. By the way, Rochester 


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opened an E85 station this week, $2.55 a gallon versus $3.25 for 

gasoline. So the price is good right out of the gate. 

In Long Island, you are right, there is more E85 coming onboard. 

Part of the problem is real estate. Most of the retailers have limited underground tank storage. They generally do blending, so they 

can’t drop a tank underneath. So, in addition, some of it is physical. 

Mr. ISRAEL. Thank you, Mr. Chairman. I yield back. 

Mr. VISCLOSKY. I have a number of questions. 

And, again, for either Mr. Israel or Mrs. Emerson, if you want 

to jump in or have questions, please, at any time, just get my attention. 

I have a question about Government research and the development of technology, because we are spending taxpayers’ dollars 

to—as the bells go off again. 

And, Dr. Greene, in your testimony, you mentioned that researchers at MIT Sloan Automotive Lab estimated that fuel economy increases of 80 to 85 percent for internal combustion engines 

may be obtainable by 2030. Not saying it could, but potentially. 

MILEAGE PERFORMANCE

We had a witness last year, Mr. John DeCicco from Environmental Defense, on transportation technologies. And he mentioned 

that while technology may be the solution, lack of technology is not 

the problem, explaining that if current technologies are used in 

automobiles to enhance performance, as opposed to mileage, we are 

not solving that part of the problem. 

Because we have and will continue to spend money on various 

technology developments, what assurance do we have that we are 

going to actually now be applying this to mileage performance? If 

anybody wants to comment. 

From my perspective, at this point, now we are wasting people’s 

money just to help auto companies increase their performance, as 

opposed to mileage, if that is what we are concerned about. 

Mr. STRICKER. Well, we do now have a 35-mile-per-gallon-by2020 requirement on the auto industry from the energy bill, which 

is a 40 percent increase in fuel economy over the next 10, 11 years. 

Mr. GREENE. Yes. I think that kind of policy directs the auto 

companies to take technologies that they could otherwise use to increase vehicle performance or increase vehicle size and weight and, 

instead, apply it to fuel economy. 

We believe that the market undervalues fuel economy improvement for a number of reasons. We know from studies that consumers don’t act like the model of rational economic actors. They 

don’t do calculations on how much fuel saving is worth to them and 

that sort of thing. And we think the reason for it is that they are 

uncertain about the value of fuel savings and they are loss-averse. 

So when someone says, ‘‘Pay some money up front to get a more 

fuel-efficient car, and in the future you will get fuel savings,’’ they 

discount the uncertain value of the fuel savings. 

So we think there is, in effect, a market failure there. And as a 

result, when technology advances come along in an unregulated 

market, they get applied for increasing the power of the vehicles 

or they get applied to increasing the size and weight of vehicles. 


hsrobinson on PROD1PC76 with HEARING
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Now, the study by MIT assumes that to get this 80 to 85 percent 

improvement in fuel economy, material substitution would be used 

to reduce and design would be used to reduce the weight of vehicles 

by about 20 percent, and that engines would be converted to 

turbocharged direct-injected lean-burn engines; that technologies 

that we don’t yet have, like variable compression ratio, would be 

implemented; and that we would have a superior lean-NOx catalyst 

that would allow these engines to operate a lot of the time in lean 

air-fuel mixture which improves their fuel economy. So there are 

some technologies that are close but not there yet that are assumed 

in that MIT study. 

CO2 REDUCTION

Mr. VISCLOSKY. Could I ask, biofuels—I appreciate the value, as 

far as reducing dependency on foreign and domestic oil. Are we seeing an advantage as far as CO2? Or is that a neutral or is that a 

negative effect, as far as CO2? 

Mr. Dinneen, I think you said it is a positive effect, as far as reducing CO2

.

Mr. DINNEEN. The models that are available today really were 

developed in Oregon, and maybe Dr. Hillebrand would like to comment as well. 

But I will tell you that the Greek model, which is sort of the default thing everybody turns to today to evaluate greenhouse gas 

benefit, demonstrates that, overall, the ethanol industry will receive about a 22 percent reduction in greenhouse gases. Now, there 

are some that are better than that, depending on what their fuel 

source is, if they are natural gas or coal. There are some that are 

not as good as that. But, overall, the industry today demonstrates 

about a 22 percent reduction per gallon of ethanol. 

Now, you look to the future with cellulosic ethanol as a feed 

stock and, again, with some assumptions about cogeneration and 

other things as the industry will develop. You could have as much 

as a 90 percent reduction in greenhouse gases. 

Mr. HILLEBRAND. We have done a chunk of that analysis that he 

is referring to. And I just want to confirm what he is saying, that 

when you look at it, you play with your variables. You can get to 

the extreme bad case, which is using old assumptions and not 

doing things the ways that are intelligent, and then you don’t see 

a lot of CO2 reduction. However, if you do it intelligently, if you are 

looking at modern growing methods and yields and all sorts of 

things like that, then you do come out with substantial CO2 reduction. 

Mr. GREENE. So here is the other opinion. 

Mr. VISCLOSKY. That is why we had——

Mr. GREENE. The GREET model, I think, is one of the international standards in this area. And it is a very good piece of work. 

Mr. VISCLOSKY. So it does factor in, I assume, the CO2 generated 

in the creation of the fuel too? 

Mr. GREENE. Yes. 

Mr. DINNEEN. Yes. 

Mr. GREENE. What it doesn’t try to do, and what the two recent 

articles in Science magazine bring out, is that there can be landuse changes induced by using land to grow corn for ethanol or soyVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00086 Fmt 6633 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

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beans for diesel or whatever. There can be induced land-use 

changes in the U.S. or somewhere else in the world. And these induced land-use changes can involve the clearing of land, forest 

land, grassland to make crops. And if that happens, then there is 

a carbon debt, if you will, released into the atmosphere from the 

biomass that was on that land and the carbon material in the soil. 

And that can take anywhere from 17 to 90 years to make back by 

the benefit from corn-based ethanol. 

Now, this is a really complicated subject, and maybe you want 

to have a hearing just on this. But Mark Delucchi of UC-Davis, 

who has his own model, the Genius model, which is also used elsewhere in the world, indicates that there is no net benefit from cornbased ethanol, approximately. Alex Farrell at UC-Berkeley, who 

did a survey of GREET model, Genius model and other studies, 

came to the conclusion that there was about a 10 percent benefit 

from corn-based ethanol. And these recent studies, which take into 

account—and Delucchi’s work takes into account induced land-use 

changes. So he is saying no benefit, if you take into account induced land-use change. The Science articles are saying it could be 

twice the greenhouse gas emissions of gasoline, if you take into account these changes. So there is a wide range of difference of opinion on the net benefits of corn-based ethanol if you take into account the induced land-use change. 

Mr. DINNEEN. And, indeed, as Dr. Greene said, this is a very 

complicated issue. And a lot will depend upon the assumptions that 

go into these various analyses. Everybody is trying to wrap their 

arms around the life-cycle analysis and understand what some of 

these inputs would be. And there will be land-use effects, which I 

think people are trying to understand better as well. 

The report that Dr. Greene had just referenced in Science was 

a situational analysis, and it looked, really, at the worst-case scenario. And some of the assumptions that they made were just not 

at all reasonable. It assumed, for example, that there would be 30 

billion gallons of corn-derived ethanol in the United States, when 

the law doesn’t allow for that; it allows for half of that. It assumes 

that the land coming into production would be in the most environmentally sensitive parts of the globe, and that is not a realistic assumption. 

It does, sort of, set the benchmark and demonstrates, yeah, you 

can produce biofuels in a very unsustainable way. But you can also 

produce biofuels in a very sustainable way. And, so long as your 

agricultural processes or constraints are such that you are encouraging the most sustainable technologies, as I believe the United 

States does, you are not going to be clearing forests in the United 

States to make way for biofuels. And farmers today are more and 

more engaged in no-till/strip-till, you know, very environmentally 

sensitive technologies. 

Mr. VISCLOSKY. And I don’t mean to cut you off, but we are getting short, and Mrs. Emerson has an Ag meeting too. And it is unclear as to what is happening on the floor. 

I don’t know, do any of you have to leave? And I am not asking 

to you stay until 9:00. I am just wondering, if this sorts itself out 

in the next 10 minutes. 

Mr. GREENE. I have to leave at 3:00. 


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Mrs. EMERSON. No Members at Ag. So I can just stay here. Our 

side walked out today. 

Mr. HILLEBRAND. The Science article—I have here about three 

pages of our rebuttal, essentially, to the Science article, which will 

be posted tomorrow—I won’t go all the way through it—but 

Delucchi’s errors as he was going through and doing the analysis. 

So this is something that is going to go back and forth for a very 

long time on land usage and such. But we don’t see the same results, and I think we have some really good technical reasons for 

not seeing the same results. 

Mr. VISCLOSKY. Not out of disrespect, but Dr. Stanek, British Petroleum, BP, University of California-Berkeley, I guess Lawrence 

Berkeley National Lab, University of Illinois, are looking at possible—so you don’t have to make any change, as I understand it, 

in the infrastructure. 

Do you want to comment on that approach, as well? 

Ms. STANEK. So you are suggesting maybe, like, a butanol pathway and different things that can utilize the existing infrastructure. 

Mr. VISCLOSKY. I assume that is the gist of your——

Ms. STANEK. It is one of the pathways they are looking at. They 

are looking at biomass, longer chemical strings that look more like 

petroleum. They are looking at butanol, which is an extender. We 

are very bullish on those, but we just have no production quantities 

of it. So we like the directions as it is going. 

We do like the algae discussion. We are actually working with a 

university that is taking crops growing in the desert, applying salt 

water, to grow to fuels. There are a lot of approaches. We are for 

them all. 

But keep in mind, for real, meaningful transportation integration 

and discussion and teamwork, we need billions of gallons of fuel. 

And that is ethanol. 

Mr. VISCLOSKY. Lastly, because we had had a conversation before, and Mrs. Emerson and I do have to leave now, is on hybrids. 

Whoever had the best summary of the conversation we informally 

had. Because with the plug-in, as I understand it, you are getting 

additional mileage on the vehicle, but you also have a greater CO2

problem, you want to go first? 

Mr. STRICKER. Sure. I will try to be quick, to leave my colleagues 

some time. 

Mr. VISCLOSKY. You know what—we are stuck. We have to go. 

Mrs. EMERSON. You have to go. I am good. 

Mr. VISCLOSKY. Go ahead. Keep going. You just have to vote on 

this one, and there will be two more maybe. 

Mr. STRICKER. We were discussing a couple of items, and I am 

not exactly sure which one the Chairman was referring to. So I will 

weigh in, and my colleagues can also weigh in. 

This was during the break. A point that I was making to the 

Chairman was that, in the future, whatever battery advances are 

made, whether they are made because we are trying to achieve a 

plug-in hybrid or whether they are being made because we are trying to just advance battery technology for use in hybrids or other 

vehicles, what needs to be looked at is not the delta in fuel savings 

or CO2 savings between a plug-in hybrid and a conventional vehicle 


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but the delta in fuel savings and CO2 emissions between a plugin hybrid and a hybrid. Because hybrids are out there, and you 

can’t have a plug-in hybrid without a hybrid to start. 

So a consumer will be faced with a choice in the future, potentially, if we have plug-ins: Do I want to buy a hybrid that will be 

a very, very good hybrid if there is new battery technology, or do 

I want to make an additional investment for some incremental benefit to buy a plug-in hybrid? 

And I think a lot of people don’t think about that point. They just 

say, a plug-in hybrid compared to a 25-mile-a-gallon, average, midsized car and not a plug-in hybrid compared to the—the consumer 

is going to look at the marginal cost and marginal benefit between 

those two technologies. 

Mr. HILLEBRAND. In terms of numbers, conventional car, it costs 

you $1,000 a year for your gasoline. A hybrid, it would be about 

$300 a year for your gasoline. A plug-in would take you to about 

$150 a year for gasoline. 

So what you are really saying is, your real savings is not from 

$1,000 to $150. You are saving $150 a year. You have to pay for 

your battery and all your equipment out of that $150 a year. It 

takes you a lot of years to pay for a plug-in at only that kind of 

savings, because you are already starting from an efficient point. 

Ms. ZIEGLER. Your comment was from around the CO2 emissions. 

The chart that we saw there reflects current electricity generation, 

which I think we all believe and understand will change. And so, 

if you move to—you know, in California, where we have mostly gas, 

you see a much different picture in terms of CO2 emissions. The 

plug-in hybrid is very beneficial. 

So it really depends on the assumptions you make about the future generation mix of electricity, in terms of how much CO2 benefit you get for plug-in hybrids. 

Mrs. EMERSON. Of course, we don’t know how long it is going to 

take for us to have all States, for example, adopt the same standards as California. And I dare say there are probably some States 

who don’t want to, at least right now, because of cost and just having to make the transition, I think. 

Mr. HILLEBRAND. If you are going to deal with climate change, 

you are going to need a Federal policy. 

Mrs. EMERSON. I understand. 

Mr. HILLEBRAND. I just want to re-emphasize that and point out 

that, from oil dependence as well, the plug-in hybrid gives you an 

ability to substitute electricity for oil. So that is beneficial also. 

Mrs. EMERSON. Are there any other comments on this? 

Ms. STANEK. Again, I just need to throw in for hydrogen. I know 

we talked about it earlier. It is important. We are really on the 

cusp of great things for all the companies. So, in addition to this 

debate on biofuels and plug-ins and hybrids, let’s not forget that we 

really do have some strong hydrogen programs, with all the OEMs, 

and infrastructure, for that is important as well. 

Mrs. EMERSON. Let me ask a follow-up question just on the strict 

hybrid, not a plug-in. And, you know, obviously, hybrid vehicles are 

always a more—or appear to be a more appealing economic option 

as long as gas prices stay high. And this country is notoriously bad 

for, kind of, bouncing around because, obviously, as gas prices diVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00089 Fmt 6633 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

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minish, then we don’t feel that same urgency to go out and perhaps 

purchase a hybrid car. 

CONSUMER INTEREST IN ALTERNATIVE VEHICLE TECHNOLOGIES

Let me ask you, Mr. Stricker and Dr. Stanek and any others who 

want to jump in, how do we maintain consumer interest in alternative vehicle technologies despite the inevitable variation in gas 

prices? 

Mr. STRICKER. Great question. A couple of points, I guess. 

First of all, as I said in my testimony, our goal is to reduce the 

cost of our hybrid system by another 50 percent moving into the 

next decade. So that is one hedge against variability in fuel prices, 

is higher volumes mean lower costs; technological advancement 

hopefully means lower costs. And so that is one method. 

The other, it is kind of interesting, you know, when you—people 

sometimes ask about the economics of hybrids. And, you know, it 

is not a completely straightforward discussion, because there are 

different kinds of vehicles, there are different kinds of hybrids, 

there are different option packages that hybrids are sold with at 

the dealership level, and people drive differently. They drive different mileage; they recoup costs differently over time. And some 

of that has to do with what is the fuel price. 

