DEPARTMENT OF ENERGY’S 

FISCAL YEAR 2007 

BUDGET PROPOSAL 

HEARING 

BEFORE THE 

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED NINTH CONGRESS 

SECOND SESSION 

MARCH 9, 2006 

Serial No. 109-82 

Printed for the use of the Committee on Energy and Commerce 

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WASHINGTON : 2006 

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27-744PDF 
COMMITTEE ON ENERGY AND COMMERCE 

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

 Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

 Vice Chairman

VITO FOSSELLA, New York 

ROY BLUNT, Missouri

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOHN D. DINGELL, Michigan 

 Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, General Counsel

REID P. F. STUNTZ, Minority Staff Director and Chief Counsel

(II)
CONTENTS 

Page 

Testimony of: 

Bodman, Hon. Samuel W., Secretary, U.S. Department of Energy ................................. 34 

Additional material submitted for the record: 

Bodman, Hon. Samuel W., Secretary, U.S. Department of Energy, response for the 

record.............................................................................................................................. 106 

(III) 

(1) 

DEPARTMENT OF ENERGY’S FISCAL 

YEAR 2007 BUDGET PROPOSAL 

THURSDAY, MARCH 9, 2006 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The committee met, pursuant to notice, at 10:00 a.m., in Room 2123 

of the Rayburn House Office Building, Hon. Joe Barton (chairman) 

presiding. 

 Members present: Representatives Hall, Upton, Stearns, Whitfield, 

Shimkus, Radanovich, Bass, Pitts, Terry, Ferguson, Otter, Sullivan, 

Murphy, Burgess, Blackburn, Dingell, Markey, Rush, Stupak, Engel, 

Wynn, Green, Strickland, Capps, Doyle, Allen, Schakowsky, Solis, 

Inslee, and Barton. 

 Staff present: Mark Menezes, Chief Counsel for Energy and 

Environment; Annie Caputo, Professional Staff Member; Maryam 

Sabbaghian, Counsel; Kurt Bilas; Counsel, Margaret Caravelli, Counsel; 

Elizabeth Stack, Policy Coordinator; Sue Sheridan, Minority Senior 

Counsel; Bruce Harris, Minorty Professional Staff Member; and Peter 

Kielty, Legislative Clerk. 

CHAIRMAN BARTON. The hearing will come to order. We are 

waiting for Ranking Member Dingell and as soon as Mr. Dingell gets 

here, we will proceed, and he is on his way. But welcome, Mr. 

Secretary, we are glad to have you. 

 SECRETARY BODMAN. Delighted to be here, sir. 

 CHAIRMAN BARTON. In fact, I think I am going to go ahead and do 

my opening statement to help expedite time. I want to welcome you, 

Secretary Bodman, for the hearing on the Department of Energy’s 

budget. We look forward to hearing from you. We also look forward to 

continuing to work with you on the energy issues that face the United 

States. The past year has seen some very notable achievements in the 

energy area, especially the passage of the Energy Policy Act of 2005. 

We are here to review the Department’s Fiscal Year 2007 budget. The 

Department performs work that is critical to the jobs, health, safety, and 

security for all Americans and you, Mr. Secretary, lead that work. 

 I believe your Department’s performance has improved over the last 

several years and particularly, the last year under your leadership. We 

would like to see this trend continue. As we have seen all too clearly in 

the past, working American families and the U.S. economy rely on 

secure, ample supplies of energy at prices they can afford to pay. 
2

Hurricanes at home and even political storms in distant places can have a 

real impact on the daily lives of our people. Providing reliable energy 

means more jobs, more economic security, and more national security for 

us and our children. 

 Last year the Congress passed, and the President signed, the Energy 

Policy Act of 2005. Most of that legislation originated in this committee. 

I would like to thank you for your hard work on that same bill. It has 

placed new obligations on your Department. You have new work to do 

to accomplish energy efficiency, electric transmission and security, 

nuclear power, clean coal development, renewable energy, hydrogen and 

oil and gas, and multiple deadlines in the bill. Speaking of the deadlines 

in the bill, I think we need to commend the new chairman of the Federal 

Energy Regulatory Commission, Chairman Joe Kelliher, for his work in 

meeting those deadlines. FERC has met every deadline they are 

supposed to have met in the new bill. I wish I could say the same about 

the Department of Energy, but unfortunately I cannot. 

 The President has announced some new programs this year, such as 

the global nuclear energy partnership. He also has announced initiatives 

for renewable fuels, transportation, solar power, and American 

competitiveness in basic science. Managing and successfully meeting all 

the requirements of the recently passed Energy Policy Act and the 

President’s new initiatives is an important challenge for your 

Department. 

 The President and I both strongly believe that nuclear power is 

necessary to meet our Nation’s energy needs. The nuclear industry must 

begin to build new plants as soon as possible to meet the growing 

demand for electricity. I believe that your Department’s ability to meet 

its obligation to build the Yucca Mountain Repository is linked directly 

to the industry’s ability to build some of these new plants. I am very 

frustrated that the Department still has not filed a license application, 

which is almost four years overdue. 

 I want to commend you, Mr. Secretary, for demonstrating initiative 

by proposing the Global Nuclear Energy Partnership as a long-term 

concept to address nuclear waste disposal and international proliferation 

issues. I am concerned, though, that the scope of this program may be 

too broad and it may be premature. I would urge you not to allow the 

Global Nuclear Energy Partnership to divert focus and resources away 

from the near-term challenges that must be overcome to ensure the longterm viability of the industry, especially progress at Yucca Mountain. 

 Today, the President is going to host a meeting on energy with a 

bipartisan group of House members, some of whom are on this 

committee. Because of that, it is my understanding that you need to 

leave at approximately 1:00 p.m., or very shortly thereafter, to prepare 
3

for that meeting. Mr. Dingell, myself, and several others are planning on 

going to that same meeting, so we are going to try to expedite this so that 

we can all attend the meeting with the President this afternoon. By prior 

agreement and prior discussions, today’s opening statements, except for 

myself and Mr. Dingell, will be one minute each and then we will ask the 

Secretary questions for five minutes at a time. 

 Finally, I want to take this opportunity to commend our Chief 

Counsel for Energy and Environment, Mark Menezes, for the fine job 

that he has done the last several years for the committee. Next week is 

going to be his last week on the committee. He has decided to seek 

greener pastures and we are going to miss you. So good luck to you and 

we hope that we get to see you again. Mark is going to become a partner 

at Hunton and Williams, which is a law firm here in Washington, D.C. 

 With that, I want to recognize my Ranking Member, Mr. Dingell, for 

his opening statement. 

 [The prepared statement of Hon. Joe Barton follows:] 

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY 

AND COMMERCE

The hearing will come to order. I would like to welcome Secretary Bodman back to 

this Committee. We look forward to continuing to work with you, Mr. Secretary, on the 

many important energy issues facing the United States. The past year has seen some 

notable achievements, including the passage of the Energy Policy Act of 2005. 

We are here this morning to review the FY 2007 budget request of the Department 

of Energy. The Department performs work that is critical to the jobs, health, safety, and 

security of all Americans, and the Secretary leads that work. The Department’s 

performance has improved greatly over the last several years, and particularly over the 

last year under your leadership, Mr. Secretary. Keep up the good work -- we want to see 

that trend continue. 

As we have seen all too clearly in the past year, working American families and the 

U.S. economy rely on secure, ample supplies of energy at prices they can afford to pay. 

Hurricanes at home and even political storms in distant places can have a real impact on 

the daily lives of our people. Providing reliable energy means more jobs, economic 

security, and national security for us and our children. That’s a tall order, Mr. Secretary, 

and I look forward to hearing how you plan to fill it. 

Last year, Congress passed and the President signed the Energy Policy Act of 2005. 

Thank you for your hard work on that bill. This legislation placed new obligations and 

responsibilities on the DOE. DOE has new work to accomplish on energy efficiency, 

electricity transmission and security, nuclear power, clean coal development, renewable 

energy, hydrogen, and oil and gas. There are multiple deadlines in this bill, and I want to 

commend Chairman Kelliher of the FERC for meeting those deadlines. I hope that DOE 

will strive to achieve the goals and deadlines in EPACT. 

In addition, the President has announced new programs as part of the Global Nuclear 

Energy Partnership, and initiatives for renewable fuels for transportation, solar power, 

and American competitiveness and basic science. Managing and successfully meeting all 

of the requirements of the Energy Policy Act and the President’s initiatives will be an 

enormous challenge for the Department. 
4

The President and I both strongly believe that nuclear energy is necessary to meet 

our nation’s energy needs. The industry must begin to build new plants as soon as 

possible to meet the growing demand for electricity. I believe that DOE’s ability to meet 

its obligation to build the Yucca Mountain repository is linked to the industry’s ability to 

build new plants. I am frustrated that DOE still has not yet filed a license application, 

which is almost 4 years overdue. 

I commend you, Mr. Secretary, for demonstrating initiative by proposing the Global 

Nuclear Energy Partnership as a long-term concept to address nuclear waste disposal and 

international proliferation issues. However, I am concerned that the scope of this 

program may be overly broad and premature. I urge you not to allow GNEP to divert 

focus and resources away from the near-term challenges that must be overcome to ensure 

the long-term viability of the industry. 

Today, the President will host a meeting on energy with a bipartisan group of House 

Members, some of whom are on this Committee. I note that Secretary Bodman will have 

to leave at 1pm, or very shortly thereafter, to prepare for that meeting. I assure you that 

neither the Secretary nor I selected the time of this meeting, and it is regrettable that our 

hearing will have to end at a fixed time. 

Opening statements today will be 1 minute, except for Ranking Member Dingell and 

myself. When asking questions of the Secretary, I encourage all Members to stick to the 

five minutes they are allowed under the rules, or even to turn back some time so that as 

many Members may ask questions as possible. 

I remind all Members of the opportunity to ask questions for the record following 

the hearing. I have asked the committee staff to help pull together those questions that 

come in quickly. Mr. Secretary, I ask you to please respond to questions as soon as you 

can, particularly from Members that don’t get to ask questions today. 

Finally, I want to give a word of thanks to a departing member of the committee 

staff. Mark Menezes, the majority’s chief counsel for energy and the environment, will 

be leaving us next week. Mark is one of the staffers most responsible for the bipartisan 

success of last year’s energy bill, and has been instrumental in everything energy-related 

this committee has done since his arrival in 2003. Mark will become a partner at Hunton 

and Williams, where he will doubtless serve his clients well. Mark, congratulations and 

we will miss you. I ask the Members of the Committee to join me in a round of applause 

for Mark. 

 Mr. Secretary, again, welcome. I look forward to working with you, and listening to 

your testimony today. 

 MR. DINGELL. Mr. Chairman, I thank you for your courtesy. Good 

morning and Mr. Secretary, welcome to the committee. Mr. Chairman, I 

thank you for this hearing. I thank Secretary Bodman for appearing 

before the committee today to discuss the DOE budget for fiscal year 

2007. Mr. Secretary, this time you appear before this committee to 

discuss DOE’s budget and much has transpired since your last visit. 

First, after several consecutive years of failure, the Congress finally 

agreed to a comprehensive energy bill that was signed by the President 

last August. That bill was born out of difficult and hard-fought 

negotiations touched by a number of important and complex questions 

and issues. Given that, I am sure that members will be anxious to hear 

the progress the DOE is making in implementing the various components 

of that legislation. And by the way here, parenthetically, I would 
5

commend the Chairman here for his leadership in the way that was 

achieved. 

 Several months after the energy bill was signed, the Nation suffered 

one of the worst natural disasters in its history due to Hurricanes Katrina 

and Rita. The Nation’s energy infrastructure in the Gulf Coast was 

significantly damaged and the country saw even more volatile energy 

prices as a result. The Energy Information Administration reports that 

gasoline prices hit an average high of $3.11 per gallon and natural gas 

prices reached $16.11 per MCF. While prices have abated since then, 

they still remain high. Hurricane season will soon again be upon us and I 

would appreciate your comments today as to lessons learned that could 

be applied again should we be unfortunate enough to undergo similar 

experiences to the disasters that occurred in the last hurricane season. 

 Your budget request raises a number of interesting questions that 

merit attention. First, in the President’s State of the Union address, he 

announced an advanced energy initiative that would help achieve an 

Administration goal of replacing more than 75 percent of our oil imports 

from the Middle East by 2005. Questions rise around that. Is this a 

realistic goal? If so, how precisely will we get there? Does this initiative 

consist of new programs or just funding for the Energy Policy Act of 

2005 and other statutes or would it entail new initiatives? If so, what 

will those initiatives be and when will they be submitted to the Congress 

so that we can commence working on them to meet this difficult, 

challenging and complex opportunity and engagement? 

 Second, as I asked in my February 8, 2006 letter to you, which I 

note, Mr. Secretary, remains unanswered, we are interested in the degree 

to which the Administration’s budget request matches the funding levels 

we authorized in the energy bill for important programs such as lowincome home energy assistance program, LIHEAP regulation and the 

Energy Star program. I hope that in your visit today you will shed light 

on these questions, as they are indeed important. 

 Third, the budget request is also noteworthy for its emphasis on 

nuclear programs, specifically, the sweeping Global Nuclear Energy 

Partnership. While certain of its stated purposes, such as nonproliferation, are laudable, others appear to require closer scrutiny. 

However, I am concerned that this sprawling new venture may divert 

many of DOE’s attentions from other immediate concerns, such as 

fulfilling its current responsibilities under the Nuclear Waste Policy Act 

with respect to Yucca Mountain, which is not, as I am sure you will 

agree, going very well. It is years behind and billions of dollars overbudget. 

 In this connection, I would ask that a November 10, 2005 letter that 

Representative Boucher and I sent to DOE regarding various nuclear 
6

matters and the Secretary’s response of yesterday be included in the 

hearing record, Mr. Chairman, without objection. 

 CHAIRMAN BARTON. Without objection. 

 [The document follows:] 
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MR. DINGELL. Mr. Secretary, all of us appreciate the magnitude of 

DOE’s tasks and the difficulties that you confront in addressing them. I 

can hardly disagree with the goals that purport to wean us from our 

dependence on foreign oil and I applaud you for attempting the difficult 

task of envisioning a long-term nuclear energy policy. These are things 
18

on which we have struggled for a long time. I hope you have better 

success than have your predecessors on these two questions. 

 I hope, however, that we can focus on the policies that the Congress 

has already put in place that address some of the important problems of 

the day and that affect our citizens right now, such as conservation, 

efficiency, and nuclear waste. Again, Mr. Secretary, I thank you for your 

appearance before us today. I thank you, Mr. Chairman, for recognizing 

me and I yield back the balance of my time. 

 [The prepared statement of Hon. John D. Dingell follows:] 

PREPARED STATEMENT OF THE HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF MICHIGAN

Mr. Chairman, thank you for holding this hearing. I want to thank Secretary 

Bodman as well for appearing before the Committee today to discuss the Department of 

Energy’s (DOE) budget request for fiscal year 2007. 

Mr. Secretary, this is the second time you have appeared before the Committee to 

discuss DOE’s budget and much has transpired since your last visit. First, after several 

consecutive years of failure, the Congress finally agreed on a comprehensive energy bill 

that was signed by the President last August. That bill was born out of difficult and hardfought negotiations and touched on a number of important and complex topics. Given 

that, I am sure Members will be anxious to hear what progress DOE is making in 

implementing the various components of that bill. 

Second, less than a month after the energy bill was signed, the Nation suffered one 

of the worst natural disasters in its history due to Hurricanes Katrina and Rita. The 

Nation’s energy infrastructure in the Gulf Coast was significantly damaged and the 

country saw even more volatile energy prices as a result. The Energy Information 

Administration reports that gasoline prices hit an average high of $3.11 per gallon and 

natural gas prices reached $16.11 per mcf. While prices have abated since then, they 

remain high. Hurricane season will soon be upon us again and I would appreciate your 

comments as to lessons learned that could be applied should we be unfortunate enough to 

experience similar disasters this year. 

Your budget request raises several interesting questions that also merit attention. 

First, in the President’s State of the Union address, he announced an “Advanced Energy 

Initiative” that would help achieve an Administration goal of replacing “more than 75 

percent of our oil imports from the Middle East by 2025.” Is that a realistic goal? And, 

if so, how precisely do we get there? Does this initiative consist of new programs or just 

funding for the Energy Policy Act of 2005 and other statutes? 

Second, and as I asked in my February 8, 2006, letter to you (which I note remains 

unanswered), we are interested in the degree to which the Administration’s budget 

request matches the levels of funding we authorized in the energy bill for important 

programs such as the Low-Income Home Energy Assistance Program (LIHEAP), 

weatherization, and the EnergyStar program. I hope that your visit with us today will 

shed light on these questions. 

Third, the budget request is also noteworthy for its emphasis on nuclear programs, 

specifically the sweeping “Global Nuclear Energy Partnership.” While certain of its 

stated purposes, such as nonproliferation, are laudable, others require closer scrutiny. 

Moreover, I am concerned that this sprawling new venture may divert DOE’s attention 

from other immediate concerns, such as fulfilling its current responsibilities under the 

Nuclear Waste Policy Act with respect to Yucca Mountain. In this connection, I would 

ask that a November 10, 2005, letter that Representative Boucher and I sent DOE 
19

regarding various nuclear matters, and the Secretary’s response of yesterday, be included 

in the hearing record. 

Mr. Secretary, all of us here appreciate the magnitude of DOE’s tasks. I can hardly 

disagree with goals that purport to wean us from dependence on foreign oil, and I applaud 

you for attempting the difficult task of envisioning a long-range nuclear energy policy. I 

hope, however, that we can focus on the policies that the Congress has already put in 

place that address some of the important problems of the day and that affect our citizens 

right now, such as conservation, efficiency, and nuclear waste. 

Again, I appreciate your appearance before us today and look forward to your 

testimony. 

MR. HALL. [Presiding] Thank you, Mr. Dingell. Mr. Secretary, I 

won’t take my further one minute that we are allotted, but you and I have 

had several discussions and I appreciate it. You have been very 

generous, and your staff has been generous, with your time and I 

understand where you are, what you have to do, and what you are going 

to do; and we will do that honorably and work together. Maybe we will 

work something out before it is over, because I think we all want the 

same thing, and that is to be free of captivity of some Nations that we are 

dependent on for 60 percent of our energy. We know we can’t live with 

that and four times as a Democrat, I passed the Ultra-deep Amendment 

with the energy bill. 

 It got by the Senate and actually, the Conference Committee even 

had approved it and then one time, as a Republican, I passed it and it has 

been signed into law. Now I understand one of the best friends I have 

got in this town was talking about zeroing it out, and I am going to be 

with him at two o’clock this afternoon and talk to him about it and I 

thank you for your time. But you know where I am and where we are on 

that. We are going to try to keep you from doing it, if we can up here, 

but we will be above board and we will let you know. Somewhere I 

heard a story said the young lover of Siam to his young maiden to named 

Kiam, if you kiss me of course you will have to use force, but God 

knows you are stronger than I am, so we don’t know if we are going--

that is going to apply or not, but you have got to get somebody up and 

down here to introduce that bill and then you got to push it through and 

we are going to sure try to keep you from doing it. Is that fair enough? 

 SECRETARY BODMAN. Yes, sir. 

 MR. HALL. Thank you, sir. All right, I recognize Mr. Markey, the 

gentleman from Massachusetts. 

 MR. MARKEY. Thank you, Mr. Chairman. Mr. Secretary, the Bush 

Administration’s Global Nuclear Energy Partnership program will cost 

the Department of Energy $4.5 billion over just the next five years and 

well over $100 billion if the program goes into commercial operation. 

This proposal is a reckless and dangerous boondoggle that will bust the 

budget, wreak havoc with the U.S. Nuclear Nonproliferation Policy, and 
20

only further facilitate the spread of nuclear materials around the world. 

It does not represent a realistic solution to the Nation’s nuclear waste 

problems. 

 We have already seen some of the results of this program. Last week 

President Bush ill-advisedly signed an agreement with the leader of India 

which is going to blow a hole in the International Nuclear 

Nonproliferation Treaty and the Nonproliferation Act, which guides 

American policy. The Pakistanis have already asked for an exception to 

the law using the Indians as a precedent. We have Iran before the United 

Nations Security Council asking them to abide by the rules. I do not 

think, Mr. Secretary, it is advisable for the United States to be telling 

India that they don’t have to play by the rules when we are asking Iran 

and North Korea and Pakistan and other to play by the rules. You cannot 

have two separate sets of rules. 

 I believe that President Bush has made an historic mistake in carving 

out this exception for the Indian government. I think we are going to 

reap long-term negative dividends from this decision, and my hope is 

that as this program continues to be better understood, that the long-term 

policy of the Bush Administration engaging in selective proliferation 

rather than uniform nuclear nonproliferation will be understood and that 

we will put a stop to it. It is just too dangerous for the world to have 

such a policy. 

 We can expect Pakistan to be cutting deals with China; we can 

expect Russia to be cutting separate deals with countries that they favor. 

This is a precedent based upon this underlying program, which, in my 

opinion, is going to make the world a much more dangerous place to live 

in. Thank you, Mr. Chairman. 

 [The prepared statement of Hon. Edward J. Markey follows:] 

PREPARED STATEMENT OF THE HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. Chairman, one of the centerpieces of the Bush Administration’s fiscal year 2007 

Department of Energy Budget Request is the call for a $250 million down payment on a 

Global Nuclear Energy Partnership program – a program that DOE estimates will cost 

$4.5 billion over just the next 5 years, and well over $100 billion if the program goes into 

commercial operation. 

This proposal is a reckless and dangerous boondoggle that will bust the budget, 

wreck havoc with U.S. nuclear nonproliferation policy, and only further facilitate the 

spread of nuclear materials around the world. It does not represent a realistic solution to 

the nation’s nuclear waste problems, and it does not represent a viable energy policy in 

today’s competitive electricity markets. 

Already, we are seeking the adverse implications of GNEP affecting our 

international relations. Just last week President Bush and Prime Minister Singh signed an 

agreement that will effectively exempt India from international and U.S. nuclear 

nonproliferation laws and controls – exemptions that will allow them to be a part of the 

Administration’s Global Nuclear Energy Partnership. What is the result of this proposal? 
21

We are establishing a precedent that states will inevitably point to as they seek similar 

exceptions to nonproliferation barriers for their preferred partners. Pakistan has already 

asked for a similar nuclear bargain from President Bush. If the U.S. says “no”, China 

may now say “yes.” 

The new Bush India nuclear loophole requires changes to U.S. law and the practices 

of the 45-nation Nuclear Suppliers Group (NSG), which currently prohibit trade with 

states (such as India) that have tested nuclear weapons or do not allow international 

safeguards to verify nuclear technology is not being used to make bombs. 

This proposal would effectively grant India highly sought-after access to nuclear 

technology and materials only accorded to the 183 non-nuclear weapon states that 

comply with the global nonproliferation standards. Countries that have played by the 

rules may no longer do so if India is allowed to have its radioactive cake and eat it too. 

The United States and India should work together to increase India’s electricity 

production and minimize climate changing carbon emissions through cleaner coalburning, renewables and energy efficiency technology. They should not, however, tip the 

delicate scales of world-wide nuclear balance and destroy the rules that have prevented 

nuclear peril for decades. Representative Upton and I have introduced a bipartisan 

resolution expressing disapproval of the Bush India deal, and I look forward to working 

with Members on both sides to oppose this dangerous loophole. 

I would note that shortly after the India deal was announced, I offered an 

amendment in the Energy Conference to disapprove it. That amendment was approved 

by the House conferences with your support, Mr. Chairman. Unfortunately, it was 

rejected by the Senate conferees after the Administration asked them to withhold 

judgment on the initial July 18th India deal until all of the details were worked out. 

Those details were hammered out last week in New Delhi in an all-night negotiating 

session in which the Bush Administration appears to have capitulated to virtually all of 

the demands put forward by the Indian government.. 

I look forward to hearing more this morning about the Administration’s plan to 

transform itself into the Johnny Appleseeds of nuclear power with this new Global 

Nuclear Energy Partnership, and the implications of partnering with countries like India – 

who refuse to sign the Nuclear Nonproliferation Treaty or accept full-scope international 

proliferation safeguards. I believe that policy is fraught with danger for the world. I also 

believe that reprocessing continues to be uneconomic in the U.S. I look forward to 

hearing the Secretary’s testimony on these matters. 

MR. HALL. The gentleman’s time is expired. The chair recognizes 

the gentleman from Florida, Mr. Stearns, for one minute. 

 MR. STEARNS. Thank you, Mr. Chairman, and I appreciate the 

Secretary coming here. You are going to get a lot of tough questions 

here. You can just see it from the top, from the gentleman from 

Massachusetts and frankly, some of the things he is talking about some 

of the conservatives have the same concern. So I mean, he is echoing, 

obviously, what he feels, but there are some pundits on the conservative 

side that ask some of the same questions about what happened in India 

and the inconsistent policy with Pakistan and why that is, so you are 

going to be called this morning to explain this policy. In Florida, 

obviously, we are all concerned with the high cost of energy. We have a 

thousand people coming into Florida every day, it is probably a 30 

percent increase in electricity consumption over the next 10 years, so we 

are anxious to hear your solution to the problem, so I appreciate your 
22

coming here and answering these questions and thank you, Mr. 

Chairman. 

 [The prepared statement of Hon. Cliff Stearns follows:] 

PREPARED STATEMENT OF THE HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF FLORIDA

Thank you, Mr. Chairman, for calling this hearing. 

Mr. Secretary, welcome and thank you for taking the time to appear before us today. 

I appreciated your efforts to work with Congress in passing last year’s energy bill, and 

look forward to our continued cooperation to tackle a specific segment of the energy 

production industry: nuclear power. 

My home state of Florida is one of the fastest growing states in the nation, with 

more than 17 million citizens -- and nearly 1,000 new residents arriving every day. 

According to the Florida State Department of Environmental Protection, my state’s 

expanding economy will lead to a 30 percent increase in electricity consumption over the 

next ten years. 

Of course, Floridians, like most Americans, want their energy as clean as possible. 

Because nuclear power is abundant, safe, reliable, and free of harmful emissions, Florida 

already looks to nuclear power for about 15% of its electricity needs. 

In his Fiscal Year 2007 budget, the President requested $544.5 million for nuclear 

waste disposal at Yucca Mountain, a $50 million increase from FY06 appropriations. 

Some $20 billion has been collected in the Nuclear Waste Trust Fund for the 

implementation of the Yucca Mountain storage site -- over $1 billion from Florida alone. 

While I appreciate the Department’s proposed Global Nuclear Energy Program (GNEP), 

which will over time reduce the amount of spent nuclear fuel destined for storage, this 

does not obviate the need to finally open Yucca for business. Since 1998, the law has 

required the Federal government to collect spent fuel, and it is time for collection to get 

underway. 

Mr. Secretary, I eagerly await a legislative proposal to set sensible scientific 

standards for waste disposal, and to comprehensively address Yucca Mountain. 

While no new nuclear plants have entered service in Florida since 1983, Progress 

Energy will be announcing plans later this month to construct a new nuclear plant in my 

state. I commend them for considering this important investment in our energy future. 

So, Mr. Chairman, Mr. Secretary, let’s not leave energy providers hanging in regulatory 

limbo. Let’s get Yucca done. 

MR. HALL. The chair recognizes Mr. Allen from Maine for a 

minute. 

 MR. ALLEN. Thank you, Mr. Chairman, for holding this hearing and 

Secretary Bodman, thank you for being here today. Mr. Secretary, I am 

puzzled by certain aspects of the President’s proposed budget for the 

Department of Energy. Last year gasoline prices shot up to over $3 a 

gallon for the first time and wholesale natural gas prices, which had 

doubled between 2002 and the beginning of 2005, doubled again by the 

end of last August. In response, you are proposing an 18 percent cut to 

the energy efficiency programs at the Energy Efficiency and Renewable 

Energy Office. Prices spike, supplies get tight and you respond by 
23

proposing to cut the portion of the budget that focuses on reducing 

demand. That doesn’t make sense. 

 This committee recognized that energy efficiency is a case where the 

government should lead by example and yet the Federal Energy 

Management Program, which leads the government-wide effort to save 

energy, has been cut by 13 percent. I would simply suggest the 

Administration’s priorities are often incomprehensible. We ought to be 

investing in programs that reduce our energy consumption. I am 

disappointed by the consummate hope that Congress will increase 

funding in these areas. 

 MR. STEARNS. [Presiding] I thank the gentleman. Mr. Ferguson. 

 MR. FERGUSON. Thank you, Mr. Chairman. Thank you for holding 

this hearing. I thank the Secretary for being here to testify and talk about 

the budget and other energy issues. I appreciate the Administration’s 

commitment to investing in renewable energy. I happen to be a fan of 

solar energy as well as other renewable energy. I have a bill on solar 

energy and I look forward to discussing that further. But Mr. Secretary, I 

want to note that PJM, which is the RTO serving 13 States in the MidAtlantic and the Midwest, including my home State of New Jersey, has 

applied to the Department seeking your support for the construction of 

new transmission lines to ensure the future reliability of electric supplies 

and lower electricity prices in New Jersey. 

 The new transmission facilities from the Midwest through 

Pennsylvania to New Jersey would help to ensure the availability of lowcost power to the region and will provide a means to spur the 

development of new advanced generation technologies, including 

renewable energy resources like solar and wind power. This is a first 

formal application before the Department seeking to utilize the authority 

that this committee provided to the Department of Energy in the Energy 

Policy Act from last year to designate “national interest electric 

transmission corridors.” 

 I hope that the Department will move thoughtfully, but also in a 

timely manner in reviewing this request because it has really important 

implications for my district, for our State of New Jersey and for our 

region for helping to make the provisions of last year’s Energy Policy 

Act really successful and I appreciate your time today. Thank you for 

being here. I yield back. 

 MR. STEARNS. Thank the gentleman. Ms. Capps recognized for one 

minute. 

 MS. CAPPS. I prefer to save my time for the questions. 

 MR. STEARNS. The gentlelady prefers to save her time. 

 MS. CAPPS. I welcome the Secretary. 
24

 MR. STEARNS. Mr. Terry for one minute. The gentleman saves his 

time. Mr. Burgess. Mr. Burgess. 

 MR. BURGESS. Mr. Chairman, I have a statement also for the record, 

but Mr. Secretary, thank you for being here this morning. I do hope we 

will hear from you this morning on a bill that we passed last fall, the 

second energy bill that we passed in the 109th Congress. This was a bill 

that dealt with increasing refining capacity in this country and also put a 

time line on development of a pipeline to bring natural gas from Alaska 

and Canada back into the lower 48 States. It has already been alluded to 

as to how the gas prices, natural gas prices are in this country. Whatever 

relief we can bring to our constituents, I think we need to be on about 

doing and I would just be interested in your thoughts on the second bill 

and what we may do to facilitate that in the Senate, and I will yield back. 

 [The prepared statement of Hon. Michael Burgess follows:] 

PREPARED STATEMENT OF THE HON. MICHAEL BURGESS, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF TEXAS

Mr. Chairman, 

Thank you for convening this hearing today. 

One of my most important responsibilities as a Member of Congress is to ensure that 

my constituents’ tax dollars are being spent wisely. It is for that reason that I look 

forward to the ongoing debate about our national funding priorities. 

Secretary Bodmin, thank you for appearing before us this morning. As we begin the 

Fiscal Year 2007 appropriations cycle, it will be helpful to hear from you about the 

President’s Budget request for the Department of Energy, particularly as this is the first 

budget year after enactment of the Energy Policy Act of 2005. 

I am especially interested to hear your testimony on the DOE’s oil and natural gas 

research programs. One of the best ways to decrease our dependence on foreign sources 

of oil is to make the most out of our domestic oil resources we do have. Research funded 

through this account, such as enhanced oil recovery using carbon dioxide, can help to 

increase domestic supply. 

We’ve seen that in North Texas with the Barnett Shale -- thirty years ago, the 

Barnett shale was nothing but rock. Since that time, with the help of a DOE grant, 

George Mitchell was able to develop the technology to recover the natural gas in the 

Barnett shale. In 2004, it produced 370 Billion Cubic Feet and total reserves for the 

Barnett Shale are estimated to be over 500 Trillion Cubic Feet. 

Now, companies using the technology developed by Mitchell and in North Texas are 

looking at tapping into several other shale natural gas plays around the country. What 

began as a small expenditure by the Department of Energy has already brought trillions 

of cubic feet of natural gas into our domestic supply and has the potential to allow us to 

tap trillions more. This has helped to hold down the cost of natural gas despite 

dramatically increased demand. As we face increasing prices for oil, gas, and other 

petroleum products, this will be extremely important moving forward. 

Secretary Bodmin, thank you again for appearing before us this morning. I yield 

back. 

MR. STEARNS. The gentleman yields back. Mr. Stupak is 

recognized for one minute. 
25

 MR. STUPAK. Thank you. Mr. Secretary, welcome. I think we can 

all agree our Nation faces an energy crisis. Americans are paying record 

prices to fill up their cars and heat their homes. We remain dangerously 

dependent upon foreign energy sources and I have seen little from the 

President’s 2007 budget that would change this. Families are paying 23 

percent more on natural gas, 24 percent more on home heating, and 9 

percent more for electricity than they did last year. Take a look at this 

heating bill my staffer’s handing you from a senior complex in Oscoda, 

Michigan. Last November their bill was $5,377.57; a month later, their 

bill was $12,492.65. This is what northern Michigan residents are facing 

this winter. The total LIHEAP for the senior citizen complex is 

approximately $7,000. It was used up in one month. 

 At the same time my constituents are faced with the choice of 

gassing up their cars or paying for groceries, oil companies are reaping 

record profits and refineries have increased their prices by 255 percent. I 

have been asking for a hearing in this committee for the last six months 

on the dramatic increases of natural gas and oil prices, but so far my 

requests have fallen on deaf ears. Just as this committee has failed to 

investigate skyrocketing energy prices, the President has offered little 

more than rhetoric and photo ops. His 2007 budget fails to provide the 

necessary funding to accomplish the energy goals set forth in his State of 

the Union address. 

 So Mr. Secretary, I believe the American people deserve better and I 

look forward to your testimony today. 

 MR. STEARNS. I thank the gentleman. Mr. Murphy from 

Pennsylvania. 

 MR. MURPHY. Thank you. 

 MR. STEARNS. You are recognized for one minute. 

 MR. MURPHY. Thank you, Mr. Chairman, and thank you for being 

here, Mr. Secretary. In an era where Iran turns off the OPEC oil valve 

because we protest their attempts to get nuclear weapons, when 

Venezuela shows its strong ties to Castro, when Russia ups the ante for 

Ukraine trying to get natural gas, we see the vital importance of energy 

independence in America. My wish is that America would set the same 

sort of focus that Kennedy said years ago for getting to the moon and we 

should aim towards energy independence within 10 years. Otherwise we 

remain hostage to other countries for this. One of the concerns that I will 

have that I want to be asking more about has to do with the cuts for the 

clean coal initiatives, and the cuts in some of the other oil and gas 

research areas I think are absolutely vital if we are going to have this 

energy independence. We have an abundant supply of coal lasting us a 

couple hundred years, and I want to make sure that is one of the areas 
26

that we address in this budget because I believe we cannot afford to have 

those cuts. Thank you, Mr. Chairman. 

 [The prepared statement of Hon. Tim Murphy follows:] 

PREPARED STATEMENT OF THE HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM 

THE STATE OF PENNSYLVANIA

Mr. Chairman, 

Our nation’s energy supply is falling short of our needs. Demand for oil and natural 

gas has greatly increased in recent years, our national production supply is down. 

As I see it, the problem lies in the fact that we depend far too much on foreign 

countries for our oil. If we are to secure our homeland and make our country more 

energy independent, then we must rely less on imports in the future. We must continue to 

make investments in our energy infrastructure by expanding natural gas storage facilities, 

building more refineries, and opening up our shorelines to exploration. 

Moreover, we can never overlook the importance of coal as a vital domestic energy 

source. From the early 19th century, it was coal that made Western Pennsylvania the 

center of energy production for a growing nation. Coal must be a cornerstone of our 

strategy to achieving energy independence. At current rates of consumption, we have 

nearly a 300-year supply of coal in this country, enough to provide more than fifty 

percent of the fuel used to generate our domestic electricity needs. Out of our four major 

fuel sources – oil, gas, uranium, and coal – coal has the largest domestic reserve base, and 

the largest share of U.S. energy production in BTUs. 

I’m concerned with the Bush Administration’s funding proposal for coal 

technologies in the budget. In the FY 2007 budget request, the Administration’s 

FutureGen initiative is funded at $54 million, while the Clean Coal Power Initiative 

(CCPI) is only allocated $5 million, compared to $54 million dollar difference in 

FY2006. If the Administration believes we ought to reduce our countries dependency on 

foreign oil, and considers coal a major component of its national energy strategy because 

of its low-cost abundance, then I don’t see how critical funding for the Clean Coal Power 

Initiative can be over looked. It is the CCPI program that takes these clean coal 

technology concepts developed in research & development and demonstrates them on a 

commercial scale. This is important because without such demonstrations industry 

generally will not take the risk to build them. In addition the CCPI program is 

implemented by the National Energy Technology Laboratory, NETL. If funding is cut 

from onsite research at NETL then there will be jobs lost through reduced hiring of 

contractors from the area. 

FutureGen is a needed venture to help build the world’s first coal-fueled zero 

emissions power plant generating “clean power” from coal, (and I am very supportive of 

that public-private partnership) I just believe that the DOE coal program has been 

successful because it has included a portfolio balanced between basic research and 

demonstration projects, and the proposed FY07 budget has abandoned that philosophy. 

America’s energy consumption is at an all-time high and rising. Energy 

conservation is important, but first and foremost, this nation must generate energy right 

here at home because we have the resources we need. It must be a national priority to 

achieve energy independence for the long-term security of America. 

Thank you Mr. Chairman. 

 MR. STEARNS. Mr. Rush is recognized for one minute. 

 MR. RUSH. Thank you, Mr. Chairman. Welcome, Mr. Secretary, it 

is always good to have you before our committee. Mr. Chairman, 
27

Congress passed and the President signed into law the Energy Policy Act 

of 2005 just last yea,r and while I had a lot of reservations, I ultimately 

supported the bill when we marked it up in this committee and I 

supported its final passage. Much of my support was due to my LIHEAP 

and weatherization amendments that this committee passed and were 

preserved in the final passage. EPACT authorized LIHEAP funding at 

$5.1 billion and the weatherization program at $600 million. The 

President’s budget falls woefully short on both of these programs and I 

look forward to hearing from Secretary Bodman on why the President is 

proposing such a shortfall in LIHEAP and weatherization funding, and I 

thank you, and I yield back the balance of my time. 

 MR. STEARNS. Mr. Pitts is recognized for one minute. The 

gentleman passes. Mr. Shimkus. 

 MR. SHIMKUS. I will pass. 

 MR. STEARNS. All right, the gentleman passes. Mrs. Blackburn. 

 MRS. BLACKBURN. Thank you, Mr. Chairman. Thanks for the 

hearing and thanks to Secretary Bodman for being here with us today. I 

really look forward to working with you on some of the progress that we 

have already made from the Energy Policy Act of 2005. I did find it 

surprising that in the State of the Union the President did not address 

ANWR and opening the outer continental shelf. I support several of the 

initiatives that have been mentioned on hydrogen and renewable fuels 

and I sincerely hope the President will continue a strong commitment to 

opening up our currently inaccessible domestic energy sources and I 

hope we will hear from you a bit on that today. 

 I think that forcing American families to pay higher energy prices in 

order to please environmental special interest groups is not good energy 

policy, and I appreciate the President’s emphasis on the use of 

technology to address our economy’s dependence on oil, but I hope we 

will also continue to focus on expanding domestic oil sources. I also 

hope that we are going to hear from you and see some greater emphasis 

on energy efficiencies. I look forward to hearing from you, Mr. 

Secretary, today and continuing to work with the committee and I yield 

back. 

 MR. STEARNS. Ms. Solis, the gentlelady from California. Ms. 

Schakowsky. Yes, Ms. Schakowsky. 

 MS. SCHAKOWSKY. Thank you, Mr. Secretary. Despite unusually 

warm temperatures, the average Midwestern consumer paid 28 percent 

more to heat their homes this winter and yesterday the Midwest 

Attorneys General Natural Gas Working Group released a report 

demonstrating that this rise in price was not caused by simple supply and 

demand factors; instead, a lack of oversight, wild speculation on the 

futures market, and price gouging were responsible, they say, for the 
28

wellhead price of natural gas to increase over $400 billion from 2000 to 

2005, and the Administration has done nothing to bring those prices 

down and I don’t see anything in the budget that would do that. 

