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[Senate Hearing 107-31]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 107-31

                       SPENCER ABRAHAM NOMINATION

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

          NOMINEE TO BE SECRETARY OF THE DEPARTMENT OF ENERGY

                               __________

                            JANUARY 18, 2001

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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
72-247 DTP                  WASHINGTON : 2001
_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402

               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii              FRANK H. MURKOWSKI, Alaska
BYRON L. DORGAN, North Dakota        PETE V. DOMENICI, New Mexico
BOB GRAHAM, Florida                  DON NICKLES, Oklahoma
RON WYDEN, Oregon                    LARRY E. CRAIG, Idaho
TIM JOHNSON, South Dakota            BEN NIGHTHORSE CAMPBELL, Colorado
MARY L. LANDRIEU, Louisiana          CRAIG THOMAS, Wyoming
EVAN BAYH, Indiana                   GORDON SMITH, Oregon
BLANCHE L. LINCOLN, Arkansas         JIM BUNNING, Kentucky
                                     PETER G. FITZGERALD, Illinois
                                     CONRAD BURNS, Montana
                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
             Andrew D. Lundquist, Republican Staff Director
                 David G. Dye, Republican Chief Counsel
            James P. Beirne, Republican Deputy Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Abraham, Hon. Spencer, Nominee to be Secretary of the Department 
  of Energy......................................................     9
Akaka, Hon. Daniel K., U.S. Senator from Hawaii..................     2
Bayh, Hon. Evan, U.S. Senator from Indiana.......................    37
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................     1
Burns, Hon. Conrad, U.S. Senator from Montana....................    41
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado........    29
Cantwell, Hon. Maria, U.S. Senator from Washington...............    47
Craig, Hon. Larry E., U.S. Senator from Idaho....................    35
Domenici, Hon. Pete V., U.S. Senator from New Mexico.............    23
Dorgan, Hon. Byron L., U.S. Senator from North Dakota............    20
Feinstein, Hon. Dianne, U.S. Senator from California.............    45
Graham, Hon. Bob, U.S. Senator from Florida......................    26
Johnson, Hon. Tim, U.S. Senator from South Dakota................     3
Levin, Hon. Carl, U.S. Senator from Michigan.....................     6
Murkowski, Hon. Frank H., U.S. Senator from Alaska...............     4
Nickles, Hon. Don, U.S. Senator from Oklahoma....................    43
Schumer, Hon. Charles E., U.S. Senator from New York.............    50
Smith, Hon. Gordon, U.S. Senator from Oregon.....................    40
Stabenow, Hon. Debbie, U.S. Senator from Michigan................     7
Thomas, Hon. Craig, U.S. Senator from Wyoming....................    33
Wyden, Hon. Ron, U.S. Senator from Oregon........................    31

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    63

                              Appendix II

Additional material submitted for the record.....................    79

 
                       SPENCER ABRAHAM NOMINATION

                              ----------                              

                       THURSDAY, JANUARY 18, 2001

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:06 a.m. in room 
SD-106, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

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

    Chairman Bingaman. The committee will come to order. Under 
the Rules of the Senate the standing committees continue from 
one Congress to the next and have the power to act until their 
successors are appointed. Although the Senate has yet to 
appoint new members, we expect, subject to the approval of a 
Democratic Conference and the full Senate, that Senators 
Feinstein and Schumer and Cantwell will be appointed as 
Democratic members of this committee and, if they are able to 
attend this morning, we will certainly permit them to ask 
questions of the nominee and participate.
    Obviously, we extend the same courtesy to any new 
Republican members, but I understand that the Republican 
Conference has not yet decided on who those members will be. Is 
that correct?
    Senator Murkowski. That is my general understanding, Mr. 
Chairman.
    Chairman Bingaman. The committee will consider the 
nomination of Spencer Abraham to be the Secretary of Energy 
this morning, then we will break for lunch and reconvene at 
2:30 this afternoon to consider the nomination of Gale Norton 
to be the Secretary of the Interior. I have decided to exercise 
the prerogatives that I have as chairman for another day-and-a-
half, Mr. Chairman, to model these hearings after those that we 
conducted in this room for Donald Rumsfeld instead of those 
that are being conducted for John Ashcroft. By that I mean that 
I would intend to give a brief statement myself, call upon 
Senator Murkowski, the Ranking Republican member, to give a 
statement, then call on the two Senators from Michigan to 
introduce the witness, and then call on Senator Abraham, the 
nominee, to make his statement, and then we would go after that 
to questions by the committee.
    In the first round of questions we will have 8 minutes per 
questioner instead of 5, so the people can make statements or 
ask questions as they see fit.
    The purpose of this hearing, as I said, is to consider the 
nomination of our former colleague, Spencer Abraham, as the 
Secretary of Energy. Several years ago, Senator Abraham urged 
that we abolish the Department of Energy. He has since seen the 
light. He has come to understand the importance of that 
Department, and the importance of it for our energy security, 
our national security, our economy, and our scientific and 
technological prowess.
    I am sure he is also learning the difficult problems facing 
the Secretary and how difficult it will be for the Secretary to 
solve those problems. Like his predecessors, he will be held 
accountable for energy supply and price fluctuations over which 
he has very little control. He will be held responsible for the 
performance of National Nuclear Security Administration, over 
which he has no direct management authority. He will be called 
to account for environmental messes that he had no part in 
making, and he will be held liable for not having opened the 
nuclear waste repository 3 years ago.
    Republicans harshly criticized President Clinton's nominees 
for this and other posts in the Department of Energy for not 
being sufficiently steeped in the intricacies of the energy 
area for which they were nominated, and for needing, as it was 
referred to, on-the-job training. It would be easy for 
Democrats to respond in kind, now that our roles are reversed. 
It would be easy but it would not be constructive or fair to 
this nominee.
    It is time for both parties to put aside their rancor, to 
work cooperatively with the new Secretary to try to solve some 
of these very serious problems facing the Department. I, for 
one, have assured this nominee of my support, and I look 
forward to working with him. At this point let me call upon 
Senator Murkowski to make any opening statement he would like 
to make.
    [The prepared statements of Senators Akaka and Johnson 
follow:]
  Prepared Statement of Hon. Daniel K. Akaka, U.S. Senator From Hawaii
    Mr. Chairman, thank you for promptly scheduling this hearing to 
confirm our Secretary of Energy. The sooner we confirm Senator Abraham 
as the Secretary of Energy, the sooner he can begin work on his new and 
challenging assignment.
    I am pleased that President-elect Bush has chosen Spencer Abraham 
to be the Secretary of Energy. He is aware of the concerns of Americans 
regarding rising energy costs. As a Senator from Michigan, Spencer 
Abraham has had firsthand experience with the increases in gasoline 
prices that occurred last year. I want to tell you that I plan to vote 
for your confirmation as the Secretary of Energy. I also commend you 
for accepting the task of running the Department of Energy. It is one 
of the most challenging jobs in the Federal government.
    As a member of this Committee and as a member of the Senate Armed 
Services Committee, I look forward to working with you on all aspects 
of the operations of the Department.
    Senator Abraham, as you know our nation has suffered the impact of 
high energy prices for the last two years. Some areas of the country 
have suffered more than others. But Hawaii has borne the brunt of 
having to pay high energy prices during all of the 1990s. For most of 
the 1990s, the average Honolulu gasoline price, based on a weekly 
survey, hovered at roughly 25 cents to 50 cents above the national 
average.
    One of the major challenges facing our nation is to stabilize 
energy prices and ensure that Americans enjoy reasonable and affordable 
energy prices. We have not had a coherent and comprehensive energy 
policy for a long time under both Democratic and Republican 
administrations. Additionally, we have not had a commitment to address 
our dependence on foreign sources of oil. The absence of an effective 
policy and a visible commitment to addressing our energy dependence 
have made us captive to OPEC's production decisions and led to other 
problems.
    The only way to reverse our energy problem is to have a 
multifaceted energy strategy and remain committed to that strategy. 
This will send a clear message to OPEC and their partners about 
America's resolve. If we are to have a comprehensive energy policy that 
strengthens our economy and serves the real needs of Americans, then we 
need to dismantle our dependence on foreign oil as soon as possible.
    The way to improve our energy outlook is to adopt energy 
conservation, encourage energy efficiency, and support renewable and 
alternative energy programs. Above all, we must develop energy 
resources that diversify our energy mix and strengthen our energy 
security. This is only one aspect of the problems faced by the 
Department. It faces other problems as well. The problems facing the 
Department are varied, complicated, and challenging. The Department has 
a large and diverse bureaucracy. The process of reinventing and 
reorganizing the Department is far from over. Electric utility industry 
restructuring poses its own challenges. Nuclear waste is a monumental 
problem. The weapons program has its own challenges. Environmental 
management at the Department's facilities is a complicated and an 
expensive undertaking.
    The Department's science and technology programs need direction in 
the post Cold War era. The Department has facilities in 35 states, 
requiring it to work very closely with state and local agencies. The 
responsibilities of the Department extend even to remote islands in the 
far reaches of the Pacific Ocean. Our national security and economic 
health depend to great extent on what the Department does. In a 
nutshell, a series of problems await our new Secretary.
    To address these and other issues, a strong hand is needed at the 
helm. The Department needs an effective leader who can promote policy 
and build a consensus. The President's nominee to be the Secretary of 
Energy is such a man. Senator Abraham's record and his experience have 
prepared him well for this challenge. I have every confidence that he 
will provide leadership in developing and implementing a comprehensive 
energy policy. I am also confident that he will address other problems 
faced by the Department in a cooperative and bipartisan manner.
    Senator Abraham, I look forward to working with you.
                                 ______
                                 
 Prepared Statement of Hon. Tim Johnson, U.S. Senator From South Dakota
    Mr. Chairman, the Secretary of Energy is a critical and vital 
Cabinet position. We are at a crossroads in our energy policy. Gas and 
oil prices are going up, shortages are becoming more prevalent and our 
electricity system is becoming more constrained. Meanwhile, demand is 
growing more than ever and our economy is affected by the volatility 
that is occurring.
    At this juncture, it is important for the Secretary of Energy to be 
a steward of the direction the nation's energy policy. It is clear that 
we must take a measured, balanced approach. Favoring one side too 
heavily in this debate could have ramifications that will take us years 
to change.
    It is also important that we work together to find solutions and 
stop assessing blame. In particular, we need to work together to find a 
long-term national energy strategy that can lower our dependence on 
foreign oil and get us away from the instability with which we are 
constantly faced. There is much debate about how to do this and far too 
much time has been spent in this committee faulting people rather than 
coming up with solutions. I am hopeful that we can be more productive.
    As we all know, the rising cost per barrel of crude oil has driven 
up the prices of gasoline, propane, diesel and heating oil with 
seemingly little relief in sight. These increases have become a 
significant obstacle for farmers and ranchers, families, local 
governments, and frankly, anyone who has any level of dependence of 
fuel for heating, transportation, or other needs. Moreover, natural gas 
prices are also going up because of low supplies and lack of 
production. In a state like mine where nearly half of the residents 
rely on natural gas for heat, this could have serious consequences.
    Its clear that consumers are going to experience disruptive price 
fluctuations as long as we rely on foreign oil imports for the majority 
of our fuel supply. Obviously, no magic bullet exists for either the 
short or long-term fuel supply and price situation. But while it is 
only one part of a potential solution to our nation's energy situation, 
I am committed to elevating the role that alternative fuels, such as 
ethanol and biodiesel, play in our nation's energy strategy. The use of 
renewable alternative fuels benefits energy security, the environment, 
and our overall economy.
    And of course, the production and use of renewable alternative 
fuels derived from agricultural products directly helps our 
agricultural economy. I have supported efforts in the past for greater 
use of alternative fuels. I authored legislation that was enacted two 
years ago that includes the use of biodiesel that federal fleet 
operators can use to meet the EPACT. In my view, this is the type of 
approach we should be using to change the demand for fuel--complimented 
with increased supply, it could go along way to way towards meeting our 
increasing energy needs. While only increasing production and use of 
domestically produced renewable fuels will not take care of our energy 
security problems, it must be one component of our long-term national 
energy strategy.
    I am interested to learn how the nominee will address these and 
other energy matters. Our well-being and economy is probably more 
dependent that we would prefer on energy needs but it is a reality that 
we must address. And we must address it in a cooperative way so that we 
can meet the needs of the American people.
    I look forward to the nominee's testimony.

      STATEMENT OF HON. FRANK H. MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you very much, Mr. Chairman, and 
let me join you in welcoming your new members to the committee, 
and I certainly commend President-elect George W. Bush for 
nominating Senator Spence Abraham to serve as Secretary of 
Energy. I must admit, Mr. Chairman, this is a little detraction 
from my ego to have to hold my breath for a day-and-a-half, but 
nevertheless it is good character-building to be readjusted, 
but the good news is, it is temporary. But in any event, you 
and I have got a close working relationship, and I think it is 
fair to say the bipartisan nature of this committee has been 
evidenced by the number of bills that we have gotten out in 
working with the professional staff in a manner that I think is 
traditional with the Committee on Energy and Natural Resources.
    Let me remind the nominee that this is not necessarily a 
glamorous position. As Senator Bingaman indicated, your 
challenges are many, and in many cases they are unique. I think 
it is fair to say that we all agree that we have an energy 
crisis that is upon us. We can point fingers, but that does not 
do the job.
    I do not know if you have looked at your gas bill, but I 
looked at mine yesterday and it roughly doubled, and Nancy and 
I have been gone most of the month, but nevertheless, outside 
of an appeal to the gas company, which we would lose on, I 
think it is a reality that natural gas is up about four times 
what it was a year ago, and 56 million or 50 percent of the 
homes in this country depend on natural gas. 98 percent of our 
new electric generation is going to be fired from gas, so the 
demand is going to be there.
    We have seen crude oil prices bouncing around up to $37. We 
noted that OPEC has cut production. Obviously they have 
discipline within their system, and intend to keep oil prices 
relatively high. We have become increasingly dependent on 
foreign oil imports. Some of us remember the gas lines around 
the block in 1973 and 1974. Others a bit younger do not know 
what we are talking about, but at that time we were 37 percent 
dependent on imported oil. Today we are 56 percent dependent. 
The Department of Energy has indicated that in about 2004 we 
will be somewhere around 62 percent. The question is, how much 
is enough? When do you adjust for the national security 
interests of the country when we have that kind of dependence?
    Supply is not keeping pace with demand. We have seen the 
California price spikes, power shortages. They finally had the 
blackouts. The consumers now are affected. Their bills have 
been affected yet, but I think some of us think that California 
may really have forgotten where energy comes from. Somebody has 
to produce it, and it has to come from some resource.
    The problems faced by consumers in California are not the 
only energy problems American consumers face. As we look at the 
new administration coming in, I think it is fair to say that 
from the lessons of the last administration we need a 
coordinated effort by the Secretary of Energy involving the 
head of the Environmental Protection Agency, the Department of 
the Interior, to work for solutions and try and generate a 
balance and the legitimate concern over the environment has to 
be modified to some extent by the reality that the energy has 
to come from some source, and what we have going for us is 
better and newer technology, and we can make a smaller 
footprint.
    We brought an oilfield into Alaska about 15 years ago. It 
came in as Endicott, the tenth largest producing field in the 
country. The footprint was 56 acres. Now, 15 years later, we 
have technology that could reduce that in the ANWR area to 
roughly 2,000 acres out of million acres. Now, that is the kind 
of consideration that we have to understand and appreciate and 
recognize the tradeoff and the balance. As you look at your new 
applications, the nuclear issue, where 20 percent of our energy 
comes from, it is efficient, clean, but nevertheless the waste 
problem is a reality that members of this committee and members 
of Congress are going to have to face up to.
    Hydro consists of about 8 percent of our electric 
generation. We have problems, of course, trying to balance the 
needs of the areas with the fish resources, but we are going to 
have to make decisions, and the decisions are going to have to 
be made on sound science. We simply cannot put off the 
decision-making process.
    Wind, solar, biomass, there is tremendous potential there. 
We spent $6 to $7 billion in the last 5 years mostly in 
subsidies, grants. It has been worthwhile, but it still 
contributes less than 4 percent of our energy source.
    Now, these are a few of the problems you will face as 
Secretary of Energy in the coming years, and I might add, I 
have not added the issues you will face with regard to 
environmental cleanup, the weapons complex. You have got to go 
out to Hanford. Believe me, it is a tough set of facts, and it 
is challenging to the science as well, the laboratories down in 
New Mexico and the contribution they make, but I have great 
confidence in your ability to meet the challenges placed before 
you as Secretary of Energy and I welcome both you and your 
family and feel that you have the qualifications, because in 
the time that you have been in the Senator representing your 
State of Michigan you have demonstrated a keen understanding of 
energy and environmental issues, from technological advances in 
automobile technology to the needs of Michigan consumers for 
natural gas and heating oil in the winter.
    Your vocal support for the funding for the T&GV at the 
Department of Energy's Office of Science demonstrate your 
commitment to the mission of the Department of Energy to break 
through research to yield the next generation of energy 
technologies and the public-private partnership needed to get 
these technologies to the market.
    You have also been one of the Senate's foremost authorities 
on high tech issues and the Department of Energy's high tech 
research will benefit from your leadership. I encourage you to 
try and bring the environmental community to recognize that 
with true technology we can make advancements and we can make 
footprints smaller, and the opportunity before you, 
particularly in the Department of Energy, with the capabilities 
in the laboratories and various other aspects, puts you in the 
forefront of that effort, so we have high expectations that you 
will be able to come forward with some answers and, indeed, a 
recognition of the necessity of trying to balance where energy 
comes from.
    So, Senator Abraham, you are clearly an outstanding 
nominee. I fully support your nomination with the chairman. I 
look forward to hearing about your vision for the Department of 
Energy, and I look forward to working with you as you help to 
solve our Nation's energy crisis and provide a secure, 
affordable, and clean energy future.
    Mr. Chairman, I just have one more comment. I commend you 
on being able to do something I have never been able to do, and 
that is limit the opening statements of you and I.
    Chairman Bingaman. With that, we will go ahead and hear 
from our two colleagues from Michigan. First, Senator Levin. We 
are glad to have you here before the committee.