What I always tell people is the good thing about hybrids is they 

start—whatever you had to pay up front for them, they start paying you back the minute you drive it off the dealer’s lot. You are 

saving fuel right then. You know, people go into dealerships and 

they will pay upwards of several thousand dollars to get a V–8 engine, so they are making an up-front payment, and the minute they 

drive it off the dealer’s lot they are losing money compared to if 

they would have stuck with, let’s just say, a standard V–6. 

So there is an overall value proposition to any advanced technology. Is it clean? Does it save you fuel? Does it make you feel 

good? You know, there are people who—Bob can probably speak to 

it—are interested in ethanol because they think it is the right 

thing to do. It is a domestic resource; it doesn’t come from the Middle East. So, you know, the value proposition for alternative fuel 

vehicles I think goes beyond just gasoline price, I guess is what I 

am trying to say. 

Mrs. EMERSON. I appreciate that. 

Dr. Stanek. 

Ms. STANEK. I do think it is a basket of decisions, and no two 

people have the same basket. So the elements—maybe the same 

priorities—are different. 

So I think, to keep consumers interested, which is really your 

discussion, I think when we see gas prices hovering at $3 and 

above, it keeps them interested. There is something about that 

number that drives different decision-making, especially to raise 

the fuel-economy metric to be a more important metric than the 

others. It is absolutely true, we see it over and over, that design, 

price, affordability, all these things are much more important cues. 

Now, I am not saying performance, but just the overall appeal of 

the vehicle and lifestyle needs. I mean, there are just certain 

things. You have a lot of kids, or you need it for business. So——

Mrs. EMERSON. Appreciate that. 


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Anybody else? 

Mr. GREENE. Could I comment on that? This is the reason I 

brought up the history in my discussion, is that, in effect, the problem was solved in 1986 when OPEC collapsed and oil prices came 

down. But then when oil prices came down, we said, well, we don’t 

need to do anything anymore. So the problem now is back. 

And I think this is a very difficult problem to solve. Consumers 

always accepted fuel economy standards as a solution, and manufacturers obviously did not. But what I think solves the problem of 

oil dependence in the long run is dealing with climate change, because that problem is not going away any time soon. 

Mrs. EMERSON [presiding]. Mr. Israel. 

Mr. ISRAEL. Thank you. 

We have a fairly fluid situation on the floor right now—not a 

fairly fluid—a very fluid situation on the floor right now. And the 

Chairman, I believe, will be returning. So we are going to keep the 

hearing going until he returns. 

I have several questions. There are recent reports that in Israel 

there is a fascinating project developing. It is a consortium between 

Renault and some private investors that will give Israelis the capability—they are trying to transform their fleet to an all-electric 

fleet. Now, it is easier to do in Israel because you can drive from 

Jerusalem to Tel Aviv. I think it is just maybe 40 miles or so. But 

that is an example of a government that has made a very deep 

commitment to trying to transform the fleet, but it would not have 

happened without the investment community. 

Again, I will go to Dr. Stanek and Mr. Stricker from the automotive industry. What should the Federal Government do in order 

to incentivize private capital or more private investment in the research of new alternative fuel technologies? Dr. Stanek. 

Ms. STANEK. You know, I may be out of step here, but I think 

the R&D on the science aspect is going very well. And when I look 

at biofuels, in particular, there has been about a billion dollars that 

will be placed on advanced biotechnology for biofuels. 

So we talked about the battery commercialization. I would say all 

these things apply the same. Matching funds, you know—and, 

again, with ceilings, not for eternities, but to encourage people to 

get in the business of, even retailers at fuel stations, more aggressive matching funds. Tax credits do work. So something that says, 

for instance, like a green retailer program, it could be a combination of biofuels, it could be hydrogen, it could be a union working 

on plug-in electrification. 

GREEN RETAILER PROGRAM

Mr. ISRAEL. A green retailer program? Elaborate on that, if you 

would. 

Ms. STANEK. A green retailer program essentially sends a signal 

to a retailer, ‘‘You can dispense the fuels as you wish. But moving 

forward, if you would like to actually get a tax incentive—maybe 

it is one, two, three cents off their gasoline sales, because the volumetric sales, correct. If you put in the following, a biofuel station, 

if you put in hydrogen, and you market—you have to market, you 

can’t have an idle tank or a hydrogen dispensing—we will give you 


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one, two, three, four cents off for a period of time on your regular 

volumetric sales.’’

So what you are doing is you are causing the infrastructure and 

things to change, but it is not for an eternity. So in other words, 

the State and the Federal Government get their tax revenue back 

from that. 

But it will require tax schemes similar to that and also matching 

funds for more conversion to get the larger investment community 

involved. 

Mr. ISRAEL. Let me ask a related question. 

I am sorry, Mr. Chairman. 

Mr. VISCLOSKY [presiding]. Just because Mr. Olver has not had 

a chance to ask. This will be a series of eight votes. 

Mr. OLVER. I will be happy to let my colleague go. I am willing 

to stay here for at least 15 minutes. 

Mr. VISCLOSKY. Well, we have got about nine. 

Mr. OLVER. All right. All right. Thank you very much. I don’t 

mean to take somebody else’s place here. 

Dr. Hillebrand, you were the first person to start talking—if I 

start asking things that have already been covered, please tell me, 

and I will just take a look at the testimony. 

You were talking about battery technology and lithium ion, particularly lithium ion and nickel hydride. Do you have a sense of 

how many dollars have been spent on research on lithium hydride? 

And conversely, nickel lithium ion? Does it involve hydride or not? 

Some of them do. 

Mr. HILLEBRAND. Yes. But lithium ion, many different chemistries and many different——

Mr. OLVER. On the lithium hydride and nickel, both technologies, 

both governmental money and private money on those——

Mr. HILLEBRAND. I think the fundamental breakthroughs in both 

of those did come from Government Federal investment, both on 

nickel hydride, which was a combination of Federal funding and 

the ovanics company, Olshinski, up in Michigan. 

Mr. OLVER. What is the dollar value of it, roughly? Your thinking? I know the wheels are grinding to try to come up to something 

close to that. 

Mr. HILLEBRAND. Yes. Well, it has been an ongoing over 10 

years, probably 11 years, of investment. It was fairly small when 

it started out. It was probably sub-$10 million, and now it is probably in the $40 million to $50 million range. 

Mr. OLVER. In either or both cases? 

Mr. HILLEBRAND. I am sorry. I am looking at the full battery development program. And those are partially commercialization, 

partially chemistry development. I am sorry, I don’t know. I don’t 

know the answer to that. 

Mr. OLVER. Okay. Well, if you want to tell me, can you—there 

was a time when I was a young person that I was an 

electrochemist, and I am trying to remember from way back then. 

You mentioned that the lithium ion, that key issues were safety 

and cost. 

Mr. HILLEBRAND. Yes. 


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NICKEL METAL HYDRIDE

Mr. OLVER. What are the key issues in the case of nickel hydride? 

Mr. HILLEBRAND. First and foremost, the cost of nickel, which is 

going up. It has gone up drastically, and it will continue to go up. 

Nickel metal hydride batteries are limited in their energy storage 

capacity. 

Mr. OLVER. How many hydrogens per nickel? 

Mr. HILLEBRAND. I don’t know. As to how the connection——

Mr. VISCLOSKY. He is serious. 

Mr. HILLEBRAND. I know he is. 

Mr. OLVER. You said that you are not one of the chemists at an 

earlier stage. While I was floating in and out, I do remember hearing you say that. So you don’t know how many hydrogens per nickel. 

One of the key limitations in any of these things relates to hydrogens, how many hydrogens can you—it is a density—the energy 

density you can get out. 

Mr. HILLEBRAND. That is right. 

Mr. OLVER. And I think in nickel hydride, it is not more than two 

or four. I think there are some materials that have been worked 

on that get to eight or a dozen. And maybe with metal ions that 

are not any heavier than the nickel. So it depends. 

And what are the other limitations here? In the case of lithium 

hydride, you say cost and safety. Is there another major limitation, 

or is that it? 

Mr. HILLEBRAND. No, there are many limitations with the lithium—low temperature, performance. It tends to have trouble when 

it is working below temperatures. The comparison directly between 

lithium ion and nickel metal hydride, nickel metal hydride has severe temperature limitations, which is why a lot of the money in 

the vehicles actually goes into keeping the batteries cool, whereas 

lithium ion can be—the temperature can actually go up another 15 

degrees C, which lowers the whole system cost quite a bit. 

Mr. OLVER. Aren’t you substantially limited by the number of recharges that you can get out of one of these batteries? To be functional in the vehicles, you have to be able to recharge them again 

and again and again. And doesn’t it also include the rate of the 

electrochemical reaction that is going on? 

Mr. HILLEBRAND. You know, I mentioned earlier, some of the 

chemistries address some of the problems within lithium ion. I 

keep going back and forth with the different chemistries. With 

nickel metal hydride, you cannot deep discharge the battery the 

way you can with lithium ion. You work with a state of charge. You 

are very shallow. 

Mr. OLVER. Is there a review article that a somewhat intelligent 

layperson could understand on this that you could direct me to 

about battery technologies? 

Mr. HILLEBRAND. There is a report put out by the AABC, 

Menahem Anderman, that comes out every year, excellent report. 

Mr. OLVER. How big a report is it? Does it have a big density——

Mr. HILLEBRAND. 70 pages long. 

Mr. OLVER [continuing]. Or is it 10 or 20 pages? 


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Mr. HILLEBRAND. It is about 70 pages long. And it does walk 

through these chemistries. It is an excellent report, actually. It is 

what I used when I was putting together my presentation for this. 

Mr. STRICKER. Lots of pictures too. 

Mr. HILLEBRAND. It is just a very good overview. 

Mr. OLVER. Let me just say as a comment from what I heard 

from several different people say from questions and a bit in the 

testimony, it seems to me that it is utterly critical that we do not 

close the door on the chemistries, either on the research and development and the different technologies and chemistries either in 

battery technology or in biofuels, because, I mean, there are multiple ways of doing it. I have heard of others, at least in the case 

of the battery technology, and each of them has its own set of limitations that one works on, and sometimes you make breakthroughs. 

In the case of the biofuels, we start out with ethanol procedures 

that have come up that are now moving ethanol from corn ethanol 

to cellulosic. The cellulosic people talk about doing things that either are several steps of biological degradation to get to your ethanol or you get to your ethanol by a mixture of chemical and biological steps, and all the efficiency that go on with those become 

a problem, a possible problem. 

And then there are those that think they have an almost holy 

grail of a one step from cellulosic, to which particular simple 

cellulosics you do that with, to suspect it would be easiest, say, 

from algae back to ethanol. 

And then there are the butanol people. 

Mr. HILLEBRAND. We are doing testing with butanol right now. 

It is a very exciting fuel. 

Mr. OLVER. And the biodiesel people. And there are people who 

are out there doing research on taking the biomass and doing essentially a breakdown all the way to hydrocarbons and CO2 or——

Mr. HILLEBRAND. Gas. 

Mr. OLVER. Think about that a little bit. And then reconstituting—it is hard for me to think that that could possibly be energy-efficient in the system. But I suppose the energy efficiencies 

of some of the sequences of other steps in other places might be so 

extensive that it actually becomes easier to break them down all 

the way and then start putting them back to whichever ones you 

want, which has—if you don’t—in the building up again, you don’t 

make them into ethanol with oxygen, so the ethanol gets you 65 

percent or, say, 67 percent as much energy as—and butanol is 

somewhat more. Then your hydrocarbon and the octane range or 

whatever happens. 

Mr. HILLEBRAND. One of the most exciting things we are working 

on right now is a project we call the Omnivorous Engine. It is essentially a diesel cycle engine that runs on a range of different 

types of fuels. Essentially it sniffs what fuels it has and adjusts its 

engine parameters to run on that fuel, so combinations of butanol, 

diesel, Fischer-Tropsch, biodiesel, et cetera. It optimizes itself for 

all these different types of fuels. Because that way, you can have 

any fuel source you want. You combine them all together, and the 

engine optimizes itself for the various combinations—which, long 


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term, you don’t want a single fuel. You want all sorts of different 

sources and all sorts of different fuels. 

Mr. OLVER. That is why I am saying we must not close any of 

the research on any of these technologies, because there are so 

many possibilities. And if we just head one way, we may make a 

terrible dead-end, like dead-ends in evolution that just didn’t go 

anywhere and didn’t produce anything useful. We think we are 

fairly useful, but it was a fairly complicated process. 

If I may, they were talking, so I will just go on for a while—I 

would love to hear——

Mr. VISCLOSKY. I am learning. 

Mr. OLVER. I would love to hear the debate among you folks, particularly among the doctorates who maybe have some better understanding of the complexity of the chemistries involved in these new 

papers. I have both of them here in my file. They were given to me 

by a colleague, a very close friend who is a professor of chemistry. 

And quickly, those sort of things reach me. Whether I have time 

to read them and understand them I am never quite sure. 

We have gone from an earlier stage when we are talking about 

ethanol from corn, and 4 or 5 years ago there were a bunch of papers that ranged over whether it was negative or positive there, 

and the different inputs that were put into the energy balance 

equation were not as complete, and some things weren’t taken into 

account. But I think we have finally pretty well concluded that 

they were on the positive side. 

But in those early papers, none of them looked into the land-use 

changes, which are quite extensive. If the land you take out in 

order to make cleared land to grow some other kind of biomass that 

is more easily cropped, then you are going to end up with a horrible carbon deficit. 

And even if you use what these papers are suggesting, that even 

as you use old crop land, if you move from crop land, presently crop 

land, and force growing crops onto this less useful land—well, anyway, I think the discussion already came up between Greene and 

Hillebrand on this one. Clearly, these papers are making—and I 

think we will have to be answered. These are Minnesota and 

Princeton people, who are probably just as good as the Dartmouth 

and others. 

Mr. VISCLOSKY. And I apologize, gentlemen——

Mr. OLVER. But there will be many more papers coming out on 

the stuff. 

Mr. VISCLOSKY. I do want to thank all of the witnesses. I want 

to thank Mrs. Emerson for coming back and for her patience. 

And I assume most of you have testified before congressional 

committees before, and I hope you appreciate that it is not lack of 

interest or attentiveness, and your testimony has been read. Your 

work and your time has been appreciated. And as I like to describe 

it, we know where you live, because obviously we have to make 

funding decisions this year, and we would like to make all deliberate haste in moving at the right pace in the right direction. And 

it has set the stage for the rest of our work this year, and I want 

you to know we appreciate it very much. Thank you very much. 


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WEDNESDAY, FEBRUARY 27, 2008. 