 The budget funds LIHEAP at a level that is $2.3 billion under what 

this committee authorized in the Energy Policy Act, cuts millions of 

dollars from critical energy efficiency programs and increases funding 

for renewable energy programs by only .2 percent, making the 

President’s State of the Union commitment to end America’s addiction to 

oil nothing, in my view, but an empty promise. Most inexplicitly, this 

budget invests hundred of millions of dollars in new nuclear 

infrastructure and dangerous, expensive programs like reprocessing, 

which could divert resources from nuclear waste cleanup. 

 It will be hard to justify this nuclear expansion to the residents of 

Illinois who were informed in February that two Illinois plants spilled 

radioactive cancer causing tritium between 1996 and 2003, expanding 

the nuclear industry is a recipe for a public health disaster. Families 

across the Midwest whose wallets were stressed by the most expensive 

winter on record should expect more from their Administration. Thank 

you. 

 MR. STEARNS. Mr. Otter is recognized. 

 MR. OTTER. Thank you, Mr. Chairman. Good to have you here, Mr. 

Secretary. I had hoped my colleagues from the Pacific Northwest would 

be here to help gang up on you about the DPA diversion of funds. I am 

going to use my time when I have the opportunity for questions and 

responses to speak mostly about nuclear energy and in particular, the 

Idaho National Laboratory and its future. I was a little disappointed in 

some of the figures and some of the things that I have heard relative to 

whether or not this Administration is going to fulfill those commitments 

and responsibilities made by previous Administrations and so I hope we 

will have a chance to talk about that. But once again, Mr. Secretary, 

thank you for being here. 

 CHAIRMAN BARTON. Ms. Solis. 

 MS. SOLIS. Thank you, Mr. Chairman. I would also like to thank 

you for having this hearing today and I also want to state that I believe 

the Department of Energy’s budget does not reflect our American 

priorities. Funding for weatherization and consumer protection programs 

should be significant, yet we see that Bush’s budget cuts will cut 

LIHEAP by $2.3 billion less than we authorized in the EPACT program. 

We should be making real investments in Federal research to develop 

creative energy solutions rather than focusing just on oil and gas and we 

should rebuild the Gulf Coast quickly as a model of an integrated, 

diverse, and sustainable society. 
29

 What are we doing about monitoring the repairs of the pipelines that 

were damaged in the Gulf? I hear there were 100 pipelines that were 

damaged. I encourage this committee to also bring the EPA here to 

discuss their budget because EPA is ignoring very important priorities 

that we should be looking at in concert. For example, through 2011 there 

were nearly $1 billion in gas taxes that could have been used to clean up 

leaking underground storage tanks and prevent future leaks, but President 

Bush’s budget refuses to expend these funds. I yield back the balance of 

my time. 

 CHAIRMAN BARTON. The gentlelady yields back and I would like to 

compliment her on how nice she looks on TV in that green suit. It looks 

really, really good on television. It does, it really does. Mr. Sullivan. 

Has Mr. Murphy been given a chance? Mr. Green of Texas, speaking of 

green. 

 MR. GREEN. Thank you, Mr. Chairman, but I have a maroon tie on. 

How does it look today? 

 CHAIRMAN BARTON. Wait until we see you on the close-up monitor. 

 MR. GREEN. Okay. Mr. Chairman, thank you and welcome, Mr. 

Secretary, and those of us who strongly supported the Energy Act and I 

guess we are concerned about where the budget priorities are. 

Obviously, I share the same concern on LIHEAP and weatherization, but 

I count 76 programs authorized by the Energy Policy Act which the 

President strongly supported but received zero dollars. Our committee 

established a number of loan guarantee programs for the next generation 

of energy technology like coal and petroleum, coke and the next 

generation nuclear plants, but again, there is nothing in there for that. 

 I am concerned that the $50 million authorized for the Ultra-deep 

Water Research program, the President has requested zero dollars and 

last year Congress appropriated $64 million, a pretty modest sum for oil 

and gas research and development; here again, we have zero dollars this 

year. And no matter how many speeches we give, petroleum and 

petroleum products are not going to go away anytime soon. Putting our 

heads in the sand, even if it is oil sands, still doesn’t help us break our 

addiction to foreign oil and so that is why I think our research we need to 

do and again, we worked with the Department on research to get more 

out of the ground, so we don’t have to knock as many holes in the 

ground, so hopefully the Budget Committee and Congress will change 

some of that. But again, welcome. 

 CHAIRMAN BARTON. The tie doesn’t look worth a toot, but your hair 

looks pretty good on TV. Mr. Inslee of Washington. 

 MR. INSLEE. Thank you. Mr. Secretary, I think you are one of the 

most important people in the world today because you have a capability 

of doing something about global warming. As we speak this morning 36 
30

cubic miles of the Antarctic has melted in the last year. The glaciers in 

Greenland have accelerated their march to the sea by a factor of two in 

the last 10 years. We have massive kills by the pine beetle in our forests 

in the Northwest and Southwest of Canada. We have the disappearance 

of the glaciers in Glacier National Park, all of which is occurring on your 

watch and I am very interested in hearing what you intend to do for all of 

our grandkids and great grandkids who would like to see glaciers in 

Glacier National Park when they have an opportunity to go there and 

frankly, to date, your Administration has been AWOL on this issue. It 

has adopted the posture of the ostrich rather than the American eagle. 

We hope that it will take its head out of the sand at some point and 

actually show leadership, internationally and nationally on this, and you 

are in a position to do so. And I would hope that at some point you 

would take on that role because we need to and I will look forward to 

any of your discussion about that today. Thank you. 

 CHAIRMAN BARTON. We thank the gentleman. The gentleman from 

Pennsylvania, Mr. Doyle. 

 MR. DOYLE. Thank you, Mr. Chairman. Mr. Secretary, welcome to 

our committee. I look forward to hearing your testimony at the 

conclusion of opening remarks. As we all know, the President, during 

his State of the Union address declared that Americans are addicted to oil 

and then made several proposals that he claims would lead our Nation to 

energy independence. While I applaud the Administration for the 

statement and welcome you all to the table, I have strong concerns that 

rhetoric is being substituted for a real commitment to achieving this goal. 

In 1960 President Kennedy challenged America to put a man on the 

moon by the end of the decade. NASA saw its total budget increase sixfold over the next eight years by which time that national goal was 

achieved. 

 However, in this case, a case that I believe is easier technologically, 

the President has chosen not to increase your budget by any measurable 

manner. Instead of bringing new resources to the table, this budget 

simply robs Peter to pay Paul by shuffling around funds to over fund the 

President’s newly named initiatives while under funding proven 

programs that can bring near-term solutions to fruition. Simply put, Mr. 

Secretary, the time for rhetoric has passed. I stand ready to work with 

you and my colleagues on both sides of the aisle to take the steps we 

need to turn the dream of energy independence into reality. I yield back, 

Mr. Chairman. 

 CHAIRMAN BARTON. The gentleman from Pennsylvania yields back. 

Is any other Member present who hasn’t been given an opportunity to 

make an opening statement? Seeing none, the Chair asks unanimous 
31

consent that all Members not present be given the requisite number of 

days to put their opening statements in writing in the record. 

 [The statements follow:] 

PREPARED STATEMENT OF THE HON. TAMMY BALDWIN, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF WISCONSIN

Thank you, Mr. Chairman for holding this hearing today. Welcome Secretary 

Bodman. 

Like many of my colleagues, I was delighted that President Bush, in his State of the 

Union address, spoke so candidly about America’s energy policy. He echoed those now 

famous words –America is “addicted to oil.” He went on to call for a “break to this 

addiction.” The President then vowed to reduce America’s oil dependence by cutting 

Middle Eastern petroleum imports by 75 percent by 2025. Such an ambitious goal 

provided a ray of hope to those of us who have advocated for wind power, solar energy, 

and ethanol use. 

Unfortunately, two things have happened since the President’s address. First, 

Secretary Bodman backed away from the President’s statement, telling the world - 

specifically the Middle East - that the President didn’t really mean what he said. In fact, 

he stated that the President’s words were meant “purely as an example,” and not a real 

policy directive. 

Then, the President released his FY2007 budget proposal. And despite all the 

promises to improve energy dependence, the budget virtually flat funds the Department 

of Energy’s programs, and cuts others. 

For instance, programs that would lower costs for Wisconsin working families see 

declines in funding. I am concerned about funding for the weatherization program, 

which assists low-income Wisconsin households increase the efficiency of their homes, 

yet is cut by $78 million. And, despite a movement towards new technologies aimed at 

reducing the U.S. demand for oil – such as hydrogen powered automobiles – the money 

to fund new research initiatives that eventually result in these technologies just doesn’t 

appear to be a priority for this Administration. 

Mr. Chairman, Secretary Bodman, if we are truly committed to overcoming our 

addiction to foreign oil and to reducing record energy prices for Wisconsin’s working 

families and all Americans, we must commit to taking the necessary steps toward 

reaching our goal – and, we must provide the financial support that will allow us to reach 

our goals. 

Thank you, Mr. Chairman. I look forward to hearing from the Secretary. 

PREPARED STATEMENT OF THE HON. SHERROD BROWN, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF OHIO

Thank you, Mr. Chairman, and thank you Mr. Secretary for your testimony today. 

Secretary Bodman, I wanted to commend you for a responsible request for 

FutureGen – the proposed public-private partnership to build a production-scale, coalfueled, zero-emissions fuel cell power plant. Ohio is uniquely situated to host the 

FutureGen plant, and I fully support the Administration’s efforts to move this project 

forward. To that end, I encourage you to seek a statutory authorization for FutureGen, 

which would solidify its appropriations footing. 

There were, however, a few areas of the Administration’s budget proposal that I 

believe fell short. 

The Industrial Technologies program has a track record of proven success in Ohio, 

and its Industries of the Future component serves industries that play a critical role in 
32

Ohio’s economy – including metal casting, steel, chemicals and others. But the 

President’s budget attacks Industrial Technologies again – with a request that would cut 

funding by 40%, relative to 2005 appropriations. 

And hydrogen and hydrogen vehicle development is another shortcoming. The Ohio 

Fuel Cell Coalition – with member organizations in academia and industry on the cutting 

edge of fuel cell, hydrogen and battery research – could benefit from a robust investment 

in the development of these technologies. 

And when the President announced the Hydrogen Fuel Initiative in 2003, he 

committed to deliver $720 million in new funding over 5 years. That equates to $144 

million a year, but on average, the President has enacted well less than that. And his 

2007 budget requests less than $65 million in new funding, according to an analysis by 

the Congressional Research Service. I believe we can and should provide much more to 

support this research effort. 

The NASA Glenn Research Center in Cleveland is also engaged in promising 

research with important energy and economic security potential. NASA Glenn’s UltraEfficient Engine Technology for Aircraft (UEET) program seeks to develop systems 

offering significant reductions in jet fuel consumption. 

When fully implemented, these efficiency improvements may eventually save 

airlines 130 million gallons of jet fuel a year. And leadership in this technology would 

enhance the competitiveness of American engine and aircraft manufacturers in a global 

marketplace. 

I offered an amendment during this committee’s consideration of the energy bill, 

authorizing Energy Department funding to help NASA advance this initiative. My 

amendment was adopted and enacted as part of the bill. But the President’s 2007 budget 

requests no funding for this important program. 

Let me just mention one other thing. I wrote you earlier this year, asking that you 

accelerate implementation of several energy bill provisions that would support fuel cell 

and advanced vehicle development. And I asked that you support the establishment of an 

Advanced Batteries Center of Excellence in Ohio. I have not received your reply yet and 

would ask that you respond as soon as possible. 

To protect Ohio’s traditional industries and develop Ohio’s emerging industries, my 

state needs a much more significant commitment from the federal government. I hope I 

can count on the Administration to join me in supporting increased appropriations for 

Industrial Technologies, the UEET and other programs of importance to Ohio. 

I would also appreciate your prompt reply to my request for accelerated 

implementation of energy bill provisions important for the development of advanced 

vehicle industries in Ohio. 

Thank you again for taking the time to join us today. 

 CHAIRMAN BARTON. The Chair would now like to recognize and 

welcome the Secretary of Energy, the Honorable Sam Bodman, to the 

Energy and Commerce Committee. Welcome, Mr. Secretary, and you 

are recognized for such time as you may consume. 

STATEMENT OF HON. SAMUEL W. BODMAN, SECRETARY, 

U.S. DEPARTMENT OF ENERGY 

SECRETARY BODMAN. Thank you, Mr. Chairman. I am very 

pleased to be here in front of the committee. As you know, our 

Department has several critical energy, economic and national security 
33

missions and these are spelled out in detail in my written testimony, 

which I will submit for the record. Let me, if I may, take a brief 

opportunity here at the outset to mention a few of the highlights of the 

$23.5 billion request from the President. First, the 2007 budget includes 

a $505 million increase in the Department of Energy’s Science Office. 

The goal here is to support an ambitious new American Competitiveness 

Initiative which the President outlined in his State of the Union address. 

 The goal of this is to ensure that America remains at the forefront of 

science in an increasingly competitive world and to do that, our 

Department is pursuing transformational new technologies at the cutting 

edge of scientific fields that we believe will be important in this next 

decade; areas like nanotechnology, material science, biotechnology and 

high speed computing. The President also announced the new Advanced 

Energy Initiative to increase spending on clean energy sources that will 

reduce our dependence on imported fossil fuels. 

 While our Department maintains several programs to help consumers 

conserve energy and lower their utility bills, we also know that the 

Nation’s energy needs will continue to expand as our economy grows. 

So we are working to accelerate research and development in the most 

promising renewable energy technologies. Specifically, the 2007 budget 

request proposes $150 million for biomass, the biomass and biofuels 

programs; and $148 million to support the Solar America program. In 

addition, the budget requests a total of $288 million to support 

implementation of the President’s Hydrogen Fuel Initiative. 

 As a part of the President’s Advanced Energy Initiative, the 

Department’s 2007 budget also features a $250 million request to begin 

investments in the Global Nuclear Energy Partnership. This partnership, 

GNEP, as we have come to call it, is a new, what we hope will be an 

international effort to help meet the world’s rapidly growing electricity 

needs with safe, emissions-free nuclear power while enhancing our 

ability to keep nuclear technology and materials out of the hands of those 

who would seek to use it for non-peaceful purposes. As a complement to 

the GNEP strategy, the Department will continue to pursue a permanent 

geologic storage site for nuclear waste at Yucca Mountain and the 2007 

budget includes a $544 million request to support this goal. 

 For the National Nuclear Security Administration or NNSA, the 

budget proposes a total of $9.3 billion in 2007, a $211 million increase 

from the 2006 appropriation. Most of this increase, $111 million, is in 

the Defense Nuclear Nonproliferation area. Programs that will accelerate 

efforts to secure nuclear materials in the former Soviet Union and 

advance an aggressive global nuclear nonproliferation agenda. 

 Finally, the Department of Energy’s budget request also focuses on 

other key priorities. To meet our environmental commitments, the 
34

budget submission requests $5.8 billion to clean up legacy nuclear waste 

sites. We recently announced the completion of cleanup at Rocky Flats, 

a former nuclear weapons plant located outside of Denver. In 2006, 

DOE will complete the environmental cleanup of the Fernald and 

Columbus sites in Ohio, the Sandia National Laboratory in New Mexico, 

and several other smaller sites. 

 Mr. Chairman, that concludes my prepared statement and I look 

forward to responding to questions from the committee members. 

 [The prepared statement of Hon. Samuel W. Bodman follows:] 

PREPARED STATEMENT OF THE HON. SAMUEL W. BODMAN, SECRETARY, U.S. DEPARTMENT 

OF ENERGY

Good morning, Mr. Chairman and Members of the Committee. I am pleased to 

appear before you today to discuss the President’s Fiscal Year (FY) 2007 budget request 

for the Department of Energy (DOE). 

Most notably, this budget request contains: 

• A Landmark Investment in Scientific Research 

The FY 2007 budget includes a $505 million increase in DOE’s Science 

programs, which is part of a commitment to double funding for certain highleverage science agencies over the next ten years. The American 

Competitiveness Initiative recognizes that scientific discovery and 

understanding help drive economic strength and security. Developing 

revolutionary, science-driven technology is at the heart of the Department of 

Energy’s mission. The increase proposed for the Department’s Science 

programs reflects the significant contribution DOE and its world-class research 

facilities make to the Nation. 

• Strategic Investments to Reduce America’s Dependence on Foreign Oil 

and Develop Clean Energy Technologies

The President’s Advanced Energy Initiative provides a 22 percent increase for 

research that can help reduce America’s dependence on foreign oil and advance 

clean energy technologies. The FY 2007 Budget proposes $149.7 million for 

Biomass and Biorefinery Systems Research and Development (R&D) program 

to support the new Biofuels Initiative to develop cost competitive ethanol from 

cellulosic materials (agricultural wastes, forest residues, and bioenergy crops) 

by 2012. In addition, the budget request continues to pursue the vision of 

reducing America’s dependence on foreign oil, reducing air pollution, and 

reducing greenhouse gas emissions through the development of a hydrogen 

economy. The FY 2007 Budget requests a total of $289.5 million (including 

$1.4 million requested by the Department of Transportation) to support 

implementation of the President’s Hydrogen Fuel Initiative. The FY 2007 

Budget also provides a 27 percent increase for advanced battery technologies 

that can improve the efficiency of conventional hybrid electric vehicles (HEV) 

and help make “plug-in” HEVs commercially viable. 

To help develop clean electricity, the FY 2007 Budget funds diverse technology 

R&D programs. The FY 2007 Budget includes $148.4 million for a new Solar 

America Initiative to develop cost competitive solar photovoltaic technology 

by 2015. The FY 2007 Budget also provides $60.0 million for U.S. 
35

participation in ITER, an international experimental reactor program that has 

the potential for putting us on a pathway to tap nuclear fusion as an enormous 

source of plentiful, environmentally safe energy. The FY 2007 advances the 

Administration’s commitment to the FutureGen project, which will establish 

the capability and feasibility of co-producing electricity and hydrogen from coal 

with near-zero atmospheric emissions of pollutants and greenhouse gasses. 

• Strategic Investments to Enable Nuclear Energy Expansion in a Cleaner, 

Safer Manner 

The Department’s FY 2007 budget features $250 million to begin investments 

in the Global Nuclear Energy Partnership (GNEP). GNEP is a comprehensive 

strategy to enable an expansion of nuclear power in the U.S. and around the 

world, to promote non-proliferation goals; and to help resolve nuclear waste 

disposal issues. 

The Energy Information Administration (EIA) projects that over the next 25 

years, demand for electricity in the United States alone will grow by over 40 

percent. Nuclear power is an abundant, safe, reliable and emissions-free way to 

help meet this growing demand for energy throughout the world. As part of the 

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

develop and demonstrate new proliferation resistant technologies to recycle 

spent nuclear fuel to reduce waste. To help bring safe, clean nuclear power to 

countries around the world, the international GNEP partners will also develop a 

fuel services program to supply developing nations with reliable access to 

nuclear fuel in exchange for their commitment to forgo developing enrichment 

and recycling technologies. 

As a complement to the GNEP strategy, the Department will continue to pursue 

a permanent geologic storage site for nuclear waste at Yucca Mountain, and 

the FY 2007 budget includes $544.5 million to support this goal. Based on 

technological advancements that would be made through GNEP, the volume 

and radiotoxicity of waste requiring permanent disposal at Yucca Mountain will 

be greatly reduced, delaying the need for an additional repository indefinitely. 

GNEP builds upon the successes of programs initiated under President Bush’s 

leadership to encourage the construction of new nuclear power plants here in 

the U.S. The FY 2007 budget includes $632.7 million for nuclear energy 

programs, a $97.0 million increase above the FY 2006 appropriation. In 

addition to the $250 million for GNEP within the Advanced Fuel Cycle 

Initiative, Generation IV (Gen IV) research and development ($31.4 million) 

will improve the efficiency, sustainability, and proliferation resistance of 

advanced nuclear systems and Nuclear Power 2010 ($54.0 million), will lead 

the way, in a cost-sharing manner, for industry to order new, advanced lightwater reactors by the end of this decade. In addition, ongoing implementation of 

the Energy Policy Act of 2005 (EPACT) will establish federal insurance to 

protect sponsors of the first new nuclear power plants against the financial 

impact of certain delays during construction or in gaining approval for 

operation that are beyond the sponsors’ control. 

• Strengthening America’s National Security Commitments 

In the area of national security, the budget proposes a total of $9.3 billion in FY 

2007, a $211.3 million increase from the FY 2006 appropriation. At $6.4 

billion, Weapons Activities remain essentially level with the FY 2006 
36

appropriations to continue the transformation of the Nation’s nuclear deterrent 

and supporting infrastructure to be more responsive to the threats of the 21st

Century. The majority of the increase, $111.4 million, is in Defense Nuclear 

Nonproliferation programs to accelerate efforts to secure nuclear material in 

the former Soviet Union and advance an aggressive global nuclear 

nonproliferation agenda. 

The Department of Energy’s budget request also focuses on other key priorities. To 

meet our environmental cleanup commitments arising from nuclear activities during the 

Manhattan Project and the Cold War, the budget requests $5.8 billion to clean up legacy 

nuclear waste sites. DOE has accelerated cleanup at the legacy nuclear waste sites and 

recently announced completion of cleanup at Rocky Flats, a former nuclear weapons 

plant located outside of Denver, Colorado. In 2006, DOE will also complete 

environmental cleanup of the Fernald and Columbus sites in Ohio, the Sandia National 

Laboratory in New Mexico, and several other sites. 

Reflected throughout the FY 2007 budget are the integration of performance 

measures and the incorporation of sound business practices in the Department’s operation 

consistent with the President’s Management Agenda. We also have established straightforward operating principles which set the tone for further improving the management of 

the Department. These principles are: 

 Accept no compromises in safety and security 

 Act with a sense of purposeful urgency 

 Work together, treating people with dignity and respect 

 Make the tough choices 

 Keep our commitments 

 Manage Risk through informed decisions 

PROMOTING SCIENCE AND TECHNOLOGICAL INNOVATION

As the millennium unfolds, we stand on the threshold of scientific revolutions in 

biotechnology and nanotechnology, in materials science, in fusion energy and highintensity light sources, and in high-speed computing, to touch on only a few important 

fields. The nations that lead these scientific revolutions will likely dominate the global 

hi-tech economy for the foreseeable future. We are on the verge of major new 

discoveries about the nature of our universe, solutions to some of the deepest mysteries of 

the cosmos and the fundamental understanding of matter—insights that will transform the 

way we think about ourselves and our world. 

The President’s American Competitiveness Initiative will encourage American 

innovation and bolster our ability to compete in the global economy through increased 

federal investment in critical areas of research, especially in the physical sciences and 

engineering. This initiative will generate scientific and technological advances for 

decades to come and will help ensure that future generations have an even brighter future. 

Twenty-first century science requires sophisticated scientific facilities. In many 

fields, private industry has neither the resources nor the near-term incentive to make 

significant investments on the scale required for basic scientific research to yield 

important discoveries. Indeed, in recent years, corporate research has declined. That is 

why the Department’s Office of Science, which is responsible for ten world-class U.S. 

national laboratories and is the primary builder and operator of scientific facilities in the 

United States, plays such a critical role. Investment in these facilities is much more than 

bricks and mortar; it is an investment in discovery and in the future of our Nation. The 

Office of Science is also educating and training our next generation of scientists and 

engineers. Roughly half of the researchers at Office of Science-run facilities are 

university faculty or graduate or postdoctoral students (who work side by side with 

scientists and researchers employed directly by the labs), and about a third of Office of 
37

Science research funds go to institutions of higher learning. In addition, the NNSA 

operates three world-class national laboratories which greatly advances the frontiers of 

science in connection with their national security mission and which have many 

interactions with universities. 

I am pleased to inform the Committee that the Department is already achieving 

meaningful scientific results with our latest high-end supercomputing systems, including 

Blue Gene L and Purple at Lawrence Livermore National Laboratory and our Red Storm 

supercomputer at Sandia National Laboratory. Within a month of coming online, 

weapons designers at Lawrence Livermore and Los Alamos, working jointly, have 

discovered key physics that is important to weapons design that could not have been 

identified using less capable computers. This discovery is critically important to 

predicting the behavior of weapons, and, as a result, our ability to be responsive to 

national needs. Because of the interrelationships among the Department’s science-based 

programs, these new, remarkably powerful computers are already having a major, 

positive effect on science in several of our laboratories. 

The President’s FY 2007 budget request of $4.1 billion for the Office of Science 

will move us forward on several scientific fronts designed to produce discoveries that 

will strengthen our national competitiveness. Final international negotiations are close to 

being completed with our international partners in ITER, the fusion experimental reactor 

designed to demonstrate the scientific and technological feasibility of fusion energy. 

Capable of producing a sustained, burning fusion fuel, ITER will be the penultimate 

experiment before commercialization of fusion as a plentiful, environmentally friendly 

source of energy. A request of $60.0 million in FY 2007 provides funding for the second 

year of the ITER project. The return on investment will expand across international 

borders and has the promise of tremendous economic opportunity and development. 

The FY 2007 budget also includes $105.9 million to enable us to continue 

construction of the Linac Coherent Light Source (LCLS), the world’s first x-ray free 

electron laser. The LCLS will allow us to watch matter in action, one molecule at a time, 

and witness chemical reactions at the microscopic level in real time. The structural 

knowledge obtained with x-rays holds the key to understanding the properties of matter 

such as mechanical strength, magnetism, transport of electrical currents and light, energy 

storage, and catalysis. Likewise, in biology much of what we know about structure and 

function on a molecular level comes from x-ray studies. Such knowledge forms the basis 

for the development of new materials and molecules and the enhancement of their 

properties, which in turn will advance technology, fuel our economy, and improve our 

quality of life. In addition, the FY 2007 Budget seeks $19.2 million in FY 2007 for the 

first full year of operations of each of four facilities for nanoscience research and $19.4 

million to continue with construction of a fifth. 

The FY 2007 budget provides $171.4 million for the Spallation Neutron Source 

(SNS), which enters its first full year of operation as the world’s foremost facility for 

neutron scattering. 

The FY 2007 budget request also includes $135.3 million for the Genomes: GTL

research, which will help us understand how nature’s own microbial communities can be 

harnessed to remove carbon from the atmosphere, generate hydrogen for fuel, and turn 

cellulose into ethanol. 

Within the $4.1 billion FY 2007 budget request for Science, $143.3 million is 

provided to support near full operation of the Relativistic Heavy Ion Collider (RHIC), 

which gives us a lens into the early universe, and $80.0 million is allocated to allow near 

full operation of the Continuous Electron Beam Accelerator Facility (CEBAF), which 

will give new insight on the quark-structure of matter. Early studies of nuclear and 

particle physics provided the foundation for technologies that have changed our daily 

lives, giving us televisions, transistors, medical imaging devices, and computers, and has 

enormous potential to lead to unexpected discoveries. The Large Hadron Collider 
38

(LHC) at CERN, scheduled to be completed in 2007, will open a new chapter in 

illuminating the structure of matter, space and time. At this new energy frontier, 

qualitatively new phenomena of nature should emerge. There are many possibilities - 

supersymmetry, extra space dimensions, or unexpected new symmetries of nature - but 

finding out which, if any, are true can only be settled by experiment. In FY 2007, $56.8 

million is requested to support U.S. participation in the LHC research program. The new 

results anticipated at the LHC can be significantly advanced by discoveries at a potential 

next generation International Linear Collider (ILC) which would break new ground in our 

understanding of nature. In FY 2007, the ILC funds for research and development are 

doubled with a funding request of $60.0 million. 

The budget also includes $318.7 million to solidify America’s leadership in the 

economically vital field of high-speed computing, a tool increasingly integral not only 

to advanced scientific research, but also to industry. The budget will provide the pathway 

toward a point when computers will be so powerful that researchers will be able to attack 

a wide range of previously impossible scientific problems through modeling and 

simulation, enabling the U.S. to maintain leadership in this strategic area. Additionally, 

from development of the suite of scientific software and applications for the petascale 

computers, U.S. industry will be able to accelerate innovation, saving billions in 

development costs and giving our economy untold competitive advantages. 

We are, in short, on the verge of a revolution across multiple sciences as profound as 

any humanity has witnessed - one that will transform our vision of nature and, ultimately, 

our industry and economy. 

ADVANCING AMERICA’S ECONOMIC AND ENERGY SECURITY

The Energy Policy Act of 2005, signed by President Bush on August 8, 2005, serves 

as a roadmap to help lead the United States to a secure energy future. The FY 2007 

budget request of $2.6 billion to support energy programs fulfills President Bush’s pledge 

to promote a strong, secure economy and expand our Nation’s energy supply by 

developing a diverse, dependable energy portfolio for the future. 

The President has proposed the Advanced Energy Initiative to help reduce 

America’s dependence on foreign sources of oil and accelerate development of clean 

energy technologies through targeted increases in federal investment. 

The FY 2007 budget request of $1.2 billion for energy efficiency and renewable 

energy activities reallocates resources to emphasize technologies with the potential for 

reducing our growing reliance on oil imports and for producing clean electricity with 

reduced emissions. It includes two new Presidential initiatives; Biofuels and Solar 

America. The FY 2007 budget proposes $149.7 million for the Biofuels Initiative to 

develop by 2012 affordable, domestically produced bio-based transportation fuels, such 

as ethanol, from cellulosic feedstocks (such as agricultural wastes, forest residues, and 

bioenergy crops), and encourage the development of biorefineries. Biomass has the 

promise to deliver a plentiful domestic energy resource with economic benefits to the 

agricultural sector, and to directly displace oil use. The Solar America Initiative

accelerates the development of solar photovoltaics, a technology that converts energy 

from the sun into electricity. Further development can help this emissions-free 

technology achieve efficiencies to make it cost-competitive with other electricity 

generation sources by 2015. The FY 2007 Budget provides $148.4 million for the Solar 

Energy Program that comprises the initiative. 

In addition to funding increases for biomass and solar energy, the Energy Efficiency 

and Renewable Energy budget request includes $195.8 million to support continued 

research and development in hydrogen and fuel cell technology which holds the 

promise of an ultra-clean and secure energy option for America’s energy future. The 

increase of $40.2 million above the FY 2006 appropriation accelerates activities geared to 

further improve the development of hydrogen production and storage technologies, and 
39

evaluate the use of hydrogen as an emissions-free transportation fuel source. The 

President’s Hydrogen Fuel Initiative is funded at $289.5 million and includes $195.8 

million for DOE’s Energy Efficiency and Renewable Energy program, $23.6 million for 

DOE’s Fossil Energy program, $18.7 million for DOE’s Nuclear Energy program, $50.0 

million for DOE’s Science program, and $1.4 million for the Department of 

Transportation. 

While the budget proposes increases for Biomass, Solar and Hydrogen research, the 

Geothermal Program will be closed out in FY 2007 using prior year funds. The 2005 

Energy Policy Act amended the Geothermal Steam Act of 1970 in ways that should spur 

development of geothermal resources without the need for subsidized Federal research to 

further reduce costs. 

Nuclear power, which generates 20 percent of the electricity in the United States, 

contributes to a cleaner, more diverse energy portfolio. In FY 2007 a total of $632.7 

million is requested for nuclear energy activities. Within the total, $250 million will 

support the Global Nuclear Energy Partnership (GNEP). GNEP is a comprehensive 

strategy to enable an expansion of nuclear power in the U.S. and around the world, to 

promote nuclear nonproliferation goals; and to help resolve nuclear waste disposal issues. 

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

technology and systems, and enhance the work of the United States and our international 

partners to strengthen nonproliferation efforts. GNEP will accelerate efforts to: 

• Enable the expansion of emissions-free nuclear power domestically and abroad; 

• Reduce the risk of proliferation; and 

• Utilize new technologies to recover more energy from nuclear fuel and 

dramatically reduce the volume of nuclear waste. 

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

develop new recycling technologies that do not result in separated plutonium, a 

traditional proliferation risk. Recycled fuel would then be processed through advanced 

burner reactors to extract more energy, reduce waste and actually consume plutonium, 

dramatically reducing proliferation risks. As part of GNEP, the U.S. and other nations 

with advanced nuclear technologies would ensure developing nations a reliable supply of 

nuclear fuel in exchange for their commitment to forgo enrichment and reprocessing 

facilities of their own, also alleviating a traditional proliferation concern. 

GNEP will also help resolve America’s nuclear waste disposal challenges. By 

recycling spent nuclear fuel, the heat load and volume of waste requiring permanent 

geologic disposal would be significantly reduced, delaying the need for an additional 

repository indefinitely. 

The Administration continues its commitment to open and license Yucca Mountain 

as the nation’s permanent geologic repository for spent nuclear fuel, a key complement to 

the GNEP strategy. Managing and disposing of commercial spent nuclear fuel in a safe 

and environmentally sound manner is the mission of DOE’s Office of Civilian 

Radioactive Waste Management (RW). 

To support the near-term domestic expansion of nuclear energy, the FY 2007 budget 

seeks $54.0 million for the Nuclear Power 2010 program to support continued industry 

cost-shared efforts to reduce the barriers to the deployment of new nuclear power plants. 

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

advanced light water reactor designs, which offer advancements in safety and economics 

over the Generation III designs. If successful, this seven-year, $1.1 billion project (50% 

to be cost-shared by industry) could result in a new nuclear power plant order by 2009 

and a new nuclear power plant constructed by the private sector and in operation by 2014. 

Funding of $1.8 million is provided in FY 2007 to implement a new program 

authorized in the recently enacted Energy Policy Act of 2005. The program will allow 

DOE to offer risk insurance to protect sponsors of the first new nuclear power plants 

against the financial impact of certain delays during construction or in gaining approval 
40

for operation that are beyond the sponsors’ control. This program would cover 100 

percent of the covered cost of delay, up to $500 million for the first two new reactors and 

50 percent of the covered cost of delay, up to $250 million each, for up to four additional 

reactors. This risk insurance offers project sponsors additional certainty and incentive to 

provide for the construction of a new nuclear power plant by 2014. 

The FY 2007 budget request includes $31.4 million to continue to develop Nextgeneration nuclear energy systems known as Generation IV (GenIV). These 

technologies will offer the promise of a safe, economical, and proliferation resistant 

source of clean, reliable, sustainable nuclear power with the potential to generate 

hydrogen for use as a fuel. Resources in FY 2007 for GenIV will be primarily focused on 

long-term research and development of the Very-High Temperature Reactor. 

 The University Reactor Infrastructure and Educational Assistance program was 

designed to address declining enrollment levels among U.S. nuclear engineering 

programs. Since the late 1990s, enrollment levels in nuclear education programs have 

tripled. In fact, enrollment levels for 2005 have reached upwards of 1,500 students, the 

program’s target level for the year 2015. In addition, the number of universities offering 

nuclear-related programs also has increased. These trends reflect renewed interest in 

nuclear power. Students will continue to be drawn into this course of study, and 

universities, along with nuclear industry societies and utilities, will continue to invest in 

university research reactors, students, and faculty members. Consequently, Federal 

assistance is no longer necessary, and the 2007 Budget proposes termination of this 

program. The termination is also supported by the fact that the program was unable to 

demonstrate results from its activities when reviewed using the Program Assessment 

Rating Tool (PART), supporting the decision to spend taxpayer dollars on other 

priorities. Funding for providing fresh reactor fuel to universities is included in the 

Research Reactor Infrastructure program, housed within Radiological Facilities 

Management. 

Recognizing the abundance of coal as a domestic energy resource, the Department 

remains committed to research and development to promote its clean and efficient use. 

U.S. coal accounts for twenty five percent of the world’s coal reserves. For the last three 

years, the Department has been working to launch a public-private partnership, 

FutureGen, to develop a coal-based facility that will produce electricity and hydrogen 

with essentially zero atmospheric emissions. This budget includes $54 million in FY 

2007 and proposes an advance appropriation of $203 million for the program in FY 2008. 

Funding for FutureGen will be derived from rescinding $203 million in balances no 

longer needed to complete active projects in the Clean Coal Technology program. Better 

utilization of these fund balances to support FutureGen will generate real benefits for 

America’s energy security and environmental quality. 

The budget request for FY 2007 includes $4.6 million to support Alaska Natural 

Gas Pipeline activities authorized by Congress in late 2004. Within the total amount of 

$4.6 million, $2.3 million will be used to support an Office of the Federal Coordinator 

and the remaining $2.3 million will support the Loan Guarantee portion of the program. 

Once constructed, this pipeline will be capable of delivering enough gas to meet about 

ten percent of the U.S. daily natural gas needs. 

The budget request proposes to terminate the oil and gas research and development 

programs, which have sufficient market incentives for private industry support, to other 

energy priorities. 

The Energy Policy Act of 2005 established a new mandatory oil and gas research 

and development (R&D) program, called the Ultra-Deep and Unconventional Natural 

Gas and Other Petroleum Research program, that is to be funded from Federal revenues 

from oil and gas leases beginning in FY 2007. These R&D activities are more 

appropriate for the private-sector oil and gas industry to perform. Therefore, this budget 

proposes to repeal the program through a future legislative proposal, although we will 
41

faithfully execute current law until such time that Congress acts affirmatively on that 

legislative proposal. 

The FY 2007 budget includes $124.9 million for a refocused portfolio of energy 

reliability and assurance activities in the Office of Electricity Delivery and Energy 

Reliability. This will support research and development in areas such as high 

temperature superconductivity, and simulation work needed to enhance the reliability and 

effectiveness of the Nation’s power supply. This office also operates the Department’s 

energy emergency response capability and led DOE’s support effort during and after the 

Gulf Coast hurricanes. 

The Department of Energy’s Power Marketing Administrations (PMAs), 

consisting of the Southeastern (SEPA), Southwestern (SWPA), Western Area (WAPA) 

and Bonneville Power Administrations (BPA), play an important role in meeting energy 

demands and fueling our economy. The electricity generated at Federal hydroelectric 

facilities and sold by the PMAs represents four percent of the Nation’s electricity supply. 

In FY 2007, $229 million is requested for SEPA, SWPA, and WAPA to continue their 

activities. 

The budget includes a proposal that sets the interest rate for certain new obligations 

incurred by SEPA, SWPA and WAPA paid to the Treasury for power related investments 

at the rate Government corporations borrow in the market. This rate is similar to the 

interest rate current law sets for BPA borrowing from the U.S. Treasury. However, this 

change applies only to investments whose interest rates are not set by law. These three 

PMA obligations due to Treasury currently outstanding will continue to retain existing 

interest rates. This is expected to result in a rate increase of less than 1 percent paid by 

some PMA customers. This change is expected to increase total receipts to the U.S. 

Treasury, beginning in FY 2007, by approximately $2-3 million annually. 

 BPA, unlike the other three PMAs, is “self-financed” by the ratepayers of the Pacific 

Northwest and receives no annual appropriation from Congress. BPA funds the expense 

portion of its budget and repays amounts it has borrowed from the Treasury as well as 

certain Federal investments with revenues from electric power and transmission rates. 

The President’s FY 2007 Budget provides, consistent with sound business practices 

required under the Federal Columbia River Transmission Act of 1974, that BPA will use 

any net secondary revenues it earns above $500 million annually to make early payments 

on its federal bond debt to the U.S. Treasury. Due to high energy prices, these net 

secondary revenues could be significantly higher than historical levels, especially in the 

next three years. The budget reflects $924 million from FY 2007-2016 from these 

higher-than-historical net secondary revenues. Absent implementation of the Budget 

proposal, BPA could run out of borrowing authority from the U.S. Treasury, and 

therefore limiting BPA’s ability to invest in energy infrastructure, as early as 2011. 

In addition, the FY 2007 budget provides that Energy Northwest will refinance a 

portion of its debt in calendar years 2006 and 2007. During FY 2006 and FY 2007, these 

deficit reduction proposals should allow $1.3 billion in additional U.S. Treasury 

borrowing authority to become available to BPA. 

In the month since the FY 2007 budget was released, I have heard from Members of 

Congress and from various stakeholders concerning the Administration’s budget proposal 

relating to BPA. I also have met with Members of Congress from the Pacific Northwest, 

from both parties, concerning that proposal; I have found those discussions to be helpful. 