          STATEMENT OF HON. CARL LEVIN, U.S. SENATOR 
                         FROM MICHIGAN

    Senator Levin. Senator Bingaman, first let me congratulate 
you on the way this committee has thrived under your 
chairmanship. To be able to do what Senator Murkowski just did 
indicates a tremendous initiative, leadership on your part.
    You know, it is one of the wonders of the political world 
that within a few months after Senator Abraham lost an election 
to Senator Stabenow, an election in which I supported Senator 
Stabenow, that today we are here, Senator Stabenow and I, to 
introduce to this committee Senator Abraham to recommend his 
confirmation by the U.S. Senate. This is really American 
democracy at its ironic best.
    One of the most demanding jobs in this Government is that 
of the Secretary of Energy, for the reasons which Senators 
Bingaman and Murkowski have just enumerated. Energy is the key 
to our security, to our economy, and to our comfort. The 
importance of it is highlighted by some of the recent problems 
that we have had, from high gas prices around the country to 
shortages in California of electricity, to the demands for 
heating, fuel, fuel oil, to the way in which OPEC manipulates 
the world market in oil.
    This is a tremendously demanding and tasking job to which 
Senator Abraham has been nominated. It needs someone who is 
extraordinarily hard-working, and someone who is a quick 
learner. Senator Abraham is both. He is known for being both a 
quick study and somebody who is extremely hard-working. I just 
want to spend a moment on one issue which has not yet been 
touched upon. Senator Abraham brings a special expertise with 
his knowledge of alternative fuel vehicles and the importance 
to those vehicles to our energy security and our energy future. 
The auto industry in this country is moving towards alternative 
fuel vehicles, which include now hybrids and fuel cells.
    Over the next few years, and over the next few decades, 
these vehicles will be the secret to greater energy 
independence, to fuel efficiency, and to greener automobiles, 
or environmentally sound automobiles. These AFV's, as we call 
them, these alternative fuel vehicles, are really going to be a 
centerpiece of our automotive future and will be a major 
contribution to both energy use reduction as well as to 
environmental protection.
    To achieve this, we are going to need partnerships between 
the industry and government. We are going to need incentive for 
consumers, and we are going to need a full use of markets, free 
markets, in order to achieve their fuller utilization. Spence 
Abraham has been involved in all of these, from his involvement 
in tax incentives for the use of vehicles, alternative fuel 
vehicles, to his involvement in the partnership for a new 
generation of vehicles, the PNGV. He has knowledge of the 
industry and the direction in which it is moving, which will be 
very, very useful in our struggle for both energy and 
environmental security.
    Spence really needs no introduction to any of us. He is a 
friend of all of ours. He has made friends on both sides of the 
aisle, which is surely the goal of this body, and of every 
member of this body. His wonderful wife, Jane, needs no 
introduction to any of us. She is well known. I will leave the 
treat of introducing his three children to him, because I know 
how important they are in his life and how supportive they and 
Jane are of him and of his career.
    I am delighted to be here to introduce Spence Abraham and 
to recommend his confirmation to this committee.
    Chairman Bingaman. Thank you very much, Senator Levin.
    Senator Stabenow, we are glad to have you before the 
committee.

        STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR 
                         FROM MICHIGAN

    Senator Stabenow. Good morning. It is wonderful to be here, 
Mr. Chairman, the ranking member, soon to be chairman, both of 
you. It is a pleasure for me to have one of my first duties in 
the U.S. Senate to be here today to present a major Michiganian 
to this committee for confirmation as our next Secretary of 
Energy.
    As you would imagine, we have certainly gotten to know each 
other over the last few years. Our previous meetings have been 
behind podiums facing each other, and today I am very pleased 
and honored to be sitting at the same table representing 
Michigan.
    Mr. Chairman, Senator Abraham is a devoted family man, as 
Senator Levin indicated, and his wonderful wife and children 
are here today. He has a long record of service in government 
and politics. Our Secretary-designee is no stranger to the 
Senate, as we all know, or to Washington, D.C. He has an 
impressive work and educational background. He received his 
bachelor's degree at my alma mater, Michigan State University, 
and we both cheered together the basketball team as they 
hopefully go on to their second NCAA men's championship this 
year.
    After that, he went on to obtain his law degree from a 
small university in the East called Harvard. Prior to his 
Senate service, Senator Abraham served as Deputy Chief of Staff 
to Vice President Dan Quayle, and from 1983 to 1990 he served 
as the Republican Party chairman for the State of Michigan.
    Mr. Chairman, when Senator Abraham takes his next oath of 
office, he will be confronting major energy problems, as we all 
know. These are critical issues facing our Nation and Michigan 
residents. As Senator Levin has indicated, he brings great 
knowledge of the auto industry and the technologies we can 
bring to many of these problems and solutions.
    One major problem is the volatile price of energy. For 
example, Michigan residents still remember the high price 
spikes in gasoline during last summer's driving season. I know 
that Senator Abraham has witnessed this price shock first-hand. 
That is why I am pleased that a son of Michigan will be a 
member of the new President Bush Cabinet. I wish him the best 
as he addresses complicated, difficult energy issues that will 
affect our families in Michigan and across the country. Mr. 
Chairman, I am pleased to be here to support the nomination of 
Spencer Abraham and hope the committee and the full Senate will 
confirm him expeditiously.
    Thank you.
    Chairman Bingaman. Thank you very much, Senator Stabenow. 
We also want to acknowledge and recognize the presence of the 
Governor of Michigan, John Engler. Thank you very much for 
being here today.
    Senator Abraham, before I administer this oath to you, 
which we require of all witnesses, let me just ask if you would 
like to introduce your family members who might be here today.
    Senator Abraham. I would be glad to, Mr. Chairman. I am 
joined today by my wife, Jane, and our children, our daughters 
Betsy and Julie, and our son, Spencer. We are also joined by 
Jane's parents, Bob and Betty Jane Hershey, and by a number of 
other friends and family members who have traveled here to 
Washington to be with us today. I am very happy they are all 
with us, if I could ask them maybe just to stand up.
    Chairman Bingaman. Very good. We welcome them.
    [Applause.]
    Chairman Bingaman. Thank you very much.
    The rules of the committee, which apply to all nominees, 
require that they be sworn in connection with their testimony. 
Would you please rise and raise your right hand, please? Do you 
solemnly swear that the testimony you are about to give to the 
Senate Committee on Energy and Natural Resources shall be the 
truth, the whole truth, and nothing but the truth?
    Senator Abraham. I do.
    Chairman Bingaman. Go ahead and be seated. Before you begin 
your statement, I need to ask three questions that we address 
to each nominee before this committee.
    First, will you be available to appear before this 
committee and other congressional committees to represent 
departmental positions and respond to issues of concern to the 
Congress?
    Senator Abraham. I will.
    Chairman Bingaman. Are you aware of any personal holdings, 
investments, or interests that could constitute a conflict, or 
create the appearance of such a conflict should you be 
confirmed and assume the office to which you have been 
nominated by the President?
    Senator Abraham. Mr. Chairman, my investments, personal 
holdings, and other interests have been reviewed by myself and 
the appropriate ethics counselors within the Federal 
Government. I have also taken appropriate action to avoid any 
conflicts of interest. There are no conflicts of interest or 
appearances thereof, to my knowledge.
    Chairman Bingaman. Senator Abraham, are you involved, or do 
you have any assets held in blind trusts?
    Senator Abraham. No, I do not.
    Chairman Bingaman. With that, we very much welcome you to 
the committee. Go right ahead with your statement.

 TESTIMONY OF HON. SPENCER ABRAHAM, NOMINEE TO BE SECRETARY OF 
                    THE DEPARTMENT OF ENERGY

    Senator Abraham. Mr. Chairman, thank you very much. I 
wanted to thank you and Senator Murkowski, as well as the 
members of the committee. It is a privilege to appear before 
you today as President-elect Bush's nominee to be Secretary of 
the Department of Energy, although I have to say, as I listen 
to both the chairman and Senator Murkowski describe the 
challenges facing the next Secretary, and their suggestions as 
to the difficulties of this job, I took it even more seriously 
than before.
    I am extremely honored that the President-elect has asked 
me to serve in this capacity, especially considering the 
tremendous importance of the energy and national security 
issues facing this country. I want to thank you, Mr. Chairman, 
for moving forward so expeditiously with this nomination.
    Although they have left, I also want to publicly express my 
gratitude to my former colleague, Senator Levin, to Senator 
Debby Stabenow for her gracious introductions here today, and I 
look forward to working here with them as well as with the 
other members of this committee and my former colleagues in the 
Senate.
    As I look around the room, I do see an awful lot of 
friends, people with whom I have worked, the members of this 
committee, with genuine expertise on the important and diverse 
programs at the Department of Energy. I have enjoyed working 
with a number of you on various projects in the last few years, 
and I can assure you that, if I am confirmed by the Senate as 
the next Secretary of Energy, that I will continue to work 
closely with each of you and to draw on your expertise to 
address the challenges that lie before this Department and the 
country.
    Mr. Chairman, I have already introduced my family and, when 
I finish my comments, our children will, if they are still 
awake, at least, be leaving the hearing room. They heard about 
the Ashcroft hearings, I think, so they wanted to go over and 
see some real fireworks here today.
    But I just also really do want to publicly thank a number 
of friends who have come down from Michigan to be with us, and 
family members as well. As each of you knows, the missions of 
the Department of Energy are vital to this country. The 
Department splits a national interest in a variety of contexts 
but for particular areas. National security, energy policy, 
science and technology, and environmental management. What I 
would like to do today is to just briefly discuss the 
Department's role in each of these areas and my perspectives on 
that.
    First, national security. Paramount among the four missions 
of the Department is supporting our national security. As all 
of you know, more than two-thirds of the Department's funding 
comes from defense accounts. One of the most sobering and 
important responsibilities that is vested in the Secretary of 
Energy is the duty to annually certify to the President that 
the U.S. nuclear arsenal is safe, secure, and reliable.
    I can assure the members of this committee that nothing 
that I will do will be higher on my priority list than the 
management of our nuclear stockpile. The Department also plays 
a critical role in the challenge of nuclear nonproliferation. 
This Nation has an acute interest in accounting for and 
preventing the spread of nuclear weapons materials and 
expertise. The Department has had many past successes in this 
arena, and working with you the Bush administration will 
continue those efforts with regard to security at the 
Department's national laboratories. I will only say that this, 
too, will be a very high priority of mine.
    I met with Under Secretary Gordon earlier this week, and I 
look forward to working with him to make our national 
laboratories secure and to make sure that the Department and 
the NNSA (National Nuclear Security Administration) functions 
are effectively performed, which means that we must also make 
ensure that the highly skilled employees at our facilities are 
treated with the dignity and the respect that they deserve.
    The second area where the Department supports the national 
interest is, of course, in the area of energy policy. Let me 
begin today by saying that I am very concerned with recent 
developments in California. We appreciate the urgency of the 
situation and have been monitoring it. I have had the 
opportunity to discus the situation briefly with Secretary 
Richardson yesterday, as well as with many members of this 
committee over the last few days. While I believe it would be 
premature to speculate today as to actions the Bush 
administration might or might not take, I want to assure all of 
you that we will work with California, with the members of this 
Congress, and with other concerned parties, particularly those 
in the region, to address this urgent situation.
    Certainly the situation at the Northeast heating oil 
supplier evidence the importance of the Department's 
responsibility to develop a national energy policy. President-
elect Bush and I are deeply committed to developing an energy 
policy that includes domestic production of energy in an 
environmentally responsible manner, increasing our use of 
renewable energy, decreasing our reliance on imported oil, and 
developing new technologies that can conserve fossil fuels and 
reduce energy-related pollution.
    It will take a concerted, cooperative effort from both 
sides of the aisle, each end of Pennsylvania Avenue, and from 
individuals both inside and outside of government to accomplish 
these objectives. The American people deserve our best efforts. 
That much is clear from the experience of the past year, a year 
in which Americans worried about the price and supply of 
gasoline, heating oil, electricity, and natural gas. It was 
also a year in which oil imports reached an all-time high, 56 
or 57 percent, as was mentioned in Senator Murkowski's opening 
statement, compared to just 36 percent in 1973-74, when our 
economy was disrupted by the OPEC oil embargo.
    Every day, our economy grows more dependent on energy. Just 
look at the Internet, which accounts for nearly 10 percent of 
U.S. electricity demand. As the Internet doubles in size every 
100 days, and e-commerce expands every day, the associated 
electricity consumption has and will continue to rise sharply. 
Clearly, our continued economic prosperity is directly linked 
to ensuring adequate supplies of reasonably priced energy.
    Just let me take an additional moment to put this in 
perspective. Over the last decade, oil consumption has 
increased by more than 14 percent, while domestic oil 
production has declined by more than 18 percent. These trends 
have increased our dependence on imported oil, as I have said, 
to the 56 or 57 percentile, which is our highest level ever. We 
now import more than 11 million barrels of oil each day, and 
the Department of Energy estimates that imports will increase 
to perhaps as high as 15 million per day by the year 2010.
    Natural gas prices have more than doubled over the last 
year in many areas of the country, and in some places are much 
higher. All this will drive up the price of goods through 
increased production and transportation costs. The Department 
of Energy is the principal Federal agency charged with 
responsibility for development of a national energy policy. 
However, development of such a national policy requires 
coordination with other Federal agencies and departments, and 
working with Congress, and I look forward to doing both in the 
days ahead.
    The third area where the Department supports the national 
interest is through research in science and technology. For the 
past 6 years, I have worked with a number of you and others of 
our colleagues on a variety of science and technology programs 
that I believe can improve our economic competitiveness. I 
cannot stress enough my desire to continue to move this Nation 
forward in this area. The science and technology programs at 
the Department have been widely praised, and justly so.
    The laboratories have improved the ability of the 
Department to perform its national security, its environmental 
management, as well as its energy policy missions. The 
laboratories are also, of course, supporting the activities and 
missions of other Federal agencies, but they are much more than 
that. I think we would all agree they are national treasures. I 
believe the national laboratories can serve the country in many 
other capacities, and I look forward to exploring the full 
potential for partnerships with industry and with the academic 
community.
    The final area where the Department supports the national 
interests is in the area of environmental stewardship. As you 
all know, the Department has the unenviable responsibility for 
implementing the world's largest cleanup program. In this 
respect, the Department has an exceptionally difficult 
challenge in terms of both cleaning up as well as managing the 
waste generated during more than 50 years of nuclear weapons 
production.
    These problems were not created overnight, and certainly we 
are not going to dispense with them quickly or easily, but I 
think we can do a better job of accelerating cleanup and 
closure of those sites that are surplus to DOE's needs. I 
pledge to work with Congress and the States to find ways to 
move the DOE's cleanup program forward.
    With respect to the nuclear waste program, I share 
President-elect Bush's commitment to ensuring that sound 
science governs the program. I share the frustration of the 
members of this committee with the lack of progress in this 
area. My commitment is to make progress on the nuclear waste 
program while ensuring that sound science governs decisions on 
site recommendation.
    Before I close, I would just like to move to a topic that 
was alluded to by the chairman in his remarks, and is, I am 
sure, on the minds of a few folks in this room. As you all 
know, I think, as a member of the Senate I supported 
legislation that would have shifted the various and important 
and vital functions of this Department to other departments and 
agencies or to the private sector. Widely held concerns about 
the Department's management structure and operational success, 
combined with the relatively stable nature of our energy 
markets, led me to support this legislation in the past. A 
number of developments have occurred that either significantly 
address these concerns or have put them in a new light.
    Just to mention a few, I think quite clearly the changing 
energy situation, as well as the enactment of a National 
Nuclear Security Administration Act last year which 
restructured the Department to improve agency management have 
significantly altered the equation, and I can assure the 
committee that I no longer support this legislation and its 
various components, such as the privatization of the Federal 
Power Marketing Administrations.
    Mr. Chairman, in closing, let me just say again how 
extremely honored I am that President-elect Bush has chosen me 
for this position. The missions of the Department are vital to 
our national interest. If confirmed, I will work with the 
members of this committee and others in Congress to carry out 
these missions to the very best of my abilities, and in the 
best interest of the American people.
    Thank you very much.
    [The prepared statement of Senator Abraham follows:]
 Prepared Statement of Hon. Spencer Abraham, Nominee to be Secretary, 
                          Department of Energy
    Mr. Chairman, Senator Murkowski and Members of the Committee, it is 
a privilege to appear before you today as President-elect Bush's 
nominee to be Secretary of the Department of Energy. I am extremely 
honored that the President-elect asked me to serve in this capacity, 
especially considering the tremendous importance of the energy and 
national security issues facing the country.
    I want to thank you, Mr. Chairman, for moving forward expeditiously 
with my nomination.
    As I look around this room I see many former colleagues and 
friends. The members of this Committee have genuine expertise on the 
important and diverse programs at the Department of Energy. If 
confirmed by the Senate as the next Secretary of Energy, I pledge to 
work closely with each of you, and draw on your expertise, to address 
the challenges that lie before the Department and the country.
    As each of you know, the missions of the Department of Energy are 
diverse, complex and vital to our country. The Department of Energy 
supports the national interest in four critical areas--national 
security, energy policy, science and technology and environmental 
management. I would like to briefly discuss the Department's role in 
each one of these areas.
                           national security
    Paramount among the four missions of the Department is supporting 
our national security. As you know, more than two-thirds of the 
Department's funding comes from defense accounts. One of the most 
sobering and important responsibilities vested in the Secretary of 
Energy is the duty to certify to the President each year that the U.S. 
nuclear arsenal is safe, secure and reliable and I can assure the 
members of this Committee that nothing I do will be higher on my 
priority list than the management of our nuclear stockpile.
    The Department also plays a critical role in addressing the 
challenge of nuclear nonproliferation. This nation has an acute 
interest in accounting for and preventing the spread of nuclear weapons 
materials and expertise. The Department has had many past successes in 
this arena and--working with you--the Bush Administration will continue 
those efforts.
    With regard to security at the Department's national laboratories, 
I will only say that this too will be a very high priority of mine. I 
met with Under Secretary Gordon earlier this week and look forward to 
working with him to make our national laboratories secure and to make 
sure that the Department and NNSA functions are effectively performed. 
Which means that we must also ensure that the highly skilled and 
patriotic employees at our facilities--who, by the way, create the 
nuclear secrets we all agree must be protected--are treated with the 
dignity and respect that they deserve.
                             energy policy
    The second area where the Department supports the national interest 
is in the area of energy policy. Certainly recent developments in 
California's electricity markets and the Northeast's heating oil supply 
evidence the importance of the Department's responsibility to develop a 
national energy policy.
    President-elect Bush and I are deeply committed to developing an 
energy policy that includes increasing domestic production of energy in 
an environmentally responsible manner, increasing our use of renewable 
energy, decreasing our reliance on imported oil and developing new 
technologies that conserve fossil fuels and reduce energy-related 
pollution.
    It will take a concerted, cooperative effort--from both sides of 
the aisle, each end of Pennsylvania Avenue and from individuals both 
inside and outside government--to accomplish these objectives. The 
American people deserve our best efforts. That much is clear from the 
experience of the past year--a year in which Americans worried about 
the price and supply of gasoline, heating oil, electricity and natural 
gas. It was also a year in which U.S. oil imports reached an all-time 
high--57 percent compared to 36 percent in 1973-74 when our economy was 
disrupted by the OPEC oil embargo.
    Every day our economy grows more dependent on energy. Just look at 
the Internet, which accounts for nearly 10 percent of U.S. electricity 
demand. As the Internet doubles in size every hundred days and e-
commerce expands every day, associated electricity consumption has and 
will continue to rise sharply.
    Clearly, our continued economic prosperity is directly linked to 
assuring adequate supplies of reasonably priced energy. Let me take a 
moment to put this in perspective.
    Over the last decade oil consumption has increased by more than 14 
percent while domestic oil production has declined by more than 18 
percent. These trends have increased our dependence on imported oil to 
57 percent--our highest level ever. We now import more than 11 million 
barrels of oil each day--and DOE estimates that imports will increase 
to 15 million per day by 2010.
    Natural gas prices have more than doubled, over the last year in 
most areas of the country and in some places are much higher.
    All of this will drive up the price of goods through increased 
production and transportation costs.
    The Department of Energy is the principal Federal agency charged 
with responsibility for the development of a national energy policy. 
However, development of a national energy policy requires coordination 
with other Federal agencies and working with Congress.
                         science and technology
    The third area where the Department supports the national interest 
is through research in science and technology. For the past six years, 
I have worked with a number of you and others of our colleagues on a 
variety of science and technology programs that can improve our 
economic competitiveness. I cannot stress enough my desire to continue 
to move this nation forward in this area.
    The science and technology programs at the Department have been 
widely praised and with good reason. The laboratories improve the 
ability of the Department to perform its national security, 
environmental management and energy policy missions.
    The laboratories also support the activities and missions of other 
Federal agencies. But, they are much more than that--they are national 
treasures. I believe the national laboratories can serve the country in 
many other capacities and look forward to exploring the full potential 
for partnerships with industry and academia.
                        environmental management
    The final area where the Department supports the national interest 
is in the area of environmental stewardship. As you all know, the 
Department has the unenviable distinction of implementing the world's 
largest cleanup program.
    In this respect, the Department has an exceptionally difficult 
challenge in cleaning up and managing the wastes generated during more 
than 50 years of nuclear weapons production. These problems were not 
created overnight and certainly we are not going to dispense with them 
quickly or easily. But we can do a better job of accelerating cleanup 
and closure of those sites that are surplus to DOE's needs. I pledge to 
work with Congress and the States to find ways to move the DOE cleanup 
program forward.
    With respect to the nuclear waste program, I share President-elect 
Bush's commitment to ensuring that sound science governs this program. 
I share the frustration of members of this Committee with the lack of 
progress in this area. My commitment is to make progress on the nuclear 
waste program while ensuring sound science governs decisions on site 
recommendation.
                           doe reorganization
    Before I close, I would like to move to a topic that I suspect is 
on more than a few minds in this room. As the members of this Committee 
know, I supported legislation that would have shifted the various 
important and vital functions of the Department of Energy to other 
departments and agencies or the private sector.
    While widely-held concerns about the Department's management 
structure and operational success, combined with the relatively stable 
nature of our energy markets, led me to support this legislation in the 
past, a number of new developments have occurred that either 
significantly addressed these concerns or put them in a new light.
    Indeed, the changing energy situation and enactment of the National 
Nuclear Security Administration Act last year, which restructured the 
Department to improve agency management, have significantly altered the 
equation. I assure the Committee that I no longer support this 
legislation and its various components, such as privatization of the 
Federal power marketing administrations.
                                closing
    In closing, let me say again that I am extremely honored that 
President-elect Bush has chosen me for this position. The missions of 
the Department are vital to our national interests. If confirmed, I 
will work with the members of this Committee and others in Congress to 
carry out these missions to the best of my abilities and in the best 
interests of the American people.
    Thank you.