BUREAU OF RECLAMATION 

WITNESS 

ROBERT W. JOHNSON, COMMISSIONER, U.S. BUREAU OF RECLAMATION 

CHAIRMAN VISCLOSKY’S OPENING STATEMENT

Mr. VISCLOSKY [presiding]. Good morning. I would like to bring 

the hearing to order, and before I give my opening statement, just 

want to sincerely welcome back Mr. Rehberg to the committee—it 

is good to have you back—and also very good to have Ken Calvert 

on the subcommittee as well and the wealth of knowledge he brings 

to the water issues, in particular, that we face, as well as a new 

and fresh perspective with the Department of Energy. 

So, Ken, also very good to have you on the subcommittee. 

This morning, we are pleased to have the Honorable Robert 

Johnson, commissioner of the Bureau of Reclamation. We would 

also like to welcome the staff that are with you. I think most people understand Mr. Hobson and my loyalties. I will point out for 

Mr. Wolf’s benefit that my 17-year-old son just returned from his 

visit to Ann Arbor this past weekend. We do not yet know what 

particular decision he may make but did want to point that out for 

the record, if I could. 

Mr. WOLF. I have four family members with Notre Dame connections. [Laughter.] 

Mr. VISCLOSKY. Give them the money. Give them the money. 

[Laughter.] 

Okay. Now we will continue here. 

Future growth in the West will continue to put significant pressure on available water and power supplies. The nation will face 

challenges as competition for these scarce resources increases and 

will need to ensure the effective management of its infrastructure 

in the public interest. 

In light of these growing demands, the administration’s proposal 

to reduce funding for the Bureau of Reclamation from fiscal year 

2008 levels represents a failure to address the water infrastructure 

requirements of our nation, a failure to invest in America. 

The request for the Bureau of Reclamation totals $926.8 million, 

more than $181 million below the fiscal year enacted level, notwithstanding the legislative proposal for the new San Joaquin 

River Restoration Fund. 

The request also contains an appropriation for the Central Utah 

Project Completion Account of $42 million. 

In total, the administration seeks approximately $969 million in 

discretionary appropriations for the Department of Interior from 

the subcommittee. The request is partially offset by $51.3 million 


hsrobinson on PROD1PC76 with HEARING
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in discretionary receipts from the Central Valley Project Restoration Fund. 

I would like to ask, Commissioner Johnson, for your assistance. 

The subcommittee may be asked to move quickly and mark up our 

fiscal year 2009 bill sometime in mid-May. In order for us to meet 

this aggressive schedule, I would need your assurances that the 

hearing record and any questions for the record and supporting information requested by the subcommittee are cleared through your 

department and the Office of Management and Budget not later 

than 4 weeks from today. 

Members are to submit their questions for the record by 5 p.m. 

today, and we will submit all questions to the department by close 

of business today. 

With those opening comments, Mr. Hobson, we would certainly 

turn to you for any opening comments you would like to make. 

MR. HOBSON’S OPENING STATEMENT

Mr. HOBSON. Thank you, Mr. Chairman. 

Welcome, gentlemen, and welcome, Ken. Mr. Rehberg is back. I 

am not sure if that is good or not. 

But, anyway, I want to welcome Commissioner Johnson to the 

subcommittee again, and thank you for your work and, Mr. Wolf, 

Murray, for your work also. It is good to see you again. 

With the difficulties that we sometimes face with other agencies 

under our jurisdiction, I usually look forward to our hearings with 

the Bureau of Reclamation. Today, though, I have got an issue on 

my mind that is disturbing to me. 

We recently reviewed the bureau’s first 5-year plan, and, frankly, 

that is a step in the right direction that you got one, but I am, 

frankly, disappointed with the lack of quality and depth in it. It 

really doesn’t tell us anything more than your budget justifications. 

In fact, your disclaimer, ‘‘The out-year numbers represent place 

holders pending decisions in future years,’’ makes the point very 

clearly. 

We intend the 5-year—I think we do—we intend the 5-year plans 

to be much more than placeholders, and I hope, Commissioner, 

that you will be able to share with the committee today some 

progress on out-year planning. 

If the Department of Interior or OMB prevented you from putting any useful content in the plan, we could have helped you out 

if you would come to us sooner on this. There has got to be a 

change. The Corps of Engineers has gotten it now, and they are 

going to try to do some planning. But if this committee in the future is going to do its job better with you, we have got to have better 5-year plans. I think it will help, not hinder, what we do in the 

future. 

So thank you for appearing with the subcommittee today, and 

continue the good work within your agency, but I do have problems 

with the 5-year plan. 

Thank you, Mr. Chairman. 

Mr. VISCLOSKY. Thank you, Mr. Hobson. 

Commissioner, if you care to have an opening statement, and 

your entire statement will certainly be entered into the record. 


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MR. JOHNSON’S OPENING STATEMENT

Mr. JOHNSON. Thank you, Mr. Chairman, Mr. Hobson and other 

members of the subcommittee. It is a pleasure to be here today in 

support of the president’s 2009 budget request for the Bureau of 

Reclamation. 

As you mentioned, Mr. Chairman, I have Bob Wolf, our director 

of program and budget, and also Reed Murray, who is the program 

manager of the Central Utah Protection Completion Act should you 

have questions about that program. 

The overall fiscal year 2009 request for Reclamation totals 

$926.8 million, as you said, Mr. Chairman. This request provides 

funding for priorities of the reclamation program consistent with 

the president’s objective of achieving a balanced budget by 2012. 

I have submitted written testimony, as you mentioned, which 

presents the detailed summary of our appropriation request. 

For my oral presentation, I would like to talk about three areas 

of activities that comprise the majority of the Reclamation budget: 

First, maintaining our existing federal infrastructure; second, our 

river restoration programs that are required for environmental 

compliance; and, three, funding for new water development. 

In addition, I would like to talk about Secretary Kempthorne’s 

Water for America initiative. 

First, maintaining our existing infrastructure, Reclamation budget reflects the need to maintain our existing portfolio of projects. 

Reclamation has over 472 dams, 348 reservoirs, 58 power plants 

and many other water delivery facilities. Our infrastructure provides water to 31 million people, 10 million acres of irrigated farmland, generates 44 billion kilowatt hours of electricity annually. 

Much of that infrastructure is now 50 years old or older, and its 

proper operation and maintenance is our top priority. Almost $400 

million of the Reclamation budget is dedicated to making sure that 

our facilities are operated and maintained in a safe and reliable 

fashion. 

Second, we frequently find ourselves having to manage our 

projects to meet changes in social and public values that are embodied in the Endangered Species Act and other federal and state 

environmental laws. In most cases, meeting these requirements 

has been manifested in the development of broader river basin 

management and/or restoration plans. 

Implementation of these plans is becoming a significant element 

of the reclamation programs. Reclamation’s involvement is almost 

always necessary to meet regulatory obligations associated with the 

operation of its water and power facilities and is, therefore, a critical part of our water and power mission. 

Reclamation is currently involved in environmental restoration 

programs on the Colorado, the middle Rio Grande, the Platte, the 

Klamath, the Columbia, the San Joaquin, the Trinity and the Sacramento Rivers. We anticipate that our efforts on these and other 

river systems will continue to be a significant part of our program. 

Our 2009 request contains over $150 million for these activities. 

Third, Reclamation continues to be actively involved in programs 

to develop new water supplies and infrastructure. In total, these 

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ples of ongoing activities in the 2009 request include the AnimasLa Plata project located in southwest Colorado. This project will 

provide water supplies for Indian tribes and Municipal and Industrial (M&I) use in the states of Colorado and New Mexico. 

The Reclamation budget includes funding for water systems to 

deliver surface water to Indian and non-Indian communities in the 

rural Great Plains. These projects provide good quality water to 

areas where existing water supplies are either nonexistent or very 

poor quality. 

Three water reuse projects under Title 16 of Public Law 102–575. 

Reclamation continues to provide modest funding for projects that 

allow the reuse of existing wastewater supplies. Located primarily 

in southern California, these projects provide drought-proof supplies that help reduce demand for new sources of water that would 

otherwise be developed with considerable expense and environmental controversy. 

Four, Indian water distribution systems in Arizona. Under the 

authority of the Central Arizona Project, Reclamation is funding 

the construction of water delivery systems to serve Colorado River 

water to Indian tribes in Arizona. These systems provide new supplies to settle Indian water right claims and meet economic development needs on the reservations. 

I would like to turn briefly to the secretary’s Water for America 

initiative. Chronic drought, changing climate, rapid population 

growth and increased environmental and energy needs have created water conflicts leading to growing interstate and intrastate 

competition for water resources. 

In fiscal year 2009, Reclamation will partner with the U.S. Geological Survey to implement the Water for America initiative aimed 

at addressing 21st century water challenges and ensuring security 

for future generations. 

The fiscal year 2009 budget request for Water for America is $31.9 million. Of this amount, $19 million appears as the Water for 

America initiative line item. The remaining $12.9 million is included in specific projects for enhanced endangered species recovery activities and investigations programs. 

The goal of the Water for America initiative is to address the impending confluence of three factors threatening to overwhelm our 

current ability to provide water to the arid West: Increased water 

demands, aging infrastructure and decreased or altered availability 

of water supplies. 

Reclamation’s part of the Water for America initiative will focus 

on two of three strategies: One, planning for our nation’s water future, and, two, to expand, protect and conserve our nation’s water 

resources. 

Reclamation will conduct comprehensive basin-wide water supply 

and demand studies in conjunction with willing partners in areas 

where high levels of anticipated water supply-demand imbalances 

exist. 

Each study will include three elements: State-of-the-art projections of future water supply and demand by river basin; analysis 

of the basin’s existing water and power infrastructure performance 

in light of changing water realities; and recommendations for adaptations and optimizing current operations and activities or by 


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changing or supplementing existing infrastructure and operations 

and adopting new technologies. 

These activities will be carried out in concert with Reclamation’s 

existing planning efforts in more narrowly defined geographic 

areas. 

Under the expand, protect and conserve our nation’s water resources element of the Water for America initiative, we will use a 

broad-based Challenge Grant Program, building upon the existing 

Water 2025 Challenge Grant Program, to accelerate the implementation of cost effective actions that will conserve water by improving efficiency, establishing challenge grants to advance technology 

of water treatment and support proactive efforts to avoid the decline of sensitive species. 

This concludes my oral statement. I would be happy to answer 

questions. 

[The written statement of Mr. Johnson follows:] 


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RESTORING WETLANDS ON QUECHAN RESERVATION

Mr. VISCLOSKY. Commissioner, thank you very much. Mr. Hobson and I will defer for the time being and would recognize Mr. 

Pastor. 

Mr. PASTOR. Thank you, Mr. Chairman. 

Good morning, gentlemen. 

Good morning to my colleagues. 

I think it has been over 15 years that you have had a working 

relationship, contractual relationship with Arizona State University Law School, and in the past 15 years, with your assistance, we 

have developed probably one of the premier Native American law 

programs that deal with water rights and water law, which with 

water settlements that expertise is needed. So last year we encouraged you to continue the program and to find ways of continuing 

it and there is a probability, high probability you will see it again. 

So we continue to encourage you to do it, and if there is anything 

we can do to help, please let us know. 

Mr. JOHNSON. I appreciate that. 

Mr. PASTOR. With great delight, I found out from the state director of the Bureau of Land Management that now they are working 

with the Bureau of Reclamation in Yuma with the east wetlands 

and also the west wetlands. Last year, I think we appropriated 

about $1.4 million plus monies for the restoration, and we had the 

Quechan, who are involved in this project. 

So with the Bureau of Land Management, with the Bureau of 

Reclamation, the local community, Yuma County and with the 

Quechan, we want to restore that part of the Colorado River. So 

we are going to continue working with you, so if you would like to 

comment, I would——

Mr. JOHNSON. It is a good program. We continue to implement 

consistent with the direction and the funding that we get. This 

next year, with the money that we have, we plan on developing an 

additional 500 acres of wetlands on the Quechan Reservation. And 

I am not sure that I know what has been developed previously, but 

it has been a very successful wetland development program. We 

will continue to work with the local community, and I am glad that 

we have got BLM as a partner in that. I think that is going to work 

very well. 

Mr. PASTOR. I think it is. I think in restoring—as you well know, 

you are very familiar with it—the Colorado River was treated in 

that part of the country, and restoring it has not only brought life 

to the river but people are enjoying it again. 

You mentioned the CAP and relationship of the development of 

the infrastructure for the various tribes. Recently, I met with the 

leadership of Gila River, and they were concerned that additional 

money would be needed because I think the end of this year is the 

water settlement kick-in and agreement. 

What are you funding it at in this budget, and what is the request? 

GILA RIVER

Mr. JOHNSON. For the Gila River piece, it is $11.7 million. Our 

total request for the Central Arizona Project, I believe, is around 


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$26 million, so we do have some money for working with some of 

the other tribes as well, and we also have some environmental commitments that are included in that total CAP budget. 

I think that is pretty consistent with what we have been requesting in past years. You are absolutely correct, in 2010, the funding 

mechanism created by the Arizona Settlement Act kicks in, and I 

think that will be able to enhance our effort with the tribes. 

Mr. PASTOR. I don’t know, I think that we are requesting probably an additional $4 million. I am going to put it in that ballpark 

because they felt that this year they needed to get ahead of the 

curve. But they are very grateful for the $11 million, but they are 

really going to try to see if they can augment it. 

YUMA PLANT

How is my old desalting plant down in Yuma? I know you did—

is it well? Are you going to run it? What were the tests? What were 

the final results of your test? 

Mr. JOHNSON. The test was successful. We ran it at 10 percent 

capacity for 90 days, and we produced, I think, somewhere around 

4,000 acre feet of new water by doing that. It actually ran a little 

more efficiently than we projected it to run. I think it achieved 

somewhere up around the 85 percent efficiency, meaning we only 

lost about 15 percent of the water in the reject stream, and we 

didn’t expect it to do quite that well. 

We affirmed the costs of operation and the estimates of our annual O&M costs we found are fairly accurate, although costs are 

going up. The chemical and the energy costs are going up significantly. That water in that drainage canal requires a significant 

amount of pretreatment, and so desalting that water is not just as 

easy as running it through the desalting plant. You have to do a 

lot of chemical treatment and filtering of the water before you can 

even run it through the reverse osmosis filter. So it is a little more 

expensive than maybe other forms of desalting because of the nature of the water that we have to treat. 

One of the other things that we found is that we do have—I suppose it is something that we would call a design deficiency in the 

pipe that is included in the pipe that transports the water through 

the system. It is an aluminum bronze piping, and it deteriorates. 

The water chemistry causes that pipe to deteriorate faster than we 

expected. And so to get the plant in full operational mode, we will 

have to replace that aluminum bronze piping, and that is an additional $17 million in cost. 

So the test run had both good and bad results. We can operate 

it more efficiently, and we know it works the way it was intended 

to work. We have some problems with our aluminum bronze piping, 

and some of our costs for chemicals and other things are going up. 