I continue to believe that the Administration’s proposal makes good sense for the 

Bonneville Power Administration and its customers. I have decided that a formal BPA 

rate case to address the proposal will not be initiated until July, and have committed to a 

further dialogue with members of the Pacific Northwest Congressional delegation and 

others in Congress concerning the proposal.
42

ADVANCING AMERICA’S NATIONAL SECURITY

The National Nuclear Security Administration (NNSA) continues significant efforts 

to meet Administration and Secretarial priorities by conducting fundamental and applied 

scientific research and development, and applying that science to promote national 

security. The FY 2007 budget proposes $9.3 billion to meet defense-related objectives. 

The budget request maintains commitments to the nuclear deterrence requirements of the 

Administration’s Nuclear Posture Review (NPR) and continues to fund an aggressive 

strategy to mitigate the threat of weapons of mass destruction. Key investments include: 

 Transforming the nuclear weapons stockpile and infrastructure while meeting 

Department of Defense requirements; 

 Conducting innovative programs in the former Soviet Union and other countries 

to address nonproliferation priorities; 

 Supporting naval nuclear propulsion requirements for the nuclear Navy; 

 Providing nuclear emergency response assets in support of homeland security. 

Weapons Activities: The United States continues a fundamental shift in national 

security strategy to address the realities of the 21st century. The Administration’s NPR 

addresses a national security environment in which threats may evolve more quickly and 

be less predictable and more variable than in the past. The NPR recognizes the need to 

transition from a threat-based nuclear deterrent with large numbers of deployed and 

reserve weapons, to a deterrent consisting of a smaller nuclear weapons stockpile with 

greater reliance on the capability and responsiveness of the Department of Defense 

(DOD) and NNSA infrastructure to respond to threats. The NNSA infrastructure must be 

able to meet new requirements in a timely and agile manner while also becoming more 

sustainable and affordable. As part of the goal of a responsive infrastructure, efforts are 

underway to both modernize and consolidate the facilities and infrastructure needed for 

ongoing stockpile stewardship from the current Cold War configuration. The Department 

is reviewing recommendations from the recent Secretary of Energy Advisory Board 

(SEAB) study of the nuclear weapons complex and is formulating a strategic plan for 

achieving a responsive infrastructure that includes consideration of those 

recommendations. We intend to communicate the elements of that plan to Congress this 

spring. 

The FY 2007 budget request of $6.4 billion for Weapons Activities strongly 

supports implementation of the responsive infrastructure and the ongoing program of 

work that forms the backbone of the nuclear weapons deterrent as well as a robust 

safeguards and security program. This includes all programs to meet the immediate 

needs of the stockpile, stockpile surveillance, annual assessment, and life extension 

programs. NNSA uses world-class science resources along with industry and academia 

in the areas of computation, simulation, experiments, materials science and analysis of 

highly complex weapons physics information. NNSA will continue to move ahead with 

the Reliable Replacement Warhead (RRW) program to establish the path forward for 

stockpile transformation. Success of the RRW program will, in turn, enable 

transformation to a more responsive infrastructure. The campaigns are focused on longterm vitality in science and engineering and on R&D supporting future DOD 

requirements, and include support of the first ignition experiment at the National Ignition 

Facility in 2010. These campaigns also represent a core investment in science and 

technology within DOE whose reach is felt beyond the national security arena. In 

addition, NNSA is implementing a responsive infrastructure of people, science and 

technology base, and facilities and equipment needed to support a right-sized nuclear 

weapons infrastructure. 

Defense Nuclear Nonproliferation: Preventing weapons of mass destruction from 

falling into the hands of terrorists is one of this Administration’s top national security 

priorities. The FY 2007 request of $1.7 billion strongly supports the international 

programs that are denying terrorists the nuclear materials, technology and expertise 
43

needed to develop or otherwise acquire nuclear weapons. The FY 2007 budget request 

for Defense Nuclear Nonproliferation increases by 6.9 percent the amount appropriated in 

FY 2006. NNSA continues unprecedented efforts to protect the U.S. and our allies from 

threat, including $261 million for cutting-edge nonproliferation research and 

development for improved technologies to detect and monitor nuclear proliferation and 

nuclear explosions worldwide. There are also major efforts focused on potential threats 

abroad. The budget request includes $207 million to help complete the shut down of 

three Russian nuclear reactors still producing 1.2 metric tons of plutonium per year and 

replace them with conventional fossil fuel power plants. Also, this budget requests $290 

million for construction of the U.S. Mixed Oxide Fuel Fabrication Plant at DOE’s 

Savannah River Site in South Carolina. This facility will dispose of 34 metric tons of 

U.S. surplus plutonium. 

A key breakthrough in nonproliferation efforts was recently achieved with the 

agreement at the Bratislava meeting in 2005 to allow the United States to help Russia 

improve security at a number of military warhead sites. Coupled with the continuing 

material protection and recovery programs, Megaports and Second Line of Defense, and 

the successful completion of negotiations on a liability protection protocol allowing the 

U.S. and Russia to move ahead on disposition of surplus plutonium, NNSA is making 

significant strides to reduce the threat from proliferation of warheads and weapons-usable 

nuclear materials. 

Naval Reactors: NNSA continues to support the United States Navy’s nuclear 

propulsion systems. The FY 2007 request is an increase of 1.7 percent over the FY 2006 

appropriation level. This increase allows the Naval Reactors program to develop new 

technologies, methods, and materials to support reactor plant design for the next 

generation reactors for submarines and aircraft carriers, and continue stewardship and 

remediation for their facilities and sites to maintain outstanding environmental 

performance. 

Safeguards and Security: The Defense Nuclear Security program is responding to 

a revision in threat guidance affecting physical security at all NNSA sites. Meeting the 

new Design Basis Threat will require further upgrades to equipment, personnel and 

facilities. NNSA is committed to completing these upgrades. The FY 2007 budget 

request for Cyber Security program activities, protecting information and IT 

infrastructure, is essentially level with the FY 2006 funding level. The FY 2007 Request 

includes funding for the DOE Diskless Conversion initiative. Meeting the post-9/11 

security requirements has required a significant long-term investment, reflecting DOE’s 

continuing commitment to meet these requirements. 

ENSURING A CLEAN ENVIRONMENT

Just as important as advances in national security, energy independence, and 

scientific discovery are the Department’s programs that protect human health and the 

environment by cleaning up Cold War legacy waste and improving management of spent 

nuclear fuel through the establishment of the national permanent nuclear waste repository 

at Yucca Mountain, Nevada. Like many of the Department’s major programs, the 

environmental cleanup program and the nuclear waste repository activities have 

undergone management and programmatic reforms to further improve operations and 

implement effective and efficient practices. 

To deliver on the Department’s environmental cleanup commitments following 50 

years of nuclear research and production from the Cold War, in 2002 the Environmental 

Management program underwent a major transformation that would enable the 

Department to perform its cleanup activities faster than previously estimated. Working in 

partnership with the public, states and regulators, the Environmental Management (EM) 

program has made significant progress in the last four years to shift away from risk 

management toward risk reduction. By the end of FY 2006, the cleanup of a total of 
44

eighty-six DOE nuclear legacy sites will be complete. This includes the recently 

announced completion of Rocky Flats and the anticipated FY 2006 completion of Fernald 

and Columbus sites in Ohio. While encouraged by the results demonstrated thus far, the 

program continues to stay focused on the mission and is working aggressively to enhance 

and refine project management approaches while addressing the regulatory and legal 

challenges associated with this complex environmental cleanup program. 

In FY 2007, the budget includes $5.8 billion to continue environmental cleanup with 

a focus on site completion, with eight sites or areas to be completed in the 2007 to 2009 

timeframe. This budget request is reduced from the FY 2006 budget request of 

$6.5 billion primarily reflecting cleanup completion at some sites in FY 2006 and the 

subsequent transfer of post-closure work activities. As cleanup work is completed over 

the next five years at sites without a continuing mission, EM will transfer long-term 

surveillance and monitoring activities and management of pension and benefit programs 

to the Office of Legacy Management. For those with continuing missions, these 

activities will be transferred to the cognizant program office. 

The $5.8 billion budget request remains focused on EM’s mission of reducing risk 

by cleaning up sites–consequently also reducing environmental liability–and will support 

the following key activities: 

• Stabilizing radioactive tank waste in preparation for disposition (about 30 

percent of the FY 2007 request for EM); 

• Dispositioning transuranic and low-level wastes (about 15 percent of the 

request for EM); 

• Storing and safeguarding nuclear materials (about 15 percent of the request for 

EM); 

• Decontaminating and decommissioning excess facilities (about 20 percent of 

the request for EM); and 

• Remediating major areas of our large sites (Hanford, Savannah River Site, 

Idaho National Laboratory, and Oak Ridge Reservation) (about 10 percent of 

the request for EM) 

One of the significant cleanup challenges is the management and treatment of highlevel radioactive liquid waste at the Hanford Waste Treatment and Immobilization 

Plant (WTP). In FY 2007, $690 million is proposed for the WTP project. The plant is a 

critical component of the program’s plans to clean up 53 million gallons of radioactive 

waste currently stored in 177 aging underground storage tanks. 

By June 2006, the U.S. Army Corps of Engineers is expected to complete an 

independent cost validation, deploying more than 25 professionals experienced in cost 

estimating, design, construction, and commissioning. The Department plans to utilize the 

results from several reviews to validate cost and schedule for this project. 

The Department, while responsible for the cleanup and disposal of high-level 

radioactive waste generated from the Cold War, is also responsible for managing and 

disposing of commercial spent nuclear fuel in a safe and environmentally sound manner. 

The latter responsibility is the mission of DOE’s Office of Civilian Radioactive Waste 

Management (RW). 

The Nation’s commercial and defense high-level radioactive waste and spent nuclear 

fuel will be safely isolated in a geologic repository to minimize risk to human health and 

the environment. The FY 2007 budget requests $544.5 million to establish a geologic 

repository at Yucca Mountain, Nevada. This Administration is strongly committed to 

establishing Yucca Mountain as the Nation’s first permanent repository for high-level 

waste and spent nuclear fuel. Licensing and developing a repository for the disposal of 

these materials will help set the stage for an expansion of nuclear power through the 

President’s GNEP initiative, which could help to diversify our energy supply and support 

our economic future. Permanent geological disposal at Yucca Mountain offers the safest, 

most environmentally sound solution for dealing with this challenge. 
45

To further advance the Administration’s commitment to the establishment of Yucca 

Mountain, the Department intends to submit to Congress legislation to address land 

withdrawal, funding and other issues that are important to the program’s success. 

As the Environmental Management program completes cleanup of sites throughout 

the DOE complex, management of post closure activities at these sites will transfer to the 

Office of Legacy Management (LM). In FY 2007, $201.0 million is proposed to 

provide long-term surveillance and maintenance, long-term response actions, oversight 

and payment of pensions and benefits for former contractor retirees, and records 

management activities at closure sites transferred to LM. The majority of funding 

($122.4 million) is associated with the transfer of post closure responsibilities and 

funding of three major sites from EM to LM in FY 2007. These sites are: Rocky Flats, 

$90.8 million; Fernald, $26.5 million; and a group of sites known as the Nevada off sites, 

$5.1 million. The cumulative effect of these three transfers results in a 150 percent 

increase in the Legacy Management budget matched by a corresponding decrease in the 

Environmental Management budget. 

PROMOTING CONSERVATION 

I would also like to briefly mention to you the work that the Department has been 

doing to promote energy conservation. As part of our "Easy Ways to Save Energy" 

campaign, senior leaders in the Energy Department, including myself, traveled the 

country to help American families and businesses better deal with limited supplies and 

high energy prices. We went to places like Home Depot and Lowe’s to showcase simple, 

readily-available energy savers that Americans can put into use right now. The campaign 

also includes Public Service Announcements--in English and Spanish--which were sent 

to 4,500 stations. In addition, we have distributed more than 20,000 EnergySavers 

booklets, with tips for saving energy and money in the home. We’ve also dispatched 

teams of energy efficiency experts to help identify energy-saving options at large federal 

facilities and private industrial plants. 

IMPROVING MANAGEMENT FOR RESULTS IN OUR LIFETIME

Underpinning and supporting all of the programs above, the Department of Energy 

has continued to make strides in meeting President Bush’s challenge to become more 

efficient, more effective, more results-oriented, and more accountable for performance. 

Over the past four years, the President’s Management Agenda (PMA) has been the 

framework for organizing the Department’s management reform efforts. 

To better manage human capital, the Department implemented a performance 

management system to link employee achievement at all levels with mission 

accomplishment. In FY 2006, DOE will publish, communicate and implement a revised 

five-year Human Capital Management Strategic Plan as well as a formal leadership 

succession plan. The Department completed six competitive sourcing studies and has 

three others underway. The completed studies encompass over 1,300 Federal and 1,000 

contractor positions with $532.6 million in expected savings. During FY 2007, DOE 

anticipates studying approximately 100 to 300 positions. 

In FY 2006 and FY 2007, DOE will expand the availability of financial data in 

support of decision-making by continuing to implement the Integrated Management 

Navigation (I-MANAGE) system, specifically in the areas of budget and procurement 

through the Integrated Data Warehouse (IDW). The Department continues to apply 

Earned Value Management principles to each of its major information technology 

investments. In addition, DOE is partnering with other government agencies to develop a 

standardized and integrated human resources information system, and to develop a 

consolidated grants management system. 

The Department continued its effort to institutionalize multi-year planning and 

strengthen the link between program performance and resource allocation decisions. The 
46

Program Assessment Rating Tool (PART) continues to be used to promote improved 

program performance. For programs that have not formally been reviewed by OMB, the 

PART process has been used for internal self-assessment. 

A number of important milestones were reached in Real Property Management 

including the approval of the Asset Management Plan (AMP) by the Deputy Secretary. 

The AMP outlines an overall framework for the strategic management of the 

Department’s $77 billion portfolio of Real Property Assets. Additionally, the 20,000 real 

property records in the Facilities Information Management System, the Department’s 

repository of real property information, were populated and updated as required by the 

Federal Real Property Council for support of the Federal Real Property Profile. This 

information will be used to support real property management decisions departmentwide. 

As these examples indicate, the Department of Energy is using the PMA to address 

its many management challenges. The Department is working to become more 

streamlined, more efficient, and more results-oriented in FY 2007. 

Conclusion 

The Administration recognizes that energy is central to our economic and national 

security. Indeed, energy helps drive the global economy and has a significant impact on 

our quality of life and the health of our people and our environment. The FY 2007 

budget request balances the need to address short-term challenges while planning for 

long-term actions. The request evidences the fact that our basic science research must 

remain strong if we are to remain competitive with our global partners. The request 

contains bold new initiatives in nuclear, biomass, and solar energy. It continues the 

President’s strong commitment to clean coal, hydrogen, and fusion. The request honors 

our commitment to deal with civilian nuclear waste, as well as legacy waste from the 

Cold War, and to further our already successful nonproliferation programs in order to 

help ensure a safer world for generations to come. 

 CHAIRMAN BARTON. Thank you, Mr. Secretary. The Chair would 

recognize himself for the first five minutes of questions. Mr. Secretary, 

in the Energy Policy Act, we created a new Federal partnership with 

private industry to go out and retrofit and rebuild our existing coal plants, 

co-powered electricity generation plants called the Clean Air Coal 

Program. The budget that the President and you submitted doesn’t fund 

that at all. These are the oldest plants in the country. Their 

environmental emissions have been grandfathered on at least two 

occasions. Why would we not want to fund a program that would retrofit 

or rebuild these plants and bring them up to new environmental 

standards, keeping jobs and power generation in the existing locations? 

 SECRETARY BODMAN. Mr. Chairman, this is a response that you are 

going to hear, I think, several times during the course of the morning. 

We have had a lot of tough choices to make. I talked about, in my 

opening statement, the increases in funding for the various science 

efforts, for the Advanced Energy Initiative, for the Competitiveness 

Initiative, which are the centerpiece of what we are trying to get done. 

This Department proposes a flat budget year to year, approximately, and 
47

therefore to the extent we have increased funding in one area, it has to 

come from somewhere, so it had decreased it in other areas. 

 Now, the fact that the energy bill authorized programs, there were 

certain programs that we felt did not have the same priority as those that 

are in the budget and it was strictly that. 

 CHAIRMAN BARTON. Well, why should we look at this GNEP 

program that is going to cost billions and billions of dollars and may or 

may not be successful. Why should we even look at authorizing that if 

the Department is not going to do something that we absolutely know 

will be cost effective, will keep jobs in America, and will make the air 

cleaner in America right now? I just don’t understand it. 

 SECRETARY BODMAN. Well, Mr. Barton, we have a different view, 

that is all. I think that the GNEP program and presumably, I am going to 

get asked about that later on, but the GNEP program is intended over a 

three-year period to arrive at a position of a go or no go decision that 

would enable us to decide whether this approach makes sense. This is a 

research investment of about a billion and a half dollars that we think is 

crucial to creating a new source of emissions-free electricity in our 

country. It is the only way that I see we are going to get there, from an 

electricity standpoint, and so I would consider that a higher priority for 

those reasons. 

 CHAIRMAN BARTON. Well, I don’t. I am just going to tell you, we 

just have a fundamental difference of opinion. 

 SECRETARY BODMAN. I am not shocked at the fact that you and I 

don’t agree on that and it probably won’t be the only one we don’t agree 

on. 

 CHAIRMAN BARTON. That, to me, is such a win/win, to retrofit or 

rebuild these existing coal fire power plants. We get a double win. I 

really, you know, I will prepare a letter and get as many members of this 

committee to sign it to send to the appropriators asking that they fund the 

new coal program, and will find some money in your budget that this 

committee doesn’t think is as high priority, and we will find a way to 

fund it and we will see what the appropriators do. We just have to 

honorably agree to disagree. 

 SECRETARY BODMAN. Oh, I understand. 

 CHAIRMAN BARTON. Well, let me go back to the nuclear issue. 

Looking at this new GNEP program, what is your plan to fund Yucca 

Mountain? Are you and the Administration willing to propose and 

support legislation to address the funding challenge at Yucca Mountain 

and find us a permanent fix? 

 SECRETARY BODMAN. Yes, sir. There are several things going on 

with respect to Yucca Mountain. As you are aware, I have been in this 

job a year. We have had an opportunity to evaluate it. One of the first 
48

decisions that we have made collectively is to change the approach to the 

development of Yucca Mountain to a, if you will, a clean operation. 

Heretofore the decision has been made to transport nuclear fuel to Yucca 

Mountain and then to move it at Yucca Mountain to new storage devices. 

We believe that it is simpler and more economically effective to put it in 

a single canister or a device on the site at the nuclear plant, transport it to 

Yucca Mountain and then not remove it from the site as one goes 

through the various stages arriving at an ultimate disposal. So that was 

the first decision. 

 Secondly, we have not managed this program very well. I think that 

is an understatement. Everyone, I think, would agree with that and we 

are attempting to do a better job of managing the program. Thirdly, we 

have had help. The Department of the Interior’s folks in the geological 

service were found to have written some e-mails during the course of the 

year that were reflective of a bad attitude and a poor culture, if you will, 

with respect to the quality assurance efforts of this initiative. That has 

really damaged the core, if you will, of the Yucca Mountain program. 

We have new leadership in the program that I think has taken on the task 

of moving this program forward. We are very committed to it. 

 Whether or not GNEP goes forward, we have to fix these issues, so 

we have, I think I mentioned, $544 million in there and that, I believe, 

will be adequate to deal with what we need. In addition, there will be 

legislation to get to the point that you raised and the legislation will be 

forthcoming soon, I would guess within a month, that will deal with land 

withholding; it will deal with financial reform. It may deal with interim 

storage; that still, I think, remains up in the air, but there are a number of 

issues that will be taken care of, we hope, through the legislative 

proposal that we will make with respect to Yucca Mountain. 

 CHAIRMAN BARTON. Thank you, Mr. Secretary. The gentlelady 

from California, Ms. Capps, for six minutes. 

 MS. CAPPS. Thank you, Mr. Chairman, and good morning, Secretary 

Bodman. 

 SECRETARY BODMAN. Good morning. 

 MS. CAPPS. Last month the President announced his 2007 budget. 

Unfortunately, in my opinion, it again demonstrates the misplaced 

priorities of this Administration for me, whether it is health care or 

education or energy, the President’s policies continue to show how out of 

touch his Administration is. The President did rightly point out, in his 

State of the Union address and I quote, that “America is addicted to oil.” 

He also said the best way to break this addiction is through technology, 

yet in the budget the President is not going to fund breakthrough 

technologies, he is simply going back to the funding levels of the Clinton 

Administration. 
49

 For example, the President has requested $1.176 billion for the 

Energy Efficiency and Renewable Energy Program. That is the same 

amount that was appropriated in fiscal year 2001. While the programs 

highlighted in the State of the Union received some increases, they are 

not significant enough to break our oil habit. Prices for natural gas, 

crude and gasoline increased dramatically in the wake of infrastructure 

damage caused by Katrina and Rita. I am still concerned, a lot of us are, 

that production capacity has not been restored, as well as the readiness of 

the Gulf Coast region for the 2006 hurricane season and I say that as part 

of a bipartisan delegation led by our Speaker, down to the Gulf Coast 

area this past weekend. 

 According to the EIA, the number of rigs in the Gulf is 20 percent 

lower than before the hurricane hit, and MMS says that a hundred 

pipelines were damaged by the hurricanes. As a result, 255,000 barrels 

per day of crude oil and 400 million cubic feet of natural gas will not be 

restored prior to the start of the 2006 hurricane season. I would like you 

to talk for a bit about your Department’s efforts on monitoring repairs 

and what are the plans for assistance in preparation for the coming 

hurricane season? Thank you. 

 SECRETARY BODMAN. First of all, I think the numbers you gave are 

correct, best I know. 

 MS. CAPPS. Thank you. 

 SECRETARY BODMAN. Those hurricanes did very severe damage to 

the infrastructure. Interestingly enough, the closer you got to shore, the 

more the damage, because the wave action, I guess, they got higher the 

closer one was to shore. And those are the areas where we have not seen 

recovery, Congresswoman, to the same degree further offshore where we 

had newer and more effective devices. I am not trying to draw a line 

between here and my Department and the Interior Department, that is 

their focus, the MMS offshore. 

 MS. CAPPS. Right. 

 SECRETARY BODMAN. That is what they do. And having said that, I 

am somewhat familiar with what has gone on and I think the industry has 

responded quite well. These are private sector owned rigs, they are 

private sector owned production platforms, they are private sector owned 

refineries, private sector owned transmission lines, and private sector 

owned pipelines to get the refined product up to the marketplace. You 

are looking at me as though you don’t agree. 

 MS. CAPPS. Well, I agree they are privately owned, but they get a lot 

of incentives from the Federal government and we are much less-- 

 SECRETARY BODMAN. Well, they have enormous incentive. 

Looking at the price of oil and gas in today’s world, I can assure you, 

ma’am, that they have enormous incentive to get the rigs fixed, to get the 
50

pipelines fixed, and to get the transmission lines fixed. All of this energy 

is extremely expensive and the profit motive that these private companies 

have is unbounded at this point in time, so I can assure you, they are 

working very hard on it. Now, I can further assure you that our folks, I 

am very proud of the group that we had that worked hard during both 

episodes, both Katrina and Rita. We had a whole group of us in the 

office over the Labor Day weekend, because that was when Katrina hit. 

 MS. CAPPS. Right. 

 SECRETARY BODMAN. And they were involved and, I think, we got 

very good marks on terms of their accomplishments. 

 MS. CAPPS. Right. You are talking about Labor Day weekend, but, 

and I only have a minute left. I don’t mean to interrupt you, but I am 

interested in demonstrable results of monitoring repairs and assistance in 

preparing for the coming hurricane season. 

 SECRETARY BODMAN. Offshore rigs, ma’am? 

 MS. CAPPS. Whatever you feel responsible for. The end result. 

 SECRETARY BODMAN. Well, the issues in terms of production, 

largely has do with production, which is an offshore question and I 

thought I explained it, so I wasn’t clear. 

 MS. CAPPS. Right. 

 SECRETARY BODMAN. A number of those rigs, of those production 

platforms, will not be restored. The ones that are out now, by and large, 

it is my guess, I don’t know this because I don’t work with them every 

day; this is something the Interior Department does, but by and large, 

those rigs, the production platforms that are out are not going to be put 

back because it is not economically desirable to reinvest to put those 

facilities back in place. 

 MS. CAPPS. Your Department does concern itself with energy. 

 SECRETARY BODMAN. Yes, it does. 

 MS. CAPPS. And there is a deficiency in energy now coming there 

that is apparently available energy. Are there any plans for what is going 

to happen now? 

 SECRETARY BODMAN. On what is going to happen now on the Gulf 

Coast? 

 MS. CAPPS. Yes. 

 SECRETARY BODMAN. Well, the transmission lines have been 

restored, the pipelines have been restored, the refineries have been 

restored so all of that -- we monitor it, we are in frequent touch with the 

people who do that and all of that is back in good shape. I think the last, 

we have had three refineries have remained offline and I believe within 

the next couple of weeks they are due to become online, say by the end 

of March. And so all of that is up and functioning. 
51

 MS. CAPPS. I am over time, but I just want to get from you the high 

cost of energy related to what is available there. 

 SECRETARY BODMAN. Well, the high cost of energy, 

Congresswoman, is a reflection of the high cost of oil throughout the 

world. It is a fact that for the first time in my lifetime that the suppliers 

of oil in the world are having difficulty keeping up with the increasing 

demand. We have seen enormous demands in China and in India, in 

particular. As our economy has recovered, we have seen increases in 

demand here, as well. But the real big percentage growers are in China 

and India, as we see them coming on board and so that is what is driving 

the price of oil and that is what is reflected in the prices that your 

constituents are paying, in my opinion. 

 MS. CAPPS. I realize I have gone over my time, but it seems like the 

total in natural gas rigs drilling in the Gulf of Mexico for the week are 

about 20 percent lower than they were in early August. 

 SECRETARY BODMAN. I don’t doubt that. A lot of rigs were 

destroyed during the course of the hurricanes. 

 MS. CAPPS. And I guess that begs the question--but I am over my 

time. We do have another hurricane season coming, so a foreboding. 

 SECRETARY BODMAN. I am very concerned about it. I can’t tell 

you, I can’t give you a magic wand. I wish I had one. There is no-- 

 MR. HALL. [Presiding] Okay, we have now passed the time. 

 MS. CAPPS. Thank you. 

 MR. HALL. The lady is so brave and such a wonderful member. I 

hate to tap the gavel at her, but we have a long way to go and I thank 

you. I recognize Mr. Bass from New Hampshire for six minutes. 

 MR. BASS. Thank you, Mr. Chairman. Mr. Secretary, I want to 

thank you for coming to New Hampshire a couple weeks ago. I think 

you saw, when you were there, some of the impressive energy work that 

is being done in our State and I expect in the near future there would be a 

lot more to show you and hopefully you will be able to make a return 

visit soon. 

 I have two questions for you, sir. First, Section 932 of the Energy 

Policy Act authorized the biomass and bio-refinery system R & D 

program at $213 million for 2007. The section specifies funding of 

integrated bio-refinery demonstrations and incorporate “a wide variety of 

lignocellulosic feedstocks including any portion of a plant or co-product 

from conversion including trees and forest residues.” Now, I am 

paraphrasing here. There is an additional mandate that the Secretary 

“ensure the geographical distribution of bio-refinery demonstrations.” 

 Other sections of the Energy Act and existing law provide industrial 

biomass and bio-refinery R & D commercialization and demonstration 

support. All of these sections should apply to cellulosic biomass on an 
52

even level with the traditional grains or other sources. You have heard 

me ask you this question before, obviously, a couple weeks ago. My 

question is would you describe to us briefly the Department’s 

commitment to diversity in feedstock and geography of any new biorefinery? 

 SECRETARY BODMAN. Congressman, first we are definitely 

committed to a variety of feedstock; I think you are aware of that. You 

and I chatted about it. That is part of the President’s proposal in terms of 

the biomass effort, research effort, which is to develop technology that 

would enable us to use a wide variety of feedstock and cellulosic 

materials of the sort that you just described and that to the extent that we 

are able to move forward with funding support for the bio-refineries, 

clearly we will follow the law and we will pay attention to geographic 

dispersion. I am unaware of this particular Section 932 and I would like 

answer that for the record, if I may. 

 MR. BASS. That is fine. If I could just follow up. There is a 

particular reason why we need to have a bio-refinery, some ethanol 

capability in the Northeast. As you well know, about 12 percent of all of 

the content of gasoline is, currently in some counties in the Northeast, 

MTBE, and MTBE is going to be out of the market fairly soon and we 

are not going to have any alternative to oxygenate in the area and it is 

hard to transport ethanol from elsewhere in the country, so we need that 

not only because of diversity of source, but also because we are going to 

have a critical shortage of oxygenate stock in a relatively short period of 

time. 

 Mr. Secretary, on another issue; in the energy bill, Section 206 

authorizes the only Department of Energy managed consumer focused 

incentive program for renewable energy. Increased use of smaller scale 

biomass solar and geothermal energy could significantly displace heating 

oil, natural gas, and electricity, and New Hampshire is 86 percent 

dependent on heating oil and propane. We are second in the country 

behind Maine. The appliance and systems that convert these fuels for 

use have had dramatic improvements in the past few years, but they are 

expensive and there are no central heating type systems available in the 

United States at all, not a single manufacturer. 

 There is a rebate program that your Department could authorize, 

fund, and run that would provide rebates for solar, wind, and biomass, 

but I notice in the Department’s budget request that there is no funding at 

all for Section 206. I am wondering if you have had a chance to look at 

this section, if you have any comments on it? 

 SECRETARY BODMAN. I have looked at it, you and I talked about it 

when I visited and I have a team working on it and I do not have a 
53

specific answer at this point in time, but I would be happy to respond to 

you promptly, to say within the month. 

 MR. BASS. Fair enough, Mr. Secretary, and I just want to say that 

energy, as you know, is not about philosophy or political party, it is 

about region and I think we have an opportunity with the energy bill to 

diversify not only our energy consumption, but our energy production 

around the country, and consumption of biomass in the Northeast is 

critically important and production of biomass, as well, perhaps more 

than in any other part of America, so I really appreciate your interest and 

attention to this matter and I will look forward to hearing from you and I 

yield back. 

 MR. HALL. Thank you, sir. The gentleman yields back. Ms. Solis, 

the gentlelady from California recognized for five minutes. 

 MS. SOLIS. Thank you, Mr. Chairman. Yes, my question for you, 

Mr. Secretary, you have already heard our concerns about Hurricane 

Katrina and the devastation that it had and the power outages that we are 

still seeing there at the Gulf Coast. We just returned from a CODEL 

with Mr. Hastert and our Leader, and we realized that many of our 

communities down there still have no level of electricity, but more 

importantly, many of the rigs, the oil rigs are down. And the last time I 

think you came here, we spoke with you regarding a discussion we had, 

whether oil rigs facilities currently could withstand hurricane level three, 

four, or five, and I would like to know what steps DOE is undertaking 

now to ensure that the facilities that are going to be rebuilt, whether they 

are privately owned, will meet some set standards that the Federal 

government will set by your agency? 

 And in addition, I would like to know, as you can imagine, the lack 

of power is hampering the construction there and what are we doing to 

assist these communities so that they can get moving quickly to have 

their energy restored? We went through different parishes there that 

have no electricity, no sewage, debris is still remaining there. And we 

are finding that that whole effort is very slow in its process, and I am 

wondering what DOE is doing to help coordinate with FEMA, with all 

the other agencies? 

 SECRETARY BODMAN. First of all, to answer your first question, to 

my knowledge, we do not have responsibility for the specifications of oil 

rigs that are used offshore or onshore, for that matter. That is not 

something that we do, to my knowledge. I will be happy to respond to 

you on that and do some more work on that, but that is my preliminary 

response. 

 MS. SOLIS. That is somewhat incredible given the fact that we have 

lost so much production and it is impacting us nationally. 
54

 SECRETARY BODMAN. Well, we have lost a lot of production but 

most of the production that we have lost at this point in time, we now 

have, I think it is 85 percent of the gas that was shut in is now back on 

line and functioning. I think it is 75 percent of the oil. Frankly, it is that 

or vice versa. I have forgotten which. One is 75 and the other is 85. By 

and large, the shut in material, as of today, is a function not of rigs, but of 

production platforms, and the production platforms were destroyed. The 

production platforms are the devices that are there that obviously 

produce the material and send it ashore and that is what was destroyed. 

 These are old fields, the fields that tend to be closer to shore tend to 

be older. They tend to be depleted and it was not economically viable to 

reinvest and to rebuild those and so the companies haven’t done it. They 

are drilling wells elsewhere. They are drilling further offshore and they 

are developing more reserves. They are doing that and it is, I believe, 

something that we will see as the year unfolds, provided that we do not 

have another hurricane that destroys more rigs. 

 MS. SOLIS. We will know in less than three months. 

 SECRETARY BODMAN. Well, but I can’t help that. I mean, that is not 

my job. I have enough to do and that is not one of them, but in terms of 

the electricity, the utilities-- 

 MS. SOLIS. What about the electricity, yes. 

 SECRETARY BODMAN. --and we work very closely with those 

utilities. The utilities did not install the electricity, particularly in New 

Orleans, to some of the parishes, to some of the districts, I guess. I am 

not sure of the terminology. 

 MS. SOLIS. Parishes. 

 SECRETARY BODMAN. Because it was not clear that these homes 

were going to be rebuilt and so it would have been a matter of rerunning 

the wires or the lines in there and then having them destroyed and so 

until a master plan is developed, the electric utilities have not responded 

in order to wire up some of these-- 

 MS. SOLIS. But there are some parishes where there is electrical 

lighting on the streets and yet, no household has any form of electricity. 

We actually walked into a parish and saw that, so I don’t know what the 

DOE is doing to help incentivize our public utilities groups to ask them 

to move forward. 

 SECRETARY BODMAN. It is not a matter of incentivizing them 

because we don’t incentivize them. We do work with them and they 

have been very responsive, to my knowledge. I can’t answer that 

specifically, but we will do some more homework and we will give you 

an answer. 

 MS. SOLIS. I would like to hear back from you. 

 SECRETARY BODMAN. Sure, I would be happy to. 
55

 MS. SOLIS. Thank you, Mr. Secretary. 

 MR. HALL. All right, the gentlelady yields back her time. The Chair 

recognizes Mr. Shimkus, and recognizes him as the Chairman and to ask 

whatever questions he wants. And I saved you for one more question 

about the ultra-deep, Mr. Secretary. 

 SECRETARY BODMAN. I am sure that will be forthcoming, Mr. Hall. 

 MR. SHIMKUS. [Presiding] Thank you, Mr. Chairman. I was just 

told on the floor that they think there is only one vote, so I have cast my 

vote and so we are going to continue to move on until people come back. 

Well, it depends on if you get back here in time. I know how slow you 

are. But I am going to get my wind and recognize myself for six 

minutes. Thank you for being here and I am happy to be here. I have 

rushed over here to keep the process moving. 

 SECRETARY BODMAN. Thank you, sir. 

 MR. SHIMKUS. And keep the hearing in order. Some initial 

questions have already been raised about Yucca Mountain. I would like 

to follow up on that by asking, three years since we have passed the 

Nuclear Waste Policy Act, by the time our Nation’s first repository 

opens, and I have been a big proponent of that, been pushing for it 

through all the budgetary stresses and strains; by the time it opens, we 

will have more nuclear waste than Yucca Mountain can hold under the 

provisions of the Act. Under the Nuclear Waste Policy Act, the 

Secretary is obligated to report to Congress beginning in 2007 on the 

need for a second repository. Has the Department begun this evaluation? 

 SECRETARY BODMAN. Yes, we have. We have begun, as required 

by the Nuclear Waste Policy Act. We recognize that we are required to 

deliver a report to Congress between January of 2007 and January of 

2010, so we do have a window in which we are supposed to respond. 

We are currently in the planning phase, if you will, for the development 

of that report and we will be examining a number of States as potential 

sites for repository sites. 

 MR. SHIMKUS. Let me ask you a follow-up question. We had a 

chance to meet two days ago and I really appreciate the access you gave 

many of the Members. How does this whole debate affect the expansion 

of nuclear power in the country? 

 SECRETARY BODMAN. Oh, Yucca Mountain, in my judgment, is 

necessary. 

 MR. SHIMKUS. Almost critical. 

 SECRETARY BODMAN. Is necessary; it is potentially, I guess you 

could say the most critical matter. I mean, I think there are other issues 

that are at work, as well, but it is right at the top of the list when you talk 

to the utility industry. It’s the fact that they have to have a way of 

managing their spent fuel. So I don’t know how you--I suppose for one 
56

utility, it might be the very top priority and for another it might be 

somewhat less, so but for everybody there is no doubt that it is a very 

important matter. 

 MR. SHIMKUS. Well, we will fall back to that debate on on-site 

storage, who takes over responsibility, the taxpayers’ dollars for that or 

an interim storage site? 

 SECRETARY BODMAN. In terms of interim storage, our general 

counsel tells me, and he is quite definite about it, that we are not 

permitted, we, the Department of Energy, are not permitted to take fuel 

into an interim storage situation until we get a license for Yucca 

Mountain. Once we have a license for Yucca Mountain, then the Act 

permits us to take that and deal with interim storage. In terms of interim 

storage, we have an open mind on that. I mean, that is not something 

that we ruled out, but legally we can’t do it at this point in time and we 

are focusing our efforts on trying to get Yucca Mountain done. 

 MR. SHIMKUS. Well, if I may jump in, because you are talking about 

the license issue. 

 SECRETARY BODMAN. Yes. 

 MR. SHIMKUS. When are you going to file a license application with 

the Nuclear Regulatory Commission? 

 SECRETARY BODMAN. We are going to develop a schedule for you, 

we will have that the early part of this summer, that will deal with this 

matter. As I mentioned before, I don’t think you were here, sir. 

 MR. SHIMKUS. Oh, point that out to everyone. 

 SECRETARY BODMAN. Sorry, I was just trying to be responsive. 

The issue that we have been dealing with--now I have lost my train of 

thought. You got me completely-- 

 MR. SHIMKUS. I have been successful. 

 SECRETARY BODMAN. No, no. 

 MR. SHIMKUS. The license application. 

 SECRETARY BODMAN. Yes, the issue that we have been working on 

has to do with the efforts of the USGS employees and the e-mails they 

sent and it really undermined the whole attitude and approach, if you 

will, the culture of that operation and we have been rebuilding that 

carefully and thoughtfully. We have a new leader; he is doing a very 

good job and I am comfortable with it and he is the one that has initiated 

the leadership to shift the emphasis to a so-called clean canister approach 

to managing Yucca Mountain, and they are now completing the design of 

that. The design will be competed and we will have a program that we 

think will stand your scrutiny available this summer. 

 MR. SHIMKUS. A great thing about being on this committee, for me, 

is Illinois is really an energy important State, whether it is renewable 

fuels, whether it is oil wells, coal reserves. We are a big nuclear power 
57

State, so I have been very fortunate to be well-positioned. I want to shift 

a little bit on the coal issues, as you could have guessed, and ask about in 

the five-year budget proposal we talked again about the FutureGen and 

really, the great support in this cycle. The question is for the outlying 

four years do you think the remaining $203 million is enough to keep 

FutureGen on schedule? 

 SECRETARY BODMAN. As best I can tell that it is, sir. No, you are 

talking about what the five year plan? 

 MR. SHIMKUS. Correct. You have got $54 million for the first year 

and then $203 million would be for the final four years of the five-year 

plan and the question is, is that $203 million, do you think will meet the 

needs to keep the project moving forward at the pace that we would like 

to see it? 

 SECRETARY BODMAN. No. 

 MR. SHIMKUS. Then what should it be? 

 SECRETARY BODMAN. Well, we really need the total of $750 

million; that is what is committed. There is an organization that has been 

pulled together called the Industrial Alliance or the FutureGen Alliance, 

it is a group of seven companies; four U.S. companies, three non-U.S. 

companies; two Australian, one Chinese; and they have committed to put 

up some $250 million. The Department is supposed to put up $700 

million and I don’t recall, Mr. Shimkus, what amount has been 

appropriated in the past, but that is what we are going to need over a 

period of time. 

 MR. SHIMKUS. And I will end with this statement and then yield to 

one of my colleagues. It is our observation that there is not enough in the 

CCPI for a third round of solicitations. Can you have your staff just 

address that to me and see if that is a proper analysis? 

 SECRETARY BODMAN. No, I can tell you that now. I mean, the 

CCPI is only, I think it has a $5 million amount in there and the reason 

for that is that the CCPI has been a long-term demonstration program and 

we have sizeable balances that have not been spent from years gone by in 

commitments that have been made to various, as we have gone out to 

competitions and therefore the folks at OMB and I think, frankly, they 

were right in this instance, that they said look, until we start getting some 

of this money spent and committed, why put more money in and so that 

has really been, it has been that goal, so we need to look harder at 

making sure the projects that we did, I think the new one will be the third 

round. 