    Chairman Bingaman. Thank you very much. I will go ahead 
with my first round of questions and then call upon Senator 
Murkowski for his.
    Thank you for addressing the issue about the importance of 
maintaining the Department of Energy, and I will not ask you 
again about that since you have already addressed it.
    On the issue of science and technology support at the 
Department of Energy, the science and technology programs, in 
my view at least, have not been funded at a level that is 
commensurate with their importance in the Department. 
Particularly, I refer to difference between the science budgets 
for the Department of Energy compared to budgets for other 
science-focused agencies such as the National Science 
Foundation and the National Institutes of Health.
    They, in my view, have had a much better record of 
maintaining commitments and resources for science and 
technology than the Department of Energy has, so the obvious 
question from that is whether you will support robust budgets 
for science and technology at the Department of Energy that 
would be comparable to the treatment that we give to these 
other science agencies.
    Senator Abraham. Senator, one of the roles which I took a 
part in during my tenure in the Senate was to work on some of 
these science research priorities. I am kind of very proud--I 
actually just played an active role in trying to focus more 
resources on some of the areas that you have mentioned, NIH 
(National Institutes of Health) in particular.
    I think one of the challenges for us is to make an adequate 
investment in basic research as a Nation. I intend to be a 
strong proponent of that, recognizing two things, that I will 
need to be effective for support here in the Congress, but also 
I think an appreciation that all the roles of this Department, 
particularly as it relates to environmental management and 
nuclear security as well as the science and technology function 
are very important priorities, and so my commitment is to 
continue the work I did in the Senate of trying to be an 
advocate for increased investment in science and technology, 
but I am probably also going to be an advocate for doing the 
things we need to do to address some of the other challenges.
    We can say that others are of lower priority, but they 
certainly remain important to this Nation's interests. I was 
able during my time in the Senate to work with a number of 
colleagues on this committee to try to increase those 
investments with Senator Domenici in my role on the Budget 
Committee and others in other contexts, and I look forward to 
continuing that function as an advocate for the Department.
    Chairman Bingaman. Thank you. A major issue that you are 
probably already aware of, but you will certainly become very 
aware of at our national defense labs now is the imposition of 
management requirements that has occurred in the last year or 
so. Particularly I am thinking about the polygraph examination 
requirements that have been imposed. There is a perception in 
the laboratories among many of the scientists and engineers 
there that much of that requirement for polygraph examinations 
is not based on any scientific grounding. I worked with 
Secretary Richardson to set up a review by the National Academy 
of Sciences of the science underlying the Department of 
Energy's current use of polygraphs.
    If the National Academy of Sciences finds deficiencies in 
the Department of Energy's program of using polygraphs, would 
you work to correct those deficiencies so that those polygraphs 
would only be used where their use could be justified 
scientifically?
    Senator Abraham. Well, before I address that directly, I 
would just say that one of the things I was informed of shortly 
after my designation was that, should I be confirmed, one of 
the things that will happen is that I will be subjected to a 
polygraph, and that puts this in maybe a clearer focus for me 
as I look at the issue that you have raised here today, because 
I think this proposal, which affects a lot of people in this 
Department, is one that I will be hearing a lot about and 
experiencing on a personal level.
    Clearly, we will look at any results that come about as a 
result of the study that is being undertaken. I think what we 
also want to do is to look at a broader set of considerations 
which I suspect we might talk a little bit more about before we 
are done here today. Clearly, the American people expect us to 
conduct business in the national security arena with the 
highest degree of protection of our secrets, of our security.
    I am deeply committed to making sure that that is 
fulfilled, recognizing, however, that there is a need to make 
sure that we retain and attract the body of people at the 
laboratories who can perform all the various functions of those 
laboratories in the most effective way possible. I have talked 
briefly about this issue already with General Gordon, and we 
intend to continue to focus on it as well in the context of his 
role as he addresses the broad issues that the NNSA will be 
overseeing, but certainly we will look at the results of that 
study when it is available.
    Chairman Bingaman. One issue that you alluded to and that 
is going to be very much on your agenda for consideration and 
action when you take office will be the problem with electric 
utility restructuring in California and what that has led to. 
Secretary Richardson has taken several actions to try to assist 
the situation in California, to try to head off the shortage 
that is obviously there. What additional actions, if any, could 
you advise us of today that you would take? If you were in a 
position to give us any additional information, that would be 
very useful.
    Senator Abraham. Mr. Chairman, as I said in my statement, I 
think it would be premature today for me to speculate about 
actions that might be taken once this administration takes 
office. I say that for two reasons, first, because we have not 
injected ourselves--I haven't, and I don't believe others 
have--in the negotiations and the discussions that have gone on 
with various parties involved from the government of the State 
of California to the various providers.
    I believe those kinds of discussions certainly would 
commence after the administration is in office, and also 
because I do believe that, with the ongoing discussions and 
actions that are taking place in California right now in the 
legislature as well as on various private channels, that any 
speculation, if misinterpreted or in some other way perceived 
by parties to those discussions as either advantaging or 
disadvantaging them, could disrupt what I think is a very 
important set of meetings and deliberations going on.
    I am not trying to put this off for long, but I do think 
that it is very critical that the legislative actions that are 
in the process of being conducted, and the negotiations that 
are part of that, move ahead unimpeded by speculation on 
litigation today, but I do want to assure this committee, and I 
know a number of members are from either--including Senator 
Feinstein, who is on the committee, either from California or 
from the region, who are very concerned about it, and this 
administration is very concerned as well, and we view this as a 
matter of urgent priority and will treat it as such.
    Chairman Bingaman. I firmly believe that ensuring the 
reliability of our interstate transmission grid needs to be a 
top priority. Last year, the Senate passed the reliability bill 
that came out of this committee. Unfortunately, it died in the 
House of Representatives. Late last year, the Department of 
Energy issued a notice of inquiry on initiating a rulemaking to 
impose mandatory reliability standards. Do you have some views 
you could express today about whether you would proceed with 
that rulemaking on mandatory reliability standards if Congress 
does not act in this area?
    Senator Abraham. Well, in the broadly defined area of 
electricity, I think that the administration, and I know that 
during the campaign President-elect Bush indicated a desire to 
address these issues. We have not put together yet, nor do I 
think it would be possible in the short period of time that we 
have had since the election results were determined, to begin 
to develop that program, but I know that one of the issues that 
would certainly be part of that, of any restructuring effort 
that we would propose, would be issues that relate to 
reliability, ones that we addressed in the last Congress.
    I think what I would want to do is work both with members 
of the Congress as well as examine where the Department is at 
this point in terms of putting forward some type of rulemaking 
before I would reach a conclusion as to which course of action 
made the most sense, but certainly that would be a priority 
that we will focus on.
    Chairman Bingaman. My final question relates to these power 
marketing administrations. I believe that you referred to that 
in your opening statement. The Western Area Power 
Administration provides Federal electric power to a number of 
rural utilities in my State. This low-cost power is critical to 
keeping rates down in the rural parts of the country. Do you 
foresee the need to make any changes in the operations or terms 
of sale of the Federal PMA's?
    Senator Abraham. I am well aware of the composition of this 
committee and the interest on this set of issues. In fact, I 
believe Senator Smith may have called me before any other 
person with my designation was made public to make sure I was 
fully apprised of these issues, and other Senators, Senator 
Wyden and others, were soon to follow.
    I do not have, nor is the plan of the administration to 
make any changes in the issue of rate structure or with respect 
to the continuing responsibilities of the Department of Energy 
to house those administrations within the Department in terms 
of any kind of privatization discussions, as I mentioned in my 
statement.
    Chairman Bingaman. Thank you very much.
    Senator Murkowski.
    Senator Murkowski. Thank you very much, Senator Bingaman.
    I thought your answer on California was appropriate 
relative to the fact that you have not been confirmed, the 
administration has not taken over, and clearly there are a lot 
of discussions going on in California. There have been for some 
time. But after the 20th, there are going to be great 
expectations that somehow you are going to solve this dilemma. 
I think it is unfair to characterize the California effort as 
true deregulation. Any time you structure an effort in a free 
market and then put in price controls you have disrupted that, 
and as a consequence the process was flawed from the beginning.
    We are under a great deal of pressure on this committee to 
address the issue of deregulation, and the merits associated 
with it relative to lower cost to consumers, but I personally 
think that the experiment in California is not representative 
of true deregulation, and it has to some extent muddied the 
water, and clearly compromised the credibility of the effort. 
Other States are doing quite well, Pennsylvania as an example, 
and others that I could mention, but in any event, my concern 
and questions to you relative to this are, you had better have 
some answers after the 20th, because there is expectations that 
it is going to be the partial responsibility of government.
    Now, we have seen government bail out companies before. 
Chrysler, the Mexican debt, testabonos. As a consequence, the 
parallel of what we are going to do to the largest utilities in 
the country, BG&E and Southern California Edison, that have 
missed their payments because they have been put in an 
impossible situation, where they have a cap on retail--or, 
excuse me, a cap on retail and no cap on wholesale and as a 
consequence they can't stay in business and do anything about 
that.
    Now, FERC has a responsibility as a Federal agency. They 
could potentially put a cap on wholesale, but that would be 
contrary to stimulating competition, but I would encourage you 
to recognize that before there is going to be meaningful 
corrections the California consumer has to feel the hit, and 
that has not occurred yet. They have felt an inconvenience 
associated with the recent brownouts, but the immediate burden 
has to fall on California. It has to fall on the Governor, the 
California State legislature, and the California utility 
commissions to basically restructure the process and fix the 
problem.
    Now, I do not expect an answer to that, but I think it is 
fair to say that everybody is going to be pointing fingers at 
everybody else. This was not a problem caused by the previous 
administration. This was a problem that was quite predictable, 
was ignored. The reality of where energy comes from, and to 
think that a State like California with, I think it has the 
sixth largest economy, if you will, in the world, could 
continue to prosper and continue to use energy and not be 
concerned with where it is going to come from, as long as it 
did not come from within the State of California, and as they 
begin to purchase outside they seemed to think it would never 
end and, of course, prosperity hit other States and we have 
seen the results.
    So as a consequence I would encourage you to keep the 
pressure on those that are responsible for it and not 
necessarily encourage Uncle Sam to step forward and bail out a 
situation that is going to take some internal correcting within 
the individual State.
    A question, though, and that is what this is all about, 
that moves us over to Yucca Mountain, where this committee has 
spent an extraordinary amount of time and effort relative to 
the obligation that we feel we have in addressing the 
disposition of high-level waste associated with our commercial 
reactors, and the realization that the nuclear industry 
contributes about 20 percent of the power generated in this 
country.
    1998 was the due date for the Federal Government to take 
the waste in kind. Ratepayers have paid in excess of $11 
million. Now, it did not go into escrow. It went into the 
general fund. I do not know what Pete Domenici did with that.
    Senator Domenici. Just dumped it in the Treasury.
    Senator Murkowski. Well, anyway, somebody would have to 
appropriate it if we are going to meet our obligations. Coming 
up are a couple of dates that are going to be significant. One 
is a site determination sometime this summer or early this 
spring. I am not just sure when it is, but one of, I guess, the 
concerns I have is, this has to be one of your highest 
priorities to deal with the spent nuclear fuel waste. I assume 
you will consult with this committee.
    Senator Abraham. Of course.
    Senator Murkowski. And I assume you are aware of the 
reality that nobody wants this waste. We have seen the members 
of this committee laying down their political lives to ensure 
that it did not come, as an example, to the State of Nevada. It 
is a highly politicized issue. If you throw it up in the air, 
it is going to come down somewhere.
    Nobody wants it, but the realization is that the estimated 
current litigation costs associated with the nuclear industry's 
countersuits against the Federal Government is somewhere in the 
area of $40 to $60 billion, and that is as a consequence of the 
Government failure to honor the terms of the contract that it 
entered into to take that waste in 1998. Some people seem to 
dismiss the significance to the taxpayer of this liability.
    I wonder if you have any comments relative to this dilemma 
that everybody else has simply put off for reasons of 
expediency, preferring not to accept the responsibility on 
their watch, and little heed the obligation of what it means to 
the taxpayer of this country.
    Senator Abraham. I would first note that when I was a 
member of the Senate I did support legislation that was 
produced by this committee, because in my State we have nuclear 
power generators who have waste issues that are very acute 
issues to the State of Michigan, and I take seriously the 
responsibility of this Department to fulfill the commitments 
that were made to the various companies, and to ratepayers 
across America.
    There was a process. I hope and expect to see that process 
move forward in a timely way, but it has to move forward. The 
President-elect I think made it very clear during the campaign 
that he was committed to making sound science decisions, i.e., 
the underlying basis for any site's determination.
    As the committee knows, there are a number of additional 
steps that go beyond a site determination. There is obviously 
opportunities for public comment. There is a role for the State 
which the site's determination produces to have an opportunity 
to veto, if they wish, that decision. There is an opportunity 
for Congress to override that veto. There is a role for the 
Nuclear Regulatory Commission to play in a very public sense.
    I think the key is that the process be followed, that it be 
based on sound science, and that it be followed in a timely 
manner.
    Senator Murkowski. Thank you. I just have time for one more 
question. You certainly responded adequately. This is 
coordinating administration energy policy, because the 
Department of Energy doesn't control Federal lands which 
contain energy resources. DOE does not control air quality 
standards that often impact energy supply and price. The 
Department of Energy does not have the responsibility for 
fiscal policies that are going to be necessary to stimulate 
various resource development, technological development.
    How do you propose to coordinate the reality that you are 
going to have to have cooperation from the Environmental 
Protection Agency, the Department of the Interior, various 
other organizations, to obtain an objective of relief for the 
crisis that we are in?
    Senator Abraham. Senator, you are absolutely correct that 
the challenge facing us with regard to developing and 
implementing effective energy policies is an interdepartmental 
interagency problem that is not solely the responsibility of 
the Department of Energy or any other single unit of 
Government.
    I have spoken already with the President-elect about this. 
In fact, it was one of the issues we discussed at the time we 
met to discuss my possible selection, and I know that he is 
committed to trying to bring together the various departments 
and agencies of the Government, and you mentioned a number of 
them, but arguably others even would be included beyond the 
list that you put forward to try to come back to you and to 
work with you, with the Congress and beyond, to try to identify 
the kinds of components and action steps that need to be taken.
    As we move forward on an executive branch level I certainly 
would anticipate seeking the counsel and participation in some 
form or other of the Congress, but also of others beyond 
Washington, and beyond the Government of the United States. 
There are a lot of people who have some expertise to 
participate here, but at the end of the day it clearly will 
require a set of policy options that span a variety of agencies 
and we will try to bring that together in some kind of policy 
development format.
    Senator Murkowski. Thank you, Mr. Chairman.
    Chairman Bingaman. Senator Dorgan.

        STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR 
                       FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you very much. I would 
like to just make a couple of comments, since we did not make 
opening statements, and then ask a couple of questions. First 
of all, Senator Abraham, it is my intention to support your 
nomination. You are going to inherit some of the most difficult 
policy problems we now face in this country. Yesterday's 
announcement of rolling blackouts in our Nation's largest 
State, dramatic price spikes in natural gas prices, they are 
just some of the symptoms of a very serious energy problem.
    You indicated in your statement that we are too dependent 
on foreign sources of energy. That is certainly correct. The 
solution is, in my judgment, a balanced, coordinated, 
thoughtful set of policies that blend the need to find and 
produce more energy here, with the need for more and more 
conservation. When I say more energy, I also mean more 
renewable energy.
    Now, you and I have visited in my office about a range of 
policies. We are going to agree and disagree from time to time, 
but my sense is that these creaky institutions of democracy are 
largely lubricated by the good will of men and women who aspire 
to public service and want to do the right thing, and I count 
you among that group, and that is why I support your 
nomination.
    I do want to ask you about a number of issues. First, you 
indicate that you no longer support privatization of the 
Federal Power Marketing Administrations. Let me agree with my 
colleague from New Mexico of the importance of these PMAs, the 
Power Marketing Administrations. In addition to no longer 
supporting it, could we hope or, could we expect, that you no 
longer oppose those few discordant voices who from time to time 
suggest that they be sold?
    Senator Abraham. Yes, you can.
    Senator Dorgan. Let me ask about restructuring briefly, and 
thank you for that answer. I would not agree with my colleague 
from Alaska on a couple of points but agree with him on the 
large point with respect to California. It seems to me that if 
you go to the road of complete restructuring and take the caps 
off wholesale and also the caps off resale, what is going to 
happen at the retail level with no caps is, you are going to 
find ultimately very little support for any kind of 
restructuring once you get some problems in the retail market, 
so that is why they kept the caps on retail.
    But it is clear to me that this is going to substantially 
diminish the appetite of some to want to rush headlong into 
restructuring. Do you feel that we ought to move forward 
aggressively? Do you feel we ought to move forward cautiously? 
Give me again, if you could rephrase your answer on 
restructuring, how you generally feel?
    Senator Abraham. Well, as I said, Senator Dorgan, and I 
want to thank you for your comments relative to my nomination, 
I think during the campaign the President-elect made it clear 
that he believes that some electricity restructuring needed to 
be addressed, and we are not prepared today, and I can't give 
you a time line as to when this administration either would 
come forward with its own legislation or work with legislation 
that might be offered, and I know there are a number of members 
of this committee who at times have offered various forms of 
restructuring legislation.
    Part of certainly any effort we will undertake is to 
examine what is obviously a set of laboratories that are in 
place in the various States today. Senator Murkowski mentioned 
the experiences in Pennsylvania which seem to be, at least to 
this point, quite different than experiences in California.
    I mean, I think there's fairly widespread agreement that 
the California approach is a failure, not working as currently 
structured, and I think we would want to take into account any 
and all of that information as we might develop something, so I 
don't expect that we would have a restructuring recommendation 
or piece of legislation quickly to present to the committee or 
to the Congress, because I think we need to go through that 
investigation on the executive branch side and to hear from 
members of Congress.
    I would say that as I talk to members of this committee 
it's definitely an issue that a number of people have very 
different views on, and we will want to try to sample opinion 
from all.
    Senator Dorgan. So you are not a missionary on this issue?
    Senator Abraham. Well, you know, I think that as part of a 
comprehensive energy policy we have to consider how we make 
affordable and adequate supplies of electricity available, but 
there's a lot of issues that are part of that debate, in 
addition to restructuring.
    Senator Dorgan. Some of us feel very strongly about 
renewable energy sources. Some say, well, gosh, it contributes 
almost nothing, less than 5 percent. Some of us feel very 
strongly that the potential in wind energy and biomass and 
others is very important. Will you be an advocate for those 
kinds of issues at the Department of Energy, and will you be 
supportive of, for example, production tax credit extensions 
for wind energy?
    Senator Abraham. I will continue to support the 
Department's commitment in that area. I think I supported 
legislation in the last Congress, if I remember, that would 
have extended the tax credits, and I think we ought to look at 
other kinds of incentives that might be made available in one 
or more of the various areas of renewable energy, including 
biomass, solar, and geothermal energy as well, to see what 
other kinds of ingredients might be useful. I think the 
challenge we have is to overcome what is perceived by many and 
has been mentioned by many here today is our inability thus far 
to really move in this direction in terms of supplying a 
significant portion of the energy that this country uses, but I 
think we've got to really have a balanced approach, and I think 
renewable energy is an important part of that kind of balanced 
approach.
    Senator Dorgan. And do you feel the same way about clean 
coal technology?
    Senator Abraham. Absolutely, and I would mention that the 
President-elect during the campaign has made strong statements 
of support for a substantial increase in clean coal technology 
research.
    Senator Dorgan. I would ask you about two other areas, 
Senator Abraham. One deals with fuel efficiency, but first let 
me ask about global warming. Some say clearly the evidence 
exists that there is some global warming. Others say, this is 
not settled science, and still others say, that's nuts, we 
don't have any idea what is happening to our Earth, or our 
world at this point.
    What's your impression? Some say no matter how you feel you 
ought to take a series of no-regrets policies in anticipation 
if there is settled science at some point. If there is global 
warming, you ought to have done something.
    Senator Abraham. I think regardless of the differing 
opinions of scientists and experts and so on on the broad 
issue, that we have a challenge as a Nation and an opportunity 
in the sense that the new technologies that are, you know, in 
so many ways affecting our lives, some of which I've had a 
minor role, in my previous career in the Senate, in helping to 
expand to try to make sure among the kinds of priorities we set 
for the research we're doing and the technology development 
that's going on is to try to address the issue that relate to 
CO2 production and ways to try to address that, as 
well as to see how we can conserve in a fashion that reduces 
rather than expands these kinds of emissions.
    And I hope we can look for new solutions. I think during 
the campaign the President-elect stressed that as one of his 
priorities, to find ways to use technologies to find new 
solutions so that we're not locked in to simply, you know, a 
single-minded debate about what the scientists think on the one 
hand or, on the other hand, a situation in which our debate is 
almost exclusively whether or not we can work with the less-
developed countries to come up with a more balanced approach to 
dealing with this problem.
    Senator Dorgan. I would like to follow up on that, but 
because of the time I will send you a question to answer on 
that.
    One final very short question. You come from Michigan. It 
is a great State, produces a lot of America's automobiles. We 
have had aggressive debates here in Congress about the issue of 
fuel efficiency and standards. Improving fuel efficiency by 3 
miles per gallon in this country would save 1 million barrels 
of oil per day. In my State, we are all concerned about pickup 
trucks and various things. I understand all of those issues.
    Having said that, the question, I guess, for an Energy 
Secretary is, will fuel efficiency play a role in energy 
conservation and in trying to address our energy needs? Should 
it play a role, and how will it play a role in your 
administration?
    Senator Abraham. I suspect that if you had asked either 
Senators Levin or Stabenow their views on this they would have 
been remarkably similar to mine as a Senator from Michigan. As 
a Secretary of Energy, certainly we are going to look at all 
these issues.
    What I would say is, I thought we made some very positive 
progress last year when the Senate deliberated this issue and 
came up with what I thought was a very good proposal to 
examine. I believe it was the National Academy of Sciences 
examination and study of the issue of what was an appropriate 
fuel efficiency CAFE standard, but to take into account, in 
addition to simply the question of miles per gallon, some of 
the other issues that have bothered Americans coast-to-coast on 
this issue, the safety of vehicles that are, in fact, brought 
into line with lower standards, and the impact on the economy.
    The other thing I would note in closing on that topic is 
just, as Senator Levin mentioned, we're seeing the auto 
companies actually moving faster than I suspect any kind of 
Department of Transportation regulations would move with the 
projected date of perhaps as early as the year 2003 of having 
the first of these hybrid models that Senator Levin alluded to 
in his statement, so I think we're seeing the market drive this 
probably faster than Government ever possibly will.
    Senator Dorgan. Mr. Chairman, thank you, and let me wish 
Senator Abraham well.
    Chairman Bingaman. Senator Domenici.