Mr. PASTOR. What is your 5-year plan. Do we have a 5-year plan? 

You know, this has been going on for how many years, 30 some odd 

years, maybe? 

Mr. JOHNSON. As part of our test run, we are doing a broader 

study. We have an obligation to replace that Welton-Mohawk 

drainage water, and the test run was part of a broader study to 

look at the best ways to replace that water supply. 


hsrobinson on PROD1PC76 with HEARING
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We have also been doing demonstrations, we call them system 

conservation programs, which really amount to paying farmers to 

forbear in the use of water. We did that last year with the Palo 

Verde Irrigation District in California, and I think this year we are 

doing it with some of the water users—the Yuma Mesa Irrigation 

District is participating with the program there. 

That is quite a bit less expensive means of replacing the bypass 

flow. We are buying water from farmers for somewhere around 

$160 to $170 an acre foot. The cost of operating the desalting plant, 

if it is operated at full capacity and all the best assumptions about 

chemical and efficiency and all those things, the desalting plant is 

well over $300 an acre foot. So it is quite a bit less expensive to 

do those system conservation plans. 

So we are going to be submitting a report to Congress over the 

next year that is going to lay out what we think is the best approach to be moving forward in terms of replacing the bypass flow, 

and that will kind of have a plan in it for what we are going to 

do. 

There are some other potential uses of the desalting plant. There 

is a significant amount of groundwater in the Yuma Valley that 

has fairly high levels of salt in it. It is not usable for domestic or 

irrigation, and that desalting plant could be used to desalt that 

water. And that water doesn’t have the same problems that that 

drainage water from Welton Mohawk does. It doesn’t require all 

the pretreatment, so it may actually be less expensive to treat that 

groundwater in the Yuma Valley and create new supplies than it 

would be to treat that drainage water. 

The other advantage of that is you don’t have the impact on the 

wetland down in Mexico, because you are not shutting off the flow 

to that wetland. So that is part of what we are looking at in this 

bigger study as well. 

Mr. PASTOR. Thank you, Commissioner Johnson, and I will yield 

back my time. 

Thank you, Mr. Chairman. 

Mr. VISCLOSKY. Mr. Rehberg. 

Mr. REHBERG. Thank you, Mr. Chairman, and I want to thank 

you for your kind welcome back to the committee. It is a pleasure. 

There have been certainly some difficulties and irritations with the 

changing of the majority, but you are not one of them. [Laughter.] 

And the food is better than under the last chairman, so thank 

you for making me feel welcome and for your continuing interest. 

You talked to me after I was off the committee about my projects, 

and it meant a lot to me, and I intend to be an active participant 

on this committee. 

Obviously, we are going to spend a whole lot of time on Arizona 

in the next 4 years with the next president being from Arizona. 

[Laughter.] 

We will probably have more than we can stand in Arizona 

projects. 

Mr. Wolf, I have no connection to Michigan, but I am an advocate of Milton Erickson, so if you will look in my eyes and repeat 

after me, ‘‘Montana’s water projects deserve to be in the president’s 

budget.’’ Got it? [Laughter.] 


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That wasn’t exactly an indirect suggestion, but he was the master of that. 

MONTANA’S WATER PROJECTS

Mr. Johnson, maybe you can explain to me, I just don’t get it, 

and you know I don’t get it, and I continue to ask you about why 

I don’t get it, how Montana’s three water projects, which all have 

a major impact on not only water availability and clean water 

availability to Montanans, but each of them were part of an Indian 

compact, a reserved water rights settlement that the federal courts 

required us to complete. 

All three of these projects have been authorized by Congress. Everybody agrees that these projects need to be done, and one of them 

is actually kind of exciting, because it meets more than the thresholds you talked about, and that is St. Mary’s. It impacts, one, Glacier National Park, it impacts the Blackfeet and the Fort Belknap 

Indian Reservations, it impacts Canada because the water goes 

into Canada and comes back into the United States, and it impacts 

virtually an eighth of our population, and yet it never makes it into 

the President’s budget. 

And maybe then you can explain further to me how in fiscal year 

2007 the Dry Prairie Water Project, which is in northeast Montana, 

which affects the Fort Peck Reservation, was included in the president’s budget, and then since that time has been dropped back out, 

requiring me to go in and get an earmark for these water projects. 

So we meet the tribal threshold, we meet the clean drinking 

water, we meet the river restoration. And if one project blows out 

at St. Mary’s, you have got a disaster on your hands. Unfathomable. The nation is going to go nuts when they find out the damage 

that you will have done up around the Glacier National Park area 

and into Canada, so you will have created an international crisis 

as well. 

Unfortunately, I had the opportunity to talk to your predecessor, 

and in much the same way, he sat here and he nodded his head, 

and he said, ‘‘Yes, I entirely agree. We are going to have a disaster, 

it is going to blow out, the federal government will take the responsibility,’’ and then he resigned from his position the next day. 

[Laughter.] 

So I don’t anticipate that you are quitting your job tomorrow, but 

would you give me some confidence that there is some kind of rationale as to our projects being in the president’s budget and then 

dropped back out? And based upon the criteria you brought up in 

your testimony, how do we qualify to be in the president’s budget? 

Why do we have to continue to earmark the funding? 

Mr. JOHNSON. I would be glad to start——

Mr. REHBERG. You have got 30 seconds. [Laughter.] 

Mr. JOHNSON. Congressman Pastor didn’t limit me to 30 seconds. 

Mr. REHBERG. He is in the majority. [Laughter.] 

Mr. JOHNSON. The St. Mary’s project, I want you to know that 

the St. Mary’s project was the very first project that I visited as 

Commissioner. I became Commissioner in October of 2006, and in 

November, early November of 2006, I went up to Montana and 

drove through the Blackfeet Reservation, saw the dam, the diverVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00112 Fmt 6601 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

hsrobinson on PROD1PC76 with HEARING
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sion structure, the siphons, the canal and did a tour of the facility, 

so I appreciate what you are saying. 

We do include money in our budget for the operation and maintenance of that project. I think we have somewhere in the neighborhood of $3 million for St. Mary’s. 

That does not address the issues that you bring up. Aging infrastructure is an issue. That is probably one of the best examples of 

aging infrastructure in the Bureau of Reclamation. That project is 

100 years old. The canal still works, it still delivers water, but 

there is a lot of deterioration of the diversion dam. The canal is not 

constructed to today’s standards. It is not an efficient canal. It 

doesn’t have a lot of bank on it, so you can regulate and control 

deliveries. And, certainly, the siphons are in need of replacement. 

So I appreciate very much what you are saying. 

As you know, one of the problems we have, if we appropriate 

more money for that project, it is an O&M expense, and we have 

to charge it to the irrigators in that area, and they have a limited 

ability to pay. So as part of the Reclamation appropriation, it is difficult for us to include a significant amount of money to do that 

kind of rehab. 

But as you are aware, Congress did include authorization for the 

Corps of Engineers to——

Mr. REHBERG. But how do you intend to work with the Corps? 

Mr. JOHNSON. We have met with the Corps, we have met with 

the local water users. We are prepared to cooperate with the Corps 

on moving forward and doing those repairs. I am not sure where 

the Corps is on their request for funding. I doubt if they have funding requested in their 2009 budget for that. 

Mr. REHBERG. They did not. 

Mr. JOHNSON. But we are certainly prepared to roll up our 

sleeves and work with them in any way we can. I think they are 

probably scratching their head a little bit over why are we authorized to rehab a Reclamation project. But, look, we are more than 

happy to work with them, and we will roll up our sleeves and of 

whatever we can to cooperate in moving forward. 

Mr. REHBERG. How about Dry Prairie, why was it in the Fiscal 

Year 2007 Budget and now out? 

Mr. JOHNSON. The funding for the Rural Water Program, and I 

go back, is a struggle to balance the objectives of getting a budget 

that meets the budget objectives of getting a balanced budget by 

2012 with also trying to find the proper balance of funding our programs. And that is a real challenge. 

We used some criteria on the Rural Water Program that focused 

on a couple of things. One, it said priority goes to Indian tribes, 

and priority would also go to trying to fund those projects that are 

closest to completion. And the other part of that is we fund O&M 

first. We have to fund our O&M activities first; that is absolutely 

the first thing that we have to take care of. 

When we look at the projects that we have, we put our funding 

on the two projects that are farthest along: The Mni Wiconi project 

and the Garrison project. Both of those have a much higher percentage of completion. We would like to move those toward completion so that we can then focus money back on the other projects. 


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Mr. REHBERG. Do you have a list that shows the ranking of the 

various projects, so that we have some confidence that as Garrison 

gets done, following your theory, that ours moves up or is next? Because it is the old scenario where you are driving down the road 

in Los Angeles and you look over the side and there is this bridge 

that just stops, and you go, ‘‘What idiot in the federal government 

was thinking of that when they started the project and didn’t appropriate the money to finish the project.’’ And we have a project that was started and into this budget and 

now it is back out of the budget, and we never get enough earmarks to cover the ongoing expenses. And so when you build a 

pipeline and you have got pipes sitting there and then it ends, it 

makes us all look stupid. 

And so how do we know there is this list that exists within the 

Bureau of Reclamation that is going to actually be next in line, because it has been authorized by Congress and recognized by the 

president in the past? 

Mr. JOHNSON. We would be glad to provide that. We do have a 

list of projects and how far they are along with completion and 

what the completion dates are. We can provide that. 

Mr. REHBERG. And there is nothing that can ever be jumped 

ahead of that list. And so if Dry Prairie is number 11 and you are 

funding the top 10, when one is done in the top 10, we move up, 

guaranteed. 

Mr. JOHNSON. There is certainly a large backlog on rural water, 

no question about it. 

Mr. REHBERG. That wasn’t my question. 

[Laughter.] 

Mr. JOHNSON. Look, right now, we are——

Mr. REHBERG. Take your time. 

Mr. JOHNSON [continuing]. We are funding the two that are closest to completion at this point in time, and we would be glad to—

we can provide you the data on how far they are along and what 

their projected completion dates are. 

Mr. REHBERG. Thank you, Mr. Chairman. 

Mr. PASTOR. Mr. Chairman, I just want to remind my colleague 

and friend from Montana that he mentioned the dreaded ‘‘E’’ word 

at least four times, and I think the probable presidential nominee 

from Arizona doesn’t like to hear that ‘‘E’’ word. So don’t ask—— Mr. REHBERG. And I noticed that your projects are not considered 

earmarks. They are in the president’s budget in anticipation of the 

next guy not having the ‘‘E.’’ Mr. PASTOR. Well, we will work with you on it. [Laughter.] 

Mr. VISCLOSKY. Well, we have one vote, and, Mr. Calvert, I don’t 

want to rush you and it is your choice if you want to do this 

tranche or if you want to wait and come back. I have a couple of 

follow ups on Mr. Rehberg’s line of questioning, so we are coming 

back. Whatever works best for you. 

Mr. CALVERT. I will be—— Mr. VISCLOSKY. You are recognized then. 

DESALINIZATION

Mr. CALVERT. I have known Commissioner Johnson for a number 

of years, and we have worked on a number of projects together. 


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As you know, in the state of California, we have a federal judge 

who just ruled in the California Delta to curtail water exportation 

to the south. We have got problems on the Colorado River. There 

are reports that Lake Mead and Lake Powell are drying up. I know 

this year we have had a pretty good snow melt, but it has been a 

difficult number of years. 

And I was looking through your budget proposal and one of the 

things that I think that we are going to have to do to meet the 

water requirements in the state of California is to look toward desalinization, and I see where you have zeroed out the Long Beach 

experimental facility, which is a concern of mine, along with a 

number of others. Can you explain why you did that or do you believe that desalinization is not part of the long-term answer for the 

water in the Southwest? 

Mr. JOHNSON. No, not at all. I think desal has a lot of promise. 

We have participated in the funding of that project. In fact, I think 

we have put quite a bit of money into that demonstration project, 

and we are very proud of it, and we are very proud of our interaction. 

In the context of our overall priorities, however, and trying to 

find the right balance, that one just didn’t get to the higher level 

that we felt like we had the ability to fund it. We do have money 

for desal in our budget for desal research, trying to advance technology. We have a research facility in Yuma in association with our 

Yuma desalting plant. We are also doing research at the Tularosa 

desal research facility, which came on, just completed this last 

year. So we are putting some efforts into research and trying to advance the technology of desalinization. 

Mr. CALVERT. Well, as you know, this technology is different 

than the technology you are referring to. 

Mr. JOHNSON. It is. 

Mr. CALVERT. And it has a lower energy threshold to develop 

substantial water supply. And we have talked in the past about potentially working with states like Nevada who are up to their limit, 

300,000 acre feet, they are just out of water, possibly doing maybe 

some water transfers along the river if we can agree to that under 

the Quantification Agreement. 

But that type of activity is going to have to take place if the 

Southwest is going to be able to have adequate water supplies in 

the future, because if we believe these reports, the Colorado River 

is going to have substantial problems in the future. 

ALL-AMERICAN CANAL

One other question, the All-American Canal is under construction at the present time. I understand the Mexican government has 

an individual meeting with Interior, I think, today, or they met 

yesterday, maybe, with the secretary. I would hope that there is no 

problem and the construction is going to move forward and be completed on time. Is everything going all right with that? 

Mr. JOHNSON. Everything is going great. 

Mr. CALVERT. Great. 

Mr. JOHNSON. Full guns. There is no intent to slow down anything on the All-American Canal. There are discussions with MexVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00115 Fmt 6601 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

hsrobinson on PROD1PC76 with HEARING
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ico in the broader context but not anything related to the All-American Canal. That is moving forward. 

VOLUNTARY WATER TRANSFERS

Mr. CALVERT. On the subject of water in the future, some of 

these water transfer agreements that are voluntary—I believe in 

voluntary water transfer agreements—with agencies like Imperial 

Irrigation District and others, Palo Verde and others, I would hope 

that we work on a long-term effort to work with these farming communities in a mutually positive way in which we can work out 

these water transfer agreements that I think can work and be positive for farmers and positive for the urban community. 

Mr. JOHNSON. We have had a policy for many, many years that 

supports voluntary water transfers, willing buyer-willing seller 

transfers, and that is probably one of the very viable tools for meeting future urban growth that is going on in the West. There are 

lots of opportunities for that. 

And, so, yes, that is something—there are sensitive issues there. 

Rural communities have a lot of concern about water transfers— ‘‘If our water goes to the city, we are going to dry up and go 

away’’—so you have got to be careful to structure them in a way 

that protects that. But there are lots of ways to structure transfers 

where rural communities actually thrive and don’t lose. 

In the Imperial transfer, I think the Imperial Valley is going to 

be a lot better off with that transfer. It is all going to come through 

conservation. 

Mr. CALVERT. Well, I think so too. The board doesn’t think that 

way, but—— Mr. JOHNSON. Not always, but I think as that gets developed and 

they see how it works, there will be a lot of support. 