 MR. SHIMKUS. Right. 

 SECRETARY BODMAN. So we have two rounds and we need to make 

sure that those are moving forward in a way that makes sense and that is 

what we are undertaking at this time. 
58

 MR. SHIMKUS. Great. Thank you. And I didn’t mean to cut you off, 

but I want to get to my colleague, Mr. Upton, for six minutes. 

 MR. UPTON. Thank you, Mr. Chairman. 

 SECRETARY BODMAN. Mr. Upton, nice to see you, sir. 

 MR. UPTON. Mr. Secretary, welcome back. I have enjoyed your 

leadership for the last year and I look forward to a good number of years 

remaining. I just want to say, and I am sorry my friend from New 

Hampshire left to go vote, as I just did, but before you go back to New 

Hampshire we want you to come west to Michigan, so we look forward 

to that. 

 SECRETARY BODMAN. I will bear that in mind, Mr. Upton. Thank 

you, sir. 

 MR. UPTON. I have two nuclear facilities there in my district and I 

know that we are looking forward to walking you through those facilities 

as they continue to operate. 

 SECRETARY BODMAN. Thank you, sir. 

 MR. UPTON. I didn’t hear the beginning of your answer to Mr. 

Shimkus as I was running back to vote, as it related to Yucca Mountain. 

Mr. Towns and myself helped carry the water, I guess, in the early 1990s 

for that legislation. I am very supportive of your efforts to open Yucca 

Mountain and I don’t know if you actually gave an optimistic date or a 

date at all in terms of when you think that facility might be opened to 

receiving fuel. 

 SECRETARY BODMAN. I didn’t give any date, Mr. Upton, and the 

reason is, what I did was to explain. We have had a very long and tough 

year in dealing with Yucca Mountain; you are fully aware of that, with 

the USGC situation. Our contractor, I think it is fair to say, did a lessthan-wonderful job. 

 MR. UPTON. I heard you say that in response to Chairman Barton. 

 SECRETARY BODMAN. And frankly, we in the Energy Department 

didn’t do as good a job as we should have done and overall, we are trying 

to do a better job of managing our responsibilities in the Energy 

Department. I think we are getting better. I can’t tell you we are great, 

but you know, we are getting better. And this one is an embarrassment. 

This has been around for a long time and every time I use the word 

Yucca Mountain, people cringe and so there is a real issue there. We 

have a new leader, he is doing a very good job of looking hard at what 

the history has been and what the future should be and first of all, he is 

the one that articulated this new approach to developing the clean 

canister approach to managing this, which means you would only use 

one device rather than multiple devices and it would be simpler, and 

therefore he is redesigning it and he is going to have a schedule. He will 
59

have it this summer and we are going to lay that out for you; as soon as I 

have it, you will have it. 

 MR. UPTON. Great, and I look forward to that. I saw a report in the 

last 24 hours and I tried to put my hands on it in the last hour and I 

couldn’t find it again. It related to the oil supply and I guess an 

upcoming meeting by OPEC in the next number of days. 

 SECRETARY BODMAN. Well, they just had it. They just finished 

yesterday, I believe. 

 MR. UPTON. Did they? There was a concern as I read it. Maybe it 

was because I was looking at today’s papers instead of yesterday’s, but 

there was a concern, I guess, expressed by the Saudis or some nations 

within OPEC that there might, because the oil supply stocks are higher 

than what they were anticipated to be, there was some worry that the 

price per barrel might drop dramatically to perhaps as low as $40 a barrel 

from, in essence, the $60. Now, what are your projections as to where 

things are at, particularly, at least in my district, and I expressed this to 

you earlier in the week, we have seen gas prices spike by about $.50 a 

gallon just in the last three weeks. We were about $2.55 in Kalamazoo, 

Michigan earlier this week. 

 SECRETARY BODMAN. First of all, Mr. Upton, one of the privileges I 

have in this job is not making forecasts. I don’t make forecasts. 

 MR. UPTON. Well, your people do. 

 SECRETARY BODMAN. Well, we do have a part of the Energy 

Department, the Energy Information Agency, EIA, has been organized to 

be a nonpartisan evenhanded approach-- 

 MR. UPTON. I used to ask Mr. Greenspan when he appeared before 

our committee if it was the right time to refinance. 

 SECRETARY BODMAN. And what did he tell you? 

 MR. UPTON. He laughed. Same response you are giving now. 

 SECRETARY BODMAN. Yes. Anyway, their forecast for oil prices is 

that it is going to be a little higher this year than it was last year. 

 MR. UPTON. Again exceed $3? 

 SECRETARY BODMAN. But that over time there will be a gradual 

diminution of oil prices, that is to say over a 10-year period. I think that 

is what their forecast is and the theory of that is, I believe, is that it is 

taking the world oil industry a long time to recover and to invest at the 

rate that is needed in order to supply the oil that is required throughout 

the world. This is the first time in my lifetime that the suppliers are 

having enormous difficulty keeping up with demand. They just simply 

can’t do it today. I mean, there are various discussions about which 

country can do what to whom, but when you look at the total amount, the 

totality of oil available, it is very close to the supply demand. 

 MR. UPTON. I understand. 
60

 SECRETARY BODMAN. And that is why every time there is a 

problem in Nigeria or potential problem elsewhere, Russia or wherever it 

may be, that is why you see these spikes in prices. 

 MR. UPTON. I want to get my last question in before my time has 

expired. Recently, Mr. Doyle and I have introduced bipartisan 

legislation that is cosponsored by dozens of our colleagues, to expand 

ethanol, to require by 2012 a 10 percent ethanol mandate as part of the, at 

the pump. And I have talked to the big three automotive sector, current 

automobiles, whether you drive a 1996 or a 2006 vehicle can use that 

type of blend and we are hoping to continue to get more cosponsors to 

this legislation. Our estimate is that it will save 320 million barrels of oil 

that we won’t otherwise have to import by moving to ethanol. I know in 

our State, which is another reason I would like you to come visit, we 

have four ethanol plants just about ready to operate, up and running; 

another one down in Indiana in South Bend. Another plant that has been 

permitted, as well. 

 SECRETARY BODMAN. Pardon me, these use corn as feedstock, 

right? 

 MR. UPTON. Corn. But as I understand, sugar is another source. 

We have sugar beet, but I don’t know if that is permissible with ethanol. 

 SECRETARY BODMAN. Sugar beets are not a very good, as I 

understand, they are not a very good raw material. 

 MR. UPTON. That is on the other side of the State, that is why I want 

you to come to the west side. But I just want to know, I appreciated the 

President’s comments in the State of the Union. I don’t know if you 

have taken a view on our bill, H.R. 4774, but I would appreciate your 

comments on ethanol. 

 SECRETARY BODMAN. Well, ethanol is a very important matter. 

The President has proposed a 50 percent increase in the budget for 

cellulosic ethanol. The one specter that is out there, I believe, is that as 

we use more and more corn to produce ethanol, and we are now up to, I 

think, 14 percent or so of the corn that is grown is now being grown for 

ethanol. It is some significant factor and so as that number increases, we 

are going to see increase in price. We are already seeing increase in the 

price of corn and so it will follow through in terms of food prices and so 

forth, we are going to start to reach a limit; I don’t know where it is. It 

may be at this 10 percent number, whatever it is, but 10 percent is still 20 

billion gallons, 22 billion. Pardon me, it is 14 billion gallons. We use 

about 140 billion gallons a year, so it would be about 14 billion gallons. 

That is somewhat higher than I have heard, the 10 to 12 billion gallons a 

year is what I have understood to be the limit before we start getting into 

real issues with respect to land available. 
61

 MR. UPTON. Well, I have Kellogg’s, too, so I appreciate your 

comment. 

 SECRETARY BODMAN. Yes, sir. 

 MR. UPTON. If I could have set this up, I would have taken claim, 

but I have my corn growers who are just over here in the corner and they 

agreed with your percentage, Mr. Secretary, as far as the amount of corn 

that is going into ethanol production, so you are right on. 

 SECRETARY BODMAN. Thank you, sir. 

 MR. SHIMKUS. And now the Chair would like to recognize my 

colleague and friend from Massachusetts, Mr. Markey. 

 MR. MARKEY. Thank you. 

 MR. SHIMKUS. Five minutes. 

 MR. MARKEY. Thank you very much. Mr. Secretary, are you 

troubled by the fact that your Department is toting the fast breeder 

reactors as a panacea for proliferation at the very moment that India 

negotiators are cleaning the President’s clock expressly to reserve the 

plutonium breeder capacity of their present and future fast breeder 

reactors for weapons-grade plutonium production? 

 SECRETARY BODMAN. No. 

 MR. MARKEY. Why aren’t you concerned? This is an exception to 

the Nuclear Nonproliferation Treaty and the Nuclear Nonproliferation 

Act which is now going to be advertised by the Indians as a way in 

which they have been able to reserve their capacity to produce nuclear 

bomb-grade material in their fast breeder reactors and obviously that will 

send a signal to other countries in the world that they, too, should be 

attempting to gain access to nuclear breeder reactors so that they can 

have nuclear bomb-grade material produced? Why isn’t that something 

that is at the top of your concerns, Mr. Secretary? 

 SECRETARY BODMAN. Mr. Markey, you and I have discussed this in 

the past and we don’t agree. I don’t agree with you; it will not come as a 

surprise to you. First of all, I view the agreement that has been struck 

with India as a very positive event. The United States has agreed to seek 

from Congress an exception for India, an exception related to the Atomic 

Energy Act, I think it was of 1954 or so. It has agreed to work this issue 

with the Nuclear Suppliers Group, which is a group of, I think, some 40 

nations that are signatories to the Nonproliferation Treaty. The Indians 

have agreed to take two-thirds of their reactors and, for the first time, 

have nuclear reactors in India that will be submitted to scrutiny of the 

International Atomic Energy Agency. 

 MR. MARKEY. Are their fast breeder reactors going to be part of the 

safeguards program? 
62

 SECRETARY BODMAN. No. They are not. I think they have two 

small fast breeder reactors that are used for experimentation, to my 

knowledge. 

 MR. MARKEY. Mr. Secretary, they can make bomb-grade nuclear 

material in those breeder reactors which President Bush is not requiring 

them to put under full scope safeguards. 

 SECRETARY BODMAN. That is correct. 

 MR. MARKEY. Will the Indians qualify for help under your global 

nuclear program despite the fact that they are not putting their breeder 

reactors under full scope? 

 SECRETARY BODMAN. I would think that they would not. 

 MR. MARKEY. You think they would not? 

 SECRETARY BODMAN. I would think that they would not. 

 MR. MARKEY. Okay, so the sharing of GNEP technology with India 

is not going to happen? 

 SECRETARY BODMAN. I can’t tell you that. I answered your 

question, Congressman. You said do you think and I said I would think 

not. 

 MR. MARKEY. You would think not. 

 SECRETARY BODMAN. I am one person. The Administration has got 

a lot of different people that think different things, but I would think that 

they would be where they are in a position that they are not involved 

with, they have not subjected their breeder reactors or so-called fast 

reactors to international scrutiny that they would not be involved in 

GNEP. 

 MR. MARKEY. Mr. Secretary, under Section 57(b) of the Atomic 

Energy Act you have the authority to approve nuclear technology 

transfers. These are so-called Part 810 transfers. Since the July 18 

agreements, have you approved any such transfers to India? 

 UNIDENTIFIED SPEAKER. Excuse me for a minute. 

 SECRETARY BODMAN. I have no idea who this lady is. 

 UNIDENTIFIED SPEAKER. Hello. Excuse me, sir. My name is-- 

 CHAIRMAN BARTON. Ma’am, you haven’t been approved to be a 

witness. Our only witness is the Secretary. 

 UNIDENTIFIED SPEAKER. Well, my problem is that I was told by the 

office that I was supposed to be here today to testify at 11:21, and my 

children, who have been raped and tortured in the street-- 

 CHAIRMAN BARTON. That hearing is in the Senate. You are in the 

wrong room. This is the House, not the Senate. You are in the wrong 

room, ma’am. 

 UNIDENTIFIED SPEAKER. Do you know where I would go, sir? 

 CHAIRMAN BARTON. If you will go with that gentleman, we will 

find out. 
63

 UNIDENTIFIED SPEAKER. Thank you, sir. 

 CHAIRMAN BARTON. Thank you, ma’am. 

 SECRETARY BODMAN. I have forgotten where we were, Mr. 

Markey.

 CHAIRMAN BARTON. Thank you. You may proceed, Mr. Secretary. 

 MR. MARKEY. Could I ask, Mr. Chairman, if the time would be 

placed back onto the clock for me so that I can continue my questioning? 

 CHAIRMAN BARTON. Sure. Sure. There you go. 

 MR. MARKEY. I thank you. I thank you, Mr. Chairman, very much. 

Have you approved any such transfers to India? 

 SECRETARY BODMAN. No. 

 MR. MARKEY. No. Are there any requests for nuclear technologies 

to India currently pending before the Department of Energy? 

 SECRETARY BODMAN. Not that I am aware of. 

 MR. MARKEY. Could you check for the record? 

 SECRETARY BODMAN. Of course. 

 MR. MARKEY. Let me again, I make the point again that our 

credibility with Iran and North Korea and Pakistan is going to be 

destroyed if we make an exception for India. It will not end. 

 SECRETARY BODMAN. If I may say, Mr. Markey, to compare India 

with North Korea and Iran, I believe, is a gross distortion of the facts. 

Indian has had nuclear materials for a number of decades. They have 

been very responsive, they have never been involved in proliferation 

efforts or issues that I am aware of and I think that you are aware of and 

where it is clear that both Iran and North Korea have got serious 

questions with respect to that issue and I just think it is a very bad 

comparison, if I may say. 

 MR. MARKEY. It is not a bad comparison and I will tell you why. 

India never signed a nuclear nonproliferation-- 

 SECRETARY BODMAN. I understand that. 

 MR. MARKEY. Iran and North Korea and other countries have. We 

now have Iran before the Security Council at the UN asking them to 

comply with the agreement so that we have their uranium enrichment 

program under full scope safeguards. It is preposterous for the President 

to think that he can go to India and give an exception for a plutonium 

breeder reactor program that actually manufactures nuclear bomb 

material and not to think that Iran is going to point to that exception to 

Russia, to China, to others at the Security Council and say how can you 

have two standards? How can you have one for a country that doesn’t 

sign the treaty and then one for our country that does sign the treaty? 

Why should we sign the treaty? Why should we abide by it? And 

Pakistan will be making that case. North Korea will be making that case. 
64

 I think that Chavez in Venezuela will be arguing that they could cut a 

deal with China for nuclear programs with that same type of agreement. 

I just think that the precedent is so dangerous for India, which we can cut 

a deal in the clean coal technology sector which is 70 percent of their 

electrical generating capacity. We could have cut a multi-billion dollar 

agreement rather than in this 2 percent sector in nuclear electrical 

generating capacity which has incredible precedential value when it 

comes to Iran and North Korea and Pakistan, Venezuela, other countries 

that actually talk in terms of nuclear weapons programs, so the exception 

makes the rule unenforceable because these other countries are going to 

look at it and they are going to say we are not going to abide by it, either. 

 The President can’t determine where the exceptions are. It has to be 

the nonproliferation rule which we are maintaining. Selective 

proliferation on a bilateral basis will destroy a multilateral uniform 

enforcement of the nonproliferation treaty, especially at a point where we 

have the world with us at the UN with Iran. Russia will have less of a 

reason to be tough on Iran if we have less interest in being tough with 

India, which has never signed a nuclear nonproliferation treaty and is 

touting the fact that they are going to use their breeder reactor program 

now to construct more nuclear weapons after the U.S. has just signed this 

agreement last week. 

 That is why the onus is on Congress now because if we don’t 

maintain it, we are going to see the spread of nuclear weapons across the 

planet without the enforcement of the globe and this debate is something 

which goes right to this GNEP program which you are bringing before 

us, Mr. Secretary. If we don’t ensure that safeguards are put in place 

where we are spreading this technology, then we should expect the rest 

of the world to use it as an exception that will basically eviscerate the 

entire nuclear nonproliferation regime in the world and that is the only 

place where Bush and Kerry agreed that nuclear nonproliferation is the 

number one issue. You can’t say it is the number one issue and then 

carve out exceptions that Iranian and North Korean diplomats can look 

to. I thank the Chairman. 

 SECRETARY BODMAN. Is there any question there or is it just a 

speech, sir? 

 MR. MARKEY. It is obviously something I want you to take back to 

the President because I don’t think he understands the implications for 

the planet. 

 SECRETARY BODMAN. I believe he does, sir, and you and I, as I 

said, have already talked about this. 

 CHAIRMAN BARTON. The gentleman from Nebraska for six minutes, 

Mr. Terry. 
65

 MR. TERRY. Thank you, Mr. Chairman. I just have a few questions 

here. E85, automobile industry is touting the E85, the number of flex 

fuel vehicles that are out on the road today, even in the State of Nebraska 

there is a total of three E85 pumps. I have contacted people I know who 

own chains of BP Amocos and Shells who have told me that they have 

contacted their franchisor and have said not only no, we will not give you 

permission, it is a violation of your contract; and hell no, we won’t waive 

that provision of the contract to allow you to put E85 under the canopy, 

and this has all been within the last 60 days. So is the Department of 

Energy doing anything to work with our major retailers to allow E85 

under the canopy or at least on the premises? 

 SECRETARY BODMAN. Yes, this issue is one that arose for the first 

time, in my thinking, last week. This is a new issue in terms of my 

concern, my consciousness. So I have instructed my colleagues and 

myself each time we see executives of the large oil companies to talk 

with them about what they are doing to encourage the development of 

additional ethanol. The problem that they have, and I have had one 

conversation so far, the problem that they have is that they are not in the 

business of manufacturing the ethanol as yet and therefore they cannot 

certify the quality of the material that is there. They cannot certify the 

fact that the ethanol is used in vehicles that are supposed to accept the 

ethanol; that vehicles’ owners may put the fuel, put the E85 in a vehicle 

that shouldn’t have, that is not equipped to deal with E85, so that is their 

concern and so there are a number of issues that have to be worked 

through. It is not a simple matter to merely wave a wand and cause 

something to occur. 

 MR. TERRY. Are you working, then, or is your Department working 

with those issues to see that we can get more E85 pumps out there 

without having to be a completely independent, you know, come and gotype gas station? 

 SECRETARY BODMAN. Are we? 

 MR. TERRY. Are you working-- 

 SECRETARY BODMAN. We are working the issue. I am trying to 

understand what the facts are and that is the first time, as I said, this 

occurred a week ago. I was asked a question. I frankly hadn’t focused 

on it prior to that and this is the second time I have been asked. 

 MR. TERRY. All right, I would appreciate your continued efforts. 

 SECRETARY BODMAN. We would be happy to do it. 

 MR. TERRY. It is important. 

 SECRETARY BODMAN. I understand. 

 MR. TERRY. Then on the hydrogen fuel cell, which I really think is 

long-term. E85 is a short-term solution, and I want to talk a little bit 

about the Hydrogen Fuel Cell Initiative. One of the more important 
66

areas is energy efficiency, the renewable energy, which is just shy of 

$200 million. On the surface, that appears extremely low. In order to 

convince the American public that we are really serious about new 

alternative technologies, do you feel that the $195 million in that specific 

category, and $288 million in total Department of Energy for the 

Hydrogen Fuel Cell Research Development Initiative is right on, too 

small, too big? 

 SECRETARY BODMAN. Well, it seems to me to be dealing with the 

right issues. The issues with respect to hydrogen are in two areas, 

technical issues. One, is the development of the fuel cell and shrinking 

the size of the fuel cell, that is to say, upping the current density and that 

involves a lot of sophisticated work related to the design of the 

membrane and so forth, so I think it is about the right amount. 

 MR. TERRY. Okay. 

 SECRETARY BODMAN. The second issue-- 

 MR. TERRY. I would agree with your first conclusion and 

respectfully disagree, then, that with those highly technical problems that 

$288 million is enough. 

 SECRETARY BODMAN. Well, the President committed, I think the 

number was a billion one or billion two-- 

 MR. TERRY. Over five years. 

 SECRETARY BODMAN. Over five. I was about to say over five years. 

You completed my sentence for me. 

 MR. TERRY. I like to do that. 

 SECRETARY BODMAN. I thought you were very good at that. And so 

we are on target to do that and we believe that we are having an impact. 

I should also add that private industry is also investing heavily in this 

area and they seem to be making very good progress. 

 MR. TERRY. Yes, they do and I appreciate their efforts, as well. I 

certainly would support probably a doubling of the renewable energy and 

the science portions of that. Another area that I hear a great deal of and I 

would appreciate your comment, earmarks have taken away about 25 

percent of that and according to some of your employees, without them 

going too far out on a limb, have stated that that has slowed down the 

progress. 

 SECRETARY BODMAN. That is accurate, that is accurate. 

 MR. TERRY. So you agree with that? 

 SECRETARY BODMAN. Yes, sir. 

 MR. TERRY. Should we fight to eliminate those earmarks? 

 SECRETARY BODMAN. Well, I think earmarks are a Congressional 

prerogative. I think what we can do from our standpoint, and it is up to 

us to make the case as to why we want to have the money spent the way 
67

we wish to spend it and then why spending it in other ways is not as 

desirable and you know, clearly the power of the purse sits in Congress. 

 CHAIRMAN BARTON. The gentleman’s time has expired. 

 MR. TERRY. And I would certainly fight to eliminate those 

earmarks. 

 SECRETARY BODMAN. Thank you, sir. 

 CHAIRMAN BARTON. The gentleman from Maine, Mr. Allen, for 

five minutes. 

 MR. ALLEN. Thank you, Mr. Chairman. Mr. Secretary, in my 

opening I mentioned that the Energy Efficiency and Renewable Energy 

Office programs are being cut by 18 percent and the Federal Energy 

Management Program, which leads the government-wide effort to save 

energy, is being reduced by 13 percent. I think the problem we have here 

is the one that Paul O’Neil described to the President when he left the 

Administration over the 2003 tax cuts. He told the President if you do 

the 2003 tax cuts as proposed, you will never have enough money to do 

anything else that you want and it seems to me that is true. 

 But I want to ask you a couple questions on energy efficiency. One, 

do you believe the funding for energy efficiency programs in the budget 

match the Nation’s need for saving energy and if I can just follow up on 

that, the programs to deploy energy efficient technology have the most 

immediate impact on demand, yet the budget would eliminate a number 

of those programs and cut the rest. And so the general point is if there is 

a national interest in saving energy, if the President has said we are 

addicted to oil, why is DOE reducing the amount of money it spends on 

energy efficiency programs? 

 SECRETARY BODMAN. Well, first of all, there is accounting and then 

there is accounting and so it depends on which accounts you wish to look 

at. We have increased funding for vehicle technologies which are 

dealing with energy efficiency. We have increased funding for building 

technologies which deal with energy efficiency. We have reduced the 

weatherization program by about a third, which I know causes great 

angst, but that, frankly, is something that I did. When I had looked at 

where we had to make reductions in past programs in order to try to get a 

balanced budget, which is what we were instructed to do, we have a 

modest increase in the Energy Star program in order to promote the use 

of more effective appliances in our economy and so there are a lot of 

areas where we-- 

 MR. ALLEN. But overall, Mr. Secretary, overall, if saving energy, 

being more energy efficient is a major national problem, something that 

requires the full attention of this Administration, we are not doing what 

we should be doing, wouldn’t you agree? 
68

 SECRETARY BODMAN. We are doing a lot of things in this 

Administration and no, I don’t agree with that and I think that there are 

always initiatives in areas where one could do more and so we had to 

make a lot of very tough choices, which I had said before and I say 

again. We had a half a billion dollar increase in the science budget, 

which I think is crucial to the future of our country. 

 MR. ALLEN. I hear what you are saying. I would just add that it 

seems to me all the tough choices, so-called, are being made on the 

expenditure side, not on the revenue side, but I know that is not your area 

of jurisdiction. Let me just ask you one other thing. The President said 

the President set a goal of reducing our Middle East oil imports by 75 

percent by 2020. I don’t have a clue how this program would ever get 

there or what kind of analysis he went through, the Administration went 

through, to get to that number. I do not understand, if 70 percent of our 

oil goes into vehicles, I don’t understand how we could possibly reach 

that goal without significantly improving vehicular efficiency instead of 

just focusing on new fuels and that is more than just investments in 

technology. There has to be some way to substantially increase the 

efficiency of our cars and trucks. Would you comment on that? 

 SECRETARY BODMAN. Yes, the simple question, sir, is ethanol, and 

ethanol is the approach that is the background of the President’s goal of 

reducing the consumption of imported oil 20 years out, by five million 

barrels a day. 

 MR. ALLEN. Cellulosic ethanol? 

 SECRETARY BODMAN. Cellulosic ethanol because for reasons that I, 

again, I am not sure who was here when I said what I said, but we are 

running short of corn, I believe we will start to import corn. There will 

be limits as to how much corn we can use and we are now, I think, at 14 

percent of the corn that is grown in this country is being used to produce 

ethanol and we are going to see that reflected, it will be reflected 

economically in food prices and other issues. So we need to get 

cellulosic ethanol which has the potential, if we are successful, by the 

year 2012 of getting the cost of cellulosic ethanol below a dollar, that we 

would be in a position to accomplish this five million barrels a day goal 

that the President has set. 

 MR. ALLEN. Thank you. Mr. Chairman, could I just ask one 

question for the record? 

 CHAIRMAN BARTON. Yes, sir. 

 MR. ALLEN. Mr. Secretary, would you be willing to provide me with 

the backup, whatever analysis went into this 75 percent reduction in 

Middle East oil imports by 2020, the calculations, the backup? 

 SECRETARY BODMAN. Fine. 

 MR. ALLEN. I would very much appreciate it. 
69

 SECRETARY BODMAN. Sure. 

 MR. ALLEN. Thank you. 

 CHAIRMAN BARTON. The distinguished subcommittee chairman of 

Commerce, Trade, and Consumer Protection Subcommittee, Mr. Stearns. 

 MR. STEARNS. Thank you, Mr. Chairman. Mr. Secretary, I am 

going to ask sort of an easy question to start off. 

 SECRETARY BODMAN. An easy question? 

 MR. STEARNS. Easy question, yes. 

 SECRETARY BODMAN. I see. 

 MR. STEARNS. Okay. Could you explain the safeguards in the 

Global Nuclear Energy program to prevent weapons usable fuel from 

getting into the hands of terrorists? If you could sort of explain that to us 

just to give us some confidence on that would be helpful. 

 SECRETARY BODMAN. The GNEP program consists of three parts. 

One is the so-called urex-plus recovery of transuranic elements. That 

means plutonium, it means americium, curium, neptunium. Those are 

the four elements that are in large quantity inside, that are in spent fuel 

today. So the first thing is to recover it as an alloy or as a mixture. That 

mixture is not usable for making bombs by terrorists or by people who 

would do harm to us. The process that is used, for the most part, in the 

world today is the purex process, with a P. Purex recovers pure 

plutonium. That is what goes on in France, it goes on in Russia, at least 

those two countries and perhaps elsewhere. And so we have significant 

quantities of plutonium that have been recovered and is now being stored 

in secure environments by countries that are employing that technology 

and so that is the primary difference, is to be able to recover it. 

 And then the second piece of the GNEP initiative is a reactor that 

will burn it effectively and the third piece is an effort to recycle the fuel 

that comes out of the fast reactor or this burning process that will enable 

us to reduce the number of transuranic elements. 

 MR. STEARNS. Now, you have given me the three things. Do you 

think the safeguards are in place to protect so that this fuel doesn’t get 

into the hands of terrorists? 

 SECRETARY BODMAN. Well, they will have to be. I mean, when 

you say safeguards, that means that you have a standard of controlling 

this that the-- 

 MR. STEARNS. And you feel a high level of confidence that the 

safeguards are there? 

 SECRETARY BODMAN. Well, what I have is the confidence that the 

transuranic materials, as a component, is not directly useful for making 

weapons. That is the principal difference. Now, could you take the 

transuranic elements and then extract plutonium from it? Sure. You 
70

have to protect it and you have to deal with it seriously and you have to 

have it subjected to the kind of safeguard-- 

 MR. STEARNS. But it is pretty high technology to do that? 

 SECRETARY BODMAN. Oh, it is very, this is extremely high 

technology. 

 MR. STEARNS. Okay. Did you go with President Bush to India? 

 SECRETARY BODMAN. No, I did not. 

 MR. STEARNS. Okay. Were you briefed on his agreement before he 

went? 

 SECRETARY BODMAN. Yes. 

 MR. STEARNS. So you well aware what he was trying to do? 

 SECRETARY BODMAN. I was aware of it, yes. 

 MR. STEARNS. Yes. 

 SECRETARY BODMAN. I can’t tell that I was aware of all the details, 

but I was generally aware of what he was trying to accomplish. 

 MR. STEARNS. Now, India has agreed to let the International Atomic 

Energy Agency inspect 14 of the 22 nuclear facilities. 

 SECRETARY BODMAN. That is correct. 

 MR. STEARNS. So that leaves eight that are not going to be 

inspected. Is that a concern? Should we be concerned at all with this 

new agreement that eight of these facilities are not going to be inspected? 

 SECRETARY BODMAN. I think it is a fair issue to ask questions about 

and so in that sense, is it fair to be concerned? Yes. I consider this 

agreement to be a significant step forward. India has been a very 

responsible member of the world community when it comes to 

nonproliferation. 

 MR. STEARNS. They didn’t sign the Nuclear Nonproliferation 

Treaty, right? 

 SECRETARY BODMAN. That is correct. 

 MR. STEARNS. Okay. 

 SECRETARY BODMAN. I am talking about there are countries which 

have signed the nonproliferation treaty which have, in fact, proliferated. 

 MR. STEARNS. You mean like Iran? 

 SECRETARY BODMAN. Like Iran, like North Korea. And so that the 

signing of an agreement is not, it is not a sufficient condition to put on 

judging what I said and what I said was that India, despite the fact that 

they have not signed the agreement, have been a very responsible 

member of the world community. There is no record of any sign in any 

way that they have proliferated technology or materials out of that 

country. 

 MR. STEARNS. But you would agree that-- 

 CHAIRMAN BARTON. This will have to be the last question. 
71

 MR. STEARNS. Yes. You would agree that the last eight, I mean it is 

eight sites that they are not going to inspect and they will allow 14 and 

you voiced some reservation that perhaps we should have access to those 

eight sites, is that the way I hear you saying it? 

 SECRETARY BODMAN. No, that is not what I said. Whatever the 

President agreed to, he agreed to and he agreed to it without the eight 

sites. Would I rather have the eight sites in rather than out? Sure. 

 MR. STEARNS. Okay, yes. 

 SECRETARY BODMAN. But we don’t. 

 MR. STEARNS. Yes, all right. 

 SECRETARY BODMAN. And do I consider the agreement that is there 

a good agreement? I do. And the reason I think it is a good agreement is 

India has been very responsible in the past. I expect them to be very 

responsible in the future. And I think this is a very good step to kind of 

bring them into the international nuclear community in an effective way. 

It recognizes the facts of life of what the situation is there and I think it is 

a reasonable and a responsible thing to do. 

 MR. STEARNS. All right. Thank you, Mr. Chairman. 

 SECRETARY BODMAN. Thank you. 

 CHAIRMAN BARTON. We thank the gentleman. Before I introduce 

Mr. Dingell to ask his questions, we have one of the distinguished 

railroad commissioners of the great State of Texas in the audience, the 

Honorable Victor Carrillo. We welcome you to our committee. You 

have testified before. Glad to have you here. Mr. Dingell for five 

minutes. 

 MR. DINGELL. Mr. Chairman, thank you. Welcome, Mr. Secretary. 

 SECRETARY BODMAN. Thank you, sir. 

 MR. DINGELL. Mr. Secretary, in your statement you said, at page 

two, as a complement to GNEP strategy, the Department will continue to 

authorize a permanent geological storage site for nuclear waste at Yucca 

Mountain. I find this troublesome because you are saying as a 

complement. The Congress gave you clear authority and clear 

instructions that this was to be completed back in 1982. Since that time, 

ratepayers have contributed better than $20 billion to the waste fund and 

the government is now paying utilities millions of dollars annually in 

compensation for delays. Now, the question, and I think this is yes or no. 

Mr. Secretary, does DOE have the resources, fiscal, human, and financial 

to undertake a program of the magnitude of GNEP without sacrificing 

the focus required for it to fulfill its statutory duties with respect to the 

Yucca Mountain repository? Yes or no. 

 SECRETARY BODMAN. Do we have it today? 

 MR. DINGELL. Do you have it today. 
72

 SECRETARY BODMAN. We have the management resources. We 

certainly don’t have the technical resources. 

 MR. DINGELL. So you don’t have the resources to do this and I find 

this troublesome, Mr. Chairman, or rather, Mr. Secretary, because we 

have been waiting a long time on this. It is a massive problem to the 

country-- 

 SECRETARY BODMAN. Mr. Dingell, may I, then, I want to make sure 

I understand what I understood you to ask. Do we have the resources to 

undertake-- 

 MR. DINGELL. Fiscal, financial, personnel. 

 SECRETARY BODMAN. To undertake GNEP at the current time as 

well as to pursue Yucca Mountain? I believe we do have the resources to 

pursue Yucca Mountain and we are pursuing it. I do not believe that at 

the current time we have the resources to pursue GNEP. 

 MR. DINGELL. All right. 

 SECRETARY BODMAN. The technical resources. 

 MR. DINGELL. You have got, Mr. Secretary, a program on Yucca 

Mountain that indicates that probably the potential benefits of that are 

not going to be realized sometime in the future. In like fashion, it 

appears that even if things do go well, GNEP’s program will not be 

realized for decades. Is that correct or not? 

 SECRETARY BODMAN. Which one, sir? 

 MR. DINGELL. Well, first of all, I think you are way behind on 

Yucca Mountain. 

 SECRETARY BODMAN. That is correct. 

 MR. DINGELL. But GNEP’s potential benefits I don’t think are going 

to be realized for decades. 

 SECRETARY BODMAN. That is correct. 

 MR. DINGELL. As a matter of fact, that is a program that has not 

even begun to be worked on at the agency. 

 SECRETARY BODMAN. That is correct. 

 MR. DINGELL. Now, Mr. Secretary, are you effectively advocating 

in the Department extended interim storage of spent fuel bound for the 

repository at Yucca Mountain above ground in order to let GNEP catch 

up before the waste is disposed of in the underground repository? 

 SECRETARY BODMAN. We are pursuing Yucca Mountain with as 

much vigor as we can independent of progress or lack thereof with 

respect to GNEP. 

 MR. DINGELL. Now, Mr. Secretary, you are aware of the rate 

payers’ contribution to the Nuclear Waste Fund? 

 SECRETARY BODMAN. Yes, I am. 

 MR. DINGELL. I have long been concerned about them being 

diverted to unrelated purposes, something which has regularly happened 
73

and I am concerned that $18 billion or so now sitting in the Nuclear 

Waste Fund could be a particularly tempting target for parties looking to 

fund GNEP. My question to you is are you going to use the Nuclear 

Waste Fund to fund GNEP? 

 SECRETARY BODMAN. No. 

 MR. DINGELL. Is that a commitment here? 

 SECRETARY BODMAN. Yes. 

 MR. DINGELL. Now, Mr. Secretary, does the Department have any 

authority under the Nuclear Waste Policy Act to tap money so the 

Nuclear Waste Fund in order to pursue activities under the GNEP 

program? In other words, do you have authority to do that? 

 SECRETARY BODMAN. I do not believe so. I do not know the 

answer. I would be happy to get you that before the record-- 

 MR. DINGELL. That would be very much appreciated. Mr. 

Secretary, last question. Would the Department please provide the 

committee with the legal memorandum addressing this question? 

 SECRETARY BODMAN. Of course. 

 MR. DINGELL. I would appreciate it. Last of all, Mr. Secretary, you 

are always welcome here, but I think you owe me one letter and I know 

you want to-- 

 SECRETARY BODMAN. You are correct. Your bookkeeping is better 

than mine and I do owe you one letter. 

 MR. DINGELL. It would be much appreciated. The folks in the 

Administration are always a little bit hard put to respond to letters from 

Members of Congress, so we try to remind them when they come up here 

so that they will know that we are saddened by the fact that they do not 

respond to our mail. 

 SECRETARY BODMAN. I would like to say, sir, if I may, that I have 

personally worked very hard on trying to maintain a sense of 

responsiveness on the part of my colleagues in the Department to the 

Members of Congress to the point where each week, each Monday 

morning we have a meeting and the man who is responsible for all of the 

executive communication, correspondence, makes a report and we are, I 

think, increasingly diligent and so what the reasons are for this, this 

arrived on February 8, your letter, or at least it was dated February 8, I 

presume was faxed to us. I don’t know the details of it, but you can be 

sure that it will have our attention. 

 MR. DINGELL. Mr. Secretary, I don’t want you to think my 

comments to you this morning indicated any hostility or lack of affection 

or respect. It just indicated a certain concern about the fact that not just 

your agency, but every agency down there doesn’t seem to respond to the 

concerns of Members of Congress and I would just like to remind 
74

everybody who comes up here about the need to make us feel better by 

responding. 

 SECRETARY BODMAN. Well, sir, we recognize the fact that this 

Congress has the power of the purse and as far as I am concerned, you all 

are the customers and we are doing our very best to be responsive to you. 

 MR. OTTER. [Presiding] The gentleman’s time has expired. The 

Chair recognizes the gentleman from Texas, Dr. Burgess. 

 MR. BURGESS. Thank you, Mr. Chairman. Mr. Secretary, increasing 

domestic production is something we are all concerned about. There is a 

program of enhanced oil recovery through carbon dioxide injection into 

older wells and this recoverable oil resource could be increased. It is 

almost 400 percent. The estimate is 430 billion new barrels to 

technically recoverable reserves. That figure, in fact, would put us ahead 

of Saudi Arabia’s reserve count. The budget proposal that we have 

received, you are terminating the petroleum oil and natural gas 

technology programs that we have to thank for this knowledge and why 

is it that that--is this probably the same answer that has been generated 

before on other programs, but this is a terribly important program and in 

my neck of the woods down in Texas, we have the Gittings Field down 

in central Texas, the Barnett Shale up in north Texas. The Gittings Field 

has a lot of recoverable oil left in it if we would just develop the 

technology to bring it to the surface. 

 SECRETARY BODMAN. You know, I would, I guess, say two things. 

One, a lot of the use of carbon dioxide to stimulate the recovery of oil 

has been around for decades, as you well know, and part of the issue that 

goes into a decision of this kind is how much research, what is the role of 

public funding for research in some of these initiatives and I think the 

decision that was made was that with $60 oil, that there is plenty of 

incentive for the owners of these reserves to develop all kinds of 

approaches to recovering that oil. It is just a very good investment. And 

so I guess the question I would have would be to try to understand to a 

better degree than I do what the specifics are of that program and why it 

is something that makes sense for, with $60 oil, why does it make sense 

for us to put public money into it? 

 MR. BURGESS. With the coal-based methane and the natural gas 

reserves of the Barnett Shale down in Texas, those are promising 

additions to our domestic supply of natural gas. 

 SECRETARY BODMAN. Right. 

 MR. BURGESS. But these fields are developed, not by the big guys, 

but by the smaller, independent producers who don’t have the budgets, 

who don’t have the capital, who don’t have the wherewithal for 

developing this type of technology. Therein lies the problem. These are 
75

smaller pockets of energy that are developed by smaller players in the 

market and not by the big boys. 

 SECRETARY BODMAN. This has a resonance to it that resonates with 

my several conversations with Mr. Hall related to the ultra-deep drilling. 

 MR. BURGESS. Well, I would appreciate it if perhaps your staff 

could get back to my office with a little bit more detail on this. 

 SECRETARY BODMAN. Of course. I would be happy to do it, sir. 

 MR. BURGESS. I mean it is the health of the nation, as well. 

 SECRETARY BODMAN. I understand, sir. 

 MR. BURGESS. Just the other matter that I alluded to in the opening 

statement about the energy bill that we passed in October that has not yet 

been voted on in the Senate, one of the provisions in that bill, Texas has 

a pretty good program for the Attorney General being in charge of price 

gouging, as my understanding through the work we did on that bill, if 

there is not a national program and this bill, for the first time, did develop 

a national program for someone to look at the concept of price gouging. 