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

    Senator Domenici. Thank you very much, Mr. Chairman. It is 
a pleasure to be with you, Spence, and I am harkening back in 
my mind to some pleasant days when we were privileged to go off 
to Europe ahead of the euro market to learn about what was 
going on over there as they decided to have their own currency.
    I do not think you are going to have time for that for a 
little while, because I think you have taken on a job, and I am 
sure voluntarily, that is probably as onerous as any in 
American history. Anyone that is not telling you that the 
greatest Nation on Earth has a severe energy crisis is not 
telling you the truth.
    We have been playing around the edges of this crisis, doing 
little or nothing about it, no aspirations on any one, we just 
have not done much about it, and now it finally comes to a head 
in the sixth largest economy in the world, which happens to be 
California, and I would suggest, not for you, but I hope 
Californians will, in terms of how people up here feel about 
California, I think it is an immediate crisis, and I think you 
are going to be confronted with addressing some of those soon.
    But I also believe California has to decide what they want 
to do about energy. I believe they have been part of the 
decisionmakers of that State have been part of getting them 
into this problem, and I do not mean just deregulation. I think 
they have had a we-don't-want-any-power-plants-in-our-State 
attitude for far too long and frankly there is an attitude that 
we do not need any more electricity, maybe we can fix this up 
some other way.
    I want to suggest to you, without an answer required, that 
yes, we have got to help them, but yes, they ought to decide 
what they are going to do also. No comment required.
    Senator, let me suggest something to you now and ask you 
what you think about it. The United States has so much coal 
that we are considered to be the Saudi Arabia of coal. We have 
had the highest technology base in terms of nuclear power and 
new nuclear technology that the world has ever seen. We have 21 
to 22 percent of our energy in nuclear power now, and very new 
technology moves us in directions of totally different kinds of 
powerplants, but we have a fringe in America that is scared to 
death to even mention it.
    We have natural gas in the Department of the Interior, 
where the lands are tied up, that we have now been told contain 
200 trillion acre feet of natural gas. For your perusal, we use 
20 a year. They are on Federal land which we cannot drill for 
natural gas. Part of it is in my State. We have ten times the 
current annual use of natural gas locked up, and yet what 
happens in America? Every new powerplant built, Mr. Secretary, 
of recent origin, five or six have been built to use natural 
gas. No coal, no nuclear, just this beautiful fuel called 
natural gas.
    We do not have enough natural gas for that, and we do not 
have enough infrastructure to deliver it, so we have become a 
natural gas-dependent country. Now, I ask you, Mr. Secretary, 
in light of all the diversity possible, does that frighten you, 
as the Secretary of Energy, as you look at America's future?
    Senator Abraham. As I mentioned, I believe in my response 
to Senator Murkowski, I think that we cannot allow ourselves to 
move any further away from a balanced approach with respect to 
the sources of energy that we use. That's, I think, the 
strongest argument among many for the kind of interagency 
program of developing a comprehensive strategy that includes a 
focus on all the various possible sources on the one side, 
conservation issues and investments in research toward 
development of renewable energy sources, to the provision of 
more fossil fuel-generated energy sources as well.
    If we allow ourselves to essentially put off-limits one 
after another of the sources--and I think we can all see, you 
know, how some of this has come about. I mean, we have had what 
seemed to be an abundant supply of energy in recent years, and 
so it perhaps moved us away from a focus on the future. I think 
that any comprehensive policy we develop can't just look at 
America today, or even America in a couple of years. I mean, we 
really have to put together a set of proposals that has a far 
longer focus to it, and I think we've got to include in that 
each of the sources you mention.
    Senator Domenici. Mr. Secretary, since my time is going to 
go out, let me give you a couple more observations. First, 
yesterday I sent a letter to the President-elect. I would like 
to give it to you today so you can read it.
    I believe it is time for the President to suggest that we 
cannot put the whole burden on you because you do not have the 
power to make the decisions, but the other Departments of 
Government should all be tasked, be it the Department that we 
call Environmental Protection, Interior, and others. They 
should be tasked with reviewing each of their policies and each 
of their decisions in terms of, how does that affect the energy 
supply of this Nation, not necessarily making energy decisions, 
but look at them in that light. Would you suggest some approach 
for trying to make sure we are not making contrary decisions 
with reference to our energy supply?
    Senator Abraham. Right. Well, I would, and I think I have 
made that point. I will look forward to seeing your letter, and 
I would support that kind of interagency participation. This is 
by no means something that only one Department has the ability 
to affect exclusively.
    Senator Domenici. I want to suggest that--Senator Bingaman 
raised an issue. In confirming a Secretary of Energy he raised 
an issue of lie detector tests at the national laboratory, and 
it is very interesting that in your opening remarks you 
addressed the morale of those great scientists and those who 
support them at the national laboratories, and I think there 
are 10 that are energy labs, three of which are nuclear 
deterrent laboratories, but it is interesting that we are 
talking about that in an Energy Secretary, because you have 
jurisdiction over that.
    I want to put on the record that I believe you should start 
immediately trying to find out why we should be doing between 
10 and 20,000, which I think is what the statute which came out 
of the House and the conference report requires. I think it is 
borderline ludicrous to have that many lie detector tests in 
these three laboratories.
    I think we have got to find out how they work and put them 
to work, but by saying we are doing 80 times more than we did 6 
years ago we are secure I believe is rather ludicrous, and I 
would hope that you would attend to that as quickly as you can.
    Senator Abraham. As you said, I have talked already with 
General Gordon about this issue, and asked him to bring me up 
to speed as quickly as possible on the status of his analysis, 
and your point, and the one that I made also about the morale 
and the need for us to have the kind of environment that 
attracts the talented people and retains the people, that allow 
us to have the skilled force of workers there that we need, is 
paramount.
    Obviously, we all want to make sure at the same time that 
we do not in any way back away from a standard that protects 
the secrets that those very scientists have been responsible 
for creating.
    Senator Domenici. Now, Mr. Secretary, my last question has 
to do with the creation by the Congress of the NNSA, the 
National Nuclear Security Administration, which is now headed 
by retired General John Gordon. If you have not, I am sure you 
and your staff will have an opportunity to read that statute.
    It was heavily debated in conference and was significantly 
manicured, but it does create a semiautonomous agency within 
your Department, you are still ultimately in control, but it 
creates that Department to manage and see that the nuclear 
weapons part of your jurisdiction is no longer dysfunctional 
and managed from so many sources it cannot get its work done, 
as recently outlined by the General Accounting Office when they 
reviewed it.
    Is it fair to say from your opening statement that you will 
attempt to abide by that law and to work with General Gordon or 
his successor to create that kind of an entity contemplated by 
that statute I referred to?
    Senator Abraham. I voted for the legislation, as you know, 
and therefore obviously approved of the thrust of it and, 
indeed, have talked to Senator Rudman and others who have done 
extensive analysis from the President's Foreign Intelligence 
Advisory Board's perspective and others on this subject.
    General Gordon and I look forward to working with him to 
make sure, to do the part that the Secretary must perform to 
make sure that the job he's performing is done well, but I 
also, as you mentioned, recognize that the ultimately 
responsibility still rests in this agency with the Secretary, 
and my goal is to make it possible for the work of the NNSA to 
be done as well as possible. I look forward to working with him 
to achieve that objective.
    Senator Domenici. I thank you, Mr. Chairman.
    Chairman Bingaman. Thank you.
    Senator Graham.

          STATEMENT OF HON. BOB GRAHAM, U.S. SENATOR 
                          FROM FLORIDA

    Senator Graham. Thank you, Mr. Chairman. I would like to 
start with the same statement that my colleague, Senator Dorgan 
did. I look forward to voting in support of Spencer Abraham to 
be Secretary of the Department of Energy. I have known him to 
be a man of intellect, high values, and an ability to absorb 
complex information rapidly. I believe that he will provide 
wise leadership in an area where we need all the wisdom that we 
can get at this present time.
    As we discussed in the office, I believe that it would be 
very beneficial if the Department were to try to establish some 
national energy goals and to put as many numbers behind those 
goals as possible. For instance, the last number I had is that 
we were using somewhere in the range of 17 to 18 million 
barrels of petroleum per day.
    Those numbers may be somewhat out of date by now, but what 
should be our national policy in terms of the total amount of 
petroleum that we used, and then what should be our national 
goal over time in terms of the allocation between domestic 
production and foreign imports. That will then get to a set of 
subsidiary questions such as how much of a reserve and resource 
should we maintain in our domestic production?
    Should we try to maintain a 50-year reserve of petroleum in 
the United States, which will tend to restrict our current 
ability to draw down our domestic resources, or are we prepared 
to live with a smaller cushion of safety? What would be your 
receptivity to the idea of setting some national goals with the 
numbers behind them which then drive the resolution of the 
difficult tradeoffs that are going to be involved?
    Senator Abraham. Well, first of all, Senator Graham, I just 
want to thank you for your kind remarks and support. As you 
know from our conversation just the other day, and I might add 
a number of other members raised similar interests, I guess a 
similar level of interest in trying to get a kind of current 
status of the challenges before us, and have raised, and I 
alluded to it a minute ago, the interest in not having just a 
comprehensive energy policy for 2001, or 2001 through 2005, but 
a much longer term kind of approach, and I think it makes every 
bit of sense.
    To the extent that we can quantify some of these 
projections, I think everybody ought to begin with that 
framework, because we try to talk about policy changes, whether 
it's on the conservation side or the production side or any 
other aspect of this we really do need to know either what the 
current demand level is going to be, and what the projected 
supply levels are going to be, category by category, so I would 
say that some type of an initial analysis is particularly 
important before we talk about policies that might reach that 
level of fulfillment.
    Senator Graham. There are some issues which would be 
affected by that analysis that are coming fairly quickly before 
Congress. On the issue of energy conservation, one of the 
principal sets of incentives to achieve conservation has been 
the tax code. Various tax credits, deductions and other 
specialized provisions that were designed to encourage 
everything from biomass to solar energy to more conservation-
oriented appliances have ended up in the tax code.
    Yesterday before the Finance Committee the nominee for the 
Secretary of the Treasury, Mr. O'Neil, indicated that within 
the next 60 days he anticipated the administration would 
present to the Congress a large, in the range of $1\1/2\ 
trillion, proposed tax cut. At that scale, that is probably 
going to be the major tax recommendation for the foreseeable 
future. Have you, or would you review that in terms of what 
that tax cut would provide in terms of incentives for energy 
conservation which in turn might be part of your overall energy 
strategy?
    Senator Abraham. We will, and I think I mentioned in an 
earlier answer that I believe in the last Congress I supported 
proposals that would at least extend the current tax code's 
special treatment of certain types of investments.
    I think that without elaborating too much, as we look ahead 
towards the development of a comprehensive policy, certainly we 
know that there are in a variety of the areas of possible 
sources of production or conservation, or renewable 
development, situations in which adjustments in the tax code 
could make an impact. Whether, and to the extent to which those 
will be part of this initial proposal of the administration I 
can't say today, but I think it will be certainly on the table 
for this Department to work to include.
    Senator Graham. My point is, I think there should be a 
certain sense of urgency on that, because if we are going to 
have an energy policy that will be balanced as between 
increasing supply and reducing demand, one of the key levers in 
the reduction of demand is going to be through the tax code. It 
looks like many of the decisions as to what will be offered for 
reductions in tax measures will be made early rather than 
later, so I would suggest that an early assignment for the 
Department would be preparing to influence what will be in the 
program and then explain it once it is proposed.
    Senator Abraham. The point is well-taken. I agree.
    Senator Graham. On the supply side, an issue that I know 
Senator Domenici and many other members of this committee have 
been interested in, as have I, has been the use of nuclear 
energy in meeting our electrical generation needs. My State is 
fairly typical of the Nation. Not too long ago we had about 20 
percent of our total electric generation from nuclear energy. 
Today, that is dropping down close to 15 percent and appears to 
be headed down further.
    This is a complex issue, which involves matters of disposal 
of waste, but it also involves regulatory policy. How do you 
reinvigorate the industry to seriously look at nuclear? How do 
you get the financial institutions to be willing to undertake 
the investment? What do you see as the role of the Department 
of Energy? Should there be a role? Is it an appropriate policy 
to try to reinvigorate our nuclear power option and, if so, 
what are some of the things you might consider doing?
    Senator Abraham. Well, I think that any kind of balanced 
comprehensive policy has to take into account the possible role 
and the broadening or focused role of nuclear power as a source 
of generation. My own view is that again, and there are a 
number of agencies that have various responsibilities here, and 
I think that we, as I keep saying, have to do this on a multi-
departmental level.
    What I would say is that I think we all know that there has 
not been a new nuclear power facility started in this country 
in a very long period of time. I think maybe it's back to the 
1970's. But we also have existing facilities that may be headed 
towards a point where they may not be allowed to continue. They 
may need to be reauthorized.
    I know one of the challenges, for instance, is the 
purchasing by entities who often have greater expertise in the 
safe and efficient operation of nuclear facilities from current 
owners who do not, and it seems to me we have to look at that 
part of the puzzle. How could we keep facilities already in 
place, functioning well into the future? I think all of those 
are issues the Department ought to be examining as we conduct 
this analysis in terms of the development of a long-range plan, 
or strategy.
    Senator Bingaman. Thank you very much. We will have one 
other set of questions here from Senator Campbell, and then we 
will take a 10-minute break.
    Senator Campbell.

          STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, 
                   U.S. SENATOR FROM COLORADO

    Senator Campbell. Thank you, Mr. Chairman. One of the 
benefits, I guess, of sitting this far away from the center of 
power, where the chairman sits, is that most of the questions 
have already been asked, or in your statement you have already 
talked a good deal about the things I was interested in, but I 
appreciate the comments of my colleagues, particularly Senator 
Dorgan and Senator Bingaman.
    There is no question you are stepping into a quagmire of 
problems, and I just have to tell you, Spence, I really admire 
you for taking on that job. I think that California, which 
tends to lead the rest of the Nation in a lot of things good 
and a lot of things bad as it washes across the country, is 
just the tip of the iceberg of what we are going to be facing, 
and I know it is easy just to sort of point fingers, you know, 
that deregulation was the problem, or it is those greedy power 
producers, they are the problem, or whatever, but I think we 
all recognize that Nation-wide we have got a growing population 
and diminishing power production, maybe not diminishing, but it 
certainly is not keeping up with the amount of power we need.
    One of my colleagues mentioned the Internet takes 10 
percent of our power uses now, and who knows what things have 
not even been invented yet that will need power in the next 10 
years, but clearly the present administration, by locking up a 
lot of our resources, or preventing us from developing them, 
has been part of the problem.
    I noticed with interest this morning that seven more large 
tracts of land were locked up under the Antiquities Act that 
will be off the screen now for any kind of future development, 
and I know, too, that there is a national defense component.
    I read with interest a couple of days ago that Iraq is 
already rearming, and doing it with the money that we are 
paying them, since we are now importing more oil from Iraq than 
we did before the war. I mean, there is something wrong with 
that picture. Americans lose their lives over there in the sand 
of the Middle East, and just a decade later we are dependent on 
them, instead of them dependent on us. There is something wrong 
with our policy that needs a major fix, and I know that you are 
just going to be up to your ears in it, so I just want to tell 
you how much I admire you for doing that.
    But one of my colleagues did mention interagency 
cooperation, and coming from public lands States, many of us 
have a little different view on perhaps the sale of the PMA's 
where rural electrification is so important, or the use of 
public lands for drilling and coal-mining, things of that 
nature, but clearly a lot of the things that you will have to 
deal with in looking for energy sources so that we can get less 
dependent is going to have to be done in cooperation with the 
Interior Department and perhaps a number of others, too, and I 
just want to commend you.
    I do not have a lot of questions to ask you, but I know, as 
you do, that we haven't built a refinery in this country, a new 
refinery for oil, in 30 years. I do not know how many years ago 
it has been since we built any kind of a nuclear facility, a 
good number of them, I guess, and I know that this last 
administration that is now leaving advocated tearing down some 
of our dams, which are suppliers of much of our electrical 
power.
    I do not know how anybody in their right mind could not 
look at all those and recognize that we are in deep trouble, 
and we are going to get more and more dependent on foreign 
power all the time, but Senator Dorgan mentioned, too, 
something about conservation. I think that is important, and 
alternative fuels are important, too.
    Living out West, coal bed methane, natural gas, oil shale, 
things of that nature are just sort of coming on line. The 
price has not been right, but as we get more and more expensive 
oil, I am sure they will be, but certainly automobile 
manufacturers and those manufacturers of apparatuses that use 
energy can do better, too. We now have Caterpillar and Cummins 
in Detroit and a number of our manufacturers that basically got 
their start in your State who have engines developed now that 
develop 600 horsepower and pull 80,000 pounds and still get 6 
miles to the gallon. I do not get that much in my pickup.
    I will not mention the name of my pickup, because I do not 
want to hurt their sales, but I am getting rid of that thing. 
One of the reasons is, I know there are more efficient engines 
out there, and I know that we can do a lot more on efficient 
engines that still use hydrocarbon power. We are not ever going 
to get to the position where we can use solar, or wind, or 
something like that to drive our ship fleet or our bombers or 
heavy trucks. It is just not going to happen, and we need the 
kind of power that comes from hydrocarbons, which has basically 
been cut off from our use.
    But I just wanted to make just one comment to you. It will 
not be really in your purview, but you probably know that 
something like one-third of our whole trade deficit now is 
related to oil. It is really a downward spiral, and it is going 
to continue as long as we are related more and more to foreign 
oil.
    But there is one form of land in this country that has huge 
resources of coal, of coal bed methane, of natural gas, of oil, 
too, and that is Indian lands, and they have not had the 
opportunity to develop that, to provide jobs for their own 
people, but it seemed to me that if you do some work with the 
Department of the Interior you are going to find an opportunity 
in which a lot of the resources in America that have not been 
locked up will be able to be developed for the good of the 
Nation, and certainly the good of the people that live on those 
lands, by providing jobs and an income to those tribes, so I 
would hope you would keep that in your mind as you take your 
position.
    I also just want to wish you good luck in your tenure.
    Thank you, Mr. Chairman.
    Chairman Bingaman. Thank you very much. We will take a 10-
minute break and then continue with the questions.
    [Recess.]
    Chairman Bingaman. Let us go ahead and reconvene. I wanted 
to advise all members that it would be the intention of the 
chair to have a vote on the Abraham nomination when we come 
back into session at 2:30 this afternoon before we proceed to 
the hearing on Gale Norton's nomination, so we will advise all 
offices of that so that if there is objection we can consider 
that, but otherwise if there is no objection we will do that.
    Senator Wyden, you are next.