The Palo Verde, another example of one. 

So we keep trying to tell that story in these rural areas about 

the benefits of transfers and how to structure them in ways that 

it doesn’t have a negative impact on the rural areas, and I think 

that is the key point that we need to make when we are talking 

to those folks. 

Mr. CALVERT. Right. Right. 

Well, I guess we have got to go to a vote, Mr. Chairman, so if 

you go another round, I may ask a couple of questions. 

Mr. PASTOR [presiding]. I am going to go ahead and wait till the 

chairman comes back or one of the other members. 

GLEN CANYON DAM RELEASE

Is the water being released on the Glen Canyon Dam to restore 

the banks and some of the habitat? Has that happened yet? 

Mr. JOHNSON. We are completing the environmental assessment 

and the Endangered Species Act compliance to allow that to occur. 

Mr. PASTOR. Okay. 

Mr. JOHNSON. So it is not a final decision, but assuming that got 

completed, that could happen as early as March 5, yes. 

Mr. PASTOR. Because I think Monday a big article in the Arizona 

Republic that this was the third one that was coming down. And 

the thrust of the article that I read said this will be the third one, 

and I guess there has been mixed reviews on the other two. And 


hsrobinson on PROD1PC76 with HEARING
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I am trying to remember if there was a woman who either works 

for Fish and Wildlife or she is a scientist. 

Mr. JOHNSON. Park Service. 

Mr. PASTOR. Park Service, that was saying that, what we ought 

to do is make a decision how often and what really works. The 

science has been shown. We just need to make a decision. 

Would you like to comment on that since obviously it affects Arizona and the Colorado River? 

Mr. JOHNSON. Well, certainly, more surge releases—I don’t know 

if that is the right word or not——

Mr. PASTOR. I think that is what they used, surge, yes. 

Mr. JOHNSON [continuing]. Through the Grand Canyon could 

help enhance the habitat in the Grand Canyon for fish and also for 

recreation. 

Right now, the scientists think that the canyon is primed for a 

successful release, and the reason for that is that we have had 

some very large tributary inflows that have deposited a lot of silt 

in the bottom of the river, and these high flows really help when 

you have a lot of silt in the river, because those high flows pick up 

that silt and sand and they deposit it up on the banks of the river, 

they create warmer water areas for fish and they also provide really nice places for the recreationists that are enjoying the Grand 

Canyon. 

So scientists are advising us that doing that kind of a test right 

now could really be productive, and so that is the basis of the EA. 

I think that our sense is that we use an adaptive management 

science-based approach to doing those sorts of things, and we have 

got to look at the data and make our decisions on a case-by-case 

basis as we move forward with that. 

Will there be more of these in the future? My guess is probably, 

yes, but I think you have to wait for the right kinds of conditions. 

If your river doesn’t have any sand and sediment in it, it probably 

doesn’t make a lot of sense to do it. All you are going to do is scour 

out what is already there. But if you have a good build up of sand 

and silt, then it may make more sense to do those things. 

Mr. PASTOR. Because people are saying, ‘‘Well, it is the third one. 

How many more?’’ The crux of the article was, I guess, that the Bureau of Reclamation get into a pattern that, based on scientific 

data, will be more successful. I guess that was the crux of the 

story. 

Now, is it your agency that is dealing with the drought? 

Mr. JOHNSON. Certainly, the trout fishery below Glen Canyon is 

something that we take into consideration as we do our operations 

at Glen Canyon. I think the Park Service and the Fish and Wildlife 

Service certainly have a big role in that as well. 

Mr. PASTOR. Okay. 

Mr. JOHNSON. Yes. 

Mr. PASTOR. They told me that we better adjourn to go vote, and 

I guess the chairman will be here shortly, so we will see you the 

next round. 

Mr. JOHNSON. Very good. Thank you. 

[Recess.] 


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GLACIER PROJECT

Mr. VISCLOSKY [presiding]. I would like to reconvene. 

If I could, what I would like to do is pick up on Mr. Rehberg’s 

line of questioning relative to the project at Glacier, and staff provided me with a technical description of its current condition and 

that said, ‘‘falling apart,’’ and would want to follow up because it 

was mentioned in the dialogue that the authorization now exists 

for the Corps to also work in consultation with the commissioner. 

You had mentioned that you apparently have had some conversations with the Corps. They have no money in their budget request. 

You have O&M of $3 million, as I understand it, but no construction dollars. 

Is there a proposal of how you would work with the Corps on this 

project or is that pending money to support discussions about what 

the scope of the work would be? 

Mr. JOHNSON. Yes. I think it probably is pending. Our discussions at this point are pretty preliminary with the Corps. We have 

had a meeting with them and indicated our interest in sitting down 

with them and figuring out how they want to move ahead. They 

will have to get the appropriations and I don’t think the Corps has 

a lot of background on the project or a lot of money to put a lot 

of effort in it at this point in time, in fiscal year 2008. Unless they 

have money, they are not going to be able to put a lot of resources 

in working on it. 

Now, a lot of work has been done. We have done some studies, 

the state has done some studies. So we have a general sense of 

what is required out there. There have to be detailed designs done 

and then move into the construction. But there is a pretty good 

sense of what needs to be done from the studies that have already 

been carried out. 

Mr. VISCLOSKY. For those studies, do you have an estimated cost 

as far as the various project elements, realizing you haven’t gotten 

to the point of design? 

Mr. JOHNSON. We do, and I am trying to remember. About $150 

million, and that is just ballpark. 

Mr. VISCLOSKY. And have you worked with the Corps on other 

projects similar to what may be envisioned with the authorization 

they now have on this matter? 

Mr. JOHNSON. This is probably—we have worked with the Corps 

and let me just start by saying, we have a great relationship with 

the Corps. As a matter of fact, I met with their management team 

and our management team just last week to talk about it, and 

there is no competition, there is no duplication of effort between 

the two agencies. 

We do have some areas where we are doing cooperative projects. 

Folsom Dam is probably the best example. They needed to do a 

flood control project for the Sacramento Valley, we needed to repair 

the dam for safety purposes. We put a joint project together where 

we are going to do the dam safety work, and they are going to do 

the raising of the dam to provide additional flood control. And by 

working together and coordinating our work with theirs, we are 

saving a significant amount of money over what would be spent if 

we did the project separately. It is in the hundreds of millions of 


hsrobinson on PROD1PC76 with HEARING
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dollars that we are saving by doing the project in a cooperative 

way. 

We are also doing a cooperative project with them on Yellowstone 

Dam. It is a dam in Intake, Montana. And it is actually a fish 

screen or a fish passage, and it is for the sturgeon in the Missouri 

River system. We are going to do a fish passage with the Corps on 

a bureau facility as part of their ESA requirements for the Missouri River system. So we have got a really good cooperative effort 

with them to move forward with that project on a joint basis as 

well. 

Mr. VISCLOSKY. And I assume it would be premature to talk 

about what in this situation would be the appropriate roles for the 

Bureau of Reclamation and the Corps, pending which elements of 

the project you proceed with. 

WRDA ACT

Mr. JOHNSON. Yes, I don’t think we are that far along. I think 

the act says that the Corps will do it in consultation with us—I 

think that is the word that is used—and we have gone to the Corps 

and said, ‘‘We are flexible, we will work with you however—what 

makes the most sense. How can we do this in the most efficient 

way?’’ And I think the Corps is open to that, it is just that this is 

something fairly new, it is in the WRDA bill. I am sure there are 

a lot of things in the WRDA bill that they are lining up and getting 

organized around. I just don’t think they are that far along on this 

one at this point in time. 

Mr. REHBERG. Excuse me, Mr. Chairman? Did you ask the question, do they believe they have the legal authority to work together 

on this? 

Mr. VISCLOSKY. I have not. 

Mr. JOHNSON. I sure don’t think we have any obstacles from an 

authority perspective. Clearly, the act says, ‘‘Work in consultation 

with the bureau.’’ That is all the authority we need. In fact, it is 

a Reclamation project, and we have authority to do on a Reclamation project under the project’s authorization. 

Mr. REHBERG. Mr. Chairman, the only reason I bring that up is 

that question had been raised after it was authorized in the WRDA 

bill, and we are trying to come together from two different directions on the same answer, so we are asking the question in the 

Senate of the Corps, and it is important for us to get the same answer from the Bureau of Rec. 

Mr. VISCLOSKY. And we will have the Corps in shortly before our 

subcommittee as well then, too. 

Mr. REHBERG. Thank you. 

Mr. VISCLOSKY. And two other questions on this issue: Because 

there will be a series of elements—and, again, I understand you 

don’t have precise numbers and if you can’t now, for the record—

what is the first project, what is that first tangible step between 

yourselves and the Corps, do you have a reasoned ballpark figure? 

If nothing else, as we look at 2009, acknowledging that in neither 

of your budgets do you have a request, we would know what the 

dollar figure would be. 

And coupled with that, because you had mentioned the irrigators, 

from a Reclamation point of view, they would have to reimburse 


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you, I assume. Again, Mr. Rehberg and you would know the situation on the ground out there, but they would not likely have the 

kind of money to invest themselves. 

Mr. JOHNSON. No. 

Mr. VISCLOSKY. Is there, again, an estimate as to how much they 

could reimburse so we would know at least proportionately for that 

first step, what potential responsibilities the bureau could assume 

and what the Corps could assume if we do decide to proceed? 

Mr. JOHNSON. I think the WDRA Act is pretty clear on that. I 

think it provides that there has to be a 25 percent cost share, and 

I think the state of Montana is actually going to step up and help 

provide that funding. So that is kind of the way—my guess is the 

irrigators there, that is a far north area, their ability to make significant contributions is pretty limited, I think. 

Mr. VISCLOSKY. Okay. 

One other question along Mr. Rehberg’s line and then I would 

recognize Mr. Simpson, he had a specific project in talking about 

rural water that was dropped. I would also have one, if I could, and 

that is in the budget submissions for 2006, 2007 and 2008, the 

Lewis and Clark Rural Water Project in South Dakota was included but it no longer is. What is the justification for leaving that 

out? 

Mr. JOHNSON. It is the same explanation that I gave to Congressman Rehberg, and that one actually falls short on two of the criteria. One was, priority was given to projects that serve Indian 

tribes, and that project does not have an Indian component. And 

then the second part is, what projects are the farthest along, and 

that one is not as far along as the other two that we funded either, 

I don’t believe. 

Mr. VISCLOSKY. Okay. 

Mr. Simpson. 

Mr. SIMPSON. Thank you, Mr. Chairman. 

I am tempted to ask how you are going to solve the Medicare and 

Medicaid problem, but that was the last hearing I was at, so I suspect you don’t have an answer for that. 

Mr. JOHNSON. I would have to pass on that one. 

Mr. SIMPSON. If you come with any, let us know. [Laughter.] 

INTERSTATE TRANSFERS OF WATER

The bureau has selected an option for the Garrison Diversion 

Project that includes an inter-basin transfer of water. This has not 

been a very popular choice and I am sure will continue to be debated over some time. Would you explain to the committee why you 

chose this option, especially since you are apparently not authorized to implement it without further action from Congress? And 

could you have chosen an in-basin solution, which you were authorized to implement? 

Mr. JOHNSON. Yes. Those studies were done over a several-year 

period in concert with the state and also all of the surrounding 

areas. It is in the eastern-northeastern part of Red River Valley 

part of North Dakota. 

The in-basin supplies are just not adequate to meet the future 

demands, so there are no local water supplies to meet the projected 

needs of the area. My understanding is there are some water supVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00120 Fmt 6601 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

hsrobinson on PROD1PC76 with HEARING
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plies that could be used that are in the basin but they are in the 

state of Minnesota, and the state of Minnesota has not been willing, I don’t think, to allow that interstate kind of transaction, as 

you know, the sensitivity on interstate transfers of water. 

But within North Dakota and the resources within North Dakota, they are just not adequate, and so that is why the inter-basin 

transfer piece was selected as the preferred alternative. 

You are right, it does require additional authorization to move 

forward. That was provided for in the act. The act recognized that 

an out-of-basin transfer might be necessary and directed us that if 

that was selected, that we needed to send the report back to Congress for Congress’ consideration. 

Mr. SIMPSON. As I understand it, Minnesota offered access to 

their aquifers. 

Mr. JOHNSON. Well, you know, that is not the same—I am not 

sure that it is quite that straightforward. I think if that were the 

case, that could be a solution, but my understanding is that was 

an offer that only applied—and I am not an expert on this at all— but that was an offer that only applied to emergencies. That if 

there were a dire emergency and they were literally out of water 

for a short period of time, that they would be willing to provide 

some assistance. That was the way that that has been explained 

to me. 

Mr. SIMPSON. Did you follow your standard down-selection process in choosing this option, and can you satisfy us that this process 

is adequate to ensure that all options were fully considered? 

Mr. JOHNSON. Certainly, that is documented in the EIS. We had 

a draft EIS that was controversial. We received a lot of comments. 

We went back and did a lot of work to try to respond to those comments, and that is certainly documented in the planning report and 

the environmental documents that we have completed. So, yes, 

there was very much a process that we went through to get to the 

alternative that was selected. 

The report is currently undergoing a review in the Office of Management and Budget. 

BOISE RIVER PROJECT

Mr. SIMPSON. Let me ask about the Boise River Project, just a 

general question. Recently, the legislature heard from the Army 

Corps of Engineers about the Dworshak Dam, that there is a potential problem. It was rated as a two—one being, I guess, the 

worst, five being the safest—that there is leaking around the dam 

and so forth. You are doing studies, I guess, on the safety of the 

four dams in the Boise River Project? 

Mr. JOHNSON. We are always doing dam safety reviews. We have 

a regular periodic process where we look at dams and the risk and 

their structural integrity, the hydrology and whether or not the potential for design floods are still good. So we are constantly doing 

that. 

Mr. SIMPSON. What is the safety standard on those four dams? 

Are they in good shape? 

Mr. JOHNSON. As far as I know. I am not aware of any safety 

issues on those dams, but I would want to go back and check that 

for the record. 


hsrobinson on PROD1PC76 with HEARING
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Mr. SIMPSON. Because you can imagine that some people downstream from the Dworshak are concerned. 

Mr. JOHNSON. I am sure they are, yes. I am sure they are. 

Mr. SIMPSON. I appreciate it, thank you. 

Mr. JOHNSON. You are welcome. 

Mr. VISCLOSKY. Mr. Calvert. 

Mr. CALVERT. Thank you, Mr. Chairman. 

CALFED PROGRAM

Commissioner, we didn’t spend any time, really, on CALFED, 

and I just want to give you the opportunity to let the committee 

know how that is moving along, especially the storage studies that 

are taking place. Are they moving along fine and at what point in 

time do you think we will get to the point where we are actually 

ready to start construction on one of these projects? 