Is this something that you feel would be a good thing for the country to 

have? Is it something the Department of Energy does not want? 

 SECRETARY BODMAN. It is not a matter of not wanting, I think it is a 

matter of when one starts to supersede State law. The price gouging law, 

largely State laws, as I understand it, we were, particularly in the days 

when gasoline ran up in the aftermath of Katrina and Rita, we were the 

recipient of, we had a toll-free number as well as a website that collected 

information, complaints from consumers. We put all that together, took 

it to the Federal Trade Commission and they, in turn, worked with the 

Attorneys General around the country. That seemed to be a reasonable 

way to go about doing it and would not require the bureaucracy and the 

more, the larger apparatus to try to impose on the States a Federal 

mandate, so I guess the first thing I would want to do is to find out is 

how did we do? As best I knew, we did pretty well in terms of getting 

information and there were some litigation and some people that were 

charged as a result of activities following Katrina and Rita. 

 MR. BURGESS. Is that information available in any sort of report for 

us? 

 SECRETARY BODMAN. The answer is I don’t know. I would be 

happy to look at it. 

 MR. BURGESS. Okay. 

 MR. OTTER. The gentleman’s time has expired. The gentlelady 

from Illinois. 

 MS. SCHAKOWSKY. Thank you, Mr. Chairman. Thank you, Mr. 

Secretary. First, Mr. Chairman, I would like to put into the record a 

report from the Midwest Attorneys General’s Natural Gas Working 

Group. 
76

 MR. OTTER. Without objection. 

 [The report follows:] 
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78
79
80
81
82
83
84
85
86
87
88

 MS. SCHAKOWSKY. Thank you. According to that report which was 

released by my attorney general, Lisa Madigan, as well as three other 

Midwestern Attorneys General, they say that simple supply and demand 

factors can’t explain the increase in prices and in fact, they talk about 

demand has not been surging as frequently reported in the press. Over 

the past 10 years it has been relatively flat. We are talking about natural 

gas, with a slight moderation in the winter peak. Over the past three 

years it has declined slightly and they have all kinds of charts to 

document that and what they are saying is that the Administration and 
89

the Congress can bring down natural gas prices by better regulating the 

futures market and ensuring companies do not gouge consumers. 

 And really, this is a follow-up in some ways to Dr. Burgess’s 

question about the role of the Federal government. These Attorneys 

General actually are asking for help from the Federal government to deal 

with price gouging and I wondered if you are aware of any instances in 

which oil and gas companies engaged in price gouging last year? 

 SECRETARY BODMAN. I am aware that there were people accused of 

it. There is an issue with respect to gas, so when I say there were charges 

with respect to gasoline; there were situations following Katrina and Rita 

where people were accused of price gouging. 

 MS. SCHAKOWSKY. Would you support giving the Federal Trade 

Commission legal authority to prosecute oil and gas companies that 

engage in price gouging? Right now it is only collusion that they are 

allowed to deal with. 

 SECRETARY BODMAN. Congresswoman, I would be happy to look at 

that, rather than sort of on real-time here make a commitment to that. I 

would rather not do that, but I would be happy to look at it. 

 MS. SCHAKOWSKY. I would appreciate it, as would our Attorneys 

General. I wanted to ask you about the LIHEAP program. I am very 

concerned about the--in Chicago where we haven’t had a particularly 

cold winter. We were afraid of that, but we see that the Administration-- 

 SECRETARY BODMAN. So was I, if I may say. 

 MS. SCHAKOWSKY. Right. But nonetheless, the Administration’s 

request for LIHEAP funding was at $2.8 billion, which is $2.3 billion 

less than the amount authorized in the Energy Policy Act of 2005. We 

are very concerned in these cold weather States about this decrease. 

How can that be justified in this time of rising prices? 

 SECRETARY BODMAN. Let me, at the risk of sounding like a 

bureaucrat, but let me say that is not my program. It is not part of the 

Department of Energy, it is the Department of Health and Human 

Services. Having said that, I think, again, I know Secretary Leavitt and 

his colleagues over there who administer that and who manage that-- 

 MS. SCHAKOWSKY. It is administered jointly, right? 

 SECRETARY BODMAN. No, it says jointly. I have seen that comment 

that we administer jointly. We do not administer jointly. 

 MS. SCHAKOWSKY. Okay. 

 SECRETARY BODMAN. They administer it and they run, they do a 

responsible job on it. I can just tell you that as with a lot of these things, 

for example, the decision that I made on weatherization, which is 

probably what-- 

 MS. SCHAKOWSKY. I do want, exactly, I do want to talk about that, 

as well. 
90

 SECRETARY BODMAN. Weatherization is our doing and we have 

reduced that from about $240 million a year, which has dealt with some 

90-some odd thousand homes or helped 90-some odd thousand homes, I 

think, to $160 million or something like that, which is roughly 60,000 

homes. 

 MS. SCHAKOWSKY. This is one I think that really makes me scratch 

my head and wonder how, at a time when we want to both conserve 

energy and reduce prices for low-income households, how we could 

reduce that. We are talking about, my data tells me, about 30,000 fewer 

homes are receiving weatherization assistance. 

 SECRETARY BODMAN. Your numbers are right. That was a decision 

I made. 

 MS. SCHAKOWSKY. Why? 

 SECRETARY BODMAN. Well, the reason that I made it was that I had 

choices to make in order to bring the overall budget in at a level and that 

is a choice that I made so that to the extent you are unhappy with 

anybody, don’t be unhappy with the President, OMB, or anybody else. I 

did that. 

 MS. SCHAKOWSKY. Well, I just, you know, want to go on record as 

strongly disagreeing with that decision. 

 SECRETARY BODMAN. I understand. 

 MS. SCHAKOWSKY. Let me ask you, finally, our Democratic Leader 

in the Democratic caucus has come up with an innovation agenda that 

calls for energy independence in 10 years. Do you see that as a 

possibility? 

 SECRETARY BODMAN. It depends on what you mean by energy 

independence. Does that mean that we are not going to import oil or any 

materials, energy materials from abroad? 

 MS. SCHAKOWSKY. Right. 

 SECRETARY BODMAN. I do not believe that would be likely, no, 

ma’am. 

 MS. SCHAKOWSKY. Thank you. 

 MR. OTTER. The gentlelady’s time has expired. The Chair would 

recognize Mrs. Blackburn from Tennessee. 

 MRS. BLACKBURN. Thank you, Mr. Chairman, and I thank you, Mr. 

Secretary, for hanging with us this morning. I have got three questions 

and excuse the voice. It kind of comes and goes on me a little bit today. 

The TVA, which is there for Tennessee and sir, I know you may not have 

these answers at hand. If you want to get back with me on these, that is 

going to be fine. 

 SECRETARY BODMAN. I can tell you that I don’t know anything 

about the TVA budget, but I would be happy-- 
91

 MRS. BLACKBURN. Let me tell you what my question--yes. Let us 

talk about what these questions are. They were recently awarded $35 

million in a lawsuit against DOE because they still have not started 

accepting and storing the nuclear waste at Yucca Mountain and what I 

would like to know is how many other lawsuits of this kind have been 

filed? 

 SECRETARY BODMAN. Lots. And I can get you the number. 

 MRS. BLACKBURN. And I would like the number. 

 SECRETARY BODMAN. I would be happy to get you the number. 

 MRS. BLACKBURN. Thank you. I would like to know how many are 

pending and other than that litigation, I would like to know what the 

Department, what their strategy is for addressing the dozens of 

outstanding lawsuits where utilities are really piling up millions of 

dollars of delayed damages each year because of inaction or whatever 

you all may see as the reason for that, so if you would, let us look at this. 

This is something that should’ve started in 1998 with accepting that 

waste at Yucca Mountain and TVA, as you are aware, sued because of 

the cost of building the dry cast storage to hold that waste on-site at their 

plants. They won that suit and I know that you all have only settled three 

of those. 

 SECRETARY BODMAN. Three cases? 

 MRS. BLACKBURN. Yes, sir. 

 SECRETARY BODMAN. Yes. My colleague just told me there are 

about 60 cases pending. 

 MRS. BLACKBURN. Okay. If we can have some specifics on that. 

That is of great concern to me that this would go unanswered. 

 SECRETARY BODMAN. You are right, sure. I would be happy to 

provide you with that. What we are doing is to try to move forward with 

the repository, that is why it is so important to get that and to manage it 

well, but I fear we find ourselves way behind schedule. We find 

ourselves with a situation that reflects poorly on the management of the 

Energy Department and it reflects poorly on other managements, as well, 

but there is plenty of blame to go around and we are doing our best to 

bring it back into focus and to manage it well. 

 MRS. BLACKBURN. And I appreciate that and if we could know a 

little bit about the timeline, that would be great. Continuing on the 

nuclear energy, one of the President’s initiatives is the expansion of that 

and I would like to know what specific actions that you all are taking to 

improve the certainty of the regulatory process for new nuclear plant 

designs, to ensure that they can and will be built competitively and if you 

do not have that now, if I could have-- 

 SECRETARY BODMAN. Oh, I can tell you that. 

 MRS. BLACKBURN. You can tell me that, okay, great. 
92

 SECRETARY BODMAN. If you would like to know that. 

 MRS. BLACKBURN. Yes, sir. Please. 

 SECRETARY BODMAN. We do have a program called Nuclear Power 

2010, or NP 2010, which is an effort, a joint effort or jointly funded 

effort by the government and consortia of utilities to get to generate a 

combined operating and inciting a license for new nuclear utilities. We 

have not had a new nuclear plant in over 30 years in our country. In our 

judgment, we need that in order to meet the electrical demands that will 

be in our country over the next 20 years and so starting, I think it was 

four years ago, we started this program. We have had a very good 

response to it and the goal is to generate the combined, both operating 

and the operating license and the citing authority to build and start 

construction by the year 2010. 

 MRS. BLACKBURN. And does that include the lawsuit? 

 SECRETARY BODMAN. Yes. We are working with the Nuclear 

Regulatory Commission. 

 MRS. BLACKBURN. Okay. 

 SECRETARY BODMAN. We meet with them frequently and so they 

are aware of what we are doing and we are aware of what they are doing. 

 MRS. BLACKBURN. Okay, all right. Thank you. I have one other 

question and I will just post it. I am not going to ask for an answer, but I 

think going back to our domestic supplies with ANWR in the outer 

continental shelf and what the President’s intentions and priorities there 

and I want to be respectful of others’ time, so I will just wait to hear back 

from you on that and I thank you, sir, for your time. 

 SECRETARY BODMAN. Thank you very much. 

 MR. OTTER. The Chair recognizes the gentleman from 

Pennsylvania, Mr. Doyle. 

 MR. DOYLE. Thank you, Mr. Chairman. Mr. Secretary, welcome. 

 SECRETARY BODMAN. Thank you, Mr. Doyle. 

 MR. DOYLE. Mr. Secretary, as one of the few Democrats up here 

that actually voted for this Energy Policy Act, I have to tell you, and as 

someone who thinks the goal of energy independence is probably the 

most important mission that our country has and the most important 

thing we can do for our kids and grandkids, to see this budget is 

extremely disheartening and disappointing and I think Chairman Barton, 

on his first question to you, just hit the nail right on the head. 

 We are in a situation where to tell the American people that we are 

going to strive towards energy independence is just not something that is 

not only not possible in 10 or 15 years, it is not going to be possible in 

100 years if we don’t have the financial resources to put into it and quite 

frankly, we find ourselves in the situation that we are in because the 
93

American people are going to have to realize that they can’t have their 

tax cuts and these investments, also. 

 We are staring at deficits as far as the eye can see and if this 

Administration and Members of Congress are wedded to the idea of 

making these tax cuts permanent, we are going to be looking at huge 

deficits for the next 10 to 15 years which are going to make it virtually 

impossible for us to make the kinds of investments we need to make to 

continue the research and to move forward these technologies to lessen 

our dependence on foreign oils. And it doesn’t matter who the Secretary 

of Energy is and it doesn’t matter who the President is, whether the next 

President of the United States and the next Secretary of Energy are going 

to be sitting up here playing the same shell game that you are being 

forced to play until we provide some real resources to these programs. 

 I just want to ask you one question and it gets back to what 

Chairman Barton talked about, too, when we talk about the shell game 

that is going on. Your Department has repeatedly discussed the 

importance of the Department’s Fossil Energy Research Program and the 

National Energy Technology Laboratory in helping change the outlook 

for America’s energy future by placing more reliance on the massive 

coal reserves and leading the drive to eliminate pollution and greenhouse 

gas emissions over the coming decades. And I agree with these 

assessments of the fossil energy program and the NETL’s key role. 

 Once again, we are just concerned that we are saying things but we 

are not following up with the funding when it comes to fossil energy and 

the NETL to achieve the goals. Let me give you some reasons for my 

concerns and I would like to ask you to respond to these, please. The 

proposed budget for the Fossil Energy Clean Coal Power Initiative is 

only $5 million, which is down from the $50-$100 million that has been 

appropriated over the past several years. The fossil energy, oil and gas 

budget is going from $60 million in FY 2006 to a proposed zero budget 

in fiscal year 2007. The general plant project budget at the NETL is 

being zeroed out. If we don’t address these significant infrastructure 

needs of the laboratory, we are going to compromise key operational 

capabilities, as well as safety, at NETL’s two major sites in Pittsburgh 

and Morgantown. 

 And the $22 million cut in the NETL program direction budget 

would require layoffs of up to 200 laboratory Federal and contract 

personnel in the early fall of this calendar year. Can you help me 

understand how these unusually large budget cuts that are being 

proposed by the Administration mesh up with the increased mission 

responsibilities and expectations for the Department’s fossil energy 

program and the NETL to support a better energy future for our country? 
94

 SECRETARY BODMAN. Oil and gas, as I have said before, with $60 

oil, for owners of reserves to develop new methods of producing those 

reserve, CCPI $5 million, the background of that is, at least the way I 

view that, the hiatus, we have an unusually large amount of unspent 

balances in that account that have been there. The OMB people looked 

at it, I think they were right. They have observed that those balances, we 

ought to get those projects that have been started in the past up and going 

before we start putting more money in it. 

 We have two rounds of CCPI that have been funded and the monies 

simply haven’t been spent and so that is what this is, if you will, a hiatus, 

waiting a year, putting a pause in the system and waiting until next year 

before we add other monies, before we can start a solicitation which 

would occur, presumably, in 2008. With respect to NETL, I think that is 

an accounting change. To my knowledge, there is not a change in the 

budget for NETL and I will be happy to look into that and I would be 

happy to get back to you, but I am unaware of any perspective layoffs 

that occur at NETL. 

 MR. DOYLE. Thank you. 

 SECRETARY BODMAN. There has been a change in the accounting 

that we were required to do by moving the accounting for some of the 

personnel and leadership group or administrative people from one 

account to another, I think. 

 MR. DOYLE. Could you get back to me in writing on that? 

 SECRETARY BODMAN. I would be happy to do that. 

 MR. DOYLE. Thank you. 

 MR. OTTER. The other gentleman from Pennsylvania, Mr. Murphy. 

 MR. MURPHY. Thank you. Thank you again, Mr. Secretary. I want 

to follow up on some of these questions being asked about the Clean 

Coal Initiative issue because they are extremely important. The NETL, 

the National Energy Technology Laboratory is in my district. It splits its 

funding with the Morgantown plant, too. And I have similar concerns 

about the clean coal. I understand the issue you are saying that they are 

backlogged in terms of some of those contracts. 

 SECRETARY BODMAN. Right. 

 MR. MURPHY. But I look at it this way; as water is flowing through 

a hose, if you turn it off at some point, yes, the water has a chance to go 

forward, then you have a big gap there and what I see as part of this, that 

these, the backlog in contracts, if we stop it this year, then that means 

there will be no funding for other contracts. Part of this problem is going 

through these contracts, approving them, the laborious bureaucratic 

process is not something that can be done in a year and so if we cut off 

this funding down to $5 million, which is basically below a maintenance 
95

level, it seems to me, then we will have more years before we can go 

forward on this. 

 What I see is that, with the Clean Coal Initiative, is that there is so 

much that can be done, we are so close, the research is very promising on 

all this and I understand the need to push for the FutureGen. I mean, I 

would like to see both actually funded and I go back to my opening 

comments that it sickens me when I see us funding both sides of the war 

on terror that, and when we see other countries like Iran rattling their 

saber by saying we are just going to turn off the oil on you Americans 

and watch us sweat as oil prices go up and watch what happens with the 

vulnerability we will have with other nations as we deal with natural gas 

prices, as well. For me, and I heard the comment to the Chairman earlier 

and so many of us here in the committee, this issue on clean coal, I just 

think is critically important to continue to fund and I want to go on 

record again. To me, it is a major issue in approving any part of this 

budget. 

 The other issue has to do with--I would like some more information 

on this one and that has to do with the Oil and Gas Research Program, 

because this is also critically important here on what we can be doing on 

this. I think it is a real crippling blow to zero it out and I would like 

some sense from you where you think that places us. Is that putting us at 

some risk for future research? How are we going to make up for that? 

 SECRETARY BODMAN. This is in terms of oil and gas research? 

 MR. MURPHY. Yes. In the past, I know NETL received $65 million 

for the natural gas and oil programs; $33 million for natural gas, $32 

million for oil and I see it being zeroed out now. 

 SECRETARY BODMAN. We will be happy to respond, you know, I 

think the approach that the President has used and I have heard him say 

it, that there is a lot of incentive for producing more oil and more gas. 

We have had extremely high prices, as you are well aware and your 

constituents are well aware and therefore when we start looking at how 

we should allocate public funds, that is a tough sell in terms of 

supporting oil and gas research. I don’t think it puts us at any risk, but I 

can understand that you hold a different view. 

 MR. MURPHY. Indeed, I do. Let me shift to one other question here 

in the time I have remaining. This has to do with the designating 

national interest transmission corridors and the regional transmission 

organizations, the RTOs, like PJM is one that handles Pennsylvania, 

New Jersey, Maryland, Ohio, and other areas. 

 SECRETARY BODMAN. They are well-run organizations, by the way. 

They are very effective. 

 MR. MURPHY. I think they are too, yes. 

 SECRETARY BODMAN. Yes. 
96

 MR. MURPHY. Well, I just want to have some sense of what the 

Department of Energy is going to be doing to help work on incorporating 

the work that the RTOs are doing in the corridor designations. I mean, 

my assumption is we need more transmission lines to help with our grid 

performance. I want to have a sense of what the Department of Energy 

is going to be doing to help with that work. 

 SECRETARY BODMAN. Well, we are required under the EPAct to 

prepare a report for Congress, I think by August 6 or sometime that first 

week of August, and we expect to be able to accomplish that. We will be 

meeting with RTOs; they were in my office, matter of fact, last week. 

The PJM folks that you referred to are folks who would also be meeting 

with their counterparts in Canada, which we run a unified electric grid 

that crosses the border in a seamless fashion between Canada and the 

United States, and so we will be working with our Canadian 

counterparts. So we will be following through and analyzing the 

congestion that exists or doesn’t exist in various quarters. The initial 

signs that I saw were in the eastern States and in Pennsylvania, in 

particular, we need more north and south transmission and not as much 

east and west, and that that was going to be a real help. At least, that was 

the preliminary thinking that I heard. But suffice it to say, we are 

working at it and we will provide a report and we will report to you and 

the other members of this committee. 

 MR. MURPHY. I would appreciate it if you could stay in touch with 

me, as well. 

 SECRETARY BODMAN. There is also, if I could just add, there is the 

provision in the bill that if we find there is an emergency of some kind, if 

we find we have something that requires more immediacy in terms of its 

actions, there is a provision in there to do that and we are mindful of that, 

as well. 

 MR. MURPHY. Thank you. 

 MR. OTTER. The gentleman’s time is up. Mr. Stupak. 

 MR. STUPAK. I thank you, Mr. Chairman. Mr. Secretary, earlier this 

morning when I gave my opening, I talked about gas prices and I had 

indicated that the refineries have increased their prices 255 percent from 

September 2004 to September 2005. As Secretary of Energy, would you 

know what factors go into a 255 percent increase at the refinery level for 

a gallon of gas? 

 SECRETARY BODMAN. Do I know what the costs are that go into it? 

 MR. STUPAK. What factors went into it which would cause a 255-- 

 SECRETARY BODMAN. Largely, oil prices. 

 MR. STUPAK. So just the price of oil? 

 SECRETARY BODMAN. The price of oil is roughly two-thirds of the 

price of gasoline, I think, you know, when you start looking at running a 
97

refinery. I don’t remember exactly, but we can certainly get you that if 

you would like to have those figures. 

 MR. STUPAK. Well, I would and that is why we have been asking for 

hearings because, you know, even a cubic foot of gas, which has gone up 

23 percent in the last year; home heating, 24 percent over--if inflation is 

about 3 percent, why would these items go up 23, 24, 25 percent? 

 SECRETARY BODMAN. I think you will find, unfortunately, that 

corresponding with my arrival as your Energy Secretary, sir, and that 

seemed to correspond to a rise in worldwide oil prices. 

 MR. STUPAK. Well, I don’t think we can blame you just for the rise 

in oil prices. 

 SECRETARY BODMAN. Well, there are those who do, but anyway, 

that is a different matter. I am just saying that we have had a huge 

escalation in oil prices and I think you will find it is largely the reason 

for the changes in gasoline prices. 

 MR. STUPAK. Sure, and when you mentioned to Mr. Murphy, you 

were talking about how our constituents are painfully aware and then 

when you say, you go home and they say why is it so high, what factors 

go into it, and I say well, I know 8 to 9 percent was the exploration. 

 SECRETARY BODMAN. Right. 

 MR. STUPAK. Five to 8 percent was the distribution, but 255 percent 

was the refinery. Well, why is that? And that’s what our constituents 

want to know. 

 SECRETARY BODMAN. We would be happy to provide that for you. 

 MR. STUPAK. Thank you. The weatherization program, I know I 

spend a lot of time on it, but I gave you the copy of the heating bill there 

for my Oscoda high rise. 

 SECRETARY BODMAN. Yes. 

 MR. STUPAK. Underneath the weatherization program, a lot of that 

is replacing windows and things like that, so this high rise here where we 

had this dramatic increase in price for heating, if the weatherization 

program is cut 30 percent, how do they go about trying to make their 

building more efficient or trying to do something so they don’t have 

$12,000 heating bills next year, when the weatherization program, which 

was already under-funded, was cut by another 30 percent, you can see 

the point we are driving at? 

 SECRETARY BODMAN. No, no. I understand what you are driving at. 

There are things that all of us can do, including these individuals for 

whom you sent me the bill or with the bill here, you can do to save 

energy. There are a lot of things that we can do without spending a lot of 

money and for example, light bulbs. You can buy light bulbs that use 

about a third of the energy that normal light bulbs and there are other 
98

things that you can do without spending a lot of cash that we have 

advocated and continue to advocate that people pay attention to. 

 MR. STUPAK. Well, I will be interested in seeing what their bill is 

for last month because last month we had air temperatures of 45 below 

up there. December was a pretty mild one, so I am really waiting to see 

what those bills are. 

 SECRETARY BODMAN. I am sure that is right. 

 MR. STUPAK. Let me go to the GNEP program, if I may. 

 SECRETARY BODMAN. Sure. 

 MR. STUPAK. It is my understanding that this initiative that us and 

other nuclear producing companies or countries, excuse me, are putting, 

are entering into a partnership to sell advanced nuclear power plants and 

technology and the countries would lease the fuel for use in these plants 

and when the fuel is spent, it would be sent back to the country of origin. 

Is that correct? 

 SECRETARY BODMAN. That is correct. 

 MR. STUPAK. So like in the agreement with India, this is part of this 

GNEP? 

 SECRETARY BODMAN. No, sir. 

 MR. STUPAK. Okay. If the United States entered into these 

agreements, the spent fuel rods would come back here. What would we 

do with them, then, if Yucca Mountain is not up and running? We 

already have a problem with storage. 

 SECRETARY BODMAN. Well, first of all, the GNEP program is a 

multi-decade program. This is going to be just developing the chemistry, 

we can recover the transuranics, developing the fast reactor, developing 

the fuel manufacturing, developing the fuel recycling. It is going to be 

20 years, 15, 20 years. 

 MR. STUPAK. We don’t recycle in this country. We only reprocess 

rods. 

 SECRETARY BODMAN. I understand. But it is our view that we need 

to because 90 percent of the energy that is in a spent fuel rod is still there 

and the problem is it is in a different chemical form and so we need to 

recover it. 

 MR. STUPAK. You can reprocess 97 percent of a rod? 

 SECRETARY BODMAN. That is the goal. 

 MR. STUPAK. So would you be advocating overturning the Carter 

Administration initiative against reprocessing spent fuel rods in this 

Nation? 

 SECRETARY BODMAN. No, what we are advocating and as proposed 

to Congress in this budget is the GNEP program, which is specifically 

reprocessing and so to answer your question, when fuel is spent, that has 

been sent to another nation, it is sent back to the nation from which it 
99

came, it would be reprocessed and it would be from that reprocessing 

you would produce a mixture of transuranic elements which would be 

used as a fuel in a fast reactor which would exist in the country of origin, 

the first country that created it and therefore we could burn it, gradually 

burn the so-called actinides of the transuranics and produce energy from 

that, that is the goal. 

 MR. OTTER. Mr. Green of Texas. 

 MR. GREEN. Thank you, Mr. Chairman, and I regret I am so late 

because I wanted to follow my colleagues in your questioning earlier 

lamenting the damage to our Nation because the rigs in the Gulf of 

Mexico were down and the pipeline is down and a lot of us are not--I am 

from Houston and so that is how we make a living there. 

 SECRETARY BODMAN. I am aware of that, sir. 

 MR. GREEN. And it is interesting because so many of the folks, 

particularly from California, are concerned about it since they don’t want 

to produce or drill off their coast and the question for my colleague from 

New Hampshire about MTBE, we fought in this committee for six years 

and finally in the energy bill it was prevailed upon to eliminate MTBE, 

basically. And so now it is no secret that we found out that MTBE, we 

will have to replace that with gasoline or ethanol. 

 SECRETARY BODMAN. Ethanol, yes. 

 MR. GREEN. And we don’t have the infrastructure yet for ethanol 

although, again, we have talked about it for six years in this committee 

and ethanol is not as easily transported as MTBE. You can’t pipeline, so 

I have asked, in fact, yesterday morning I met with my chemical 

manufacturers in my district and I said I hope we have some vacant land 

so we can put ethanol plants up next to these chemical plants, the 

refineries that we have in the Houston area. 

 SECRETARY BODMAN. And what did they say, if I may ask? 

 MR. GREEN. Pardon? 

 SECRETARY BODMAN. What did they say, if I may ask? 

 MR. GREEN. Well, you know, I am going to encourage them to 

invest in it and maybe we might have to have a second energy bill to see 

if we can build more ethanol plants. Congressman Shimkus and I have 

battled this for many years and I realize now there are more farmers than 

there are oil producers, so now we are going to have to bring your corn 

down or whatever else so we can make it into ethanol. 

 But let me talk about some of the questions in the Energy Policy Act 

that I thought was real important. There was a number of loan guarantee 

programs for clean coal and new nuclear generation, new renewable 

technology is also included. Petroleum co-gasification is technically 

feasible technology, but no one has been commercially successful yet, 
100

and I support the technology because it turns a waste product into electric 

generation which displaces the use of our valuable natural gas. 

 As a former chemical company executive you probably know better 

than any of us the importance of affordable natural gas to our Nation’s 

chemical industries and its workers. When will the Department’s loan 

guarantee program become operational and can you tell us about how 

they work? And I am particularly interested to know if these loan 

programs are going to be self-financing, where the companies put up the 

risk insurance premium, because I am not clear on what the benefit of a 

loan guarantee program is without risk insurance also. 

 SECRETARY BODMAN. First of all, we are working hard on the loan 

guarantee program and getting it set up and functioning. It is a very 

important part of the policy act. The expectations of Congress are very 

significant in this, of the output of this program. I have a concern that 

we do it well. This is not an area where the employees of the Energy 

Department are necessarily skilled, that is to say to make judgments on 

which chemical process do you use, which particular plant. 

 It is more like running a bank than anything else or a commercial 

bond operation where you are trying to make evaluations of different 

approaches. So we are trying to be careful in setting it up. We are 

probably going to narrow the scope of it to fund just some types of 

processes in the beginning so that we can get the systems in place that 

will enable us to manage this in a responsible manner. This is taxpayer 

money, eventually, that is going to pay for all this and we need to be 

careful about it. So that is the first comment. 

 Secondly, we have been approached by a number of people already, 

and I presume you have and others in the Congress who are 

knowledgeable about this and, we are going to be, hopefully, be able to 

run this by guidelines. I guess that is the other point I wanted to make. 

There are two general ways we can do this. One is to set a series of 

guidelines which is a more informal approach and could be accomplished 

by this summer. Within the next two or three months we should be up 

and functioning. 

 If we are required to issue rules or regulations, that is over a year and 

it is going to be the summer of 2007, not the summer of 2006 before we 

are functioning. So we are doing our best. We have told OMB that we 

want to function with guidelines, not rules. They are reviewing that. We 

will see how that all comes out, but I am hopeful that would be the case. 

We should be functioning, I would think, this summer and assuming that 

that goes well and that we would be in a position to start this program. 

But it is going to take a while and we are going to have to get it staffed. 

We don’t have the people in place to function. 

 MR. OTTER. Mr. Inslee from Washington. 
101

 MR. INSLEE. Thank you. Mr. Secretary, this budget is disappointing 

to me, but I really believe it will be an outrage to subsequent generations 

and the reason is it really dooms us to failure to achieve either energy 

independence or any meaningful reduction of greenhouse gases. I have 

listened carefully to the testimony and I think a fair description of the 

investment in clean fuels would be charitably described as chump 

change. You have proposed $149 million for biofuels, which is less than 

2 percent, to put this in perspective, of the $7 billion of royalty relief that 

the Administration currently wants to give to the fossil fuels industry and 

oil and gas from public lands. You have not done anything to require 

flex fuel vehicles, which Brazil has indicated would be successful or 

actually making sure that ethanol is available once we have flex fuel 

vehicles. 

 You have done nothing to limit CO2 to have a cap, a meaningful cap. 

We really are doomed to continued failure under this budget and it is 

extremely disappointing in that regard. I want to ask you about 

something that affects the Northwest and that is your efforts, your 

Administration efforts to increase our energy rates in the Northwest. 

You are proposing an energy rate increase for the Northwest ratepayers 

of about $924 million. It would result in about a 6 to 10 percent 

increase. Over 10 years it will cost us, it has been estimated at a 

minimum of 1120 jobs in the Northwest. 

 These are your suggestions, even though the BPA has voluntarily 

retired $1.6 billion of debt and the reason you are telling us that you want 

to foist this rate increase on the Northwest is that you have argued that it 

is good for the Northwest that if we make early payments on the debt, a 

payment of which we have never missed, this will somehow free up our 

efforts for other equity. And while we respect your efforts to give us 

advice, no one in the Northwest agrees with that, and I just want you to 

know one of the reasons we don’t agree with that. We have seen this 

movie before, how this Administration has treated the Northwest. When 

we went through the Enron debacle and pleaded with the Vice President 

for help, he just told us, effectively, to go fish. And Enron ran rampant 

and took a billion dollars of the West Coast economy. 

 And now we see today those people on trial and I noticed one of 

them yesterday said yes, I admit we were stealing money from people, 

yes, right. They were stealing money from the Northwest and my rate 

payers and your Administration, prior to you, I may note, prior to your 

coming on board, allowed that theft to go unchallenged, unchecked. So 

we look at this Administration’s efforts to increase our energy rates now 

as sort of an adding insult to injury, a second blow of a continued 

consistent pattern of leaving us out to dry in the Northwest on energy 

rates. 
102

 And my question will sound more rhetorical than anything, but I 

think it is appropriate in these circumstances and where we have always 

met our commitment on the debt to the Northwest to the BPA; where we 

have been good, solid partners with the Federal government; where we 

have experienced this pillaging already of our rate payers through the 

depredations of Enron and the likes; where the Administration did not 

help us on that; doesn’t it appear just a little bit arrogant for the 

Administration to tell us in the Northwest what is good for us when it 

comes to the BPA debt repayment? 

 SECRETARY BODMAN. Congressman, I can’t speak to the vast array 

of subjects that you have just raised. I can speak to BPA and to the 

impact of the proposal on BPA, which as a businessman, I would 

consider to be a prudent thing. What has been proposed is, that I am sure 

you are aware, that if BPA is successful in selling energy to adjacent 

utilities and generates more than a half a billion dollars of income, 

untaxed income, which would end up going to rate relief, the first half a 

billion dollars goes to reduce the rates of BPA customers, which, as you 

are well aware, are already quite low relative to the rest of the country. 

 And the proposal is that if anything above that half a billion dollars is 

accomplished, that that should be used to pay down debt, such that if 

one, the day after you paid it down, if the executives of BPA wanted to 

avail themselves of more credit, they could borrow it back and put the 

money to work if they have capital projects to put to work. So I think it 

is a reasonable and a responsible action that has been proposed, simple as 

that. And so I can’t speak to the moral indignation that is a part of your 

comment, but I can speak to the business practices that I think for which 

this makes sense. 

 MR. INSLEE. Just briefly, I can just tell you that businessmen that I 

talked to in the Northwest, some that have had somewhat successful 

businesses in the Northwest-- 

 SECRETARY BODMAN. I am sure there are. 

 MR. INSLEE. --think it is an absolute travesty that you are trying to 

do this. I will submit some questions for the record to Mr. Chair and I 

hope that you will graciously answer them. Thank you, Mr. Bodman. 

 SECRETARY BODMAN. I will be happy to do it, sir. Thank you. 

 MR. OTTER. Mr. Secretary, would you respond to a question from 

the Chair? My understanding is that you have to leave at one o’clock. 

 SECRETARY BODMAN. That is the case. 

 MR. OTTER. Thank you, Mr. Secretary. The chair would now 

recognize himself. There are a lot of questions that I have that Mr. Inslee 

already touched on and I would like to submit those to you in a letter, 

and Mr. Engel, I hope not to wait too long for your response. 
103

 SECRETARY BODMAN. No, we will try to do it as promptly as 

possible. 

 MR. OTTER. Mr. Secretary, being from Idaho, you can expect that I 

have a great hope for nuclear energy and the role that the Idaho National 

Laboratory can play in that. But I am also aware that the future of 

nuclear energy is really dependent upon how well we overcome our sins 

of the past and especially with regards to the nuclear waste problem. 

And so I got a two-part question here. 

 Number one, in your budget we appear to be taking away from sites 

such as the Idaho site on cleanup where we have had great success, good 

progress, and then that money is going to sites that have not have had as 

good progress. I would think a victory on cleaning up nuclear waste like 

we could have in Idaho should we sustain the present commitment that 

we have to that, money wise, it would be something that we could shine 

our badge a little bit and say see, here is how well we can take care of the 

problem. That, plus the fact, the second part of my question deals with 

in another committee, I think it was either yesterday or the day before, 

you mentioned that your Administration, the Department of Energy, does 

not necessarily agree with commitments that were made by past 

administrators, or Secretaries of the Department of Energy and maybe, 

perhaps, you don’t feel compelled to keep those commitments. 

 Some of those commitments, Mr. Secretary, I would remind you, are 

not gentlemen’s agreement. It wasn’t a nice deal that two people made 

because rational minds were meeting. Those were actual contracts and 

contracts that are now being challenged and so on two fronts, before I 

think we can advance the possibilities, the potential of nuclear energy, 

we have got to clean up the sins of the past. And the second part is 

before we can really advance any of this, I think we need to clean up the 

image of the Department of Energy and the image of the Department of 

Defense, which you don’t have that much to do with, I understand, 

before we can finalize the cleanup and move forward to the future that 

we have with nuclear energy. So my question is, number one, what 

about the switching of the money to where we have had progress, from 

places where we have had progress, to places where we haven’t had as 

good progress, and number two, what are we going to do to clean up this 

image that at every whim or every new Secretary or every new Under 

Secretary we suddenly shift in our focus and we shift in our 

commitments of the past? 

 SECRETARY BODMAN. Any written agreement, any contract that this 

Department has, we do our absolute level best to honor, sir, and there are 

differences of opinion between residents of Idaho, yourself in particular, 

as I have read in your news release, and our Department over what the 

nature of that contract was and we are now in litigation, as you are 
104

aware, which hopefully one of these days will be resolved one way or 

another and we will be able to proceed. But we do try to honor and I 

assure you that, it is like honoring the commitments that Congress has 

made and we try to honor those and try to do our best to do them. 

 With respect to the budget and shifting money around, what we 

attempted to do in the Environmental Management budget, first, we have 

been successful in cleaning up some sites. I mentioned them in my 

introductory remarks. Rocky Flats is now cleaned and is now--that had 

been a major, pit manufacturing facility and it is no longer. It has now 

been returned to the Department of the Interior or soon will be; Fernald; 

Columbus; Sandia. We have had some successes and I think, rightly, we 

have attempted to take credit for it. 

 In terms of construction of this particular budget, these are very 

difficult tradeoffs that we have made and I appreciate your way is one of 

characterizing it. The way I would characterize it is we have attempted 

to put the money in those areas where we are at highest risk and where 

there is the greatest risk to the environment and that, in particular, has 

been the pit plant at Hanford, which has been a major management 

problem for this Department, for the State of Washington and that is one 

which I think we made the right choice. 

 MR. OTTER. The Chair’s time is up. Mr. Secretary, as per our 

agreement, we agreed to-- 

 MR. MARKEY. Mr. Chairman? 

 MR. OTTER. Yes. 

 MR. MARKEY. May I ask unanimous consent to be allowed to ask a 

couple of questions at this point? 

 MR. OTTER. The chair would remind the gentleman from 

Massachusetts that we have agreed that we could get the Secretary out of 

here at exactly one o’clock. 

 MR. MARKEY. And we have five minutes left up there. 

 MR. OTTER. And I would ask the Secretary if he minds? 

 SECRETARY BODMAN. No, no. I would be happy to hear from Mr. 

Markey. 

 MR. OTTER. The Secretary doesn’t mind. The gentleman’s request 

is agreed to without objection. The Chair would recognize the gentleman 

from Massachusetts. 

 MR. MARKEY. I thank the Chairman very much. Mr. Secretary, you 

say in your statement, as part of the GNEP strategy, the United States 

will work with key international partners to develop and demonstrate 

new proliferation resistant technologies to recycle spent nuclear fuel to 

reduce waste. In this proposed budget you are requesting a $250 million 

down payment on what looks like to be a $4.5 billion GNEP effort over 

the next five years merely to demonstrate an engineering scale, the urex-
105

plus process for spent fuel reprocessing. Urex, I am told, stands for 

Uranium Extraction, but it really seems like it should stand for You Are 

Expensive. So I have to ask you, Mr. Secretary, what is it specifically 

about the urex-plus process that persuades you that it represents an 

improvement in proliferation resistance worthy of such a large 

expenditure? 

 SECRETARY BODMAN. You recover plutonium, neptunium, cerium 

and americium. Those are called transuranic elements. You recover 

them as an alloy, as a blend, and therefore you produce materials which, 

as opposed to the purex process, which is used in France and Russia, 

among other places, in that process they recover pure plutonium, which 

is the reason we have so much plutonium in the world today and that is 

what presents the proliferation risk. That is why this process, we think, 

is something that should be considered. 

 MR. MARKEY. Now, would you agree that the plutonium in the Urex 

separated product is inherently less cell protected by radiotoxic vision 

products against theft and diversion than plutonium that stays in spent 

fuel? 

 SECRETARY BODMAN. No. I can’t say that. Perhaps your staff 

member knows, but I don’t happen to know the answer to that. 

 MR. MARKEY. Obviously, if it stays in current spent fuel, then it is 

totally proliferation resistant. 

 SECRETARY BODMAN. Well, it is proliferation resistant in the sense 

that it can be processed and from that one can recover pure plutonium, 

which is what the Iranians are presumably planning to do. 

 MR. MARKEY. Well, a recent scientific analysis has concluded that 

the Urex separated product has a radiation dose rate three order of 

magnitude lower than the IAEA threshold for cell protection. Would you 

agree that a material that is three orders of magnitude below the IAEA 

levels isn’t really cell protected? 

 SECRETARY BODMAN. No. 

 MR. MARKEY. Okay. So are you aware that the critical masses of 

the transuranic elements separated together with plutonium in the Urex 

processes are larger than plutonium and excellent nuclear weapons 

material, but smaller than U235, also an excellent nuclear weapons 

material? So from a critical mass perspective, it is my understanding that 

the Urex product is intermediate between these two excellent nuclear 

weapons materials? Could you explain to me how that increases our 

proliferation resistance? 