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

    Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman and 
colleagues, I have worked closely with Senator Abraham on a 
wide variety of technology issues in particular, including the 
Internet tax freedom bill and the Digital Signatures Act. I 
think all of us understand that Senator Abraham is smart, he is 
fair, and he is a good listener.
    I have been kidding him that I was pleased that his proven 
legislative expertise did not extend to his bill to sell off 
Bonneville Power. As he knows, that would just clobber our 
agency, and in conversations Senator Abraham has assured 
Senator Smith and I that he will not support selling off 
Bonneville. He will not support these precipitous schemes to go 
to marketplace rates, and he will continue to support the 
preference clause that is so important to Bonneville customers 
and small businesses.
    The one area, Senator Abraham, that we did not discuss but 
that is of importance to our region are these emergency orders 
that the Department keeps issuing to require our region to sell 
power to California. Now, California energy officials publicly 
thanked the Northwest back in December for those sales that 
they said prevented rolling blackouts in their region, so 
Oregon and the Northwest is clearly being a good neighbor.
    My question to you is, will you take another look at these 
emergency orders and, in doing so, I hope you will agree with 
me that you will not continue to renew them when they put 
Northwest ratepayers at risk, or they lack guarantees that 
Oregon and the Northwest will be repaid.
    Senator Abraham. Senator, as I said in my statement, I 
think it's certainly premature today to speculate about policy 
actions which will be taken, although certainly soon, but what 
I have indicated to you, to Senator Feinstein when we met, and 
to others who have had concerns about this, is that the 
administration will look at all of these issues in a broad 
regional context, as well as in the context of the immediate 
and urgent problems in California, and obviously the concerns 
which you and others from the Northwest have expressed to us 
about where energy supplies to your States and the region will 
be at a later point this year, perhaps, are part of a broader 
set of considerations that have to be taken into account as all 
of this plays out, but it is certainly something we're 
concerned about, and something that we regard as a matter of 
great urgency.
    Senator Wyden. Understand that these emergency orders 
continue to be renewed, and the people of my State have been 
more than good neighbors, but I hope you will also look to the 
proposition that we should not be forced to ship power by 
emergency order when we do not have any. That is the concern 
that Oregonians have today.
    The second area I wanted to explore with you deals with 
environmental protection. As you know, there have been a number 
of environmental groups that have been concerned about various 
votes in the Senate. Someone said to me, you should not vote 
for your friend Spence Abraham because of his environmental 
record. What is your orientation with respect to assuring that 
the country produces more energy without compromising the 
environmental protection and the treasures that we all 
appreciate?
    Senator Abraham. Well, obviously, Senator, as you know, we 
look ahead to a real challenge in terms of the demand for 
energy that not only exists today, that produces some of the 
challenges we confront even immediately before us, but to the 
increase in demand that I think we all, at least to date, can 
project for the future, so as we move forward we have to 
analyze not only what we can do on the production side, but 
what we can do on the conservation side, what we can do on the 
renewable energy side of the equation, all of which, obviously, 
contribute I think towards environmental sensitivity.
    I think this administration, and I know the President-elect 
during the campaign made it very clear that whatever policies 
he would be advocating with respect to increases in production 
would be advocated in a way that was environmentally sensitive.
    What I think we also, though, have to recognize is that 
there are a lot of other agencies that are part of this 
decision-making process. Some of the issues that certainly 
would be related to environmental protection are not going to 
be within the scope of the work that the Department of Energy 
does, and I suspect that other hearings with Governor Whitman 
and probably later with Gale Norton here will also be part of 
that decisionmaking process, too, but certainly this 
Secretary's focus will be on trying to properly balance the 
sensitivity to environmental safety on the one hand, as well as 
the need to address the production and supply needs.
    And to just take it one step further, a major part of the 
responsibility of this Department, as you are well aware, is 
environmental management, is the cleanup of sites that have 
been over the last 50 years or so, as part of our weapons 
process and so on, have posed very serious threats, and I have 
talked to a number of members of this committee about how 
important it is to me, and I know to them, that we move forward 
and try to begin to gain some ground on the cleanup of those 
sites. That is a very important commitment as well.
    Senator Wyden. I understand your reluctance to go into 
specifics today, but I hope that early on in your tenure you 
will send a powerful message that it is possible to produce 
more energy in this country without compromising environmental 
policy. The American people are looking for that message, and I 
think it is important that you send it early on, and it is one 
that I feel very strongly about.
    The third area that I want to examine is a regional one, 
that is, the question of Hanford. There are not the funds right 
now for the cleanup of Hanford, which, of course, adjoins our 
lifeblood, the Columbia River, and the Upper Pacific Northwest. 
There are a lot of folks in our region who believe the area is 
being turned into a sacrifice zone.
    Now, the current administration considered the proposed 
restart of the fast flux test facility for a variety of 
different missions, took 5 years, spent $100 million of 
taxpayers' money, looked at every conceivable use of this 
facility, and said that the expected missions could be handled 
by other Department of Energy facilities.
    I hope that you will not resume this scavenger hunt for 
some kind of mission to restart this facility. Do you have any 
thoughts on that this morning?
    Senator Abraham. My understanding is that Secretary 
Richardson may have already have completed the process of the 
signing of the RFP, I believe, on that issue. I recognize there 
are other focuses here of other perspectives, but I really 
think, in the absence of any demonstration of inappropriateness 
in the reaching of the conclusions that have been reached, that 
that would be the extent of that effort.
    Senator Wyden. Do I have time for one additional question? 
Is my time up?
    Chairman Bingaman. You have 10 seconds.
    Senator Wyden. This one really starts a brawl in the 
committee, because the chairman and I have a difference of 
opinion on it.
    The Oregonian, our State-wide newspaper, found evidence 
that BP Amoco has manipulated the West Coast gas market through 
export sales to Asia. As you know, there had been a lifting of 
the export ban of the sales of Alaskan oil. I would ask only 
that you take a look at this issue that you consult with 
Northwest members, the chairman, of course, and others, because 
we have the dubious honor of paying the highest gasoline prices 
in the country, and the paper in our State put e-mail and other 
documents from BP Amoco on the front page of the paper saying 
that this is part of a plan to manipulate West Coast markets.
    I do not want to cause a brawl in this committee, but I 
would ask that you look at that evidence.
    Senator Abraham. I would be happy to do so.
    Senator Wyden. Thank you, Mr. Chairman.
    Chairman Bingaman. Senator Thomas.

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

    Senator Thomas. Thank you, Mr. Chairman. First, let me 
welcome Spence Abraham. I am certainly delighted that you are 
going to take this job, and I know you will do very well. As 
has already been said, by the time we get here, almost 
everything has been said, but that never deters us from saying 
it again, so I guess basically I just have some things I would 
like to emphasize with respect to what I think are important.
    One is the coordination among agencies. We have talked 
about that. I think Interior, Energy, EPA, even the White 
House, Environmental Quality Council, those kinds of things, 
all have a very important impact on this thing. I would like to 
suggest to you that there ought to be organized soon some kind 
of an almost summit meeting where the heads of those agencies 
are brought together to visit a little bit with producers as 
well as consumers, and I think we are faced with two things, it 
seems to me, both of which you have talked about.
    One is a longer-term policy which, frankly, we have not 
had. It is very important, but it isn't a short-term answer. 
And then we have to do some things more on the short term, and 
I think we need to do that.
    Nuclear waste has also been mentioned. Certainly we are not 
going to move forward with nuclear power as a supplemental or 
alternative until we do something about the waste, or else 
begin to use it as they do in Europe, in some sort of 
recycling, but we have spent billions of dollars on waste 
facilities that are not now being used very fully, and we need 
to do that.
    Hydro energy, we have talked about that. The idea of 
removing dams certainly is not consistent with the problems we 
have now.
    Obviously, access to public land, particularly those of us 
in the West, where 50 percent of Wyoming belongs to the Federal 
Government, and even more in most of the Western States. then I 
am not suggesting we open up all the wilderness or the parks 
and so on, but we do have a lot of multiple use lands that 
ought to be made more readily available, it seems to me.
    Interesting, I think this week you have had the Secretary, 
the current Secretary overseas dealing with OPEC, which is an 
appropriate thing to do, but it does not seem to me that the 
Department of Energy has a lot of leverage, and I mentioned 
this to General Powell yesterday. It would seem to me in those 
countries where we have done a great deal for them, when we are 
dealing with them about the production of OPEC, that energy 
ought to be joined by the State Department, it ought to be 
joined by DOD and some others, so that we have a little 
leverage in terms of what we are doing there.
    I am also interested, of course, in your nuclear weapons 
activities. We have, I think very important offensive 
missiles--offense, not offensive, that are very important as 
well as the missile defense, and I hope you do that.
    So you mentioned, I apparently missed it, I think, doing 
some research on clean coal. I would like to suggest that you 
expand that a little bit to also enrichment. You buy a ton of 
coal in Wyoming for $4\1/2\, and by the time it gets to Dallas 
it costs $25. We can change that by increasing the enrichment, 
get more Btu's than that. You could do some of that. What is 
your reaction to experimentation with that?
    Senator Abraham. I would say that I am not that familiar 
with the process. I know that with regard to the basic clean 
coal technology programs that we had, the work that is done in 
the labs in Pittsburgh and Morgantown and so on, that the 
President-elect has expressed a strong commitment to increase 
over $2 billion over the next 10 years for those kinds of 
programs, what the mixture would be in terms of the kind of 
research we really are not yet prepared to make recommendations 
about, but would take into consideration that as perhaps part 
of the type of research that would be done. I would be 
interested in getting more information from the Senate on that.
    Senator Thomas. I think that would be great. Actually, 
there has been research going on for some time, and it has not 
been as effective, I think, as it might be. We have a specific 
issue with my friend from Idaho where we have had the treatment 
project in INEL, which is a waste disposal pilot plant in which 
incineration was the original idea, and of course those of us 
that are downwind, whether it is Yellowstone Park or Wyoming, 
have been concerned about that.
    The Secretary has set up a study group. They have come up 
with some recommendations, and I want to urge you to continue 
to pursue the alternatives to incineration in that plant. I 
think it is very important to us.
    Again, congratulations. We look forward to working with 
you, and I think we can make some progress by working together.
    Thank you, Mr. Chairman.
    Chairman Bingaman. Thank you. Since we have no other 
already approved members of the committee on the Democratic 
side, I will go to Senator Craig.
    Senator Feinstein. Jeff.
    Chairman Bingaman. Yes. Let me call on Senator Feinstein. 
Did you have a question about the procedure?
    Senator Feinstein. No. I am sorry, I thought you said there 
were no other members.
    Chairman Bingaman. No, no. You and Senator Cantwell and 
Senator Schumar I am going to call on after the members who 
have already been approved since you have not yet been approved 
by our conference.
    Senator Feinstein. I see. Thank you.
    Chairman Bingaman. Go ahead, Senator Craig.

        STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR 
                           FROM IDAHO

    Senator Craig. Mr. Chairman, I am not sure that I want to 
be in the situation of being recognized first, before the two 
new additions to our committee, since both of them are ladies. 
However, I have worked with Senator Feinstein in the past and I 
know that if I do not get the first word in, I will never get 
the last. She is most effective. I welcome both of you to the 
committee.
    Senator Feinstein. Thank you.
    Senator Craig. The great thing about having you before the 
committee is I can say, Spence, welcome. It is not often that 
we have the opportunity to be able to know those who will 
become key players in a new administration on a personal and a 
friendship basis prior to them assuming that responsibility. 
Most of us on this committee have had that opportunity with 
you, Spence. I can say that I am excited and looking forward to 
you becoming our new Secretary of Energy.
    I am sure all of the members this morning have laid out the 
daunting task before you. I just came from the Agriculture 
Committee where we were visiting with Ann Veneman, soon to be 
your colleague in the Cabinet as Secretary of Agriculture. Even 
there, as we talked about agriculture and its problems and the 
need for leadership, energy emerged.
    The cost of the production of fertilizer has tripled in the 
last 6 months. Natural gas, as you know, is a large component 
in the production of fertilizer. Many of the fertilizer plants 
simply do not believe they can produce fertilizer for the 
coming year at a cost that the American farmer can afford.
    I do not think any average consumer even has begun to 
understand the ripple effect of high energy costs in this 
nation. Many of us on this committee knew that. We watched for 
the last 8 years as average increase in production of energy in 
this country went up less than 1\1/2\ percent. And average 
production or consumption went up over 2.5 percent. We knew 
that at some time in the future those lines would cross and we 
would be in crisis.
    Those lines crossed about 8 to 10 months ago. We are now in 
crisis. If we do not articulate and implement a new energy 
policy for this country in the near future, then the situation 
in California will be occurring nationwide.
    I say this not for the benefit of my colleague from 
California, but the political correctness that has been going 
on in California for the last decade over energy production 
produced the blackouts of yesterday. They are not a producing 
State. They are a consuming State. But tragically enough, we 
have become a consuming nation, not a producing nation. You 
know that. That is going to be a huge responsibility for you 
and an obligation.
    While just in another building, John Ashcroft is getting 
all the attention this morning, as he did yesterday and the day 
before, my guess is that in the long-term, yours is by far the 
greater task. Because what you will do in the next year with 
our new president to articulate an energy policy and to begin 
to implement it in cooperation with Congress is going to have 
immediate, short-term and long-term impact on every citizen in 
this country. Whether it is the cost of that which they consume 
or their lifestyle itself needing to be altered, simply because 
there is no longer the abundance of energy available, people 
will feel the impact of this crisis. Energy has driven the 
great economy of this country all of our lifetime and will 
certainly be a key factor in the future.
    We look forward to working with you in that task. We know 
that it has to be done. We will not be able to conserve our way 
out of this one. We will need to produce our way out of this 
one.
    At the same time, conservation is important. I would hope 
that the budget that you present to Congress will not have any 
less money in it for technology; the kind of new technology of 
which you are so well aware. You introduced me to some exciting 
new technology when I was in your State in the last year 
looking at that marvelous new fuel cell concept that is being 
produced there in the laboratories of some of our auto 
manufacturers. That technology has to go forward.
    At the same time, it is downstream. We know what we have 
got to produce in the short-term to get our country back on 
track.
    I have communicated this urgency to the President-elect. I 
am very willing to say that the current situation is the 
Clinton energy crisis. I believe that because I know that they 
have not been a producing administration. They have been a 
conserving administration. They have wanted to sit back and 
wait for new technologies to come. If we do not articulate a 
policy, if you do not help develop that and lead us in that, 
then this crisis will be short-term for Mr. Clinton and long-
term for Mr. Bush. I say that as a dedicated conservative 
Republican. At the same time, I recognize the importance of it 
getting done and that will require all of us working very 
closely together.
    You gave me the courtesy of coming to visit yesterday and 
we talked about the needs of my State. We also discussed the 
marvelous national laboratories that I have in my State and the 
resource that they are to the Nation. We discussed the kind of 
experimental, research and engineering development work that 
goes on there. Idaho's national laboratories are also DOE's 
lead laboratories for environmental research, environmental 
stewardship programs and nuclear energy technology. I am very 
excited that you are becoming our new Secretary of Energy. I am 
excited about the opportunity to watch your leadership and to 
work with you in the development of these new policies for our 
country now and for the future.
    So, welcome to the committee and let me recognize you as 
soon to be our new Secretary of Energy. Thank you, Spence.
    Senator Abraham. Thank you, Senator.
    Chairman Bingaman. Senator Bayh.