Mr. JOHNSON. We are still doing the storage studies. Let me tell 

you what has happened to us. This litigation that we have had and 

the ruling from the judge in California has required us to do a new 

consultation with the Fish and Wildlife Service on how we operated 

the Central Valley Project. That means we are taking a fresh look 

at the operations and consulting with the Fish and Wildlife Service 

on those operations. We anticipate that those operations will 

change. 

Mr. CALVERT. Does that mean we will be able to move more 

water through? 

Mr. JOHNSON. Well, no. I think we will just have to see what the 

outcome is. My guess is we probably won’t find that we can move 

more water with the changed operations. I think we will just have 

to see what the outcome of those are, but, obviously, we have got 

a problem with the endangered species there. There is concern that 

the water moving through our pumps has a tendency to move the 

Delta smelt in the wrong direction. 

Mr. CALVERT. Are you aware the governor, apparently, is prepared to enter into an executive order to initiate a study of going 

ahead to build a peripheral canal? 

Mr. JOHNSON. Yes, I am aware of that. 

Mr. CALVERT. A bypass, or whatever you want to call it. 

Mr. JOHNSON. Yes, I am aware of that. 

Mr. CALVERT. Are they going to be working with you? 

Mr. JOHNSON. We are working with the state and all the efforts 

in the Delta Vision process, and we are committed to continue to 

be a part of that. 

Mr. CALVERT. If in fact that is built, does that resolve the issue 

with the smelt? 

Mr. JOHNSON. Personally, I think it would help tremendously. 

You know, I think you have to look at the specific studies, but my 

understanding of the way that would work is it would stop that 

flow of the water in the Delta moving toward our pumps and allow 

that water to be moved around and a better control of the flow 

through the Delta, and that, in fact, it would help that situation. 

That is the feedback that I have gotten from folks over the years 

on the peripheral canal. 


hsrobinson on PROD1PC76 with HEARING
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I know there are lots of other controversies associated with that, 

and I don’t know where ultimately they will end up, but, in general, I think it could help deal with that situation. 

Our storage studies—getting back to the storage studies—we 

have had to delay completion of the storage studies, because the 

project is likely to be operated differently. We won’t know exactly 

how that operation will be different until next September. That is 

when the biological opinion has to be given back. 

Mr. CALVERT. When you say delay the storage studies, is that all 

storage studies, including Shasta and Sites Reservoir? 

Mr. JOHNSON. Right. Because how the storage interacts with the 

rest of the system is affected by our operations. So if we have a 

new operation of the facility, our hydrology changes, and the need 

for storage and the benefits of the storage change. And we feel like 

in order to do a good study, we need to have that operational pattern incorporated into those storage studies. 

Mr. CALVERT. Temperance Flat, you have to delay that too? 

Mr. JOHNSON. Well, that may be one that you don’t have to, because that is on the other side, but the completion of the storage 

studies, we do have them funded, you know, and the completion 

studies have actually been pushed out till 2010. 

Mr. CALVERT. Well, anything you can do to rush this thing along, 

we have been working on this, as you know, for a number of years, 

and with the quantification agreement now in effect, we are going 

to lose 1 million acre feet out of the Colorado River, we are losing 

a third of our exports out of the Delta, we are not building quick 

enough reclamation projects in the South, and we need help on 

that, and it seems to me we are having some delays here on desalinization. So all of that we could have a little motion car crash 

coming up here real quick. 

Appreciate it, Mr. Chairman. 

I asked him about, what, the All-American Canal that is under 

construction and—oh, you are talking about—— Mr. HOBSON. Folsom Dam? Yes, we did talk about Folsom Dam. 

Well, I don’t know if we did or not. I think I just mentioned it in 

the context of——

Mr. JOHNSON. You are probably mentioning the dam below Folsom Dam. 

Mr. CALVERT. I think he is thinking of Auburn Dam. 

Mr. HOBSON. I am talking about Auburn Dam. 

Mr. JOHNSON. Oh, Auburn. 

Mr. HOBSON [continuing]. Where we spent $400 million and acquired all the ground, it is still sitting there, and California is crying for water but nobody wants to build. 

Mr. JOHNSON. I don’t think that is considered one of the optimum storage sites. I think most of the other storage sites that are 

being looked at are ranked higher than that in terms of——

Mr. CALVERT. I would guess that it will be built when Sacramento gets flooded. We are a reactive body here. It is almost as 

much flood control as it is water storage, because Sacramento is in 

a precarious situation. 

I think it should be built. 

Mr. HOBSON. It probably won’t be built for a long time, but we 

have spent, what, $400 million acquiring land——


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Mr. JOHNSON. Yes, back in the 1970s. 

Mr. HOBSON [continuing]. Building the foundation. 

Mr. JOHNSON. Yes, back in the 1970s. 

Mr. HOBSON. And we have built other dams on equally difficult 

seismic areas in California. Namely, one that we just somewhat 

finished in the southern part of the state I looked at some years 

ago. It is easier to bring water, apparently, from other states and 

power from other states than it is for California to solve its own 

problems. The rest of the country is not really excited about that, 

to be frank with you. 

But I know you can’t do anything about it. People need to continue to talk—excuse me, Mr. Chairman, I jumped in here—but it 

is a frustrating thing to spend $400 million of taxpayers’ dollars 

and having it sitting there doing nothing and not solving some of 

the problems that we know are going to happen in this region. I 

wish we would have invested that $400 million in something else 

that would solve these problems. Right now it is down the tube. 

Mr. JOHNSON. As it relates to the state of California, in general, 

there is, I think, a fairly aggressive effort by the California water 

interests and the state to address their water issues. In fact, I 

think the legislature and the governor are working on an $11 billion bond to try to fund the water infrastructure in California, including significant amounts of storage. And I think they are focusing on Temperance and one up on Sacramento. 

Mr. CALVERT. Well, we have got to have sites, because you have 

got to be able to—— Mr. JOHNSON. Right. 

Mr. CALVERT [continuing]. Flow into the peripheral—— Mr. JOHNSON. And then Los Vaqueros is being pushed pretty 

hard too in the Delta region there that will actually help store and 

move more water through the Delta in the wintertime and serve 

that Delta area. 

Mr. CALVERT. But I bet you they come back and ask for federal 

help also in that. 

Mr. JOHNSON. I don’t know to what extent. Certainly, we are 

doing studies and we are looking at how the federal project would 

fit into that. There has been some talk about them funding it and 

having us, kind of, rent the facility on an annual basis as part of 

our O&M, have our users pay a surcharge that would help repay 

the project as part of our O&M rather than having us fund. That 

has kind of been a concept that is being talked about. 

But the details of how they would get built and who would pay 

what, I think is something that has not been worked out. I think 

they have still got to get their bond issue passed to move ahead 

with those. 

Mr. HOBSON. Can I switch subjects on that? What about the levies along the Sacramento River, the tree-infested levies along the 

Sacramento River? Nobody knows who built this one, who built 

that one, who maintains this. I think the state is working heavily 

on that. 

Mr. JOHNSON. I think that that has been something that the 

Corps has been more involved in than the bureau, the bureau has 

not had a lot of active involvement in dealing with the levies in the 

Delta. The Corps is the one that has been playing that role. 


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Mr. HOBSON. But you don’t have any role in the zoning? For example, there are all these bowls out in that region that suddenly 

get developed. The next thing we know everybody is back at the 

feds, ‘‘You didn’t provide flood control.’’ Now, most of that is the 

Corps, but do you guys play any role in that or in the zoning or 

in what goes on in flood protection? 

Mr. JOHNSON. Those are state and local issues, and we don’t play 

any significant role as it relates to that. I think that is something 

that is being talked about in California as part of its Delta Vision 

where they are looking at the whole Delta and how it develops over 

time and what the best way is to manage it. 

Bob points out to me that FEMA probably has a role as it relates 

to the levies as well. 

Mr. HOBSON. The problem is, sir, that everybody tells me these 

are state and local things, but when there is a flood it becomes a 

federal issue, and we wind up paying for the mismanagement of 

the zoning regulations in that area, because they allow these people to go in and build all these subdivisions and they don’t make 

the rules such that when they develop the subdivision that they 

handle the problems when they get excess water. When you get excess water in that area, there is no place for it to really go except 

it floods everything, and then we come back in. 

And I don’t know how the feds—you can’t be inhumane when it 

happens, but better planning and intervention by somebody as this 

process goes through would certainly lessen the burden to all the 

taxpayers of this country for the lack of planning. And that is not 

just for California, it is true other places, but it is particularly apparent in this—after I looked at it—that the Sacramento River 

area is particularly prone to all this, and that Delta region are particularly prone to it. 

And I won’t be on this committee when it is addressed but it is 

certainly something that the state and the feds need to look at, in 

my opinion, and I don’t know how you all fit into that. 

Mr. JOHNSON. We are not playing a direct role as it relates to 

those kinds of issues. I don’t know what kind of requirements the 

Corps or FEMA may have, as it relates to providing flood control 

and development and those sorts of things. They may have some 

things from a federal perspective that they bring to the table on 

those issues. 

The Bureau of Reclamation doesn’t. 

Mr. CALVERT. If the gentleman would yield, just one quick comment on your statement. What could happen in the Delta, potentially, is, quite frankly, worse than what happened in Katrina, because the islands of subsidence that is happening there, if there 

was an earthquake in California, which we have a history of having, there could be a significant problem in that region, which 

would have, quite frankly, much denser population. 

And not just new suburbs. Downtown Sacramento, quite frankly, 

is in trouble, and we have not maintained those levies. They need 

to be fixed and raised. And, quite frankly, Auburn Dam, even 

though it does have water benefit to it, it was also thought of as 

flood control for downstream. And so it has that benefit. Because 

the cost of Auburn Dam will be minor compared to the cost of Sacramento being flooded out down the road. 


hsrobinson on PROD1PC76 with HEARING
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Mr. HOBSON. If the gentleman would yield, I am told that if one 

of those levies fails, it puts 20 feet of water in downtown Sacramento within an hour or 2. That will make Katrina and the loss 

of life look like a cake walk. Frankly, I think as a result of Katrina, 

the state of California, at least, has gotten more interested in trying to affect those levies in a positive way. However, you have 

houses and subdivisions that are almost in those levies. There is 

no protection other than the levy. 

The integrity of those levies can be negatively impacted by the 

trees that grow on them. An earthquake or any sudden burst of 

water into the area, and it is really one of the most pressing needs 

in the entire country.—The potential loss of life and property that 

exists out there today. 

I think the governor of California is trying, and I am hoping that 

the legislature is too. This is a catastrophe waiting to happen. It 

doesn’t need to happen with the proper work on those levies. Also, 

the communities have got to be careful how they enhance—and 

when I say ‘‘enhance’’ I don’t mean in a positive way—enhance the 

pressures on this area by the continued development without making the proper ways to handle the excess water that everybody 

knows floods into this area from time to time. 

I know I am ranting, but I went out and looked at it. If you see 

what happens, you know what happens, what water can do and 

you know you can prevent it, it becomes very frustrating when it 

doesn’t happen. 

So, sorry, Mr. Chairman. 

Mr. JOHNSON. I know it is a big issue, and I know it is part of 

the Delta Vision of trying to establish a new concept of how the 

Delta in California is going to be managed, and I know that is part 

of what is being talked about there. But it is beyond, certainly, the 

purview of the Bureau of Reclamation. 

Mr. HOBSON. The Bonneville Dam, is that yours? 

Mr. JOHNSON. That is Corps. That is right. That is Corps of Engineers’ dam, yes, on the Columbia system. 

Mr. HOBSON. You lucked out. 

Mr. JOHNSON. We got Grand Cooley. 

Mr. HOBSON. Okay. 

Mr. VISCLOSKY. We are joined by Mr. Fattah. He does not have 

questions at this time, but, because I have a series of questions for 

the committee, I will begin. If any of the members who are here 

have additional questions, just jump in at any point. 

Mr. Commissioner, I want to follow up on Mr. Hobson’s opening 

statement and his discussion of the 5-year plan. I would add my 

thank you to his that it was submitted with the 2009 budget request but would point out that this was an initial initiative when 

Mr. Hobson chaired the committee in 2006, and so it has taken a 

number of years. 

And the disappointment. He mentioned the placeholders, and 

that is the administration’s term, not ours, that were used. I supported the Chairman’s initiative, and do today, of the 5-year plan. 

The intent of the plan is to outline the expected and necessary expenses associated with the inventory of your existing and new investments necessary to meet Reclamation’s mission. And it seems 


hsrobinson on PROD1PC76 with HEARING
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that the administration has selected an arbitrary funding level and 

then force fed its programs into a number. 

The thought was to take a clean view and picture the future and 

what does the future hold. And I would ask that you comment. And 

it does look like you just took a series of existing projects, plugged 

them in and that is the plan, as opposed to from foresight, if you 

would. 

Mr. JOHNSON. I think what you described is accurate on what we 

have provided. 

Let me just say this: That plan gets updated, I think, every year, 

and I think we would be more than happy to have our folks sit 

down with your staff and look at what the Corps has done—your 

view was that the Corps has done a pretty good job—and see if we 

can’t——

Mr. HOBSON. It is better. It gets sanitized by OMB, and that is 

a problem. We all need to work with OMB better to make sure that 

they understand what we want and we understand what they 

want. We understand what they go through, but we don’t totally 

appreciate it. 

Mr. JOHNSON. Yes. 

Mr. HOBSON. I think you do. 

Mr. VISCLOSKY. And the intent is to not get you—boy, what are 

the needs so we can start anticipating as we look at the budget on 

an annual basis. 

AGING DAM INFRASTRUCTURE

The committee has often made a point that the nation’s infrastructure, not simply that under your jurisdiction, is aging. For example, 50 percent of the Reclamation dams were built between 

1900 and 1950, 70 are over 90 years old, and it seems intuitively 

to point to the need for increasing investment to keep facilities that 

are past their design life operating. And, yet again, the base scenario, essentially, is flat funding looking ahead. 

Is that a reasonable investment strategy, and when is the anticipated increased investment in this infrastructure going to take 

place from your perspective? 

Mr. JOHNSON. Well, certainly, aging infrastructure is a concern. 

In my oral testimony, I talked about our first priority is the safe 

operation and maintenance of our facilities. And of our water and 

related resources budget, over 50 percent of that budget goes to 

maintaining infrastructure, including our Safety of Dams Program. 

We do have an increase in our request this year for the Safety of 

Dams Program. We have a $15 million increase in our request 

there. 

Longer term, one of the things that we are doing is taking a hard 

look at our infrastructure——

Mr. VISCLOSKY. That was for dam safety? 

Mr. JOHNSON. That was for dam safety, that is correct. 

Mr. VISCLOSKY. Okay. 

Mr. JOHNSON. But on a longer-term basis, we are taking a look 

at—because a lot of people are asking, ‘‘What is the total amount 

that is out there and what is your deferred maintenance, what is 

your aging infrastructure needs,’’ and those sorts of things. So we 


hsrobinson on PROD1PC76 with HEARING
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are trying to put some data together that would give us a better 

handle on that. 