 SECRETARY BODMAN. It is my position that the use of the Urex 

process is not useful to making a nuclear weapon. 

 MR. MARKEY. To achieve the reductions and heat loading of nuclear 

waste requiring long-term isolation in a permanent repository, I am 
106

informed that you are going to need a lot more than your requested urexplus demonstration plant. In fact, to credibly deliver on its forecast 

benefit for waste management, it has been estimated that your GNEP 

program would require the next 100 or more new commercial reactors 

worldwide to be fast reactors. In the United States alone this adds an 

extra $80 billion to $100 billion requirement for 20 to 25 fast reactors 

just to transmute the fuel discharged from existing U.S. power reactors 

globally. This would add hundreds to billions of trillions of dollars to the 

cost of nuclear generator electricity. 

 SECRETARY BODMAN. I disagree with that statement, sir. 

 MR. MARKEY. Thank you. I will leave it at that. 

 MR. OTTER. Thank you, Mr. Markey. Mr. Secretary, once again, 

thank you very much for your attendance here. 

 MR. ENGEL. Mr. Chairman, I am not going to ask a question, I was 

just wondering if I could just, for the record, take 30 second to--I am 

going to submit my questions, but I just want to, for the record, to just 

mention the Department’s budget proposing $42 million for the 21st 

Century Truck Partnership, which is an initiative aimed at increasing-- 

 MR. OTTER. Mr. Engel, the committee made a commitment to the 

Secretary and the Secretary needs to leave now. If you want to submit a 

question-- 

 MR. ENGEL. Okay. 

 MR. OTTER. The Secretary has agreed to answer all questions. Mr. 

Secretary, thank you once again very much for your attendance here. 

 SECRETARY BODMAN. Okay. 

 MR. OTTER. This meeting is adjourned. 

 [Whereupon, at 1:01 p.m., the committee was adjourned.] 

RESPONSE FOR THE RECORD BY SAMUEL W. BODMAN, SECRETARY, U.S. DEPARTMENT OF 

ENERGY

QUESTIONS FROM CHAIRMAN BARTON 

Energy Efficiency

Q1. Last year during the Congressional debate over EPAct 2005, there was quite a 

discussion about the timetable for DOE to issue energy efficiency standards for 

a number of appliances. Many of the standards were years behind schedule. 

Recently, DOE submitted a report to Congress showing how DOE was going to 

issue all of the energy efficiency standards. Is the 11% increase in the budget 

for the Building Technologies program, which sets these standards, sufficient to 

meet that commitment to Congress? Is there anything else that DOE needs from 

Congress to meet its commitments? 

A1. The increased funding request for FY 2007 as shown in the table below is in 

direct response to the new requirements of EPAct 2005 and will also allow the 

Department to address the backlog of rulemaking activities. In FY 2007 the 
107

program will complete action on rulemakings started in FY 2005 and prior 

years, and will continue work on the 13 product standards and test procedures 

initiated in FY 2006. 

Funding Summary (dollars in thousands) 

Program/Activity 

FY 2005 

Approp. 

FY 2006 

Request 

FY 2006 

Approp. 

FY 

2007 

Request 

Approp. 

Vs 

Request 

Equipment 

Standards and 

Analysis 

$10,147 $8,256 $10,153 $11,925 +$1,772 

A complete schedule of activities, with dates for publication of proposed 

rulemakings and other milestones, is contained in the report to Congress as 

required by Sec. 141 of EPACT 2005. The Department’s proposed activities in 

FY 2007 represent firm and achievable schedules for very important and 

complex rulemaking activities that will have significant energy savings benefits 

for the Nation. The Department’s FY 2007 budget request reflects the 

resources needed to ramp up this activity and remain at a high level of output 

for several years until the backlog of rulemaking activities is addressed. 

Solar

Q2. The Solar America Initiative will promote deployment of 5,000-10,000 MW of 

electricity generated by the sun. This seems to be a very ambitious goal; what is 

DOE’s plan to meet it? Does this program include both photovoltaic and solar 

concentration technologies? 

A2. While the SAI will support both photovoltaic (PV) and concentrating solar 

power (CSP) technologies, the focus of research funding will be on PV 

technology. New competitively- awarded, industry-led partnerships will be 

funded to aggressively improve cost, performance, and reliability. SAI will use 

a systems-driven approach, rather than focusing on incremental improvements 

to solar system components. Aggressive milestones and metrics will be used 

to monitor progress. The program will also use periodic down-selects to focus 

only on pathways with the best outlook for success. 

The technology goal is to produce levelized cost of power from 5 to 10 cents 

per kilowatt-hour, depending on the location and application. We believe that 

if we continue to reduce costs steadily and meet this 2015 target, and if State 

incentives and programs continue to accelerate deployment, as much as 5,000 

to 10,000 additional MW could be deployed. The Solar Program intends to 

work closely with the Building Technologies Program, the Office of Electricity 

Delivery and Energy Reliability, Office of Science, States, cities, utilities and 

industry to accomplish its goals. 

Advanced Vehicles

Q3. What is the current status of the advanced vehicle program authorized in 

Sections 721-723 of EPAct 2005? 
108

A3. Sections 721-723 authorize the Department of Energy to establish a competitive 

grant pilot program for the demonstration of a number of types of alternative 

fuel and other advanced technologies vehicles. 

The Department did not request funds to implement this Section of EPACT. As 

noted in the Statement of Administration Policy (SAP) submitted to energy bill 

conferees on July 17, 2005, “The House and Senate versions of H.R. 6 also 

include authorization levels that in many cases significantly exceed the 

President’s Budget. These authorizations set unrealistic targets and 

expectations for future program –funding decisions.” House and Senate SAPs 

contained similar language. 

The Department prioritized activities, including those authorized under EPACT, 

that would most contribute to the goal of reducing America’s growing 

dependence on foreign oil. The 2007 Budget reflects the Department’s 

priorities. 

 

Coal

Q4. EPAct 2005 contains not only the incentives for Innovative Technologies Title 

(Title XVII), but other loan guarantee programs in other titles of the Act. What 

is the current status of the loan guarantees for petroleum coke gasification 

projects? Has an office been created within the Department to handle the 

implementation of the loan guarantee programs? When will the application 

process for the loan guarantee programs begin? 

A4. The Department of Energy (DOE) has established a small loan guarantee office 

under the Department’s Chief Financial Officer. In implementing the program, 

we will follow the Federal Credit Reform Act of 1990 (FCRA) and Office of 

Management and Budget (OMB) guidelines, and we will emulate “best 

practices” of other federal agencies. Toward that end we are drafting program 

policies and procedures, establishing a credit review board, and are planning to 

employ outside experts. 

 Title XVII authorizes DOE to issue loan guarantees for projects that avoid, 

sequester, or reduce air pollutants and/or anthropogenic emissions of 

greenhouse gases, and “employ new or significantly improved technologies as 

compared to commercial technologies in service in the United States at the time 

the guarantee is issued.” Section 1703(b) lists some specific categories of 

projects that are eligible for these loan guarantees, including petroleum coke 

gasification. Title XVII, in contrast to Title IV, allows for project developers to 

pay the cost of loan guarantees issued by DOE. While this “self pay” 

mechanism may reduce the need for appropriations, it does not eliminate the 

taxpayer’s exposure to the possible default of the total loan amount. Therefore, 

DOE’s evaluations of applications will entail rigorous analysis and careful 

negotiation of terms and conditions. 

 FCRA contains a requirement that prevents us from issuing a loan guarantee 

until we have authorization to do so in an appropriations bill. We do not 

believe we have authority to proceed with an award absent having the 

necessary explicit authorization in an appropriations bill. 
109

Q5. How does the decrease in the funding request for University Coal Research 

compliment the Administration’s commitment to increasing American 

competitiveness in science, math, and engineering through greater educational 

opportunities and enticements? 

A5. The small decrease (approximately 7%) in the funding request for the 

University Coal Research (UCR) program will not change the Administration’s 

commitment to increasing American competitiveness in science, math and 

engineering through greater educational opportunities and enticements. The 

small decrease in UCR funding in materials, sensors and controls, and 

modeling, is offset by increases in other, higher priority areas. 

Ethanol

Q6. In your testimony, you mentioned the FY2007 Budget proposes $149.7 million 

for the Biomass and Biorefinery Systems Research and Development (R&D) 

Program to support the new Biofuels Initiative to develop cost competitive 

ethanol from cellulosic materials by 2012. What is the status of the loan 

guarantees for projects that demonstrate the commercial feasibility and viability 

of producing cellulosic biomass ethanol (Section 1511 of the EPAct 2005)? 

A6. The Department of Energy (DOE) has established a small loan guarantee office 

under the Department’s Chief Financial Officer. In implementing the program, 

we will follow the Federal Credit Reform Act of 1990 (FCRA) and Office of 

Management and Budget (OMB) guidelines, and we will emulate “best 

practices” of other federal agencies. Toward that end we are drafting program 

policies and procedures, establishing a credit review board, and are planning to 

employ outside experts. 

 Title XVII authorizes DOE to issue loan guarantees for projects that avoid, 

sequester, or reduce air pollutants and/or anthropogenic emissions of 

greenhouse gases, and “employ new or significantly improved technologies as 

compared to commercial technologies in service in the United States at the time 

the guarantee is issued.” Section 1703(b) lists some specific categories of 

projects that are eligible for these loan guarantees, including “renewable energy 

systems”. Technologies that produce ethanol from cellulosic biomass may 

qualify as renewable energy systems. Title XVII, in contrast to Title XV, 

allows for project developers to pay the cost of loan guarantees issued by DOE. 

While this “self pay” mechanism may reduce the need for appropriations, it 

does not eliminate the taxpayer’s exposure to the possible default of the total 

loan amount. Therefore, DOE’s evaluation of applications will entail rigorous 

analysis and careful negotiation of terms and conditions. 

 FCRA contains a requirement that prevents us from issuing a loan guarantee 

until we have authorization to do so in an appropriations bill. We do not 

believe we have authority to proceed with an award absent having the necessary 

explicit authorization in an appropriations bill. 
110

Gas Hydrates

Q7. One of the best ways to decrease our dependence on foreign sources of oil is to 

increase our domestic production. In your budget proposal, you are terminating 

the Petroleum-Oil and Natural Gas Technologies programs. This would 

terminate all existing DOE methane hydrate research. In addition, you do not 

appear to have allocated appropriation funding for your Congressionally 

directed obligations under EPAct 2005 Section 968 to develop a methane 

hydrate research and development program. The United States Geological 

Survey estimates that natural gas hydrate resources in-place total over 300,000 

trillion cubic feet (TCF). As you know, technology to extract this resource is in 

a very early stage and private industry cannot afford to shoulder the burden. 

How do you justify that this type of research is no longer necessary? What 

happens to the limited research that has been done? Will it be lost in the 

termination? 

A7. The decision to terminate the gas hydrates program reflects a strategic 

assessment of the program compared to other DOE programs. This is in line 

with our commitment to deliver results for the American taxpayer. The 2007 

Budget’s proposals to expand access to oil and gas resources, streamline 

permitting processes, and make the R&D investment tax credit permanent are 

better ways to increase domestic production of oil and gas than federally 

funded R&D. Several other government agencies, specifically Minerals 

Management Service (MMS), U.S. Geological Survey (USGS), National 

Oceanic and Atmospheric Administration (NOAA), National Science 

Foundation (NSF), and Naval Research Laboratory (NRL), support gas 

hydrate-related research that is relevant to their missions, focusing on resource 

characterization and basic research, rather than exploration and production. 

Some private sector companies are also investigating this potential resource. 

The results of all R&D completed by the Congressionally directed methane 

hydrate program will be publicly available to the research community and 

industry. 

 

Oil and Gas

Q8. In your FY 2007 congressional Budget Request, you propose a repeal of the 

Ultra-deepwater and Unconventional Natural Gas and Other Petroleum 

Research and Development Program (the “Ultradeep Program”) enacted 

pursuant to the EPAct 2005. As you are aware, a letter dated February 15 

stating our concerns about repeal of the Ultradeep Program was sent t you. 

Since the Ultradeep Program is a federal law and has been directly funded 

pursuant to that law, please explain where DOE is in its implementation of the 

Ultradeep Program and your full 2006 schedule for full implementation. 

A8. The Department is complying, and will continue to comply, with the Energy 

Policy Act. In compliance with the Energy Policy Act, on November 4, 2005, 

the Department issued a solicitation for administration of the Ultra-deepwater 

and Unconventional Natural Gas and Other Petroleum Research and 

Development Program. The solicitation closed on February 2, 2006, and the 

Department has completed its review and made a selection of the consortium in 

May 2006, as required by the Energy Policy Act. 
111

On April 27, 2006, Secretary Bodman transmitted to the House and Senate a 

legislative proposal to repeal the program. Oil and gas are mature industries 

and both have every incentive, particularly at today’s prices, to enhance 

production and continue research and development of technologies on their 

own. There is no need for taxpayers to subsidize oil companies in these efforts. 

Q9. In his 2006 State of the Union address, the President laid out an aggressive 

vision to decrease U.S. dependence on crude oil from the Middle East. The 

Ultradeep Program is designed to accomplish that by increasing our 

economically available oil and gas resources through research and development 

and thereby decrease our dependence on Middle Eastern sources of oil. By 

recommending that the Ultradeep Program be repealed, does DOE indirectly 

support increasing our foreign imports of oil and gas? Wouldn’t a national 

R&D program designed to increase our economically available domestic 

resources provide an alternative to less expensive foreign oil to companies? 

A9. Oil and gas are mature industries and both have every incentive, particularly at 

today’s prices, to enhance production and continue research and development 

of technologies in areas such as ultra-deepwater exploration on their own. 

There is no need for taxpayers to subsidize oil companies in these efforts. The 

Administration’s Research and Development Investment Criteria direct 

programs to avoid duplicating research in areas that are receiving funding from 

the private sector, especially for evolutionary advances and incremental 

improvements. Private control of intellectual property provides a market 

incentive for the private sector to invest in R&D and advance technology. 

While not part of the Fossil Energy budget, The 2007 Budget’s proposals to 

expand access to oil and gas resources, streamline permitting processes, and 

make the R&D investment tax credit permanent leverage private sector 

ingenuity and are better ways to increase domestic production of oil and gas 

than federally funded R&D. 

 

The President’s goal of reducing dependence on foreign sources of oil will also 

be addressed by the Advanced Energy Initiative proposed in the budget 

including advancements in cellulosic ethanol, battery technology, and 

hydrogen, among others. The Department and the Administration has set its 

budget priorities for research and development to focus on these and other areas 

within the Advanced Energy Initiative because they hold the greatest promise 

in helping us diversify and strengthen domestic energy resources. 

Independent Producers

Q10. Because 68 percent of domestic oil and 82 percent of domestic natural gas 

comes from independent producers that cannot economically manage full scale 

exploration and production R&D programs independently, and because there is 

a national benefit to any such intellectual property being available broadly 

across this segment of the industry, doesn’t Congressional policy to advance 

technologies that explore new frontiers for domestic oil and natural gas 

production through federally funded research and development make good 

sense? 
112

A10. Oil and gas are mature industries and both have every incentive, particularly at 

today’s prices, to enhance production and continue research and development 

of technologies on their own. There is no need for taxpayers to subsidize oil 

companies in these efforts. The Administration’s Research and Development 

Investment Criteria direct programs to avoid duplicating research in areas that 

are receiving funding from the private sector, especially for evolutionary 

advances and incremental improvements. 

Private control of intellectual property provides a market incentive for the 

private sector to invest in R&D and advance technology. Although independent 

operators may not fund technology development directly, the service industry 

that supplies them with equipment funds significant development of 

technologies with application to independent operators. The Department 

expects the service industry to continue to provide technological innovations 

for use by major and independent producers. 

While not part of the Fossil Energy budget, the 2007 Budget’s proposals to 

expand access to oil and gas resources, streamline permitting processes, and 

make the R&D investment tax credit permanent leverage private sector 

ingenuity and are better ways to increase domestic production of oil and gas 

than federally funded R&D. The President’s goal of reducing dependence on 

foreign sources of oil will also be addressed by the Advanced Energy Initiative 

proposed in the budget including advancements in cellulosic ethanol, battery 

technology, and hydrogen, among others, some of which is included in the 

Fossil Energy budget. 

 

Strategic Petroleum Reserve

Q11. Pursuant to the EPAct 2005 Section 301, you are directed to fill the Strategic 

Petroleum Reserve (“SPR”) to its 1,000,000,000-barrel capacity as 

expeditiously as possible. To this end, pursuant to Section of EPAct 2005, you 

are directed to complete a proceeding to select sites necessary to enable 

capacity expansion of the SPR to meet that 1,000,000,000-barrel mandate. You 

do not appear to have allocated appropriation funding for the actual acquisition 

of the selected sites. When do you expect to request such funding to fulfill 

your ultimate obligation of expanding and filling the SPR and do you have an 

estimate of how much that request will be? Are there plans to acquire interim 

storage capacity while larger sites are being built? 

A11. The Department initiated a proceeding in early Fall 2005 to identify potential 

sites for expansion of the Strategic Petroleum Reserve to 1 billion barrels. 

Public meetings were held through the Fall to solicit community input and 

comments were received. The proceeding to select sites is expected to be 

completed in late summer with the publication of an Environmental Impact 

Statement and recommendation for site selection. 

 EPACT 2005 requires that the Secretary of Energy “shall, as expeditiously as 

practicable, without incurring excessive cost or appreciably affecting the price 

of petroleum products to consumers, acquire petroleum in quantities sufficient 

to fill” the SPR to the one billion barrel authorized capacity. The FY 2007 

Request is sufficient to comply with responsibilities established under EPACT 

2005. 
113

Global Nuclear Energy Partnership (GNEP)

Q12. The DOE budget cuts every nuclear energy research and development program 

except for Advanced Fuel Cycle Initiative, which is the funding source for 

GNEP. This suggests that previous Department goals, such as developing new 

generations of reactor technology and harnessing nuclear energy for the 

production of hydrogen, are no longer priorities. Considering that these goals 

have been major Department initiatives in the past, what assurance can you 

provide that GNEP not suffer a similar fate, thereby wasting taxpayer’s funds 

on a program that will fall out of favor in a few short years? 

A12. Developing new generations of reactor technology and harnessing nuclear 

energy for the production of hydrogen are key priorities for the Department. 

Both of these activities are part of the President’s Advanced Energy Initiative. 

With the funding requested in Fiscal Year 2007 for the Nuclear Hydrogen 

Initiative and the Next Generation Nuclear Plant concept, the Department will 

continue the research and development needed to bring these technologies to 

the point of maturity necessary to inform a decision in 2011 on whether to 

proceed with construction of a reactor co-generation demonstration facility. In 

addition, consistent with expectations expressed in the Energy Policy Act of 

2005, we are also currently exploring the feasibility of using existing nuclear 

power plants for hydrogen production. We believe all of this research is 

important for the Nation. Instead of reducing other initiatives, the Global 

Nuclear Energy Partnership initiative will support them by providing a 

sustainable path for the U.S. and global development of nuclear energy. 

Q13. DOE is not requesting any additional legislative authority to pursue the GNEP 

initiative at this time. Under what authority does the Department believe it may 

conduct each aspect of the initiative? 

A13. DOE currently believes the existing legislative authority under the Atomic 

Energy Act of 1954 as amended, is sufficient for carrying out the activities 

currently proposed as part of the GNEP initiative. 

Q14. What are the program’s specific objectives? 

A14. The Global Nuclear Energy Partnership (GNEP) initiative seeks to develop 

worldwide consensus on enabling expanded use of economical, carbon-free 

nuclear energy to meet growing electricity demand. This initiative proposes to 

use a nuclear fuel cycle that enhances energy security, while promoting nonproliferation. It would achieve its goal by having nations with secure, 

advanced nuclear capabilities provide fuel services – fresh fuel and recovery of 

used fuel – to other nations who agree to employ nuclear energy for power 

generation purposes only. The closed fuel cycle model envisioned by this 

partnership requires development and deployment of technologies that enable 

recycling and consumption of long-lived radioactive waste. Under the GNEP 

initiative, the Department would seek to demonstrate the critical technologies 

needed to change the way used nuclear fuel is managed – to build recycling 

technologies that enhance energy security in a safe environmentally responsible 

manner, while simultaneously promoting non-proliferation. 
114

Q15. Please describe any work that the Administration has begun on the GNEP 

program. 

A15. Under GNEP, the Department has proposed $250 million in FY 2007 to 

accelerate the demonstration of integrated recycling technologies that are 

currently under development as part of the Department’s ongoing Advanced 

Fuel Cycle Initiative (AFCI). Under AFCI, the Department’s current efforts 

are aimed at conducting the applied research, engineering and environmental 

studies that would be needed to inform a decision in 2008 on whether to 

proceed with detailed design and construction of the engineering scale 

demonstration facilities. The Department recently approved the mission need 

for these demonstration facilities, the first critical decision in the Department’s 

project management procedures. In March 2006, the Department issued an 

advance notice of intent, announcing plans to prepare an environmental impact 

statement (EIS) for the GNEP technology demonstration program. The EIS 

effort is anticipated to be completed over the next two years. Also last month, 

the Department announced that it is seeking expressions of interest from the 

public and private sectors for hosting advanced recycling demonstration 

facilities and related activities. 

Q16. How many people does the Department have working on the GNEP program 

now? How many people does the Department anticipate it will have working 

on the GNEP program at its peak? When will that peak occur? 

A16. Currently, 15- 25 Federal staff provide technical and management support to 

the Advanced Fuel Cycle Initiative (AFCI). About 100 engineers, scientists 

and technicians from DOE national laboratories are currently supporting AFCI. 

Under GNEP, the Department would propose to accelerate the AFCI program 

to demonstrate the integrated recycling technologies. While the specific levels 

of staffing for the future cannot be provided until the conceptual designs are 

completed, it is anticipated that staffing would significantly increase as the 

technology demonstration program transitions to detailed design and to 

construction. 

Q17. Which countries are potential fuel cycle partners? Would technology 

development be coordinated within the GNEP or will each partner pursue its 

own programs? 

A17. The U.S. has completed initial consultations with fuel cycle countries and the 

International Atomic Energy Agency on the key objectives of GNEP. From a 

technical perspective, to date, France, Japan, Russia, and the United Kingdom 

have expressed strong interest in cooperative, coordinated research and 

development. It is anticipated that the technology development and 

demonstration would be a coordinated effort among the partner nations. In the 

course of meetings held in February and March 2006, these countries agreed in 

principle to substantial collaboration with the U.S. in the preparation for, and 

execution of, the GNEP technology demonstrations. The visions for the GNEP 

technical strategies are shared by all these countries. 
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Q18. What projects within the GNEP will be regulated by the Nuclear Regulatory 

Commission? 

A18. DOE would regulate the GNEP technology demonstration program under its 

own authority granted by the Atomic Energy Act. DOE would engage the 

Nuclear Regulatory Commission throughout the technology demonstration 

phase to ensure that the technologies developed and demonstrated are 

licensable by NRC. 

Q19. Do you believe, and has the Department done any studies that show that the 

infrastructure development necessary for GNEP will produce cost competitive 

power for consumers? 

A19. A major objective of the demonstration phase of the GNEP initiative is to 

understand and determine the costs associated with a more proliferation 

resistant closed fuel cycle while demonstrating those technologies necessary to 

support the global expansion of emissions-free nuclear energy. Engineering 

scale demonstrations will enable the Department to improve plant design and 

reduce costs. It is too early to determine the cost competitiveness of power 

produced from the proposed integrated GNEP facilities. 

GNEP – Costs

Q20. What is the projected cost of the GNEP program over its lifetime? 

A20. The Department’s preliminary, order-of-magnitude estimate of costs for the 

GNEP initiative range from $20 billion to $40 billion, which includes the costs 

of the technology demonstration projects, including the Nuclear Power 2010 

and Yucca Mountain programs. The preliminary, order-of-magnitude costs 

associated with the demonstration of technologies would be substantially less, 

and have previously been estimated to range from $3 billion to $6 billion over 

the next ten years to bring those technologies to the point of initial operations. 

These estimates are based on pre-conceptual studies and information available 

from laboratory-scale testing. We will be able to provide costs with a higher 

degree of confidence as the conceptual design studies are completed over the 

next two years. 

Q21. What are the GNEP funding requirements for FY 2008 and succeeding years? 

A21. The Department is currently developing and anticipates completing the GNEP 

Program Plan by the end of May 2006 which will guide the GNEP technology 

demonstration program work scope over the next five years and will identify 

the funding requirements for its implementation. 

Q22. Will the Nuclear Waste Fund be used to pay for some of the program costs? 

A22. The Department has no plans to use the Nuclear Waste Fund to fund any for 

GNEP technology activities. The Nuclear Waste Policy Act of 1982 authorizes 

the Secretary to “make expenditures from the Waste Fund ... only for purposes 
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of radioactive waste disposal activities ... including: ... any costs that may be 

incurred by the Secretary in connection with the transportation, treating, or 

packaging of spent nuclear fuel or high-level radioactive waste to be disposed 

of in a repository, to be stored in a monitored, retrievable storage site, or to be 

used in a test and evaluation facility.” (42 U.S.C. 10222(d)). To the extent that 

GNEP activities involve the “treating, or packaging of spent nuclear fuel,” for 

disposal at Yucca Mountain, such activities would come within the scope of 

radioactive waste disposal activities within the meaning of the Nuclear Waste 

Policy Act of 1982, and thus the Nuclear Waste Fund could potentially be used 

for such activities. Any use of the Nuclear Waste Fund for GNEP activities 

would require the approval of Congress through the appropriation process. 

Q23. Considering that both GNEP and the Yucca Mountain programs will require 

dramatic funding increases in roughly similar timeframes, how will DOE 

accommodate those competing requirements within its budget? What 

offsetting reductions in DOE activities is the Administration considering? 

A23. DOE intends to request sufficient funding to support both GNEP and the Yucca 

Mountain programs. The Administration has submitted legislation, “Nuclear 

Fuel Management and Disposal Act,” which would provide stable and 

predictable funding for Yucca Mountain Program by making annual receipts 

from the Nuclear Waste Fund available to the program. No decisions have 

been made at this stage concerning whether there would be offsetting 

reductions in other programs. 

Q24. Deputy Secretary Clay Sell’s testimony before Senate Appropriations states, 

“We will be looking for a sizable portion of GNEP costs to be shared by our 

partners and industry starting in 2008.” What aspects does the Administration 

envision the industry funding and how much would the industry contribute? 

A24. Our industry and international partners would focus their contributions on the 

demonstration of the technologies that support the more proliferation resistant 

closed fuel cycle. Industry and international partners have significant 

experience and capabilities that would support various aspects of the GNEP 

initiative. While specific funding levels have not been set among possible 

participants, it is anticipated that cooperating on the development of these 

advanced recycle technologies would enable the U.S. to leverage its investment 

with fuel cycle partners. 

Q25. Will fuel cycle partners provide funding support for the program? 

A25. Industry and international partners have significant experience and capabilities 

that would support various aspects of the GNEP initiative. While specific 

funding levels have not been set among possible participants, it is anticipated 

that cooperating on the development of these advanced recycle technologies 

would enable the U.S. to leverage its investment with fuel cycle partners, 

increasing the U.S. investment several fold. 
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GNEP – Fuel Leasing

Q26. Which countries seeking to develop nuclear energy have expressed interest in 

the GNEP? 

A26. The preliminary responses from major fuel supply nations such as Japan, 

France, the United Kingdom, Russia and China have been very encouraging. 

We recognize that there are responsible states that have partial fuel cycles 

whose interests can be accommodated in the GNEP framework. Government 

delegations from Canada and South Korea were briefed at their request. In 

addition, many science counselors from embassies that expressed interest in 

learning more about GNEP from Europe, Asia, Latin America and Africa were 

briefed in Washington. The IAEA has been supportive of GNEP goals. In 

March, the International Atomic Energy Agency Board of Governors was 

briefed, including representatives from nearly 40 nations. We are still in the 

outreach stage, attempting to provide more information in response to inquiries, 

for example, concerning Indonesia, Vietnam and Turkey. 

GNEP

Q27. Countries wishing to purchase nuclear fuel services could do so through 

existing markets. How would GNEP fuel-leasing concept be different? What 

incentives are there for those countries to utilize GNEP fuel leasing? Will 

GNEP provide subsidies or incentives that would make fuel cheaper than the 

competitive market? If so, who would pay the costs of those subsidies or 

incentives? 

A27. The commercial uranium market provides some margin of fuel supply security. 

Under GNEP, we envision extending the security through fuel supply 

assurances and cradle-to-grave fuel services. This provides two important 

incentives for nuclear power users: (1) access to fuel in the event of a supply 

disruption, and (2) elimination of a requirement to store spent reactor fuel for 

an extended period of time. No subsidies are envisioned under this 

arrangement. We anticipate all fuel transactions would be at prevailing market 

prices and conditions, consistent with our goal of not adversely impacting the 

commercial nuclear fuel market. 

Q28. What potential role might the International Atomic Energy Agency play in fuel 

leasing arrangements? 

A28. The International Atomic Energy Agency is expected to play a significant role 

in any fuel supply arrangements. Under the Reliable Fuel Supply Initiative we 

envision, the IAEA will serve as the central point of contact for states facing 

(Note: don’t want to let states get near actually experiencing a disruption – time 

between contracting of uranium for fuel and fabrication can be fairly lengthy) a 

short-term, fuel supply disruption. In such circumstances, the IAEA would act 

as a broker, helping states identify alternative sources of nuclear fuel from 

supplies around the world. This role is consistent with the IAEA’s charter and 

mission. 
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Q29. I understand that DOE has allocated 17 metric tons of High Enriched Uranium 

for fuel leasing under the GNEP concept. Considering that the value of that 

material at current market prices is near $800 million, how does the 

Department plan to ensure that American taxpayers benefit? Where is this 

reflected in the DOE’s budget? 

A29. As part of the Reliable Fuel Supply initiative announced by Secretary Bodman 

last year, 17 metric tons of highly-enriched uranium (HEU) is to be 

downblended to low-enriched uranium (LEU) and the LEU set aside as an 

emergency stockpile for states that refrain from pursuing national enrichment 

and reprocessing programs and that experience a short-term fuel supply 

disruption. The Reliable Fuel Supply is separate from the GNEP initiative. 

Limiting the spread of enrichment and reprocessing programs is one of the 

nation’s highest priorities, and its achievement will provide a crucial benefit to 

U.S. taxpayers. Under the fuel supply arrangement we envision, the 

Department will sell LEU from the reserve at current market prices. Revenues 

from any sales of this material will be returned to the U.S. Treasury. At today’s 

prices, the gross market value of the material is estimated to be approximately 

$640 million. After taking into account processing and downblending costs, 

the net market value is estimated to be just over $500 million. These potential 

future revenues to the Treasury cannot be reflected in the DOE budget, since 

the timing and extent of any such future sales are unknown. 

GNEP – Fast reactors

Q30. Who is working on development of fast reactors and what is the status in the 

U.S.? In the world? 

A30. While the U.S. has considerable experience with fast reactor technology and is 

exploring a sodium fast reactor concept under the Generation IV nuclear energy 

systems initiative, there are no fast reactors currently operating in the U.S. 

Worldwide, Russia, Japan, France, China, and India are also working on fast 

reactors and fast reactor technology. Russia, France, Japan, and India have 

operating fast reactors. China and India are each currently building a fast 

reactor. All of these countries envision a long-term expansion of nuclear 

energy with significant contributions from fast reactor technologies to ensure 

sustainability. 

Recently, the U.S., France and Japan signed a systems arrangement to 

cooperate on the development of sodium fast reactor technology. It is 

anticipated that this arrangement will provide the framework under which these 

countries could cooperate on developing advanced burner reactors under the 

GNEP program. 

 

Q31. What is your best estimate of how much it will cost to take to develop fast 

reactors? What is your best estimate of how long that development will take? 

When would fast reactors be deployed? 

A31. DOE has estimated that it will take between $2 billion and $5 billion to develop 

an advanced fast test reactor in which to demonstrate the burning of 

transuranics and support the qualification of larger advanced burner reactors. 
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The Department has set a goal of developing the fast spectrum test reactor 

between 2014 and 2019. The Department would need several years of 

experience operating the technology demonstration facilities in parallel with the 

design of commercial-scale facilities. It is anticipated that commercial-scale 

operations could begin over the next twenty years. 

Q32. What is your best estimate for the cost of a fast reactor? Do you expect that 

fast reactors will be commercially deployed? If so, what is the basis for 

assuming that such plants will be economically feasible? 

A32. The Department does not have a specific cost estimate for the design of fast 

reactors. These costs will be estimated over the next two years as the 

Department conducts conceptual design on the advanced burner reactor and 

works to develop a baseline schedule and cost for demonstration of the 

technology. 

 Under the Advanced Fuel Cycle Initiative, the Department would propose to 

invest $25 million on the advanced burner test reactor technology in FY 2007, 

to complete much of the conceptual design and complete a series of extensive 

studies to establish cost and schedule baselines and determine the scope, safety, 

and health risks associated with fuel design, siting and acquisition options. In 

addition, under the Generation IV program, the Department would propose to 

allocate about $3 million in FY 2007 to explore research and development 

associated with fast reactor technology. 

 We believe that innovative design features and modern project management, 

fabrication, and installation technologies offer the promise of significant cost 

reductions for fast reactor technology as well as other reactor systems. 

However, with any new reactor technology, the cost of first-of-a-kind 

demonstration facility will be higher than the eventual commercial system. 

One of the fundamental objectives of demonstrating the advanced burner 

reactor technology is to determine the commercial feasibility of the technology, 

and to incorporate and demonstrate technical innovations that would improve 

reactor economics. The Department’s plan calls for a demonstration of the 

technology in the 2014 - 2019 timeframe. The Department would need several 

years of experience operating the GNEP technology demonstration facilities in 

parallel with the design of commercial-scale facilities. It is anticipated that 

commercial-scale operations could begin over the next twenty years. 

Q33. How many fast reactors are envisioned under the GNEP program? 

A33. Under GNEP, the Department’s preliminary estimate is that approximately one 

advanced burner reactor would be required for every four to ten light-water 

commercial power reactors. The exact number will not be known until the 

reactor design is substantially completed. 

Q34. Given this number of fast reactors, how long will it take to eliminate all of the 

material expected to be generated by the existing fleet of nuclear plants in the 

U.S.? 
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A34. A determination of the time required to recycle the current and projected 

inventories of spent nuclear fuel from the existing fleet is dependent on the 

ultimate size of the separations facility or facilities required to produce the 

feedstock for fueling the fast burner reactors. The Department is not currently 

in a position to make this determination. 

Q35. Has the NRC ever licensed a fast reactor design? What is your best estimate of 

when it could do so? 

A35. NRC has previous experience in reviewing fast reactor technology, including 

both the Fast Flux Test Facility (FFTF) and the Clinch River Breeder Reactor. 

In the case of FFTF, the NRC completed a safety evaluation and issued the 

FFTF Safety Evaluation Report. The Clinch River Breeder Reactor licensing 

effort was almost complete at the time the project was terminated. It is DOE’s 

hope that the NRC would be ready to license an advance burner reactor by 

2025. 

GNEP – Reprocessing

Q36. Would existing reprocessing facilities be utilized until UREX+ technology is 

deployed? 

A36. The Department has made no decisions concerning the use of existing facilities 

for demonstrating the recycling technologies and there currently are no plans 

for the U.S. to use the existing recycling facilities in the interim while the 

UREX+ technology is deployed. 

Q37. Can the reprocessed material be used in the existing fleet of nuclear reactors or 

does it require a fast reactor? 

A37. The uranium separated from the spent fuel could be used in fast spectrum 

reactors or re-enriched and used in light water reactors. The transuranic 

material would not be usable as fuel for light water reactors but could be 

consumed as fuel in a fast spectrum reactor. For this reason, the Department is 

considering a sodium-cooled fast reactor for the GNEP program. Use of 

recycled plutonium and other transuranic elements in some existing 

commercial reactors is technically feasible but does not produce the 

environmental benefits which can be achieved through the use of fast reactors 

to consume transuranics. 

Q38. According to DOE’s Global Nuclear Energy Partnership proposal, the United 

States would provide nuclear fuel services to other countries including the 

return of spent fuel for reprocessing. Where will the ultimate waste product be 

disposed? 

A38. We do not envision accepting spent fuel pursuant to GNEP until there is 

sufficient advanced recycling capability available in the U.S. At that time, we 

would have to consider the conditions under which the U.S. would reprocess 
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another country’s spent fuel. It is anticipated that other countries resultant biproduct waste materials would be returned to the country of origin. 

Q39. I understand that the GNEP program anticipates use of the UREX + process. 

What is the status of developing that process? 

A39. Over the last five years, the Department has pursued development of more 

proliferation resistant separations technology. The Uranium Extraction Plus 

(UREX+) technology has been successfully demonstrated at the “laboratory 

scale,” demonstrating that uranium can be separated at a very high level of 

purity from light water reactor spent fuel. While we have had success in 

demonstrating the technology at the “laboratory scale,” a central challenge is 

demonstrating the ability to separate spent fuel at an “engineering scale,” at 

those same levels of purity. It is also necessary to demonstrate waste forms for 

the products of the UREX+ technologies. The GNEP program would enable the 

Department to accelerate the demonstration of the UREX+ technology at a 

sufficient scale to demonstrate the feasibility and performance of a full scale 

facility. 

Q40. Who is working on development of the UREX+ process in the U.S.? In the 

world? 

A40. The UREX+ process has been developed by the DOE and its national 

laboratories up to this point. This technology was chosen because of the purity 

with which we have been able to separate constitutents of spent fuel at the 

“laboratory scale” level and because many of its process steps are similar to 

well demonstrated processes, further increasing the probability of success at the 

“engineering scale.” Other countries such as France, Japan and Russia are 

working on similar processes. 

Q41. What is your best estimate of how much it will cost to take the UREX+ process 

from where it is today to deployment? What is your best estimate of how long 

that development will take? 

A41. DOE has previously estimated that it would require between $700 million and 

$1.5 billion to bring the UREX+ demonstration facility to the stage of initial 

operation. The Department has set a goal of facility start-up between 2011 and 

2015. The Department would need several years of experience operating the 

facility in parallel with the design of a commercial-scale facility. It is 

anticipated that commercial-scale operations could begin over the next twenty 

years. 

Q42. What is your best estimate for the cost of a commercial UREX+ facility? Do 

you expect that reprocessing plants will be commercial, profit-making 

enterprises? If so, what is the basis for that assumption? Are any of the 

existing foreign reprocessing facilities profitable? 

A42. An engineering scale demonstration of the spent fuel separations process is 

expected to provide a significant amount of information that could be used to 
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estimate the cost of a commercial UREX+ facility and the potential for 

establishing a profitable enterprise. The profitability of foreign facilities is 

difficult to assess but we believe that France and the United Kingdom have 

demonstrated profitable operations, using the potentially more expensive 

PUREX process. We are making the economics of spent fuel processing one of 

the major focal points of our development program. 

Q43. How many UREX+ facilities are envisioned under the GNEP program? 

A43. During the technology demonstration phase of GNEP, a single spent fuel 

separations facility is required to demonstrate the technical feasibility for 

scaling up the technology to a commercial scale. The number of commercial 

spent fuel separations facilities ultimately needed would be contingent upon 

several factors including the rate of spent fuel generation, the existing inventory 

of spent fuel at the time a decision is made to commercially recycle spent fuel, 

and the size of the separations facility. 

Q44. Given this number of UREX+ facilities, how long will it take to reprocess all of 

the spent fuel from the existing U.S. fleet of nuclear plants? 

A44. A determination of the time required to recycle the current and projected 

inventories of spent nuclear fuel from the existing fleet is dependent on the 

ultimate size of the commercial facility or facilities deployed. The Department 

is not currently in a position to make this determination. 

NGNP

Q45. In accordance with the President’s decisions to strive for a hydrogen economy 

and to further nuclear power, the EPAct 2005 authorized an aggressive project 

to demonstrate the use of nuclear energy to generate hydrogen. This project 

was authorized for $1.25 billion for fiscal year 2006-2015. Considering the 

important role of this project in demonstrating emission-free energy production, 

why is the budget request merely $23 million for FY ‘07? 