           STATEMENT OF HON. EVAN BAYH, U.S. SENATOR 
                          FROM INDIANA

    Senator Bayh. Thank you, Mr. Chairman. It is good to be 
with you again today. And Senator Abraham, I would just like to 
say that it is good to know that there is life after the U.S. 
Senate. You are looking very well here today.
    I would also like to compliment you on your stamina. You 
were good enough to call me on the phone shortly after your 
nomination. You then came to see me. And now you are good 
enough to endure our comments here today. It reminds me in some 
ways of the medieval justice system where they had the trial by 
ordeal. So this is a testimony to your dedication to public 
service. And I know I speak for all of us when I say that I 
also apologize for having to step out. I enjoyed seeing your 
beautiful family. How old are your twins again, Spence?
    Senator Abraham. Seven.
    Senator Bayh. Seven. Well, as you know, I have got twin 
boys who are 5 years and 2 months old. And I kind of wondered 
how long your girls were going to last there in the front row. 
If I had brought my boys to something like this, they would 
have been at the witness stand there in no time flat.
    Senator Abraham. Well, we had sort of arranged in the event 
that the questioning turned particular hostile to send our 4\1/
2\-year-old son loose on the committee. And so he had been 
practicing his various techniques last night for disruptive 
behavior. But we decided at the last minute that might not go 
down too well.
    Senator Bayh. Well, you never know. Having experienced that 
times two----
    Senator Abraham. The threat still exists. He remains on the 
floor. So he is somewhere in the building.
    Senator Bayh. All right. We will bear that in mind as the 
proceedings continue on. And finally, I know your friend and 
colleague, the Governor of Michigan, has been recognized 
previously. John, it is good to see you again. I enjoyed our 
service together. And I could not help but remark, as I think 
you and I were commenting on yesterday, you have twins. And I 
have twins. And the Englers have triplets. There must be 
something in the Midwestern water that produces these results.
    Senator Abraham. The Department of Energy will study that 
issue as well.
    Senator Bayh. I will look forward to the results. Just 
briefly, we have talked about these issues previously. As you 
know, as I think Senator Craig was just mentioning, and several 
of our colleagues have talked about the importance of energy 
independence for our country.
    And I have had a chance to share my thoughts with you about 
the great reserves of coal that we have, not only in the Ohio 
River Valley Basin, but elsewhere across our country, and the 
importance of continuing to invest in technology and research 
so that we can utilize those resources that we have in 
abundance in a way that is environmentally safe and sound. And 
I would encourage the efforts that you have pledged to 
undertake in the Department.
    I know you expressed your support for this. I know the 
President-elect has also indicated his support for clean coal 
technology. I think it has to be one of the fundamental pillars 
of a long-term strategy for energy independence in our country. 
It should be a win/win strategy, a domestic energy source that 
is reliable and affordable. With the new technology coming on 
line, we should also be able to find ways to make it safe for 
the environment. So I just take an opportunity here on the 
public record to reiterate my support for that initiative.
    Secondly, as we have previously discussed--I know Senator 
Feinstein will probably have some additional comments about 
this. Perhaps some of my colleagues will as well. I shared with 
you my own conviction that in the long run, we need to harness 
market forces in the electricity market in ways that will 
provide a safe, secure, and affordable source of electricity 
without relying on the traditional monopolies that have 
dominated that part of our energy system.
    One of the beauties, as our mutual friend Governor Engler 
would tell you, one of the beauties of the Federal system is we 
allow different States to experiment with different solutions 
to the problems that face our citizens. And then those of us at 
the national level can use the benefit of that experience to 
see what works and what does not work.
    Unfortunately, there appear to be some things that have 
gone seriously awry in California. But I hope that does not 
mean that we give up on the prospect of having a more open 
market for energy and that we can look for ways that, as I 
said, harness market forces, while still absolutely assuring 
people of a reliable and affordable supply of energy.
    That is a balance that needs to be struck and I am sure 
that we will be analyzing the results from the West Coast and 
elsewhere as we try to seek, ultimately, the right answer. But 
I would encourage you to at least analyze that situation and 
glean the answers that can be taken from it to inform our 
future policymaking.
    Just a couple of other quick points. I know that we all 
share--particularly you and I, several of the rest of us from 
automotive producing States--your two colleagues who introduced 
you to the committee emphasized this--a strong commitment to 
the next generation of automobiles to ensure that they get the 
better fuel mileage and also they have lower emissions. And I 
would encourage your dedication in that regard.
    It is an important domestic industry as you know. We employ 
a lot of people. And we need to try to invest in this 
technology to ensure that we get the economic benefits of this 
industry while still doing right by the environment and the 
long-term energy concerns of the country.
    So I know I am preaching to the choir here when I mentioned 
this, but, again, I just want to reiterate that for the public 
record.
    Finally, Spence, I did have one question for you. I do not 
want to bring this out of the blue. It was submitted by, or 
recommended to me, by a member of your congressional 
delegation. He asked that I get the benefits of your thoughts. 
It must be an issue you have had to address before because it 
comes from Michigan. About any thoughts that you might have 
about the advisability or appropriateness of drilling for oil 
and gas in the Great Lakes Basin. Apparently, this is something 
that is on the mind of some folks up there. And if you have any 
thoughts along those lines. Obviously, the Great Lakes are a 
vitally important natural resource. I personally was not aware 
that there was a great interest in drilling, but apparently at 
least one member of Congress believes there is.
    Senator Abraham. Yes, I am not aware that there is either, 
Senator. I certainly have the support of that and do not bring 
that perspective to this job. And as I said to several of the 
members during the comments, our goal here is to try to work 
together to identify the new sources of energy or ways to 
enhance the current sources we have in an environmentally 
sensitive and balanced way.
    And obviously, the fresh water supply the Great Lakes 
provides for our Nation is so vital, I do not think that we 
would ever lose sight of that set of factors as we would 
consider--or factors like them in other areas of production and 
sources. Clearly, we have to weigh all these considerations.
    At the same time, as I mentioned, we need a balanced 
approach. And as you and I talked this week, trying to make 
sure that we do have balance is pivotal to the success. The 
dependence somebody mentioned earlier, the increasing 
dependence on natural gas cannot be allowed to continue because 
that will not work for long. And we really need to look at this 
in a more balanced way, but also an environmentally sensitive 
one as well.
    Senator Bayh. Thank you, Spence. Apparently, there was a 
gas leak in one town out there that raised this concern, and 
with the possibility of some slant drilling and things of that 
nature apparently are issues on some people's minds.
    You know as well as I do that the Great Lakes are a vitally 
important part of our ecosystem and a great national treasure. 
So I think you are right. Any activity of this kind there needs 
to be done in an appropriate and sensitive way to ensure both 
the continued greatness of the Great Lakes while ensuring that 
people do not have any undue health concerns.
    Having said all that, I look forward to supporting you. And 
I look forward to working with you. And I appreciated the hand 
in friendship you extended the other day. And on behalf of all 
of us on this side of the aisle, let me just say we want to 
work with you, when we can, to try to get policy right in our 
country. I wish you the very best of success.
    Senator Abraham. Thank you. And I look forward to working 
with you as well.
    Chairman Bingaman. Senator Smith.

         STATEMENT OF HON. GORDON SMITH, U.S. SENATOR 
                          FROM OREGON

    Senator Smith. Thank you, Mr. Chairman. Spence, I also take 
delight in calling you by your first name and so appreciate the 
opportunity and the great challenge that you have.
    I have heard my colleagues state the dilemma facing you in 
different ways. And to state it differently, I have 
reconstructed a couplet that I heard as a boy for this 
occasion.
    Just because--I am speaking of Oregonians now. Just because 
we love our fish, our birds and our trees should not mean that 
we must sit in the dark and freeze.
    So that is your challenge, Spence. We want a good, clean 
environment. But we want our lights on at night and the heat on 
in the winter. And I must say I am very concerned for my State. 
I have been--I have felt I have been something of a voice in 
the wilderness for a long time now saying that food does not 
come from Safeway. We do not create energy by hitting a light 
switch. Gasoline does not come from a filling station.
    All these natural resource industries have been under 
assault for 8 years. Now, the challenge you have is to meet the 
new environmental ethic of our country. But somehow reconnect 
the reality dots for the American people as to what we must do 
to help them to continue to prosper as a people.
    Now, why am I concerned about Oregon? We are California's 
neighbor. We care about our neighbors and we want them to be 
well and to be healthy. And we want them to be warm in the 
winter, especially cool in the summer. But frankly, I think my 
State is being set up--and I include Washington State--to be an 
energy farm for California.
    Now, why do I say that? Recently, the California Public 
Utilities Commission voted to increase rates temporarily from 9 
to 15 percent. However, yesterday after we met, I received 
three calls from different industries in Oregon complaining to 
me that they are just being put on notice that their rates will 
go up between 30 and 40 percent because of what is happening in 
California.
    I have to tell you whatever hope they might have had for a 
profit this year is gone with those rates. Now, that effects 
directly the value of those businesses, their ability to pay 
taxes, the ability to keep schools open for their children, the 
ability to have a family wage job.
    I wonder, Spence, if you agree with me that Governor Bush 
was incredibly prescient when he said in the Northwest that it 
is the height of irresponsibility to tear out hydroelectric 
power in the middle of a looming energy crisis. Do you agree 
with that?
    Senator Abraham. I support the Governor's position. And I 
think he has made that very clear on a number of occasions.
    Senator Smith. Yes, he did. And I appreciate his courage in 
saying that. A lot of people did not realize how far sighted he 
was when he said that.
    But right now my State is in the cross hairs. And for those 
who love the environment--and I count myself as one of those--
the policy of our government has been to store up water to 
produce some power in the winter--and we ship a lot of it to 
California, but we do it in a way that protects salmon.
    Our reservoirs are at historic lows right now. And so our 
ability to help is frankly much impaired. But we need to run 
these assets. These are assets that were established by 
Franklin Roosevelt in the 1930's when only 30 percent of my 
State even had electricity. And we are being beguiled into 
believing that we can have it all, but we do not need to 
produce it. We can just import it. I say to every American, we 
have never been in greater jeopardy to foreign sources of oil 
that are hostile to the interests of this country.
    Somehow, Spence, you have got to keep our lights on and you 
have got to produce. And you have got to protect the birds, the 
trees, and our fish as well.
    It is a tall, tall order. But I hope that reality can be 
returned soon.
    Spence, I also want to invite you to Oregon. I think we 
need to talk about how to run our hydroelectric system, how to 
create more power and frankly I would like to distance myself 
from the comments of my governor who said recently that the 
problem is not that California is not doing enough. People 
outside the region do not appreciate what California is doing. 
I think they are doing something now.
    But you know what? This problem has been in creation for a 
decade now. And I can cite you chapter and verse in utilities 
that have been shutdown, dams removed, proposals for energy 
production said we do not need them. And here is a headline 
from the Daily Astorian on an article. It says ``Cash Starved 
California Utilities See No Help in Governor's Plan''.
    And I just am asking, Spence, to be fair to this neighbor 
of California. Because my citizens cannot afford this. It is 
going to take a neighborly approach. But it must be fair. And 
what is going on right now is not fair. It is not fair to every 
other Western State.
    And so I plead for fairness. And I plead for a more 
balanced approach. And somehow, I hope you and the Governor, 
President-elect Bush, will use your bully pulpit to reconnect 
the reality dots for the American people as to how we make it 
all run. I think I had a question, Mr. Chairman, but it got 
lost in my statement.
    Chairman Bingaman. All right. Well, we will let you submit 
it for the record.
    Senator Burns.

         STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR 
                          FROM MONTANA

    Senator Burns. Thank you very much, Mr. Chairman. Spence, I 
want to associate myself with my colleagues on this committee 
about your dedication to community service and national service 
and your family values. That is all you have got written down 
here. Do you want me to say anything else?
    [Laughter]
    Senator Abraham. I have to say that the second page was 
even more impressive than the first.
    [Laughter]
    Senator Burns. We have some people nodding off out there 
and I kind of wanted to wake them up. I think Senator Smith hit 
upon a point that the situation that we find ourselves in today 
just did not start at the first of this year. I have two of my 
largest employers shutting down because of energy in Montana. I 
am sort of like the movie Apollo 13, ``Houston, we've got a 
problem.'' That Houston is you.
    And also, we are looking at a situation where--I tell you 
when you get to a certain age, New Year's Eve is not what it 
used to be when you were younger. My wife has grown to the 
stage where we rented a movie and stayed at home and watched a 
movie. And we watched a movie called ``The Perfect Storm''. And 
there is a lot of lessons to be learned there, but we are in 
the middle of what one could call a perfect storm.
    I represent a constituency that is oil producing people. 
That should be good for us because oil prices are high. We also 
produce a lot of natural gas. Gas prices have increased some 
four times from just a year ago. I am in a State that produces 
coal which effects energy prices in Minnesota and Michigan and 
a lot of States we ship our compliant low sulfur coal.
    But at every turn in the last 10 years because we are also 
a public lands State and the policy for public lands is that 
they have been withdrawn from any kind of exploration or 
management.
    We say that impacts us and it does. But basically, we see 
now that it is impacting all of America. But some of these 
policies that were supported, now when they hit the switch to 
turn the lights on, the lights are not going on. Bad policy.
    In the mix of things, there has to be conservation. In 
1976, when we had the shortage of oil and we had the lines and 
we were asked to conserve, we Americans did react. And we did 
conserve. And we can. And it should be part of the mix. But 
also, on our power mix are fuel cells, alternative fuels, 
ethanol, coal bed methane, to make those fuel cells, has to be 
in the mix.
    It would take a person much smarter than I am to see how 
they complement and work with each other, but we must have 
somebody or someone or something that could figure out exactly 
how that is. And then to dream a little bit and to tell America 
or at least give us a vision where do we want to be energy-wise 
in ten years, 20 years and 30 years down the road instead of 
just taking a band-aid and fixing it tomorrow.
    My farmers cannot afford the fuel prices that diesel is 
going to cost this summer, not on $2.50 wheat. They also cannot 
afford their fertilizer with natural gas as high as it is four 
times higher.
    So it is going to effect our food prices. Is food going to 
cost more at the grocery store? I doubt it. But the raw product 
will cost more and that impacts the income in my State.
    Somebody is going to have to make some hard choices. We 
have been willing to make some of those hard choices in the 
last 10 years, but nobody else has. And I am like Senator 
Smith. We have been sort of a voice in the wilderness saying 
there has to be a different kind of an approach.
    So with PMAs and when you represent a State now I realize 
that Senator Smith has got Portland in his district. I do not 
have any really large city. I have got a lot of dirt between 
light bulbs. And all of those folks out there are just like any 
other American. They have a right to the same sources of energy 
to power their economy as the rest of America does. And I am 
going to make sure that it is there as best I can.
    Well, I appreciate your coming in. We went over the 
questions. We locked it up today. Also, I would suggest to this 
administration to set up an interagency, someplace where you 
can bring all agencies together and say if we do this, how does 
it effect agriculture? If we do this, how does it effect 
agriculture? If we do this in agriculture, how does this effect 
transportation?
    And, you know, we are going to ride horses in the parade on 
Saturday. And when we mentioned horses, I will never forget 
this. The man who is in charge of the parade, he said, well, 
can't you cowboys walk? We do not especially want horses in 
this parade. And I said, you do not know cowboys. That is the 
reason they make pick ups and horses. We do not walk anywhere.
    Well, I will tell you what. We may spend more time on that 
horseback than we are in them pickups. But I would hope not 
because those pickups are very important to the State of 
Michigan. And I would not want to put the Governor here in any 
embarrassing position.
    But I look forward to working with you. And also on clean 
coal technology. And I serve on the Interior Appropriations. 
And we are going to make sure that you have got research 
dollars so that that can move forward. And I think the great 
future with your automobiles in the next generation is fuel 
cell development. And we just happen to have the resources it 
is going to take to build those fuel cells. And we want to talk 
to you about that also.
    So, thank you for coming today. And thank you, Mr. 
Chairman, for your kindness.
    Chairman Bingaman. Thank you.
    Senator Nickles.

          STATEMENT OF HON. DON NICKLES, U.S. SENATOR 
                         FROM OKLAHOMA

    Senator Nickles. Mr. Chairman, thank you very much. And 
welcome to my friend and colleague. Senator Abraham, I am 
delighted that you are here. I am delighted that President Bush 
selected you for this position. It is a pleasure to see a 
friend, Governor Engler, as well before you and supporting you. 
But you are taking on an enormous task. And you are taking on a 
task that is close to crisis. And you are up to that task. But 
it is going to take a lot of work. And it is going to take 
Democrats and Republicans working together to work with you and 
this administration to get some positive accomplishments to 
help meet these challenges confronting you.
    You mentioned in your statement that we are now importing 
57 percent of our oil. We are very vulnerable to foreign 
supplies. In 1973 and 1979 when we had curtailments and 
brownouts and shortages that Senator Feinstein is experiencing 
today in California, that was the last time we had significant 
curtailments is in 1973 and 1979. That means that factories 
were shut down, schools were closed, homes did not get power in 
those years, 1973 and 1979.
    What we do about it is important. Congress at that time did 
a lot of things. In 1979 and 1980, they passed a lot of 
legislation. Most of it did not do any good. As a matter of 
fact, most of it was harmful. Most of it was counter 
productive. But Congress wanted to do something. And I feel 
maybe a sense that we are in the process now. We want to do 
something. I want to do something. But let us make sure it is 
positive.
    If you look back in history, if you look at the five major 
energy acts that were passed as a result of the shortage, the 
crisis in 1979, Congress passed the synthetic fuels 
corporation. We abolished it later. It wasted a lot of money. 
We passed the Natural Gas Policy Act. It had some good things 
and some good things and some bad things, but it continued and 
extended price controls on natural gas. We finally decontrolled 
natural gas and it has worked. And it resulted in lower prices 
I might mention for consumers.
    Congress also passed the Fuel Use Act and said you cannot 
burn natural gas in powerplants and industrial facilities. We 
finally repealed the substance part of that. Congress passed 
the windfall profits tax. We finally repealed that. We taxed 
basically domestic production, did not tax imports. So we gave 
imports an advantage over domestic production. We finally 
repealed that. Also, there was an Energy Allocation Act which 
allowed politicians to distribute energy which was really 
absurd and we repealed that.
    So the major energy acts that were passed in the Carter 
administration basically to respond to the energy crisis in the 
1970's were serious mistakes. We need to make sure that we move 
forward and do not make serious mistakes, but do things to help 
alleviate the problem.
    If you are importing 57 percent today, Mr. Secretary and 
Mr. Secretary to be in a couple of days, that figure is quite 
likely to be 66 percent in 10 years. That means we are very 
vulnerable. And that means if hostilities become more hostile 
in the Middle East, we could really have a problem. And if 
California thinks they are alone, our entire country could 
experience shortfalls, brownouts, curtailments.
    And so we need to be very leery of that, aware of it, and 
try and take some efforts to alleviate it. And that includes 
energy from a lot of sources. That means increasing supply and 
not just in Anwar. It means nuclear power. It means producing, 
increasing production. It means conservation. It means a 
balanced approach. And as you said, a balanced approach and 
environmentally sensitive and sound management.
    So, you have an enormous challenge. I look forward to 
working with you. You have proven yourself to be a very 
outstanding legislator I think in the Senate and I think you 
will be an outstanding Secretary of Energy. And we look forward 
to working with you in the next several years. My complement to 
you for taking on this enormous task.
    Chairman Bingaman. Senator Cantwell. Senator Cantwell is 
gone.
    Senator Feinstein.