From a deferred maintenance standpoint, we don’t think we have 

a lot of deferred maintenance. We think we do a pretty good job 

of maintaining the facilities that we do operation and maintenance 

on. 

Now, we have a lot of facilities that we have transferred to water 

users, and they do the operation and maintenance on, and the 

extents to which they have deferred maintenance, quite frankly, we 

don’t have a real detailed handle on. They pay those costs anyway. 

Very few of those costs are actually part of our budget request. 

Those are funds that they provide from their own resources. But 

we are working hard to get a better handle on what we think the 

total need is in terms of aging infrastructure. 

Aging infrastructure is really a different issue than deferred 

maintenance. I mean, aging infrastructure, as a facility gets so 

many years old, there is nothing you can do, or very little you can 

do, in terms of operation and maintenance to stop concrete deterioration, and that is really the kinds of things that we are talking 

about or a dirt canal that has been there for 50 or 100 years and 

you have had rodent holes and a lot of other things. There is not 

a whole lot of maintenance on those kind of facilities that can prevent the gradual deterioration that occurs. 

So it is an issue, it is an area of concern, it is something that 

we are looking at, no question. 

Mr. VISCLOSKY. Last year, you testified that Reclamation would 

begin gathering data on transferred works, those operated and 

maintained by local beneficiaries but federally owned, that would 

characterize a potential need for major O&M work that could not 

be accomplished under routine programs, which you are suggesting 

as far as routine activities, you are in reasonably good shape. 

Do you feel you have adequately defined the need for rehabilitation and replacement demands now for that major O&M? 

Mr. JOHNSON. Not completely, no. I think that is something that 

we are still working on. We have asked all of our area offices and 

regional offices to put together a complete inventory of this aging 

infrastructure concern, and they are working on putting that together. 

Mr. VISCLOSKY. When do you think that will be done? 

Mr. JOHNSON. I hope over the next year we will be able to have 

a better handle on that. 

Mr. VISCLOSKY. Do you think that will be included in the 2010 

budget submission or with the 2010 budget submission? 

Mr. JOHNSON. You know, I don’t imagine that we would have a 

lot of—I mean, it is information. It wouldn’t necessarily be part of 

the 2010 budget submission. It is certainly information that we can 

provide. 

Mr. VISCLOSKY. Let me put it this way: If you think you will do 

it over the next year, will it be available to the committee before 

the 2010 budget submission, do you believe? 

Mr. JOHNSON. You know, I wouldn’t want to make an absolute 

commitment to that, but we can go back and see what our schedule 

is and try to give you an answer on that. 


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Mr. VISCLOSKY. Given the work to date and the scope of the program as you understand it, would we be talking about tens or hundreds of millions of dollars or would we be talking some factor of 

$1 billion or more? Do you have any sense of that? 

Mr. JOHNSON. I would guess that it—you know, we have a $77 

billion infrastructure, so my guess is we could easily have more 

than $1 billion in aging infrastructure. 

Mr. VISCLOSKY. Commissioner—and I don’t want to beat a dead 

horse, but I will do it one more time, just as far as the budget submission essentially being reduced—last year, you testified that facility and maintenance of an aging infrastructure increased needs 

to dam safety, and you did mention the $50 million increase. 

Population growth in many areas within the western United 

States, increased Endangered Species Act requirements are all examples of trends that will impact Reclamation’s budget for the future. And, again, I will simply emphasize that I assume those 

trends are referred to be up, not flat or not down. 

Mr. JOHNSON. That is absolutely true. 

Mr. VISCLOSKY. Okay. 

Commissioner, if you had additional funding—and if you would, 

for the record, answer—to allocate among ongoing projects, on the 

theory that for the last several years, it is my sense, that in the 

end Congress increased the funding for the bureau, where could it 

most be usefully be spent, and where would a modest amount of 

additional funding have the biggest impact? If you could provide 

that to us, that would be terrific. 

Mr. JOHNSON. Yes. I would just say that I support the President’s budget. 

Mr. VISCLOSKY. No, I know. 

Mr. JOHNSON. Certainly, there is capability to spend money in 

other areas. I am sure Congressman Rehberg and Congressman 

Calvert, both rural water and Title 16, I am sure, would come high 

on their lists. Certainly, we could spend more money on our Dam 

Safety Program. Some of our research activities, I imagine, we 

could probably spend more money on. I am sure there would be a 

long list of activities. 

Mr. VISCLOSKY. A recent article in the Journal of Water Resources Research predicted a 50 percent chance that live storage in 

Lakes Mead and Powell will be gone by the year 2013. Does Reclamation agree with the trends projected in the article? 

Mr. JOHNSON. You know, I am not familiar with the details of 

that study. My guess is, from some limited conversations with people, that that study is probably based on some pretty extreme 

worst-case scenarios. I think that a number of things would happen 

before Lake Mead and Lake Powell would be allowed to decline to 

that kind of a level. 

For instance, reduction in demand. I mean, we just put in place 

on the Colorado River system a new set of criteria for managing 

water deliveries under times of shortage. So, in fact, when Lake 

Mead begins to drop to lower levels, we begin to implement reduction and deliveries to water users. 

And we actually just put guidelines in place. Secretary Kempthorne signed in September a final record of decision that defines 

how we will operate that system. I doubt very seriously that this 


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study considered reductions in demand that would be implemented 

as declines in reservoir conditions occur. 

Mr. CALVERT. Mr. Chairman, can I add to that? 

Mr. VISCLOSKY. Sure. 

Mr. CALVERT. Did that study look at the unexpected snow pack 

we have had in the Rockies this year? 

Mr. JOHNSON. I am sure it didn’t. 

Mr. CALVERT. And we are, what, about 125 percent of normal 

now? 

Mr. JOHNSON. That is about the current projection. 

Mr. CALVERT. And we are looking at at least a 50 percent rise 

on Lake Powell based upon the estimates for the melt? 

Mr. JOHNSON. Fifty feet. 

Mr. CALVERT. Fifty feet. 

Mr. JOHNSON. I don’t know if that would translate into 50 percent, but it is 50 feet. 

Mr. CALVERT. Does that have any additional water flow-in from 

Mead from that? 

Mr. JOHNSON. It depends on how much more we get in Powell 

under our new criteria that we put in place that defines how we 

do that. If we got 50 feet, we probably would see some new releases 

come down to Lake Mead as well. So there would be some rise at 

Lake Mead as well, yes. 

Mr. CALVERT. Thank you. 

Thank you, Mr. Chairman. 

Mr. JOHNSON. I don’t think that the situation is nearly as dire 

that has been portrayed in the press on that report. 

Certainly, you know, there is concern about climate change and 

what impact it has on future water supplies, and we are not ignoring that. I mean, we are looking at that, and we have done on the 

Colorado River Basin studies of climate change. We have looked at 

tree rings. We have simulated a 500-year record now on the Colorado River to look at what has happened in the past. 

We are doing a lot of work with a lot of universities on climate 

models to give us a better idea of what we think might happen. I 

am not aware of any of them that give us results. Of course, the 

jury is still out. 

We are getting a lot of new data coming in. In general, the broad 

climate models tend to show that there will be some reduction in 

precipitation in most of the western states. Now, how that translates into specific basins and specific water supplies isn’t clear, but 

I don’t think that very many are expecting declines to be as great 

as was projected in that study. 

I might also add that our Water for America initiative that I 

talked about earlier, one of the pieces of that is to look at this issue 

and doing river basin studies that try to take a broad look at the 

basin, how is climate change going to affect that basin, how should 

that affect how we operate our facilities? Does that mean we should 

change our operations? What are the future demands on the system, and what kinds of changes in management of the system and 

infrastructure would be needed to try to meet those needs? 

So that is actually part of our Water for America initiative to 

start to take a look at those kinds of things. 


hsrobinson on PROD1PC76 with HEARING
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COLORADO RIVER MEASURED FLOW

Mr. VISCLOSKY. If I could ask—and I would appreciate your comment, because, obviously, you take exception to the projections in 

the journal article—but there was an indication or at least an observation that under Reclamation’s most recent operating plan, you 

would have a deficit of water in the plan realized under most optimistic estimates of the Colorado River flow. Do you want to comment on that? 

Mr. JOHNSON. I think what they are probably talking about is 

that the Colorado River is over-allocated. If we look at the—we 

have a 100-year record of measured flow on the Colorado River, 

and that 100-year record shows that the average annual flow over 

that 100-year period has been about 15 million acre feet. 

The Colorado River has allocated about 16.5 million acre feet. 

There are 15 million acre feet that is allocated for use in the 

United States, and there are 1.5 million acre feet that was allocated to the country of Mexico under the Mexican Water Treaty. So 

we have got more water allocated for use than we have average annual flow over the 100 years. 

Now, the climate models and some of the projections, some of the 

points that have historically been made on the Colorado River is 

that that 100 years of record that we have may be high and that 

the flow may not be 15 million acre feet; maybe it is 13 million acre 

feet or maybe it is 12 million acre feet, which means that the flow 

is even less than the allocated resource. 

So that certainly gives everybody cause for concern. So far, that 

full 16.5 million acre feet has not been developed. The actual use 

on the system today is closer to 14 to 15 million acre feet. 

Mr. VISCLOSKY. Counting the water to Mexico? 

Mr. JOHNSON. Counting the water to Mexico. The upper basin 

states have not developed their full entitlement. They have the 

right to do that, but it has not occurred. Now, over time, they will, 

and you could expect that they will develop more of their uses over 

time, and that will put more pressure on the system. 

But I come back to the point that I made earlier. That is why 

we put new operational guidelines in place, so we have provisions 

for cutting back use. If we got 12 million acre feet of average annual flow, we have a set of operating criteria that will adjust how 

much water gets released and how shortages would be——

Mr. VISCLOSKY. And my observation about the implication of 

evaporation and infiltration of another 1.7 million, so what you are 

saying is, as you look ahead with the current plan, you would have, 

if you would, mechanisms in place to begin to reduce the flow if in 

fact it declined. 

Mr. JOHNSON. Right, to reduce the demand, the releases, the releases, right. 

That is not to say that if you are reducing releases, that there 

aren’t water problems out there that people are going to have to 

deal with. Certainly, the folks that are having the impact of those 

releases, there will have to be things that are done to manage 

around those. But, quite frankly, what our guidelines——

Mr. VISCLOSKY. Could I ask you about that——

Mr. JOHNSON. Yes. 


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Mr. VISCLOSKY [continuing]. Because it will be one thing to reduce demand and then management, on some level, doesn’t cost 

money; it calls for good judgment. But to have options as far as 

managing that supply and that flow, and I don’t understand all the 

intricacies of storing water and what have you, but you would still 

need to make an investment in that infrastructure to give you 

those management options. 

Mr. JOHNSON. Right. And that is happening. 

Mr. VISCLOSKY. It still gives me concern as far as the level of 

funding you have in your budget. 

Mr. JOHNSON. Yes. There is a lot of state and local funding that 

is being put in to developing options. In Arizona, they have a 

groundwater bank. They have a large groundwater system, and 

their plan for dealing with reductions, and they are a state that is 

impacted significantly if we cut back on flows on the Colorado system, but they have a groundwater storage system where they have 

put a tremendous amount of water in the groundwater basin, and 

they will be able to fall back on that groundwater basin during 

times of drought. 

In California, the Metropolitan Water District is doing similar 

kinds of things. The other thing that Metropolitan is doing—it is 

part of this whole overall California plan that was put together 3 

or 4 years ago—is most of the water use in California from the Colorado River is agriculture water use, and there are provisions between the Metropolitan area and the agricultural areas in California to allow the agricultural users to give up their supplies for 

use by the urban areas. So kind of a form of water sharing or water 

transfers, willing buyer, willing seller markets to help meet needs 

when those kinds of reductions occur. 

Mr. CALVERT. In the state of Nevada, it seems to me Arizona, 

California, the upper basin states are in better shape than Nevada. 

It seems to me Nevada has an immediate problem. They are desperate for water supply, they are pulling out people’s front yards 

and paying for it, subsidizing that and so forth. 

How can they sustain the rate of growth that they have experienced here in the last number of years, and they can’t expand their 

right within the Colorado River? What is the state of Nevada doing 

to address that problem? 

Mr. JOHNSON. They are doing a lot of things, and some of it involves the Colorado River. They are looking at an in-state water 

project where they are going to tap groundwater basins in the central part of the state and transport that water down to——

Mr. CALVERT. How about the adjoining states? Obviously, they 

are going to take them to court on that, right? 

Mr. JOHNSON. In some of those basins, not all of them, there are 

disputes between Nevada and Utah over the sharing of those 

groundwater basins, and that is something that the two states are 

going to have to work on. 

Mr. CALVERT. Who is in charge of that water basin area? Is your 

department——

Mr. JOHNSON. No. 

Mr. CALVERT. If they drain that basin, how is that going to affect 

the state of Utah? 


hsrobinson on PROD1PC76 with HEARING
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Mr. JOHNSON. The groundwater management in both of those 

states is carried out and managed under state law. 

Mr. CALVERT. Okay. 

Mr. JOHNSON. The Bureau of Reclamation is not a part of any 

of those projects. 

Mr. CALVERT. But it is a dispute between two states. Are they 

going to end up in federal court? 

Mr. VISCLOSKY. Is the basin bi-state? 

Mr. CALVERT. The basin extends both in Nevada and in Utah, 

yes. 

Mr. JOHNSON. Not all of the basins do. There are some groundwater basins that are just in Nevada, and they are going to tap 

those. There is one groundwater basin that as you move farther 

north that is shared by both states, and there are studies that are 

on in that—— Mr. CALVERT. Isn’t that the largest one, though? 

Mr. JOHNSON [continuing]. And discussions. I couldn’t say. I don’t 

know if they are. 

But Nevada is doing some other things. One of the things that 

Nevada is going to do is they are going to pay—and, in fact, the 

bureau is going to do the construction—they are going to pay for 

the drop-to reservoir. I don’t know if you have heard of the dropto reservoir. This is a storage facility, a regulatory facility, that we 

are going to build along the All-American Canal in California. 

What it does, it is going to allow us to more efficiently regulate 

our flows on that lower end of that river. There are times when—

the travel time from the last point of storage to the point of diversion at the southern end of the river is 3 days. There are times 

when we release water for use down at the lower end of the basin, 

and over that 3-day period, if you get a rain storm or something 

happens, the demand for that water diminishes, and we have all 

this water coming and no place to put it and it ends up being lost 

to the system. 

And so we are going to build a small storage facility down on the 

lower end of the system and we will be able to capture those flows. 

We estimate that we can probably conserve about 60,000 acre feet 

of water a year by implementing that. 

The state of Nevada is going to pay—it is about $170 million facility—they are going to pay for the facility. We are going to construct it, operate and maintain, conserve that water, and Nevada 

is going to get the use of it. 