A45. The funding requested for FY 2007 is the level needed to continue the progress 

necessary to inform a decision in 2011 on whether to proceed with the 

construction of the Next Generation Nuclear Plant (NGNP) as required by 

EPACT. With these funds, the Department will continue the graphite particle 

fuels development effort, which is on critical path for determining the 

feasibility of the technology. In FY 2007, we will also continue irradiation 

testing of the fuel and begin preparation for post-irradiation examination of the 

fuel. 

University Assistance

Q46. FY 2006 appropriations included $27 million for a program called University 

Reactor Infrastructure and Education Assistance. This program is intended to 

address the increasing shortage of graduates in nuclear-related fields by 

improving reactor facilities and providing fellowships and scholarships to 
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attract students. This year, the DOE budget declared victory and eliminated the 

program because enrollments have increased. 

 However, the number of graduates is still flat and less than 500 per year. 

Considering that the Nuclear Regulatory Commission alone will hire 350 

personnel next year for the next several years, what action is DOE taking to 

ensure that our universities will be able to produce the graduates needed to 

power the rebirth of nuclear energy, including the Global Nuclear Energy 

Partnership? 

A46. The Department will continue its efforts to attract and prepare nuclear 

engineering students for careers in advanced fuel cycle technologies and related 

disciplines by continuing the Advanced Fuel Cycle Fellowship Program. 

Through the Nuclear Energy Research Initiative, the Department will continue 

to sponsor university-conducted research and development associated with the 

Advanced Fuel Cycle Initiative, Generation IV program, and the Nuclear 

Hydrogen Initiative. On an annual basis, the Department solicits proposals and 

awards grants for university-led research projects that support the goals and 

objectives of the AFCI, Generation IV and Nuclear Hydrogen programs. 

University participation in our research is important to strengthening nuclear 

engineering education infrastructure in the U.S. and to enabling the Department 

to accomplish its goals and objectives with respect to developing advanced 

nuclear reactor and fuel cycle technologies. 

In addition, the contractor organizations that operate DOE’s national 

laboratories are also strong supporters of nuclear engineering education in the 

U.S. Several of the national laboratories specifically support nuclear 

engineering education on advanced fuel cycles through joint appointments, 

sabbaticals and internships that enable students to obtain practical experience 

with fuel cycle technologies in a national laboratory setting. For example, last 

year the University of Chicago, which manages and operates Argonne National 

Laboratory established and funded an initiative with the University of 

Wisconsin to enable nuclear engineering students to obtain practical experience 

with nuclear fuel cycle technology through short-term internships at the 

laboratory. Batelle Energy Alliance, which manages and operates the Idaho 

National Laboratory, has similar efforts underway to involve the three Idaho 

state universities (University of Idaho, Idaho State University, and Boise State 

University) and a consortium of five other nuclear engineering programs across 

the country in the work of the laboratory and to provide educational 

opportunities for students. Many of the Department’s national laboratories 

sponsor summer internships for engineering students. 

Q47. EPAct 2005 Section 1405 gives the Secretary certain obligations for the 

National Priority Project Designation. We understand that DOE has not met its 

deadline for promulgating guidance for implementation of the National Priority 

Project award, which would recognize large renewable energy projects. What is 

the status of implementation of this the National Priority Project provisions of 

EPAct 2005? Does the Department have an estimate for when it will be 

promulgating guidelines to implement this provision of the EPAct 2005? 

A47. EPACT section 1405 places authority with the Secretary of Energy to establish 

a Presidential Awards program to advance the field of renewable energy 
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technology and contribute to North American energy independence through the 

designation of National Priority Projects that promote the recognition of large 

wind, biomass, solar, photovoltaic, fuel cell, and energy-efficient building 

projects. The Department’s General Counsel is currently reviewing the relevant 

provisions, including Section (a) Designation of National Priority Projects; 

Section (c) Selection Criteria; and Section (e) Certification. Once the review is 

complete, the Department will establish a path forward. 

QUESTION FROM CONGRESSMAN STEARNS 

New Nuclear Plants

Q1. Last year’s energy bill established numerous incentives for the construction of 

new nuclear plants. The Treasury Department is currently developing 

regulations on how a production tax credit will work. Is the Department of 

Energy working the Treasury to develop these regulations, and are both 

agencies consulting with industry on what is needed in the credit to achieve 

Congress’s intent: as many new nuclear plants as possible? 

A1. The Department of Energy (DOE) is supporting the Treasury Department in its 

development of the regulations to allocate the production tax credit. The 

Treasury Department has published an Advance Notice in the Internal Revenue 

Bulletin setting forth interim guidance pending issuance of the regulations. 

Since the Energy Policy Act of 2005 limits the total tax credit to a total 

capacity of 6,000 megawatts nationally, the interim guidance provides a 

process for allocating the tax credit among those new plants that begin 

construction by 2014. In addition, the Notice states that applications for the tax 

credit must be filed with the DOE. The DOE must then certify that the 

applicant’s technology is an advanced nuclear facility, in order to qualify for 

the production tax credit. 

QUESTIONS FROM CONGRESSMAN GILLMOR 

Q1. I understand that DOE has funded an environmental clean up project at the 

former Lockbourne Air Force Base in Columbus, Ohio. Is this the case? What 

oversight measures do the Department’s Office of Environmental Management 

and Office of Environment, Health, and Safety undertake on contracts issued 

by the Department pertaining to activities in their area? 

A1. No, in fact, the Department of Energy (DOE) has not funded an environmental 

cleanup project at the former Lockbourne Air Force Base in Columbus, Ohio. 

However, there is a U.S. Army Corps of Engineers project for clean up at the 

former air base. 

 Regarding the DOE’s oversight policies, DOE Policy 226.1, Department of 

Energy Oversight Policy, establishes a DOE-wide oversight process to protect 

the public, workers, environment, and national security assets, to ensure 

compliance with all Federal, State and local statutes and regulations and DOE 

Headquarters and site requirements. It covers such operational aspects as 

environment, safety, and health; safeguards and security; cyber security; 
125

emergency management; and business operations (project management, 

contract administration, financial management). As defined in the Policy, DOE 

oversight encompasses activities performed by DOE organizations to determine 

the effectiveness of Federal and contractor programs and management systems, 

including assurance and oversight systems. Oversight programs include 

operational awareness activities, on-site reviews, assessments, self-assessments, 

performance evaluations, and other activities that involve evaluation of 

contractor organizations and Federal organizations that operate Federal 

government-owned sites. 

DOE’s assurance systems and oversight programs include four essential 

elements: 

• a comprehensive and rigorous assurance system at all sites 

implemented by the contractor and Federal organizations that manage 

or operate on a DOE site; 

• DOE field element line management oversight processes, such as 

inspections, reviews, surveillances, surveys, operational awareness, 

and walkthroughs, that evaluate programs and management systems 

and the validity of the site assurance system; 

• DOE Headquarters line management oversight processes that are 

focused on the DOE field elements and also look at contractor 

activities to evaluate the implementation and effectiveness of field 

element line management oversight; and 

• independent oversight processes that are performed by DOE 

organizations that do not have line management responsibility for the 

management of the activity and thus provide an independent 

perspective for senior management on the effectiveness of programs 

and activities at all organizational levels (Headquarters, field, and 

contractor). 

Q2. If DOE terminates a contract because it does not consider it cost effective, is 

there monitoring of future contracts to insure that either entities related to or 

entities deploying the same technology application as one that has been rejected 

by the Department are prevented from filing for or being awarded a DOE 

contract? Does DOE coordinate with the U.S. Army Corps of Engineers or the 

U.S. Environmental Protection Agency to ensure there is not a circumvention 

of Federal contracting procedures for environmental remediation projects? 

 

A2. Contract termination does not necessarily preclude an entity from receiving a 

future contract award. The Department of Energy (DOE) would consider the 

circumstances that led to the termination. For example, a contract may be 

terminated for reasons that are not the fault of the contractor, such as changes 

in Federal or state environmental regulations. On the other hand, if a contract 

was terminated because of an entity’s failure to meet its contractual obligations 

(for example, an inability to control costs), the termination could adversely 

impact the entity’s chances for future contract awards. 

 Contractual Statements of Work are routinely reviewed to determine whether 

the scope of work duplicates an existing contract. Prior to awarding a contract 

for a technology that may have previously been unsuccessful, DOE would 

review the current proposed approach and assess its probability of success. If 
126

the new approach appears to resolve the technical issues that led to a prior 

failure, the DOE may go forward with a new award. 

DOE considers contractor past performance as a factor in all of its procurement 

decisions. Information on a contractor’s past performance, including contract 

termination, is recorded in the Past Performance Information Retrieval System, 

a web-enabled, Federal government-wide computer database that DOE uses to 

check a contractor’s performance history. An entity that did not perform 

successfully on a prior contract would be ineligible for consideration of a future 

award if the entity is suspended, debarred, or proposed for debarment. 

(Individuals and companies are typically debarred or suspended for reasons of 

gross negligence or misconduct, often involving ethical violations, or failure to 

follow certain statutory requirements.) 

Unless the U.S. Environmental Protection Agency or the U. S. Army Corps of 

Engineers is provided as a reference for past performance information on a 

competitively awarded contract, the DOE does not routinely consult with them 

regarding procurement procedures. 

Q3. Does DOE have a procedure in place by which DOE reviews contracts issued 

as a Research and Development (R&D) project to ensure that R&D efforts are 

not being used to circumvent a process that would ordinarily result in a contract 

being awarded through an open for fair and open bidding process? 

A3. Contract and financial assistance awards, including those for research and 

development (R&D) projects, are made in compliance with all applicable 

statutory and regulatory requirements, including the Competition in 

Contracting Act of 1984 and the Department of Energy Financial Assistance 

Regulation. This means that a competitive process is utilized to make such 

awards, unless an exception to competition is documented, justified and 

approved, consistent with regulatory requirements. 

Consistent with these laws and regulations, a research and development project 

may also be assigned to a DOE management and operating contractor for 

performance, provided the project falls within the contract’s scope of work. 

While in that case there is no requirement for competition, the Department 

often solicits and evaluates proposals for the research and development work 

from more than one laboratory or site before deciding which DOE contractor 

will be assigned the R&D project. 

Q4. What is the status of DOE activities at the Miamisburg Mound site and in 

particular the OU-1 property? How is DOE using Federal funds at this site? Is 

any Federal money being used to support public outreach efforts at this site 

and, if so, how much and what activities and dates have these outreach efforts 

occurred? 

A4. The Department of Energy (DOE) is using Federal funds to achieve cleanup of 

the Mound Site in 2006. The CH2MHill contract currently reflects a 

completion target in September 2006; work remaining includes: remediation of 

newly identified low-level waste soil volumes, decontamination in T building, 

and backfilling and re-contouring previously cleaned areas. 
127

 

The Conference Report (109-275) accompanying the Energy and Water 

Development Appropriations Act, for Fiscal Year 2006 (P.L. 109-103), 

directed the DOE to work with the Miamisburg Mound Community 

Improvement Corporation (MMCIC) to develop a mutually agreed upon 

remedy for the Operable Unit (OU)-1 landfill and appropriated $30 million to 

conduct the additional remedial work at OU-1. This congressional direction to 

remediate the OU-1 landfill represents a significant increase in work. 

Therefore, current plans are to manage the OU-1 work as a distinct project. 

Every effort will be made to achieve the remediation in parallel with 

CH2MHill’s efforts to complete the balance of site cleanup. To costeffectively implement this work, a small share of the work scope, and 

corresponding funds currently under contract to CH2MHill (the rail spur and 

waste staging area) will be transferred into the new contract for the OU-1 work. 

These changes will not adversely impact CH2MHill’s ability to complete the 

previously planned Mound cleanup project on schedule. 

 DOE developed a Project Team (Team) consisting of representatives from the 

MMCIC, the City of Miamisburg, the U. S. Environmental Protection Agency 

(EPA), and the Ohio Environmental Protection Agency (OEPA). The Team 

has been meeting weekly over the past few months to: 1) perform additional 

assessments of available information to better define the nature and extent of 

contaminants within the OU-1 area; 2) establish removal priorities for the 

waste types believed present; 3) evaluate various excavation strategies to target 

priority wastes; and 4) agree on the regulatory approach to ensure adequate 

EPA and OEPA oversight during remedy implementation. DOE and MMCIC 

have reached general agreement on a remedial approach for OU-1. DOE is 

preparing to hold a public meeting to discuss the proposed cleanup plan and 

initiate a formal 30-day public comment period (during the month of May). 

In addition to the OU-1 activities, the DOE participates in monthly meetings of 

the Mound Reuse Committee (MRC), which consists of a variety of community 

leaders/representatives and is chaired by the city manager, to answer questions 

and provide updates on the status of cleanup activities at the site. As a closure 

site with the majority of cleanup work winding down, the monthly meetings 

with the MRC constitute the principal forum for public outreach at this time 

and requires minimal (approximately $1000.00/month) DOE and contractor 

resources. 

Q5. What is the status of the project as well as DOE’s efforts with regard to the 

Moab Uranium Mill Tailings Site (Moab site), Grand County, Utah? 

A5. On August 25, 2005, the Department of Energy (DOE) approved the mission 

need (Critical Decision (CD) 0) for the Uranium Mill Tailings Remedial Action 

Project at Moab, Utah. DOE has since developed an Acquisition Strategy, 

which details the project schedule, major work activities, estimated annual 

expenditures for the life-cycle of the project, and the various acquisition 

alternatives. DOE expects to approve the preliminary baseline/proposed work 

plan (CD-1) in May. Once approved, we will conduct a competitive 

procurement to procure contractor(s) who will be responsible for developing a 

project baseline and cost estimate that can be validated and approved by the 

DOE, as part of the CD-2 decision process. 
128

In the meantime, we are continuing with interim remedial soils and 

groundwater actions, which include dust control measures, groundwater 

cleanup, sampling and monitoring at the site, soil characterization, and 

environmental air monitoring. In addition, contaminated soils from the former 

uranium mill site area have been remediated, resulting in a cumulative 

reduction of the contaminated area footprint by a total of 40 acres. Additional 

soil remediation adjacent to the site is planned later this year. Field 

characterization efforts at the Crescent Junction disposal site have also been 

completed to support preparation of the Remedial Action Plan for submittal to 

the U.S. Nuclear Regulatory Commission. 

Q6. What is the status of the project and site as well as DOE’s efforts with regard to 

the Santa Susana Field Laboratory? Does DOE have any future plans for work 

at SSFL? 

A6. The Department of Energy (DOE) has not conducted any research at the Santa 

Susana Field Laboratory (SSFL), owned by Boeing Corporation, since 1996, 

and has no plans for any future research or other type of activities. The DOE’s 

involvement at the SSFL is confined to the former Energy Technology 

Engineering Center (ETEC). ETEC is comprised of a few buildings on land 

owned by the Boeing Corporation within the 2,900 acre SSFL. DOE 

remediation and cleanup activities at ETEC are divided into two areas: the 

decontamination and demolition (D&D) of contaminated buildings and 

associated systems, and the cleanup of contaminated soils and ground water 

pursuant to the Resource Conservation and Recovery Act (RCRA) corrective 

action process. The D&D effort is nearly complete, with two radiological 

facilities and two sodium facilities remaining to be completed. The RCRA 

corrective action process for soils and ground water is in the late 

characterization phase. The remediation activities, under the regulatory 

oversight of the California Department of Substances Control, are ongoing, and 

DOE is using its best efforts to complete the ETEC cleanup in 2009. 

 

QUESTIONS FROM CONGRESSMAN BURGESS 

Oil recovery

Q1. One of the best ways to decrease our dependence on foreign sources of oil is to 

make the most of our domestic oil resources we do have. Enhanced oil recovery 

through CO2 injection is one way to get more oil out of the same well. 

According to recent DOE oil and gas research, CO2 injection for enhanced oil 

recovery could add 89 billion new barrels to the recoverable oil resources of the 

United States. That’s nearly a 400% increase from current proved reserves 

using current technology. If multiple advances are made in technology and the 

availability of carbon dioxide, we could eventually add as much as 430 billion 

new barrels to the technically recoverable reserves. That would put us ahead of 

Saudi Arabia’s reserve count. Yet, in your budget proposal, you are 

terminating the petroleum-Oil and Natural Gas technologies programs that 

would have helped us develop the technologies necessary to realize these 

reserves. Why doesn’t the Administration think that this research is necessary 

any longer? Isn’t it true that the increase will occur in fields and wells that are 
129

owned by independent operators that have not necessarily made the 

phenomenal profits we witnessed last year? 

A1. Oil and gas are mature industries and both have every incentive, particularly at 

today’s prices, to enhance production and continue research and development 

of technologies on their own. In particular, enhanced oil recovery is a mature, 

commercially deployed technology receiving funding from the private sector 

for evolutionary advances and incremental improvements. There is no need for 

taxpayers to subsidize oil companies in these efforts. The Administration’s 

Research and Development Investment Criteria direct programs to avoid 

duplicating research in areas that are receiving funding from the private sector, 

especially for evolutionary advances and incremental improvements. 

Private control of intellectual property provides a market incentive for the 

private sector to invest in R&D and advance technology. Although independent 

operators may not fund technology development directly, the service industry 

that supplies them with equipment funds significant development of 

technologies with application to independent operators. The Department 

expects the service industry to continue to provide technological innovations 

for use by major and independent producers. 

 

The 2007 Budget does provide funding for achieving long-term carbon storage 

through a variety of methods, including in conjunction with enhanced oil 

recovery, as a means to reduce emissions of greenhouse gases. This R&D is 

consistent with the R&D Investment Criteria because there is currently not a 

market incentive for ensuring long-term storage of carbon. 

Oil and gas companies have generally done well financially as a result of high 

worldwide oil and gas prices. For example, the International Petroleum 

Finance index of oil company shares rose a collective 15.7% in 2005, following 

an increase of 21.5% in 2004. Share gains in 2005 for independent oil 

producers were generally higher than those for the majors. 

While not part of the Fossil Energy budget, The 2007 Budget’s proposals to 

expand access to oil and gas resources, streamline permitting processes, and 

make the R&D investment tax credit permanent will leverage private sector 

ingenuity and are better ways to increase domestic production of oil and gas 

than federally funded R&D. The President’s goal of reducing dependence on 

foreign sources of oil will also be addressed by the Advanced Energy Initiative 

proposed in the budget including advancements in cellulosic ethanol, battery 

technology, and hydrogen, among others, some of which is included in the 

Fossil Energy budget. 
130

Price gouging

Q2. In the GAS Act, the House included provisions that would outlaw price 

gouging on gasoline. My understanding is that the Department of Energy 

collected information about reported price gouging following Hurricanes 

Katrina and Rita. Can you please share this information with the Committee? 

A2. The Department collects information from consumers via the Gas Price Watch 

(GPW) Hotline operation. The methods used to gather the information include 

an Internet web form (http://gaswatch.energy.gov/) and phone bank operations 

(1-800-244-3301). Consumer information is stored in a data base from which a 

report by State is generated and distributed on a weekly basis. Electronic 

copies of the report are distributed to the Federal Trade Commission, US 

Department of Justice and also to each State Attorneys General Office for 

investigation and prosecution where appropriate. Information collected by the 

GPW operation for the period of Hurricanes Katrina and Rita (August thru 

December 2005) was voluminous and included 32,123 responses. In 

September, 2005 alone there were 22,629 consumer complaints reported. This 

large volume of information has been made available to you on the web at 

http://gaswatch.energy.gov/reports.html . 

Oil and Gas

Q3. I would also like for the Department to provide an update on the 

implementation of the Ultra-Deepwater and Unconventional Natural Gas 

program that was created by the EPAct 2005. 

A3. The Department is complying, and will continue to comply with, the Energy 

Policy Act. In compliance with the Energy Policy Act, on November 4, 2005, 

the Department issued a solicitation for administration of the Ultra-Deepwater 

and Unconventional Natural Gas and Other Petroleum Research and 

Development Program. The solicitation closed on February 2, 2006, and the 

Department has completed its review and made a selection of the consortium in 

May 2006, as required by the Energy Policy Act. 

On April 27, 2006, Secretary Bodman transmitted to the House and Senate a 

legislative proposal to repeal the program. Oil and gas are mature industries 

and both have every incentive, particularly at today’s prices, to enhance 

production and continue research and development of technologies on their 

own. There is no need for taxpayers to subsidize oil companies in these efforts. 

 

QUESTIONS FROM REPRESENTATIVE DINGELL 

Q1. Please provide a legal memorandum indicating what authority, if any, the 

Department has under the Nuclear Waste Policy Act, the Atomic Energy Act, or 

any other law, to store high-level radioactive waste and spent nuclear fuel on an 

interim basis? 

A1. Prior to the enactment of the Nuclear Waste Policy Act of 1982 (NWPA) DOE 

had authority and continues to have authority, to accept spent nuclear fuel 

(SNF) in certain circumstances. Section 55 of the Atomic Energy Act of 1954, 
131

as amended, (AEA) (42 U.S.C. 2075), provides that “DOE is authorized to the 

extent it deems necessary to effectuate the provisions of [the Act] to purchase, . 

. .take, requisition, condemn or otherwise acquire any special nuclear material 

or any interest therein.” The authority under the AEA may be exercised to 

further any of its purposes including international cooperation and nuclear 

nonproliferation, support of research and development in nuclear power, and 

management of the U.S. nuclear defense programs. 42 U.S.C. 2111, 2112, 

2013, 2051(a), and 2152. 

 Pursuant to this AEA authority, the Department has accepted and stored U.S. 

supplied foreign reactor fuel at various DOE sites. DOE has also used this 

authority to accept for research and development purposes small amounts of 

spent nuclear fuel such as parts of the Three Mile Island melted reactor core and 

other damaged SNF. DOE also has accepted commercial spent fuel under 

contracts that pre-date enactment of the Nuclear Waste Policy Act of 1982 

(NWPA or the Act). 

With enactment of the NWPA, Congress provided a detailed statutory scheme 

for commercial SNF storage and disposal that, by its specificity, severely 

limited the Department’s commercial SNF storage and disposal options. The 

NWPA did not affect the Department’s authority to accept spent fuel not 

covered by the Standard Contract mandated by the NWPA. However, the 

NWPA limits DOE’s authority under the AEA to accept SNF from commercial 

reactors subject to the Standard Contract to the situations specified in the 

NWPA and, in very limited circumstances, to specific research and 

development activities that further the goals of the NWPA. 42 U.S.C.10199. 

The NWPA, in sections 111(a)(5) and 302(a)(4), states that SNF generators 

should pay for the ultimate disposal of their waste, including the interim storage 

of that waste until such time that the DOE accepts it for disposal. 42 U.S.C. 

10131 (a)(5); 42 U.S.C. 10222(a)(4). 

 Consistent with this more limited authorization, the NWPA permits the 

Department to pay for interim storage in two distinct instances. Section 135 of 

the Act authorized the Department to enter into contracts to assist or provide 

temporary storage of small amounts of SNF until a repository was available. 

This authority expired in 1990. Section 141 of the Act authorizes the 

Department to site, construct and operate a Monitored Retrievable Storage 

(MRS) facility, but restricts DOE’s ability to pursue this option by linking any 

activity under this section to almost unattainable milestones. 42 U.S.C. 10155-

10157. For example, before the MRS can be constructed, the Nuclear 

Regulatory Commission must have issued a construction authorization license 

for the main repository; until the main repository starts accepting SNF, the 

quantity of spent fuel stored at the MRS site cannot exceed 10,000 MTUs; after 

the main repository starts accepting SNF, the total quantity of SNF at the MRS 

site cannot exceed 15,000 MTUs at any one time, and the MRS cannot be 

located in Nevada. 

In a 1989 report to Congress regarding dry cask storage, the Department 

concluded that the Nuclear Waste Fund was not legally available to pay for onsite storage. That study further concluded that the Fund should not be made 

available “as a means of providing direct assistance to utilities in their at-reactor 

storage activities.” See Final Version Dry Cask Storage Study at I-110 (U.S. 

Dept. of Energy, February 1989). 
132

 In 1994, a Notice of Inquiry on Waste Acceptance Issues (NOI) issued by the 

Department sought public comment on, among other issues, whether DOE had 

statutory authority under the NWPA to provide interim storage of SNF. 59 FR 

27007 (1994). In the subsequent 1995 Final Report responding to public 

comments, the Department determined again that the NWPA explicitly 

contemplated interim storage in only two instances: interim storage under 

section 135 of the Act and monitored retrievable storage under section 142 of 

the Act. Final Interpretation of Nuclear Waste Acceptance Issues, 60 FR 21793 

(1995). However, the Report also noted that the interim storage provision had 

expired and the MRS provisions were unusable because of the required linkages 

to repository development. The Report concluded that because neither of the 

NWPA’s explicit interim storage authorities applied and because the NWF 

statutory uses precluded the Secretary from spending NWF monies for 

construction or expansion of a facility without express authorization from 

Congress, the Department lacked authority to provide interim storage under 

existing law. Specifically, the report stated: 

Interim storage by DOE was contemplated by the Act in only two 

situations, neither of which currently applies. Under the Act, DOE had 

authority to offer a limited interim storage option. See 42 U.S.C. 10156. 

However, that authority has, by its express terms, expired. Under the Act, 

DOE also has the authority to provide for interim storage in an MRS. That 

authority is also inapplicable, however, because the Act ties construction of 

an MRS to the schedule for development of a repository. See 42 U.S.C. 

10165, 10168. Because these are the only interim storage authorities 

provided by the Act, and because the Act expressly forbids use of the 

Nuclear Waste Fund to construct or expand any facility without express 

congressional authorization (42 U.S.C. 10222(d)), DOE lacks authority 

under the Act to provide interim storage services under present 

circumstances. 60 FR 21793, 21797. 

 

 This final interpretation was later one of the issues litigated by commercial 

nuclear utilities seeking to have DOE begin taking their fuel in two cases filed 

in the U.S. Court of Appeals for the District of Columbia. See Indiana 

Michigan Power Co. v. Department of Energy, 88 F.3d 1272 (D.C. Cir. 1996); 

and Northern States Power Co. v. U.S., 128 F.3d 754 (D.C. Cir. 1997), cert. 

denied, 119 S. Ct. 540 (1998). In those cases the Department again reiterated 

that it did not have authority under the NWPA to provide interim storage of 

SNF. 

In 1991, the State of Idaho filed suit against the Department challenging DOE’s 

authority to ship spent nuclear fuel for storage at its Idaho facility. In that case, 

the 9th Circuit found that the Department’s contract to store and dispose of fuel 

with a Colorado utility that was entered into prior to enactment of the NWPA 

was not subject to the NWPA’s restrictions on the Department’s payment of 

SNF storage costs. Idaho v. Department of Energy, 945 F.2d 295 (9th Cir. 

1991.) In other words, this case is an anomaly that deals with spent nuclear 

fuel covered by a contract with DOE that pre-dates the enactment of the NWPA 

and provides no authority for the Department to store utility SNF under NWPA 

provisions. 
133

In 2000, the Department settled one of the SNF cases in which the Department 

permitted a utility to offset its delay damages by taking credits against its future 

fee payments into the Nuclear Waste Fund (NWF). Utilities not parties to the 

settlement challenged the settlement on the grounds that credits to fee payments 

were an improper use of the NWF. That Court found that the Secretary’s 

authority to use the NWF, while not limited to those activities explicitly set out 

in Section 302(d) of the NWPA (Use of the Waste Fund), did not authorize 

expenditures of NWF monies on settlement agreements aimed at compensating 

utilities for their on-site storage costs. Alabama Power v. U.S. Department of 

Energy 307 F.3d 1300, 1313 (11th Cir. 2002). 

 

Q2. Please provide a legal memorandum addressing the question of whether or not 

the Nuclear Waste Policy Act of 1982 authorizes the Department of Energy 

(DOE) to use money in the Nuclear Waste Fund for activities in furtherance of 

the Global Nuclear Energy Partnership (GNEP). 

A2. The Nuclear Waste Policy Act of 1982 authorizes the Secretary to "make 

expenditures from the Waste Fund [...] only for purposes of radioactive waste 

disposal activities [...] including: [...] any costs that may be incurred by the 

Secretary in connection with the transportation, treating, or packaging of spent 

nuclear fuel or high-level radioactive waste to be disposed of in a repository, to 

be stored in a monitored, retrievable storage site, or to be used in a test and 

evaluation facility.@ (42 U.S.C. 10222(d)). To the extent that GNEP activities 

involve the "treating, or packaging of spent nuclear fuel," for disposal at Yucca 

Mountain, such activities would come within the scope of radioactive waste 

disposal activities within the meaning of the Nuclear Waste Policy Act of 1982, 

and thus the Nuclear Waste Fund could potentially be used for such activities. 

Any use of the Nuclear Waste Fund for GNEP activities would require the 

approval of Congress through the appropriation process. 

 

Q3. Could some of the activities DOE plans to undertake in connection with GNEP 

(such as research and development or waste treatment) also be characterized as 

integral to the Yucca Mountain repository program? If so, do you believe the 

Waste Fund could be used to pursue such activities? 

A3. As explained above in the answer to Q2, to the extent that GNEP activities 

involve the treatment or packaging of spent nuclear fuel in furtherance of its 

disposal at Yucca Mountain, the Nuclear Waste Fund potentially could be used 

for these activities. Any proposed use of the Nuclear Waste Fund for such 

activities would require the approval of Congress through the appropriation 

process. The Department currently has no plans to use the Waste Fund to fund 

any GNEP activities. 

QUESTIONS FROM CONGRESSMAN MARKEY 

GNEP

Q1. How long will it take, and what will it cost to develop, deploy, and operate the 

UREX-ESD to the point of decision on whether to proceed to the full GNEP 

program? 
134

A1. The Department would need several years of experience operating the 

technology demonstration facilities in parallel with the design of commercialscale facilities. It is anticipated that commercial-scale operations could begin 

over the next twenty years. Initial pre-conceptual estimates are that the cost to 

bring the UREX+ technology demonstration facility to the point of initial 

operation ranges from $700 million to $1.5 billion. More detailed baseline cost 

and schedule estimates will be developed as part of the conceptual design and 

prior to a decision on whether to proceed to detailed design and construction. 

Q2. Assuming a positive outcome to the ESD trials, please provide an approximate 

annual top line funding profile for the GNEP from FY 07 through: 

a. the planned deployment and operation of the SRS MOX plant up to the 

point that it will exhaust the feed material coming from the Plutonium 

Disposition program; 

b. up to the point of commercial operation of the first 2000 MTHM/yr 

reprocessing plant; 

c. up to the point of the commercial operation of the first FBR engaged in 

transmutation. 

A2. The Department is not currently in a position to make this determination. 

Q3. Please provide a year-by-year funding profiles to completion, estimated Total 

Project Cost (TPC), planned construction start and completion dates, and 

estimated annual operating cost, for each of the following facilities identified in 

the FY 2007 DOE/NE budget request as being part of the GNEP program plan 

over the next 15 years: 

 UREX + Engineering-Scale Demonstration (ESD) 

 Advanced Fuel Cycle Facility (AFCF) 

 Advanced Burner Reactor (ABR) prototype 

 UREX + Commercial Scale Reprocessing Plant (2000 MTHM/yr) 

 Idaho National Laboratory (INL) Infrastructure Support 

A3. The Department is currently not in a position to make this determination. The 

preliminary, order-of-magnitude costs associated with the demonstration of 

technologies have previously been estimated to range from $3 billion to $6 

billion over the next ten years to bring those technologies to the point of initial 

operations. 

Q4. Please provide a year-by-year funding profile to completion, estimated Total 

Project Cost (TPC), planned construction start and completion dates, and 

estimated annual operating cost, for each of the following facilities identified in 

the FY2007 DOE/NE budget request as being part of the GNEP program plan 

over the next 15 years for MOX-fuel related facilities funded in the 

NNSA/Defense Nuclear Nonproliferation budget: 

A. Pit Disassembly and Conversion Facility (PDCF), Aiken, SC 

B. PDCF-MOX Waste Facility, Aiken, SC 

C. Mixed Oxide (MOX) Fuel Fabrication Plant, Aiken, SC 

D. U.S. Funding for analogous Russian MOX Facility and Fuels 

Research 
135

A4. The plutonium disposition program and the Global Nuclear Energy Partnership 

are two separate programs. To implement the U.S. plutonium disposition 

program, DOE will build a Pit Disassembly and Conversion Facility, a MOX 

Fuel Fabrication Facility, and a Waste Facility at the Savannah River Site in 

South Carolina. For the Pit Disassembly and Conversion Facility, construction 

is planned to begin in 2011 and completed in 2015, with an estimated annual 

operating cost of approximately $100 million. For the MOX facility, 

construction is planned to begin in 2006 and completed in 2014, with an 

estimated annual operating cost of approximately $100 million. For the Waste 

Facility, construction is planned to begin in 2008 and completed in 2011, with 

an estimated annual operating cost of approximately $30 million. We are 

working to develop cost and schedule baselines for all three facilities that will 

be validated as part of the Department’s critical decision process. As for the 

Russian plutonium disposition program, the United States and Russia currently 

working together to determine the technical path forward. 

Q5. How many Liquid Metal Fast Burner Reactors (LMFBR) and spent fuel 

reprocessing plants, with what capacity, deployed when, would be required to 

transmute the transuranics contained in the existing backlog and projected 

discharges of spent fuel from U.S. reactors, such that the capacity of Yucca 

Mountain or a similar sized repository located elsewhere would suffice to 

dispose of all spent fuel discharges as claimed, to the end of the century? 

A5. The number of spent fuel separations plants needed to process spent nuclear 

fuel depends on how many nuclear power plants are built and the size of the 

separation plants. The current 103 operating U.S. Light Water Reactors 

(LWRs) generate about 2,000 metric tons/year of spent fuel, which is roughly 

an appropriate annual throughput for a large chemical separation plant. Thus, 

there would be approximately one separation plant for every 100 LWRs. One 

separations plant could be sufficient for the existing inventory under certain 

conditions. The exact ratio of separations facilities to nuclear power plants 

depends on separations facility plant size, the operating lifetimes, and the 

number of thermal reactors and burner reactors deployed. 

Q6. Based on historical costs for commercial liquid-metal breeder reactors of 

similar capacity, what would the first demonstration LMFBR be likely to cost? 

The first commercially-deployed LMFBR? 

A6. DOE has estimated that it will take between $2 billion and $5 billion to develop 

an advanced fast test reactor in which to demonstrate the burning of 

transuranics and support the qualification of larger advance burner reactors. 

The Department has set a goal of developing the fast spectrum test reactor 

between 2014 and 2019. The Department would need several years of 

experience operating the technology demonstration facilities in parallel with the 

design of commercial-scale facilities. It is anticipated that commercial-scale 

operations could begin over the next twenty years. 

Q7. Assuming production of such reactors can be standardized, what are the best, 

worst, and most likely or expected capital cost ratios for the LMFBR versus 

conventional Generation III+ LWR designs currently in the final stages of 
136

licensing review by the NRC? What are the comparable operating-cost ratios? 

Fuel-cost ratios? 

A7. The purpose of the Advanced Burner Test Reactor (ABTR) includes 

clarification and improvement of costs for future Advanced Burner Reactors. 

Such reactors may be slightly less expensive or more expensive than advanced 

LWR designs for both capital and operating costs. The cost ratios depend on 

the reactor type as well as whether a once-through fuel cycle or a closed fuel 

cycle is adopted. The cost of recycling must be weighed against the cost of the 

additional geologic repositories that would have to be built with the once 

through fuel cycle. In any case, nuclear fuel cycle costs are a minor portion of 

the overall cost of nuclear energy. 

Q8. What evidence do you have that demonstrates or even suggests that the GNEP 

plutonium fuel cycle (UREX + MOX fuel in LWR’s followed by 

pyroprocessed MOX fuels in FBR’s) with transmutation can compete 

commercially, on a fully amortized cost-per-kilowatt basis, with LEU-fueled 

LWR’s on a once-through cycle? With Integrated Gasified Coal Combined 

Cycle with Carbon Capture and Storage? With combination of increased 

efficiency, wind, solar, and distributed co-generation? Please provide 

references and or copies of studies that support your judgments and 

conclusions. 

A8. The GNEP approach does not involve the recycle of plutonium with LWRs. 

The economics of the GNEP closed fuel cycle cannot be estimated with any 

degree of accuracy at this time, and it is one of the main purposes of the GNEP 

Technology Demonstration Program to assess the economics of the system. 

The Department believes that nuclear power is a necessity for baseload 

production of emissions-free electricity and expects that it will continue to be 

fully competitive with other electricity sources as it is today. 

Q9. Which of the following countries would be treated as non-fuel cycle owning 

‘client-states’ of the GNEP, and which would be treated as nuclear-fuel cycle 

states considered eligible for plutonium fuel-cycle facilities, and what is the 

rationale for making each determination: South Korea, Taiwan, India, Japan, 

China, Russia, Pakistan, South Africa, Germany, Italy, Span, Brazil, Argentina, 

Israel, Iran Ukraine, China, Iran Kazakhstan, Pakistan, Finland, Sweden, 

Belgium. 

A9. GNEP’s purpose is to promote nuclear energy growth worldwide using 

technologies, systems, and arrangements that reduce the risk of nuclear 

weapons proliferation. We do not envision a formal division of “fuel-cycle” 

versus “reactor” states, but instead a partnership that includes states at various 

stages of nuclear fuel cycle development. A principle we seek to advance is 

that states not now in possession of full scale, fully functioning enrichment and 

reprocessing programs should agree to refrain from pursuing those programs. 

Those that do agree will be eligible for reliable fuel supplies and cradle-tograve fuel services, two important incentives to discourage additional states 

from closing the fuel cycle. While no formal decision has been made as to 

which states would qualify as fuel-cycle states, we expect at a minimum it 
137

would include the U.S., U.K., France, Russia, China, Germany, the 

Netherlands, and Japan. 

Q10. Which of the above named states already have nuclear cooperation agreements 

or other less formal arrangements with the United States allowing for the 

exchange of information on plutonium fuel cycles, fast reactors, and/or uranium 

enrichment, and what types of information can currently be shared with each 

state? 

A10. The United States has entered into agreements for cooperation with Argentina, 

Australia, Bangladesh, Brazil, Bulgaria, Canada, China, Columbia, Egypt, 

Indonesia, Japan, Kazakhstan, the Republic of Korea, Morocco, Norway, 

Romania, South Africa, Switzerland, Thailand, Taiwan, and Ukraine. The 

United States also engages in peaceful nuclear cooperation with Austria, 

Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, 

Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the 

Netherlands, Poland, Portugal, Slovakia, Spain, Slovenia, Sweden, and the 

United Kingdom under the Agreement for Cooperation with the European 

Atomic Energy Community (EURATOM). An agreement for cooperation is 

also proposed for India. 

Under such agreements for cooperation, the United States may transfer 

information concerning the use of nuclear energy for peaceful purposes. Such 

transfers may include information pertaining to: nuclear reactors; the use of 

nuclear material in research, medicine, agriculture and industry; nuclear fuel 

cycle studies; safeguards and physical protection of nuclear material, 

equipment, and components; health, safety, and environmental considerations; 

and assessments of the role nuclear power may play in national energy plans. 

The United States may not transfer Restricted Data and sensitive nuclear 

technology under agreements for cooperation, unless the agreement specifically 

provides for the transfer of such information. 

Q11. During the hearing I asked you whether India would be allowed to become a 

part of the GNEP program and you said, “I would think that they would not.” 

However, press reports have quoted you as having stated, just one week earlier, 

that “we would think India would be a perfectly good and, in fact, an excellent 

participant in the GNEP program” Which is it? Is India going to be allowed to 

participate in GNEP or not? 

A11. As an advanced state with nuclear technology, India has great potential to 

contribute to GNEP. We have discussed with India ways in which India might 

participate in GNEP. In particular, U.S. and GNEP partners would consider 

Indian participation in activities that are made available for international 

safeguards. 

Q12. Has the President, you, or any other official of the United States government 

extended an invitation to India to join the GNEP as a “nuclear fuel-cycle 

state?” If so, under what circumstances would India be invited to participate? 

Would India be given access to UREX, pyroprocessing or other breeder reactor 

technologies that may be developed as part of GNEP? 
138

A12. India has not been extended an invitation to join GNEP as a “nuclear fuel-cycle 

state.” We will continue to have discussions with India about how it might 

participate in GNEP on activities that are made available for international 

safeguards and that do not contribute to India’s weapons program. Currently, 

we would not be able to engage in cooperation that would involve India’s fast 

reactor program, and we do not envision any future cooperation on 

reprocessing. 

Indian Nationals at DOE Laboratories

Q13. Please provide a table listing how many Indian nationals have been given 

access to each of the Department’s national laboratories over the last 5 years. 

Since India is a nation which is a non-signatory to the NPT and is known to 

have a nuclear weapons program, are any access or other restrictions placed on 

Indian nationals visiting the Department’s national laboratories. 

A13. India is included on the Department of Energy (DOE) Sensitive Countries List. 

Countries may appear on this list for national security, nuclear nonproliferation, 

or terrorism support reasons. For visit requests involving foreign nationals from 

countries on the Sensitive Countries List, particular consideration is given 

during the DOE internal review and approval process. 

The requirements that must be met for an Indian or other Sensitive Country 

national visitor include: 

• Subject matter expert reviews by security, export control, technology 

transfer, counterintelligence and intelligence (when there is an onsite field 

intelligence element); 

• Indices checks by appropriate U.S. Government agencies to determine 

whether information exists on the foreign national; 

• A specific security plan under which the visit will be conducted. The plan 

must address site security concerns related to the foreign national’s visit, 

must include information on what physical areas will be accessed, and 

must include what information will be shared with the foreign national (to 

include information on the DOE Sensitive Subjects List); and 

• Approval by the site/laboratory approval authority prior to access being 

granted. The approval authority must take into consideration all 

information from the review process, including subject matter expert 

reviews, and must evaluate potential impacts on local site operations. 

Determination of access approval must ensure that any identified risk to 

the Government associated with the access granted to the foreign national 

has been appropriately evaluated and mitigated. 

I would like to provide a table for the record to show how many Indian 

nationals have been given access to each of the Department’s national 

laboratories over the last 5 years. The information follows. 

 2001 2002 2003 2004 2005 

Ames Laboratory 21 29 44 43 50 

Argonne National Laboratory 346 430 471 512 534 

Brookhaven National Laboratory 237 258 323 372 400 

Fermi National Accelerator Laboratory 58 67 96 87 79 
139

 2001 2002 2003 2004 2005 

Idaho National Engineering Laboratory 4 4 6 10 17 

Lawrence Berkeley Laboratory 35 73 123 157 208 

Lawrence Livermore National 

Laboratory 

34 36 55 72 57 

Los Alamos National Laboratory 15 29 39 81 163 

National Energy Technology 

Laboratory 

59 47 41 29 29 

National Renewable Energy 

Laboratory 

— 1 13 42 42 

Oak Ridge National Laboratory 111 134 152 202 221 

Pacific Northwest National Laboratory 51 45 79 109 104 

Princeton Plasma Physics Laboratory — — 1 2 3 

Sandia National Laboratories, 

Albuquerque 

8 28 32 9 43 

Sandia National Laboratories, 

Livermore, CA 

12 26 21 28 19 

Stanford Linear Accelerator Center 1 1 33 77 91 

Thomas Jefferson National Accelerator 

Facility 

1 1 17 15 17 

Total 993 1,209 1,546 1,847 2,077 

GNEP

Q15. In light of the U.S. government’s obligation under Article 1 of the Nuclear 

Nonproliferation Treaty “not in any way to assist, encourage or induce any 

non-nuclear-weapon state to manufacture or otherwise acquire nuclear 

weapons,” India’s refusal to place its fast reactors, other reactors, and sensitive 

nuclear fuel-cycle facilities under IAEA peaceful uses, please explain how 

India, a “non-nuclear weapon state” for the purposes of the NPT, could 

participate in nuclear technology sharing under the GNEP without the US 

violating its Article I NPT obligation? 

A15. While we are prepared to discuss ways in which India might participate in 

GNEP, it is clear that India could only participate in those areas that have been 

declared as civil and placed under international safeguards. The purpose of 

safeguards is to ensure that peaceful nuclear transfers are not diverted to India’s 

weapons program. In this way, such transfers from GNEP partners to India 

would be in accordance with U.S. law, treaty obligations, and policies. We 

currently would not be able to engage in cooperation and technology sharing 

related to India’s fast reactor program as long as it is not part of the civil 

program, and do not envision any future cooperation on reprocessing. 
140

Q16. During the hearing you indicated that you were not at all troubled by the fact 

that the recently signed U.S.-Indian nuclear deal would exclude India’s existing 

fast reactors from safeguards, and allow India to exclude future fast reactors 

from safeguards. If India’s existing fast reactors are excluded from safeguards, 

how many bombs worth of material could they produce annually? 

A16. India does not currently have any fast reactors that produce more plutonium 

than they consume. India’s only existing fast reactor— the Fast Breeder Test 

Reactor (FBTR) — consumes more fissile material than it produces and, over 

time, reduces India’s overall stockpile of plutonium. Although India has used 

weapon-grade plutonium to fuel the FBTR core in the past, this type of reactor 

also offers the possibility of burning reactor-grade plutonium in the core to 

produce a small amount of weapon-grade plutonium annually, though not 

enough for a single weapon. 

Q17. During the hearing I asked you whether the Department has approved any Part 

810 nuclear technology transfer to India since the President’s July 18, 2005 

announcement, and you indicated you had not. I also asked whether there were 

any pending requests before the Department for approval of such transfers and 

you indicated you would supply this information for the Record. Please 

provide this information now. 

A17. No. Since the July 18, 2005 Presidential announcement, the Department has 

received no requests for nuclear technology transfers to India requiring 

authorizations under 10 CFR Part 810. 

 

Q18. During the hearing I noted that "a recent scientific analysis has concluded that 

the UREX separated product (in this instance comprised of plutonium plus 

neptunium, curium, and americium) has a radiation dose rate three orders of 

magnitude lower than the IAEA threshold for self-protection." I then asked you 

whether you would "agree that a material that is three orders of magnitude 

below the IAEA levels isn’t really self protected?" You answered with a simple 

"No," but declined to offer any evidence or argument in support of your 

position. Please explain the technical or other basis for your answer? 

A18. Physical protection measures, including radiation barriers, are designed to 

address one aspect of the proliferation problem by preventing unauthorized 

theft or diversion, whether criminal organizations, terrorists, or others. But the 

proliferation resistance of any fuel cycle depends on many additional factors, 

including international safeguards to detect and deter diversion and the 

structure of international cooperation and export control arrangements that take 

into account such factors as the nonproliferation record of the countries hosting 

sensitive nuclear facilities and regional stability. 

 

GNEP aims to develop and demonstrate technologies that are more 

proliferation-resistant and therefore advance nonproliferation goals, but this 

concept needs to be viewed broadly. The GNEP model works because only the 

supplier states will be engaged in the recycling of spent fuel. These are states 

with strong non-proliferation records, already possess advanced nuclear 

technology, and in most cases, are nuclear weapons states. 
141

The plutonium mix from UREX+ would not meet the self-protection standard 

of spent fuel and, therefore, the physical protection measures and safeguards 

associated with the process will need to be stringent. Nonetheless, the material 

would be significantly more difficult to handle than separated plutonium and 

mixed oxide fuel which are already the global norm for commercial recycled 

fuel. Therefore UREX+ represents a significant improvement over current 

separations technology. 

One of the principal objectives of GNEP is to develop successor technologies 

to those in commercial use today. These technologies would be more 

proliferation resistant and more robust, by design, from a physical protection 

standpoint, and would employ advanced international safeguards. These 

processes will be under IAEA verification auspices. GNEP will also consider a 

variety of recycling approaches, beginning with the one that is most mature, 

UREX+. 

Q19. I also noted that someone in your position would likely be aware of the fact that 

the critical masses of the transuaranic elements separated together with 

plutonium in the UREX process are large(r) than plutonium, an excellent 

nuclear weapons materials, but smaller than U-235, also an excellent nuclear 

weapons material? So from a critical mass perspective, I noted that it was my 

understanding that the UREX product is intermediate between these two 

excellent nuclear weapons materials, and therefore potentially usable in 

weapons. I asked you to explain how this mixture could be considered as 

affording increased proliferation resistance. You replied, “it is my position that 

the use of the output of the UREX process is not useful to making a nuclear 

weapon.” I recognize this may be your position, but I am wondering whether it 

is supported by nuclear weapons experts at the DOE laboratories and 

independent scientists and experts. Please provide the technical basis for your 

position on this important issue for the record, and inform the committee 

whether there are different views regarding this issue among experts at the 

DOE laboratories, and what the substance of those differing views are. 

A19. Your question about the relative attractiveness of different nuclear materials for 

nuclear weapons use requires a classified answer. Basically, UREX+ has 

multiple intrinsic and extrinsic features that will be engineered in to maintain 

proliferation resistance of the process. The classified response can be provided 

through the appropriate channels. 

Q20. To achieve the reductions in the volume and heat loading of nuclear waste 

requiring long-term isolation in a permanent repository, I’m informed that 

you’re going to need a lot more than your requested UREX-plus demonstration 

plant. In fact, to credibly deliver on its forecast benefit for waste management, 

it has been estimated that your GNEP program would require the next 100 or 

more new commercial reactors worldwide to be fast reactors. In the United 

States alone this adds an extra 80 billion (dollars) to 100 billion (dollars) 

requirement for 20 to 25 fast reactors just to transmute the fuel discharge from 

existing U.S. power reactors. Globally this would hundreds to billions or 

trillions of dollars to the cost of nuclear generated electricity. 

 
142

In reply, you stated that you disagreed with my statement, but again offered no 

evidence or argument to support your answer. Since you disagreed with the 

estimated requirements that I suggested would need to be met in order to 

credibly transmute the fuel discharged from existing U.S. power reactors, 

please provide your own estimate of the number, capacity, and cost of US fast 

reactors, MOX thermal reactors, and reprocessing plants required to ensure that 

a single repository the size of Yucca Mountain would suffice, as advertised, 

until the year 2100? Please identify the major analytical assumptions that enter 

into your estimate. 

A20. In order to eliminate the transuranic elements (that dominate long term heat 

load, toxicity, and dose) created during LWR fuel irradiation three technologies 

are needed: (1) an advanced separations technology such as UREX+ 

technology that can separate the various constituents of the irradiated fuel, (2) 

fast reactors, that can eliminate transuranic elements through the fission 

process, and (3) fast reactor fuel cycle technologies that will put these elements 

into a form suitable for irradiation in fast reactors. In order to consume the 

transuranic elements produced by the current reactors operating in the U.S., 

approximately 30GWe of installed fast reactor capability would be needed (i.e.,

one advanced burner reactor would be required for every four to ten light-water 

commercial power reactors). 

Early, pre-conceptual order-of-magnitude estimates of the cost to bring these 

three integrated recycle demonstration facilities to the point of initial operation 

range from $3 billion to $6 billion. While more accurate estimates of cost of 

commercial scale facilities will be developed as the technology matures and the 

demonstrations are conducted, a key objective of the GNEP technology 

demonstration is to reduce the future cost of commercial scale facilities. 

Q21. Under the GNEP rubric, DOE is also seeking to advance a possible follow-on 

reprocessing technology, called “pyro-processing,” for extracting plutonium 

from the future advanced burner reactor’s fuel elements. This process would 

result in a highly radioactive byproduct of fission – Ce-144 – remaining in the 

separated transuranic product stream containing the plutonium in metallic form

(i.e. one step closer to weapons). But Ce-144 has a radioactive “half-life” of 

only 0.8 years, and will have decayed away to insignificance for “selfprotection” purposes by the time the advanced burner reactor fuel is 

reprocessed. In light of this fact, why do you consider pyro-processing as 

offering meaningfully enhanced “proliferation resistance? 

A21. In contrast to current international practice with the PUREX process, GNEP 

recycling would keep several transuranic elements together at all times; 

plutonium is never separated from the others. In fact, it does not appear 

possible to separate plutonium from other transuranic elements via 

pyroprocessing. The other transuranic elements make the recycled material far 

more difficult to handle than plutonium alone. The Department would not 

depend on short-lived fission products for proliferation resistance. In contrast, 

the self protection of current used nuclear fuel, accumulating around the 

country is limited to several decades. GNEP would consume the weaponusable material via recycling, rather than pass the responsibility to future 

generations. 
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Q22. Because pyro-processing produces a metal fuel, some GNEP scientists are now 

proposing to revert to metal-fueled fast reactors for transmutation. These 

designs are known to be less safe than fast reactors using ceramic oxide fuels, 

which in turn are less safe than today’s conventional light water reactors. Do 

you agree with this reasoning, and if so, what is gained from accepting the 

higher safety risks of pyro-processed fuels? 

A22. The Department does not agree that metal-fueled reactors are less safe than 

oxide-fueled reactors. Sodium-cooled fast reactors with metal-alloy fuel are 

extremely safe. For example, the metal-alloy fueled EBR-II test reactor in 

Idaho demonstrated experimentally that it could survive very severe off-normal 

conditions, in large part because sodium is an excellent coolant and because of 

several favorable safety characteristics of metal fuels. Metal fuels have higher 

thermal conductivity and expand more during high-temperature conditions than 

oxide fuels. As a result, EBR-II demonstrated that as temperatures increase, 

nuclear power rate drops without the need for safety systems or operator action 

– a significant safety feature. 

 

Q23. Could transmutation be accomplished in fast reactors with MOX fuels? In 

conventional LWR’s with MOX fuels? 

A23. Transmutation is easier in fast reactors than thermal reactors because the higher 

energy neutrons in fast reactors can split, or fission, more of the transuranic 

isotopes. Transmutation can be accomplished in both reactors using several 

types of fuels; the type of fuel appropriate for a particular reactor depends in 

part on the coolant of that reactor. For light water reactors (LWRs), the current 

fuel is uranium oxide, so transmutation could use mixed oxides of uranium and 

plutonium. Nevertheless, it is expected that the transmutation of minor 

actinides (e.g., americium and curium) would be particularly difficult in LWRs. 

For fast reactors, several candidate fuels are under consideration, including 

mixed oxides, metals, carbides, or nitrides. All could accomplish transmutation 

but at this point only oxide and metal fuels are sufficiently mature to offer a 

high probability of success. 

Appliance Standards

Q24. The appliance standards program is small in its funding, but huge in its impact 

on our energy situation. I helped pass the provision in the 1987 and 1992 laws 

requiring DOE to set many of the standards, so I’ve been distressed as year 

after year passed and the deadlines slipped and slipped. DOE has now missed 

legal deadlines for setting standards on about twenty products. A few weeks 

ago you issued a plan and schedule for issuing the required standards over the 

next six years. That is an improvement. But I’m still shocked at how slow even 

your target dates are. The first standards, other than for certain ceiling fan niche 

products, would be on furnaces and highest priorities for years. DOE issued 

Advanced Notices of Proposed Rulemaking (ANOPR) on these products, 

accompanied by hundreds of pages of technical analysis, back in July of 2004. 

According to DOE’s own guidelines, it should not take more than 18 months 

from the Advanced Notice to issuing the final rule. It’s already been more than 

18 months. But now you say you need another 19 months to issue the rule. 

Why do you need another 19 months to get your highest priority standards out? 
144

A24. On January 31, 2006, the Department published its rulemaking schedules in a 

Report to Congress. "Energy Conservation Standards Activities Submitted 

Pursuant to Section 141 of the Energy Policy Act of 2005." As documented in 

the Report, the Department is no longer using a priority setting process but is 

using a schedule setting process that ensures that all backlog rulemaking 

requirements are completed by June 2011. The published schedule also allows 

the Department to stay on schedule for the new rulemaking responsibilities in 

EPACT 2005. The schedule is firm and achievable, but if one rulemaking is 

selectively accelerated it would cause delays in other parts of the schedule. The 

Department will use the remaining time in the schedule relating to furnaces to 

publish the Notice of Proposed Rulemaking (NOPR), solicit public comment, 

and complete the final rule. The Department recognizes the importance of this 

rulemaking and is dedicated to meeting the September 2007 final rule date as 

set forth in the Report to Congress. 

Q25. What have you done on these products-supposedly your Department’s highest 

priorities-since issuing the “ANOPR” 19 months ago? 

A25. Regarding the residential furnaces and boilers rulemaking, we have conducted 

the analyses required to prepare the notice of proposed rulemaking (NOPR) and 

we are in the final stages of completing the NOPR. The ANOPR public 

meeting was held on September 29, 2004, and the comment period closed on 

November 10, 2004. Because of the Department’s commitment to stakeholder 

involvement and because of the complexity of the analyses, the staff reviewed 

over 40 different categories of comments from over 100 individual commenters 

resulting in significant analysis changes during the NOPR phase. A number of 

critical issues were raised including safety concerns over necessary venting, an 

investigation into furnace fan electricity consumption as a result of EPACT 

2005, and significant changes in AEO 2006 natural gas price forecasts which 

led to additional analyses. 

 

Q26. When do you expect to issue the Notice of Proposed Rulemaking? 

A26. We expect to publish it by September 2006, and stay on schedule to meet the 

September 2007 final rule publication date. 

Q27. The furnace standard could eventually save 187 billion cubic feet of natural gas 

a year, which would help relieve pressure on tight supplies and bring down 

prices, and it will save consumers billions of dollars. Don’t you feel some 

urgency to get these out? 

A27. Yes. The Department recognizes the importance of this rulemaking and is 

dedicated to meeting the September 2007 final rule date as set forth in the 

report to Congress. 

Energy Situation

Q28. The Administration’s National Energy Policy and the energy bill that finally 

passed last year were spurred in part by a spike in energy prices in 2001. Since 
145

then, prices have only risen higher as rising demand squeezes supply. Last year 

gasoline prices nationwide shot up to over $3 a gallon for the first time, roughly 

double prices at the beginning of 2004. Wholesale natural gas prices, which had 

doubled between 2002 and the beginning of this year, doubled again by the end 

of last August. These price increases have cost consumers hundreds of billions 

of dollars. Yet the proposed budget would cut energy efficiency programs at 

the EERE office, which are intended to address the demand side of the 

problem, by 18%. This would be the fifth cut in a row-the budget provides onethird less funding than these programs received in FY2002. You have 

recognized energy efficiency as a critical response to the nation’s energy 

challenges, but the budget does not seem to recognize that fact. Do you believe 

that the funding for energy efficiency programs in the budget match the 

nation’s need for saving energy? 

A28. The Department’s FY 2007 budget represents an aggressive, focused and 

appropriately balanced approach to developing and deploying the technologies 

that will help to improve the Nation’s energy efficiency. 

 

The Department’s FY 2007 budget request maintains robust funding levels in a 

variety of energy efficiency programs. Funding for energy efficient vehicle 

technologies, exclusive of Congressionally directed activities and transfers, is 

level compared to the FY 2006 appropriation. Funding for the Building 

Technologies program is level with 2006 appropriations on a comparable basis, 

excluding transfer of some activities into the program (which actually increase 

the Building Technology funding total by about $8 million). While funding for 

the Federal Energy Management Program (FEMP) is $2 million below the FY 

2006 appropriation, that decrease reflects the contribution of new efficiencies 

within the program that will allow the Department to achieve more with less. 

The reduction in FEMP is offset by a $2 million increase in Technology 

Advancement and Outreach, which will consolidate and streamline EERE 

outreach efforts. With regard to Industrial Technologies, high energy prices 

give the industrial sector incentive to reduce their own energy use. 

Q29. Programs to increase deployment of energy-efficiency technologies have the 

most immediate impact on energy demand, yet the budget would eliminate 

several of these programs and cut almost all the others. If there is a national 

interest in saving energy, why should we cut the programs to accomplish that 

goal? 

A29. Facing greater uncertainty over the price of petroleum, the Department 

concluded that reducing America’s growing dependence on foreign oil is the 

highest priority for the Office of Energy Efficiency and Renewable Energy in 

FY 2007 and we have directed our resources to those programs with the 

greatest potential to contribute to that goal. Thus, priority has been given to 

science and technology R&D initiatives, such as the Advanced Energy 

Initiative, to develop clean, affordable sources of energy that will help reduce 

the use of fossil fuels and lead to changes in the way we power our homes, 

businesses and cars. 
146

Q30. Will this budget leave the Department prepared to promote energy efficiency in 

case there are more price spikes next year due to natural disasters or foreign 

events? 

A30. The Department is always prepared to reach out to the public on energy 

efficiency. The vehicles for reaching large numbers of people, i.e., the 

consumer information site and the EERE information center, are flexible and 

can expand to meet increases in demand with minimal effort. 

In addition, the Department’s request includes a $2 million increase in the 

Technology Advancement and Outreach activity designed specifically to 

further promote communications with consumers, industry, States, and other 

Federal programs. This is more than double the 2006 appropriation. 

Q32. Mr. Secretary, given the Administration’s public support for reducing 

America’s dependence on oil, can you tell the Committee just what the 

President meant by setting a goal of reducing our Mideast oil imports by 75% 

by 2020 (NOTE: this is presumably a typo. The President said 2025, not 

2020). By how many million barrels a day do you hope to reduce U.S. oil 

consumption? 

A32. Reducing America’s dependency on imported oil has been and will continue to 

be a priority for this Administration. The goal President Bush set forth in his 

State of the Union address was not a change in policy, but the acceleration of a 

priority. To achieve this goal, we must accelerate our research in energy 

technologies that will fundamentally transform how we produce and consume 

energy. 

Diversification of our energy supply has always been a priority of this 

Administration. Since 2001, the Administration has spent nearly $10 billion to 

develop cleaner, cheaper and more reliable energy sources. The Advanced 

Energy Initiative (AEI) will accelerate investment into clean energy 

technologies in order to transform the way we produce and use energy in our 

homes, business and our transportation sector. To achieve these goals, the 

President has requested $2.1 billion in FY 2007 - a 22 percent budget increase - 

to develop new technologies and alternative sources of energy to help diversify 

and strengthen our nation’s energy mix. The AEI is focusing on technologies 

that we believe hold the greatest promise for American taxpayers, including 

solar, biofuels, hydrogen, nuclear, and clean coal technology. 

As part of President Bush’s Advanced Energy Initiative, the FY 2007 budget 

request for the Hydrogen Fuel Initiative increased by $53 million over FY 2006 

to $289.5 million to accelerate the development of hydrogen fuel cells and 

affordable hydrogen production, storage, and infrastructure technologies. The 

Administration estimates that, if hydrogen reaches its full potential, the 

Hydrogen Fuel Initiative and FreedomCAR program could reduce our oil 

demand by over 11 million barrels per day by 2040 – approximately the same 

amount of crude oil America imports today. 

 
147

Oil Savings

Q33. If we are serious about addressing our "addiction" to oil, don’t you think we 

need to invest more in vehicle efficiency as well as in new fuels? 

A33. Transportation research remains a key factor in our plans to decrease the 

Nation’s dependence on foreign oil, and DOE’s request strongly supports this 

goal. Although it appears that we are asking for less money in the Vehicle 

Technologies Program, a closer look at the details shows that the FY 2006 

appropriation contains more than $20 million in congressionally directed 

activities that do not directly support the Vehicle Technologies Program’s 

mission and goals. Once an adjustment is made for these Congressionally 

directed activities and program transfers, it becomes clear that DOE’s FY 2007 

budget request is level with the FY 2006 appropriation. Additionally, this 

year’s request realigns some internal priorities by placing greater emphasis on 

those research activities with the greatest potential for oil savings, particularly 

to increase funding for the development of lithium-ion batteries and other 

technologies for plug-in hybrid vehicles. 

Q34. Is the Administration planning to review transportation and vehicle policies as 

well as research funding in order to address this serious problem? While I 

recognize that research funding is an important component of a long-term 

strategy, don’t you believe that this problem is urgent enough to require 

immediate action? 

A34. In addition to the research and technology development that is planned under 

the President’s Advanced Energy Initiative, transportation and policy options 

will be evaluated to determine their effectiveness in addressing this issue. 

Many near term transportation policy options fall under the purview of the 

Department of Transportation and policy tools such as tax incentives are 

primarily the responsibility of the Department of Treasury. 

Energy Bill

Q35. Last year the Congress passed an energy bill for the first time since 1992, 

authorizing a number of new energy-efficiency programs on public education, 

utility efficiency programs, building codes, appliance rebates, and other areas. 

Yet I am hard-pressed to see all the work we did on that bill reflected in the 

proposed budget. Please explain this budget discrepancy. 

A35. The Department prioritized activities, including those authorized under 

EPACT, that would most contribute to the goal of reducing America’s growing 

dependence on foreign oil. Thus, priority was given to science and technology 

R&D initiatives, such as the Advanced Energy Initiative, to develop clean, 

affordable sources of energy that will help reduce the use of fossil fuels and 

lead to changes in the way we power our homes, businesses and cars. The 2007 

Budget reflects the Department’s priorities. 

 As noted in the Statement of Administration Policy (SAP) submitted to energy 

bill conferees on July 17, 2005, “The House and Senate versions of H.R. 6 also 

include authorization levels that in many cases significantly exceed the 
148

President’s Budget. These authorizations set unrealistic targets and 

expectations for future program –funding decisions.” House and Senate SAPs 

contained similar language. 

Q36. Are there any new energy-efficiency programs authorized in the Energy Policy 

Act of 2005 that are fully funded in the proposed budget? 

A36. There are no new EERE programs funded at levels authorized in the Energy 

Policy Act of 2005. As noted in the Statement of Administration Policy (SAP) 

submitted to energy bill conferees on July 17, 2005, “The House and Senate 

versions of H.R. 6 also include authorization levels that in many cases 

significantly exceed the President’s Budget. These authorizations set 

unrealistic targets and expectations for future program –funding decisions.” 

House and Senate SAPs contained similar language. 

The Department prioritized activities, including those authorized under 

EPACT, that would most contribute to the goal of reducing America’s growing 

dependence on foreign oil. Thus, priority was given to science and technology 

R&D initiatives, such as the Advanced Energy Initiative, to develop clean, 

affordable sources of energy that will help reduce the use of fossil fuels and 

lead to changes in the way we power our homes, businesses and cars. The 2007 

Budget reflects the Department’s priorities. 

Q37. Does this budget allow you sufficient funding to implement the energy bill, 

including the added requirements on the appliance standards, federal energy 

management, and Energy Star programs, reporting requirements, and other 

provisions? 

A37. Yes, the 2007 Budget provides sufficient funding to implement the 

requirements you mention. However, the 2007 Budget does not provide 

funding for all programs authorized in the Energy Policy Act. The 

Department’s priorities are reflected in the 2007 Budget. 

 

Public Education

Q38. Public education is the quickest way to reduce energy use and address current 

energy prices and supply-demand imbalance. Yet there is almost no money for 

public education on energy efficiency in the budget, despite a $90 million 

authorization in last year’s energy law. Mr. Secretary, you have spent a great 

deal of time trying to educate the public about their energy consumption. How 

much funding would be available for proactive energy-efficiency public 

education programs under this budget? Where is that funding in the budget? 

A38. If approved, the FY 2007 budget would provide $3.5 million for support of 

energy efficiency and renewable energy public education and outreach, more 

than double 2006 appropriations. This funding is located in the Technology 

Advancement and Outreach activity within the Program Support portion of the 

budget. 
149

Of course, this is not the only place funding is requested. Most of the EERE 

program offices do some form of public education and outreach. For example, 

the Solar program supports the Solar Decathlon, a university competition held 

biannually on the National Mall that promotes awareness of solar technologies 

among the general population. The Vehicle Technologies program supports an 

Advanced Vehicle Competition that also serves to educate the public. It also 

supports development of the Fuel Economy Guide (www.fueleconomy.gov). 

And every EERE program produces pamphlets about their respective 

technologies and updates their websites with the latest information useful for 

consumers. For example, the Building Technologies program website offers 

consumer tips for saving energy around the house and information on new tax 

credits in the Energy Policy Act of 2005 

(http://www.eere.energy.gov/buildings/info/). 

Q39. What is your plan for using those funds, including plans for partnering or 

contracting with other organizations? 

A39. The $3.5 million for Technology Advancement and Outreach will be used to 

continue and expand the operations of the EERE Information Service and the 

EERE Consumer Website. It is expected the inquiries to the EERE Information 

Center will grow as energy concerns continue. It is also expected that newly 

developed products, technologies and information on energy efficiency and 

renewable energy will need to be added to the Consumer Information Page and 

to the portfolio of the EERE Information Center expertise. EERE is always 

evaluating the opportunities to cooperate with private sector organizations and 

other government entities as evidenced by the Powerful Savings effort. We 

will continue to evaluate proposals from outside partners as they come to us to 

determine the benefit of our joining in already developed partnerships and seek 

out new partners as energy information needs require. 

We are looking at the possibility of: 

Expanding our “Energy Hog” campaign– Using existing interactive web 

program for kids and redeveloping and distributing this to elementary schools 

to incorporate as part of their education discussions on energy. 

Industry partnering on renewable initiatives – Looking at participating in 

public/private partnership which would further some of the renewable 

initiatives we have. 

Final decisions will be made when funding is available and opportunities 

present themselves. EERE is currently developing a Request For Proposal 

seeking support for its outreach efforts. The contractor selected from this 

process will support the Office of Technology Advancement and Outreach in 

making timely information on energy efficiency and renewable technologies 

and processes available to the public. 

Q40. Can you describe current public education efforts, funding levels, and how 

effective you think those efforts are? 

A40. In addition to government-only funded outreach mechanisms, EERE is 

involved with private sector partners, such as the Alliance to Save Energy to 
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promote energy efficiency and alert citizens to the means by which they can 

save energy and money at home and on the road: 

Powerful Savings—A joint effort with the Alliance to Save Energy to promote 

energy savings in the home and on the road through proactive media 

placement, satellite media tours, joint public appearances and support for 

printing the “PowerSmart” book. Funding: $150,000. 

Power is in Your Hands—A joint effort led by the Alliance to Save Energy 

and including the Environmental Protection Agency, American Gas 

Association, DOW Chemical and many others. The effort developed public 

service announcement newspaper ads and paid advertising to promote energy 

efficiency during the winter heating season. Using paid and free media, the 

effort directed consumers to information on how they could save energy. 

Funding: $100,000. 

EnergyHog—An effort started by the Colorado Energy Office and currently 

managed by the Alliance to Save Energy, the education program involves 

Home Depot, the Northern American Insulation Manufacturers and more than 

10 state energy offices. EnergyHog is a three-year program to educate young 

and old on energy efficiency through the use of public service announcements 

(radio, television and billboard) directing the public to a website with 

information on energy savings directed at both adult and juvenile audiences. 

Funding: $975,000 over three years. 

Consumer Information Sites—Web based sites within the Department of 

Energy home page providing information to consumers on ways they can save 

energy or use renewable energy technologies. Additionally, the 

Energysavers.gov website directs consumers to energy saving information at 

DOE, the Department of Housing and Urban Development and the 

Environmental Protection Agency. Funding: $20,000 for EnergySavers. DOE 

consumer site is funded as part of the overall website budget and provides links 

to information at a number of sites, so separate budget information is not 

available. The EERE websites have recorded more than 28.8 million web 

pages viewed in FY2005. 

Consumer Directed Preprinted Newspaper Articles—Through the North 

American Precis Syndicate, 10 preprinted newspaper articles were distributed 

to 10,000 weekly and small daily newspapers across the country with 

information on energy efficiency and renewable energy technologies. Five of 

the articles were translated for distribution to Spanish language newspapers. 

Estimated audience reached for the English articles was more than 329 million 

readers and more than 22 million for the Spanish language articles. Funding: 

$50,000. 

EERE Information Center—EERE maintains a toll free telephone service to 

answer consumer inquiries on energy efficiency and renewable energy. The 

service responds to some 20,000 inquiries per year and distributes more than 

225,000 documents to consumers, businesses and schools. Funding: $2.2 

million. 

 
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FEMP

Q41. Last fall in the wake of the hurricanes you and President Bush gave a series of 

speeches strongly urging Americans to use energy more efficiently, and 

President Bush directed all federal agencies to conserve fuels a much as 

possible. Yet the proposed budget would cut the Federal Energy Management 

Program, which leads the government-wide effort to save energy, by another 

12%. Is this "leading by example," is this setting a good example for the 

American people in investing in energy efficiency? 

A41. The 2007 Energy Efficiency and Renewable Energy budget request for the 

Federal Energy Management Program is $2 million below 2006 enacted due to 

streamlining the Program’s management, training and communications efforts. 

We expect to be able to achieve the same, or better, results at the 2007 request 

level. It’s noteworthy that FEMP Federal employees are funded through the 

Program Direction line item. So the FEMP budget does not represent the full 

amount of resources dedicated to improving Federal energy efficiency. Also, 

our Technology Advancement and Outreach request increases by $2 million. 

Some of these funds will be used to promote deployment of energy efficient 

technologies. 

In response to Hurricanes Katrina and Rita, FEMP led an effort to show federal 

agencies how to reduce their natural gas consumption and expenses through 

relatively low cost, operations and maintenance methods. To that end, FEMP 

sent Energy Saving Expert Teams to 28 sites in November and December of 

2005. These teams identified opportunities for federal agencies to save almost 

10% of their natural gas consumption, or about $6.5 million annually at current 

natural gas prices. FEMP will continue to work with the sites to follow through 

with the recommendations of the teams. 

Q42. Wouldn’t additional funding for FEMP save the federal government more 

money than it would cost by reducing energy waste? 

A42. We believe the FEMP 2007 budget allows it to provide adequate support to 

facilitate Federal agency progress in implementing cost effective energy 

efficiency and renewable energy measures. We expect similar or better results 

from FEMP activities compared to previous years, because of efforts to 

streamline the Program’s management, training and communications efforts. 

Q43. The Energy Policy Act of 2005 reauthorized Energy Savings Performance 

Contracts, a program which allows federal agencies to contract with energy 

service companies to upgrade the efficiency of federal buildings, with the 

payment for these services coming out of the reduction in the agency’s utility 

bills. This is an innovative program that has saved millions of tax dollars. How 

many ESPCs has the federal government entered into since authority for the 

contracts was first restored in October 2004? 

A43. The ESPC program has rebounded well after the lapse in legal authority. 

During the third and fourth quarters of FY 2005 and the first quarter of FY 

2006, the Department of Energy facilitated awards on 15 ESPC projects. 

 
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 We agree that ESPCs are important for saving energy for the Federal 

government. However, we note that the program has not saved millions of 

taxpayer dollars. Reduced energy cost savings from an ESPC is used to pay 

back the energy service company (ESCO) for its initial investment, plus interest 

at private sector financing rates. Generally, only after the contract term 

(average ~17 years) would the government actually save money, assuming the 

energy conservation measures would still produce savings after the contract 

term. 

Q44. What is the Department of Energy doing to encourage federal agencies to take 

advantage of this program? 

A44. The Department is providing expert Energy Savings Performance Contract 

Project Facilitators to federal agencies to ensure the process is user friendly and 

expedient; standardizing templates and report requirements for each phase of 

the contract process, especially for measurement and verification; educating 

agencies on their roles and responsibilities through workshops and web-based 

training opportunities; and recommending that future ESPC indefinite delivery, 

indefinite quantity contracts are consolidated into one umbrella contract for the 

federal government. 

Building Codes

Q45. A small DOE program to assist states in setting and achieving compliance with 

their building energy codes leverages a few million dollars to improve the 

efficiency of every new building in much of the country. It has been rated the 

most cost-effective of all DOE programs assisting states. Yet the proposed 

budget would eliminate it. Mr. Secretary, I do not see how it makes sense to cut 

such a valuable program at a time where there is so much building occurring 

around the country. Doesn’t it make sense to provide a national source of 

technical expertise on the national model building codes, rather than trying to 

make each of the 50 states replicate that expertise? Why would you eliminate 

this highly effective program? 

A45. The Department’s FY 2007 budget request includes an increase of $13.8 

million for the State Energy Program to support the Energy Policy Act as 

appropriate and as they determine their own priorities. States can choose to use 

funding from the State Energy Program formula grants to support programs 

that increase building code compliance. The Department believes that the 

States have developed sufficient expertise and capability to upgrade, implement 

and enforce their building energy codes and has requested no specific funding 

for increasing and verifying compliance with national model building codes in 

FY 2007. 

Q46. The budget would also reduce funding for analysis of the national model 

building energy codes. Among other responsibilities this program is required, 

every time there is an update to a model energy code, to make a determination 

within a year on whether the code would save energy. Not on the cost or other 

impacts, just on whether it would or would not save energy. DOE has not yet 

made a determination on the 2003 IECC residential code, the 2004 supplement 
153

to that code, the 2001 ASHRAE commercial standard, or the 2004 ASHRAE 

standard (and now there is a 2006 IECC residential code). When do you expect 

to make a determination on these codes and standards, and on which versions? 

A46. We expect to make a joint determination regarding the 2003 IECC and the 

2006 IECC by December 30, 2006. We have no plans to make a determination 

regarding the 2004 supplement to the IECC because this interim document has 

been superseded by the 2006 IECC. We expect to make a joint determination 

regarding ASHRAE Standard 90.1-2004 by December 30, 2006. 

 

Q47. Does the budget include sufficient funding and staff to make the required 

determinations? 

A47. Yes, the Department’s FY 2007 budget request reflects the resources needed to 

complete the required determinations for building codes. 

 

National Lab Layoffs

Q48. When President Bush visited the National Renewable Energy Lab recently, 

DOE announced it had found funds to reverse layoffs there. However, I 

understand that Lawrence Berkeley National Lab also has recently laid off a 

couple dozen people in its energy efficiency program. In particular, the lab has 

been a key contractor in doing the technical analysis for the appliance 

standards, but has had to lay off about half of its group of experienced analystsabout a dozen people-even as Congress has increased funding for this program. 

Why are these posts being eliminated? 

A48. The changes in appliance standards work levels at Lawrence Berkeley National 

Lab (LBNL) are needed in order to accelerate our productivity and meet the 

schedules presented to Congress. LBNL management is working closely with 

the Department on several critical rulemakings that are included in the 

published schedule and we fully intend to use LBNL resources in the context of 

the program’s overall resource plan. 

On January 31, 2006, the Department published its rulemaking schedules in a 

report to Congress "Energy Conservation Standards Activities Submitted 

Pursuant to Section 141 of the Energy Policy Act of 2005." Chapter 6 of this 

report documents numerous productivity enhancements and changes the 

Department has made to expedite its rulemaking process. New management 

processes, including review and reporting requirements, have been instituted. 

Productivity improvements in the rulemaking program are taking effect and 

will significantly increase the number of new standards to be issued. As 

documented in the report, the recent and forthcoming process improvements 

will increase the standards output by increasing the number of products in the 

active rulemaking process, by bundling multiple products into single 

rulemakings, by shortening the time to complete successive rulemakings, and 

by implementing other productivity-enhancing techniques. 

Many of the posts at LBNL that are being eliminated were held by part-time 

employees whose contributions to specific technical rulemakings were minimal 

and are no longer needed or are being performed at other locations due to the 
154

productivity improvements. LBNL involvement has also been reduced in areas 

of project management and fiscal management because those functions are 

being performed at the Project Management Center of the Office of Energy 

Efficiency and Renewable Energy. 

 

Q49. Will the loss of this expertise affect the work on appliance standards, and how 

do you plan to replace it? 

A49. No. Many of the posts at LBNL that are being eliminated were held by parttime employees whose contributions to specific technical rulemakings were 

minimal and are no longer needed or are being performed at other locations due 

to the productivity improvements. LBNL involvement has also been reduced in 

areas of project management and fiscal management because those functions 

are being performed at the Project Management Center of the Office of Energy 

Efficiency and Renewable Energy. 

 

Q50. How will these layoffs affect the new schedule for completing required 

rulemakings on appliance standards? 

A50. The schedule was designed in light of significant changes that needed to be 

made to the Department’s resource plan for appliance standards, including 

contractor resources. The Department’s schedule will not be affected by these 

layoffs. 

 

Q51. Will you commit to restoring funds to reverse the layoffs at Lawrence Berkeley 

National Lab as well? 

A51. No. The changes in appliance standards work levels at Lawrence Berkeley 

National Lab (LBNL) are needed in order to accelerate our productivity and 

meet the schedules presented to Congress. LBNL management is working 

closely with the Department on several critical rulemakings that are included in 

the published schedule and we fully intend to use LBNL resources in the 

context of the program’s overall resource plan. 

 Oil and Gas

Q52. The Administration’s budget request rightly calls for cancellation of both the 

Oil Technology and Natural Gas Technologies research and development 

programs, as well as the Ultradeep Water and Unconventional Resources 

program that was created by last year’s Energy Policy Act, noting that "the 

budget proposes to repeal the [Ultradeep and Unconventional] program through 

a future legislative proposal, consistent with the decision to terminate the 

discretionary Oil and Gas programs." I applaud this announcement by the 

Administration. When can we expect the Administration’s future legislative 

proposal to be introduced? 

A52. Secretary Bodman transmitted the legislative proposal to the House and Senate 

on April 27, 2006. 
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