And so those are the kinds of creative things that we can do on 

the Colorado River. 

One of the other things that we are talking about—you mentioned it earlier—the idea of desalinization on the Pacific Ocean 

and exchanges between California and Nevada to supplement, but 

we are also talking about that with the country of Mexico, and are 

there opportunities for Nevada or Los Angeles or Phoenix or Tucson or anybody that gets Colorado River water to pay for desal in 

Mexico and then do exchanges with Mexico? 

Mr. CALVERT. Now, you have been the water master on the river 

for some time. Do you think you can get all the guys with the successive water rights to allow that transfer to take place without 

giving up their right within the river? 


hsrobinson on PROD1PC76 with HEARING
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Mr. JOHNSON. I think that it is doable. I think that it is—nobody 

is harmed. You can measure the water, you can back it up in the 

system. Certainly, I am not saying that it is easy. It is complicated, 

and there are a lot of legal and institutional issues that you have 

got to work through, and when you deal with Mexico, you have another country, so it is complicated. But, certainly, I wouldn’t think 

that it is impossible. 

I mean, if we can do the quantification settlement in California, 

which took years to develop, and if we can do the shortage arrangement that we put in place in the Colorado River that helps us manage the system differently, this drop-to reservoir that I talked 

about can only be implemented because we put those new operation criteria in place. 

We actually put provisions in there to allow those kinds of conservation projects to be paid for locally and developed and allow 

that water supply to be dedicated to the use in the area that paid 

for it. 

And I guess my point is, that there are lots going on and lots of 

investment occurring that is outside of the federal funding. Nevada 

is spending a lot of money to develop new resources—their own 

money. The state of California is bringing a lot of money for infrastructure to develop facilities. There are probably some opportunities for federal but, quite frankly, most of that investment is being 

incurred at state and local levels. 

Mr. VISCLOSKY. Just don’t think about the Great Lakes. 

Mr. JOHNSON. Nobody is thinking about—the Great Lakes are 

not on the list, I can assure you. 

Mr. VISCLOSKY. Commissioner, there was a requirement to establish a formal rural water supply program for rural water major 

maintenance projects in the 17 western states. What is the current 

status of that program, and is there a target date for when it will 

be completed? 

Mr. JOHNSON. Yes. I think we are developing—the legislation requires us to put regulations in place on how we would administer 

and carry that program out. Those regulations are being drafted, 

and we anticipate going through a public process over the next 

year to put those in place. And I think we have got $1 million in our 2009 budget to begin 

the administration of that project. 

Mr. VISCLOSKY. So that would be completed by this time next 

year. 

Mr. JOHNSON. We should have the regulations in place by this 

time next year, yes. 

WATER FOR AMERICA INITIATIVE

Mr. VISCLOSKY. Commissioner, you mentioned a couple of times 

the Water for America initiative, and with all due respect, in looking at the details, it does appear that the activities that Reclamation is already executing, specifically Water 2025, water conservation field services, investigations and Endangered Species Act are 

essentially, if you would, repackaged, essentially, for the same 

amount, if not a bit less, money. 

What is the difference, because an initiative would imply there 

is something new going on? 


hsrobinson on PROD1PC76 with HEARING
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Mr. JOHNSON. I think there are a couple of things that are new. 

One is the basin studies that I have talked about. That is not 

something that we have been doing, trying to take this broader 

look, given climate change, given population growth, those sorts of 

things. So the basin studies is a new piece of what we are doing. 

The other part that is new or maybe different is we are expanding the concept of the Water 2025 Program. That has been focused 

more narrowly on just traditional water conservation type projects. 

Under this proposal, that would be broadened to continue to have 

challenge grants for conservation project but to also have challenge 

grants for demonstration projects that would advance water treatment technology and then also projects that would focus on the environment, challenge grant programs that would focus on trying to 

advance species recovery and those sorts of things. So we broadened the concept of Water 2025 to cover a broader range of activities. 

The USGS component actually has some new pieces as well. 

Their new piece focuses primarily on the water census and getting 

a better handle on what the surface and groundwater resources are 

on a nationwide basis, and that is not something that has been 

going on as part of the previous programs. 

LOAN GUARANTEE PROGRAM

Mr. VISCLOSKY. Okay. Last year, you testified on loan guarantee 

programs, that it was anticipated draft rules for the program would 

be completed by the end of the calendar year 2007. 

Was the schedule met, and if so, could you elaborate on the 

structure of the program, and given that there is no budget request 

for this activity for fiscal year 2009, where is the program? 

Mr. JOHNSON. We have not been successful in getting the regulations in place. We have run into some issues related to providing 

loan guarantees on federally owned facilities in the process of developing the regulation. In the review of those, in the review of the 

legal framework, there has been an interpretation that the Credit 

Reform Act does not allow loan guarantees on federal facilities. So 

that is an issue that we are currently working through within the 

Administration. We still have hopes of getting the program in 

place, but we have run into some bumps in the road as we have 

tried to get our regulations in place. 

Mr. VISCLOSKY. Did you anticipate on the theory that this bill 

will not be completed for some time and there may be an internal 

issue for us as well as far as whether or not there will be a score 

to our allocation that if something happens with that program and 

you are successful and you want to proceed in 2009, that you would 

let the committee know as soon as possible? 

Mr. JOHNSON. We sure could. 

Mr. VISCLOSKY. All right. And I would not make representation 

we would be in a position to help you, but we can’t if we do not 

know. 

Mr. JOHNSON. Sure. 

Mr. VISCLOSKY. And right now we don’t have a space there for 

that program. 

Mr. JOHNSON. We will certainly let you know as we work 

through the issue. 


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REPROGRAMMING

Mr. VISCLOSKY. We have a number of questions, several of which 

will be submitted for the record, on reprogramming but would ask 

two now. 

One is, are all movements of funds from the level specific in the 

reports of the committee treated as reprogrammings and, as such, 

submitted to the subcommittee for approval? If not, how many 

reprogrammings does the bureau do annually that are not submitted to the subcommittee for approval? 

Mr. JOHNSON. We do what we call fund transfers, which are very 

limited from one category to another, and it is my understanding 

that we have provided detailed information on those programs to 

the committee. In fact, we are committed to report quarterly on 

those transfers. Those are limited to 15 percent, I think, of the line 

item amount. Anything beyond that we come to the committees for 

approval. 

Mr. VISCLOSKY. If it is more than $2 million. 

Mr. JOHNSON. Or if it is more than $2 million, right. No, that is 

not——

Mr. VISCLOSKY. No, it is 15 percent if it is more than $2 million, 

and if it is under $2 million——

Mr. JOHNSON. And then $300,000. 

Mr. VISCLOSKY [continuing]. Then it is $300,000. 

Mr. JOHNSON. That is correct. That is correct. 

Mr. VISCLOSKY. Does the bureau—and, I guess, in a sense, you 

have answered it, but let me ask it—does the bureau consider the 

levels provided for individual projects in the reports advisory or 

does it treat the conference allocations contained in the statement 

of managers as definitive? 

I wish Mr. Hobson was here to hear this. 

[Laughter.] 

This is my favorite question. 

Mr. JOHNSON. You know, could I respond for the record on that, 

because there are some technicalities there that I am just not 

aware of or may not be, so I don’t want to say the wrong thing. 

If I could respond for the record on that, I would appreciate it. 

Mr. VISCLOSKY. You have answered the question. 

Just one or two. 

Mr. Fattah, yes. 

Mr. FATTAH. You mentioned this Mexican Water Treaty. 

Mr. JOHNSON. Yes. 

Mr. FATTAH. And you said that our obligations under the treaty 

was 1 million? 

Mr. JOHNSON. One million and a half acre feet. 

Mr. FATTAH. A million and a half. And the longevity of the treaty 

is what, do we know? 

Mr. JOHNSON. It is perpetuity. 

Mr. FATTAH. In perpetuity. And you have $29 million allocated 

for security? 

Mr. JOHNSON. Yes. 

Mr. FATTAH. Is that across all of your facilities? 

Mr. JOHNSON. Yes, it is. 


hsrobinson on PROD1PC76 with HEARING
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Mr. FATTAH. And how is that basically handled? Do you contract 

with local governments for that? Do you reimburse? 

Mr. JOHNSON. There are a number of components of that. A big 

part of it is guards and surveillance activities at our facilities. Exactly how we do that varies on a case-by-case basis. Our preference 

is to use local law enforcement to the extent we can. There are 

cases where they don’t want to do that or for whatever reason it 

is just not practical. Sometimes we contract with security firms to 

do that. And in other cases—— Mr. FATTAH. Is $29 million sufficient, in your mind—— Mr. JOHNSON. Yes, it is. 

Mr. FATTAH [continuing]. To meet all of your security obligations? 

Mr. JOHNSON. Yes, it is. I believe so. 

Mr. FATTAH. Could you supply some additional detail on the security efforts to the committee? Thank you. 

Mr. JOHNSON. Be glad to. 

Mr. VISCLOSKY. The National Research Council suggests, among 

other things, that the Reclamation’s water program should implement stronger controls over project planning and development. 

Would you agree with the suggestion, and if so, what steps have 

the bureau taken in this regard? 

Mr. JOHNSON. You know, I am trying to place that study and exactly—is that the national NRC report that we had related to our 

Managing for Excellence Program? And could you——

Mr. VISCLOSKY. All right, let me ask you—and if you want to answer for the record, just so we are talking apples and apples, that 

would be fine——

Mr. JOHNSON. Yes. 

Mr. VISCLOSKY [continuing]. But the question again would be, 

the National Research Council suggests, among other things, that 

Reclamation’s water program should implement stronger controls 

over project planning and development. And then, obviously, what 

specific steps is Reclamation taking in this situation? 

Mr. JOHNSON. Okay. 

Mr. VISCLOSKY. If you could, for the record. 

Mr. JOHNSON. We are responding to—we have had a program 

called Managing for Excellence that we have been working on since 

that report was completed. We have identified 41 areas, 41—there 

was not 41 recommendations from the NRC report, but we actually 

identified 41 areas where we are evaluating how we carry out our 

business and how we can improve that. 

On the planning, on this particular one, what I would like to do 

is respond in detail in the record, because I am just not remembering off the top of my head exactly how we have responded on 

that one. 

CONTRACTORS

Mr. VISCLOSKY. And one last question—and it is going to be a 

question we are going to ask across the board on contracting—is 

how do you collect and use information on the performance of contractors? For example, a contractor performs poorly in Utah. How 

do you ensure that a contract review board in Arizona has access 

to that information and can take that into account? And is such inVerDate Aug 31 2005 23:02 Sep 09, 2008 Jkt 044138 PO 00000 Frm 00137 Fmt 6601 Sfmt 6602 E:\HR\OC\A138P2.XXX A138P2

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formation institutionalized throughout the bureau so people know 

in advance, here is someone who is simply not acting appropriately, 

is not a good contractor, is not going to do a good job, to save everybody a lot of time, heartburn and money? 

Mr. JOHNSON. You know, I would like to respond for the record 

on that as well, if I can. I think we do, in general, share information within the bureau about our contractors and our procurement 

activities, but I would want to respond in more detail, if I could. 

Mr. VISCLOSKY. If you could. I think it is an important principle, 

and, again, we are going to ask it across the board—— Mr. JOHNSON. Sure. 

Mr. VISCLOSKY [continuing]. With the Department of Energy——

Mr. JOHNSON. It is a good question. 

Mr. VISCLOSKY [continuing]. Too that it would be helpful to people intra-department and elsewhere to save a lot of time and heartburn. So if you could, that would be great. 

Mr. JOHNSON. We would be happy to do that. 

Mr. VISCLOSKY. Mr. Fattah? 

If not, appreciate, gentlemen, your work and the bureau’s. And, 

again, if you could make every effort to make sure that the questions for the record and other information are supplied within 4 

weeks, that would be terrific. 

And the hearing is adjourned. 

[Questions and answers for the record follow:] 


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(i) 

W I T N E S S E S 

Page 

Dinneen, Bob ............................................................................................................ 1 

Greene, D. L ............................................................................................................. 1 

Hillebrand, Don ....................................................................................................... 1 

Johnson, R. W .......................................................................................................... 97 

Stanek, M. B ............................................................................................................ 1 

Stricker, Tom ........................................................................................................... 1 

Ziegler, L. L .............................................................................................................. 1 


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rfrederick on PROD1PC67 with HEARING
(iii) 

I N D E X 

Overview Hearing—Vehicle Technology and Gas Prices 

Page 

Chairman Visclosky’s Opening Statement ............................................................ 1 

Mr. Hobson’s Opening Statement ........................................................................... 2 

Mr. Greene’s Opening Statement ........................................................................... 4 

Mr. Dinneen’s Opening Statement ......................................................................... 21 

Mr. Stanek’s Opening Statement ........................................................................... 31 

Mr. Hillebrand’s Opening Statement ..................................................................... 42 

Ms. Ziegler’s Opening Statement ........................................................................... 53 

Mr. Stricker’s Opening Statement ......................................................................... 59 

Algae ......................................................................................................................... 77 

Lithium-ion Battery ................................................................................................. 77 

Battery Manufacturing ............................................................................................ 78 

Chemistry Research ................................................................................................. 79 

CO2 Emissions ......................................................................................................... 81 

Plug-in-Hybrid Readiness ....................................................................................... 82 

Cost for Lithium-ion Battery Research & Manufacturing ................................... 83 

Mileage Performance ............................................................................................... 85 

CO2 Reduction .......................................................................................................... 86 

Consumer Interest in Alternative Vehicle Technologies ...................................... 90 

Green Retailer Program .......................................................................................... 91 

Nickel Metal Hydride .............................................................................................. 93 

Bureau of Reclamation 

Chairman Visclosky’s Opening Statement ............................................................ 97 

Mr. Hobson’s Opening Statement ........................................................................... 98 

Mr. Johnson’s Opening Statement ......................................................................... 99 

Restoring Wetlands on Quechan Reservation ....................................................... 109 

Gila River ................................................................................................................. 109 

Yuma Plant .............................................................................................................. 110 

Montana’s Water Projects ....................................................................................... 112 

Desalinization .......................................................................................................... 115 

All American Canal ................................................................................................. 115 

Voluntary Water Transfers ..................................................................................... 116 

Glen Canyon Dam Release ...................................................................................... 116 

Glazier Project ......................................................................................................... 118 

WRDA Act ................................................................................................................ 119 

Interstate Transfers of Water ................................................................................. 120 

Boise River Project .................................................................................................. 121 

CALFED Program ................................................................................................... 122 

Aging Dam Infrastructure ...................................................................................... 127 

Colorado River Measured Flow .............................................................................. 131 

Water For America Initiative ................................................................................. 134 

Loan Guarantee Program ....................................................................................... 135 

Reprogramming ....................................................................................................... 136 

Contractors ............................................................................................................... 137 

Æ 


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