       STATEMENT OF HON. DIANNE FEINSTEIN, U.S. SENATOR 
                        FROM CALIFORNIA

    Senator Feinstein. Thanks very much, Mr. Chairman. I am 
very pleased to be a member of this committee. I asked for it 
largely because of two things. One was obviously what has 
happening in California right now with respect to energy. And 
the other is my concern over the nuclear labs. And I am very 
pleased I have had an opportunity to share both of these 
concerns with Mr. Abraham. I do intend to support your 
nomination.
    I do not have a lot of questions to ask you today. I 
understand you come into this new. You are right in the middle 
of the thicket. And it is going to be a very hard time. And I 
want you to know anything I can do to make it easier, I would 
be happy to do that.
    I do want to spend my time this morning saying what I think 
is happening, particularly in California. And I know it is very 
easy for some to say, oh. California is hoisted on their own 
petard. They enacted a bill in 1996 that was deeply flawed. Let 
them sit and work it out. That is a very dangerous philosophy.
    Let me tell you what I think has happened. The bill was 
very flawed. The reason it was very flawed, the main reason, is 
because it required California to buy 95 percent of its power 
on the day ahead or spot market.
    Now, that would have been fine if there was an abundance of 
power. The point is there was a shortage of power. And whereas, 
California will have 20,000 new megawatts on line by 2004 but 
it is just not possible to get on line sufficient new power by 
the summer.
    Additionally, a good deal of the power is actually 
contracted out of the State. Five to ten thousand megawatts, 
for example, normally would be going up to the Pacific 
Northwest. That changes when you go into an energy emergency.
    This morning, California starts the day with a deficit of 
62 percent of its power need if you can believe that. The 
blackouts that are going to go on today will effect all non-
essential services. Now, that is deceptive. Non-essential 
services are hospitals under 250 beds. There are retirement 
centers. There are schools. There are street lights. There are 
ATMs. There are businesses. For 62 percent of the State, that 
is an enormous impact.
    Additionally, California's two blue chip utilities, PG&E 
and Southern California Edison, are very close to bankruptcy. 
Now, why? Because on this spot market, they had to buy power. 
They could not pass through the cost of that power in excess of 
$64 a megawatt hour. And spot power was selling anywhere from 
$4,300 to $1,400 to even $3,000 at one point. You have to buy 
power at $3,000 a megawatt hour. And you can only pass it 
through at $64. That put the utilities in the position that we 
are in today of occurring for the past 6 months tens of 
millions of dollars of debt each day. That debt has run up to a 
net of $8 billion. Their bonds are today junk status. They are 
very close to going to chapter VII, not XI, but VII bankruptcy. 
Which means they then go out of that business.
    Now, there are those in California that would say, oh, let 
that happen. I am not one of them. The worst possible thing in 
my view is to have these two blue chip utilities--first of all, 
we have got hundreds of thousands of retirees that depend on 
those stock dividends. Secondly, subcontractors that depend. 
And tens of thousands of employees that depend.
    These utilities go into bankruptcy. That will have a strong 
ripple effect through the remainder of the California economy, 
the Western economy, the national economy, and, yes, the 
international economy. It is that big.
    Now, the State is kind of in a way--the market is so 
broken, not only do you not have the supply, but the rates are 
also fixed. So unlike, for example, where Arizona where 
consumer rates flow free, California has restricted rates. So 
you cannot pass those costs on. And you have a robust consumer 
market whose consumers say we cannot pay any more. We do not 
want to pay any more. Very badly broken market.
    Now, the bilateral contracts offer a solution. If you can 
negotiate them long-term at rates that are practical, these 
negotiations have been going on now for a month and a half 
under an Administrative Law Judge. The generators will not 
budge. And the State has not budged.
    Consequently, you have got a gridlock. My appeal today is 
on both sides. Please, you have got to work out a practical 
long-term contract. There are not other alternatives.
    Secondly, the State has to move in my view to securitize 
the debt of the utilities. In other words, give them an 
opportunity to gain back the credit. They cannot do that unless 
they can show a way that they can make their forward purchases 
and pay for them. And also, the banks will not loan to them 
unless they can show a way that they can make up this $8 
billion of back debt.
    The State could securitize this. Any rate increase that is 
necessary could be spread long-term, say for 15 years, on the 
individual rate payers. But you have got to bite the bullet to 
do this. And there has been I think a broad reluctance to bite 
that bullet.
    Now, last night the Governor issued this statement at 
10:15. I had a long conference call with the four principle 
generators in California, the CEOs of those companies, Duke, 
Southern, Reliant and Dynergy, with the four legislative 
leaders in a bipartisan effort.
    Those generators were prepared to pull down the utilities 
into bankruptcy tomorrow--that is today--at 12:01 p.m. They 
have agreed, if legislation passes tomorrow, they will not do 
that. They will provide us the power necessary to keep the 
lights on.
    I very much hope that is happening today. Because we are 
going to lose life and lose business. And this is the tip of 
the iceberg. Now, I am one that believes that the State has to 
move. The State legislators have to move. They have got to 
amend that flawed bill. They have got to do it. They have got 
to allow the utilities to generate their own power, not divest 
of the power. I believe they are willing to do this. They have 
to permit full cost based contracts bilaterally, negotiate it. 
That will enable this situation to be stabilized.
    It is also my belief that FERC has not acted. FERC has 
found the rates, the rates I spoke of, $800, $1,400, $3,000, on 
the spot market, to be both unjust and unreasonable. But FERC 
has not carried out the second part of its responsibility which 
is then to set those rates.
    I sincerely believe that there is a Federal responsibility 
here through FERC. If FERC is going to sit by and allow this 
entire Western States to self-destruct, because that will 
happen, rather than carry out their mandate and set power 
rates, when rates they find are unjust and unreasonable, it is 
a disastrous situation for this Nation.
    This is why I will introduce legislation that will give 
this Secretary--he may not want it--the right to set these 
rates. If they are found to be unjust and unreasonable. And 
they will be cost based. So that there can be a pass through, a 
margin for profit, a margin to recover costs, and will permit 
any Governor of these 11 States to opt out. If the Governor 
does not believe there is a need for this, that governor will 
be able to opt out.
    Now, what will this do? To be temporary, it should only be 
until the State is able to bring some additional power sources 
online. There is no quick fix. We are going to live with this 
for the next year and a half or two years. And it is 
extraordinarily complicated.
    So what my appeal is today to this new Secretary is please 
look at all of these elements. Please understand no one thing 
is going to solve it. We must put additional generating 
facilities online on a fast track and do everything we can.
    I just got the note. I did not mean to get going here. My 
time has expired. But I do want to say that I am prepared to do 
whatever I can to help you, Spencer. This is a very difficult 
situation. Anybody who thinks this is just going to stay with 
California, as Senator Nickles said, is dead wrong.
    So what I want to say to Oregon and Washington and the 
other States is I want to work with you. I want to see us get 
ourselves out of this solution in a way that is fair to every 
State in the Union. Because it is going to eventually effect a 
number of them. Thank you very much, Mr. Chairman.
    Chairman Bingaman. Senator Cantwell.

        STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR 
                        FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman. And, Senator 
Abraham, congratulations on your nomination to this post. It is 
a great honor for me to serve on this committee as a new 
member. I think that out of the last 50 years, probably at 
least 45 of them there has been a member from Washington State. 
Because these energy issues are so important to the Pacific 
Northwest, not only the Bonneville Power Administration--and I 
appreciate your comments earlier about the Power Market 
Administration and your support of them--as well as Hanford and 
nuclear waste issues.
    If I could on a few issues, some of my colleagues have 
already covered, and that is the particular concern of 
Secretary Richardson's order requiring suppliers to sell to 
California. And I hear my colleagues comments about working 
together as a region and we want to do that. But I want to 
reiterate Congressman Wyden's statements about the great 
concern that we have about the financial security and the 
consequences that it places on the Northwest when those kind of 
emergency orders are put in place.
    And so I want to reiterate my strong concern for those 
types of solutions that put our industries and consumers at-
risk within the Northwest.
    And I do not know if you have any further comments on that.
    Senator Abraham. I think as I said at the outset of my 
opening statement, Senator, that as we assume office as an 
administration and should I be confirmed, when we are looking 
at these issues, we will be looking at them both with the goal 
of--I mean, we understand the urgency--and I stress that--as 
well as the concern of the incoming administration. And it is 
not a minimal concern. It is a very strong one.
    And our goal is to not just see us solve these problems in 
the short-run, albeit the short-run is very pivotal, but also 
on a long-run basis. And any kind of short or long-term 
solutions, as I said in my statement, need by necessity to 
include a regional, not just a State-by-State kind of analysis. 
We certainly will want to have the counsel of members 
throughout the region recognizing the interdependence here of 
energy sources.
    Senator Cantwell. Given that, what would your thoughts be 
on a west-wide price cap as a short-term?
    Senator Abraham. As I said already, I think it is premature 
for us today to--for me at least today to speculate about what 
we might offer in terms of policy options, recognizing we will 
be in a position to act in a few days.
    But there are two reasons for that. No. 1, a number of 
discussions have been going on between the current 
administration and the various parties as well as legislators 
and so on. We have not engaged in those discussions. I have not 
heard from those various participants and feel that is an 
important prerequisite to making any kind of judgment as to the 
kinds of policies we might follow.
    And I do not want to--if I say, well, maybe we are open to 
that idea or maybe we are not, it will send signals that I 
think are premature to send. We just have not looked at this at 
all from the standpoint of having those discussions. And I want 
to have that opportunity.
    I also want to make sure that--and Senator Feinstein 
touched on even today very important decisions may be made in 
the legislature in California that effect not just California, 
but the whole region. I think it would be premature to start 
talking about the next set of policies when we really do need 
action as soon as possible. I share the point that Senator 
Feinstein made about the need for action to be taken today if 
possible by those who can.
    Senator Cantwell. I appreciated your comments in your 
statement about the connection between the new economy 
businesses and their access to a reliable and stable source of 
energy. The Northwest has a long built in economy based on 
those stable and reliable sources. And, yes, now it is leading 
the way in a new economy that is very much interdependent on 
those issues as well.
    We have long had the Pacific Northwest Preference Access to 
Federal Power from the Bonneville Power Administration. And 
obviously, we have suffered some of the adverse environmental 
impacts of that.
    Can you tell me of your commitment to retain the benefits 
of BPA, particularly the exclusivity for Pacific Northwest?
    Senator Abraham. I do support that continuation. I would 
just add, your point about the new economy is a really 
important one for us as we move forward in the development of 
policy to take into account. I think a lot of the premises on 
which existing energy policy has been developed was in the 
context of an economy that we no longer are in. And as we move 
forward with the development of a comprehensive set of 
recommendations and policy, we really do have to re-analyze the 
kinds of energy needs we will have in light of the transition 
that is going on across this country.
    I mentioned in my statement the direct connection between 
Internet usage and electricity consumption. And that is just 
one example of many. We obviously have heard and seen the 
comments made by leaders in the high tech industries about the 
needs they have for certain types of energy sources if they are 
going to be able to be producing the kinds of products that 
they make in terms of the component parts to new technology 
products.
    And so I think as we move ahead with this we will be 
looking to members of this committee--particularly ones who 
come from that industry to talk about and share with us some of 
that insight. Because I think it really is a pretty central 
part of the initial analysis we have to conduct.
    Senator Cantwell. Turning to another subject, Hanford 
cleanup. And obviously, hoping to get a commitment today about 
the priority within the Department of that as a major priority. 
As well as we have had a tri-party agreement to set milestones 
that need to be met. And I guess I am looking for a commitment 
there to work with our State and to live up to the obligations 
of that agreement and the milestones that are set.
    Senator Abraham. We recognize--I do at least--the need to 
meet commitments that have been made. I think we all need to 
work together. And we have several members of the Budget 
Committee who are part of this committee to make sure that we 
have the resources to do so.
    The environmental management budget of the Department of 
Energy is right now pegged at something in the vicinity I think 
of about $6.75 billion a year which is around 34 percent of the 
total departmental budget. The projections that I have seen for 
long-range cleanup commitment to address all of our sites are 
in the vicinity of $2 to $3 hundred billion over a number of 
decades.
    But I think we have to within that long range projection 
identify urgent challenges of which I would put Hanford on the 
list as well as areas where we can move fairly quickly 
hopefully to bring closure to sites that are in the position of 
being cleaned up. Rocky Flats being an example there.
    So we want to work with you to address that. As I think 
many observers are aware, the Hanford site has something in the 
vicinity of 177 underground tanks of which some 65 to 70 are 
leaking. That is an unacceptable situation that will take a 
long time to address, but which needs to be addressed as a 
priority. And I am looking forward to working with you to make 
sure that we fund it at a level that allows that to happen.
    One of the problems I know that the Department has had is 
that the budget that is in place today, while addressing a lot 
of the maintenance concerns, is now allowing situations to 
worsen and has not allowed us to make as much progress as we 
need to actually clean up the sites. The overhead and the 
security issues by themselves have consumed too much of that 
budget. We need to get beyond not just that level, but to 
actual site closures.
    Senator Cantwell. I appreciate that. I know that my time is 
up. I just think that the deal that they are looking for in 
2001, the total cleanup was about $1.2 billion. And then 
additional resources obviously for the cleanup efforts of the 
Hanford Columbia River short. Plus, the vitrification, the 
waste classification that is coming online. That facility is 
looking for a separate item as well. So obviously, a huge 
budget item within your budget. So I look forward to working 
with you.
    Senator Abraham. Thank you.
    Chairman Bingaman. Senator Schumer.

      STATEMENT OF HON. CHARLES E. SCHUMER, U.S. SENATOR 
                         FROM NEW YORK

    Senator Schumer. Well, thank you very much, Mr. Chairman. 
And I am delighted to be here for the first time as a member of 
this committee. I want to thank you for your hospitality as 
well as the ranking member.
    Chairman Bingaman. Before any of you three arrived--I think 
Maria was here, but I did indicate that we welcome all three 
new members on the Democratic side. And if we have new members 
on the Republican side, we will equally, heartfelt welcome 
them. So go right ahead.
    Senator Schumer. Well, thank you, Mr. Chairman. And I just 
apologize to the membership and to Senator Abraham for not 
being able to be here the whole time. As you know, we have 
whole lots of hearings, including the one in Judiciary. So I 
apologize for that.
    I am also excited to be the first New Yorker on this 
committee since the late 1970's when Daniel Patrick Moynihan 
was on this committee. And I guess the only North Easterner on 
this committee since Senator Jeffords left a few years back.
    And I want to welcome Senator Abraham to this confirmation 
hearing. We have known each other quite well. We worked 
together on the Judiciary Committee. Spencer, you are a man of 
integrity. You have dealt with both sides very, very fairly. 
You went out of your way to be helpful to me in a number of 
instances on the immigration subcommittee when you were the 
chair. And you are an extremely intelligent dedicated kind of 
person, the kind of person the founding fathers would have 
wanted to go into government. So I am glad that you are not 
leaving government, but rather moving on--I guess I cannot say 
to greater heights, but to lateral heights with us here.
    Senator Abraham. I only would hope that all the members 
will remember how well they thought of me today as we move 
ahead.
    Senator Schumer. I have a feeling, Spence, that will be the 
case.
    Senator Abraham. I hope.
    Senator Schumer. And I think that you will be an excellent 
Secretary. And I have every intention of supporting your 
nomination.
    Let me say a couple of things and just ask for your 
judgment. One of the reasons I sought to be on this committee 
is I do believe we have an impending energy crisis. I have seen 
it in my State of New York. Last summer for the first time in a 
long while, we struggled with brownouts. They were small and 
controllable, but they are a real problem.
    And the situation is very, very simple. And I am sure it 
has been touched on by many of the people who spoke before me 
this morning, many of my colleagues. That supply is basically 
flat and demand will go up.
    And one of the things I worry about is if our economy sort 
of cools down a little bit, we will forget about this. The 
long-range prognosis is that the world economy will grow. I 
read somewhere that China alone is expected to have 170 million 
new cars, cars that nobody drives right now, as their economy 
grows over the next 15 years.
    That is just something to think about. As the rest of the 
world and as I think our economy continues to grow, we are 
going to have this problem. And one of the problems we faced is 
we had it so good for so long that there was not a national 
focus on energy policy and we are going to need it.
    I guess my second observation is it seems there is 
something of a deadlock in Washington where mainly--this is not 
exclusive on either side, but one side of the aisle focuses on 
supply. One side of the aisle focuses on demand. And we do not 
get much done.
    I look forward to working with you. There is not a better 
place for a 50/50 Senate than the Energy Committee. Because it 
means that both sides have to be put together. And it seems to 
me that that is a policy that makes sense to. That when demand 
increases and supply is flat, we have to do things to both to 
try to limit the demand increase without limiting economic 
growth and increase supply.
    And I for one am willing to work with you on both sides of 
that equation, not just on one. And I think you are the perfect 
guy to help put it all together because you have had such good 
relationships with Senators on both sides of the aisle.
    So I do not want to ask a whole lot of questions having not 
been here. The questions I will ask probably have been asked 
already by my colleagues.
    But I would just like your comments on that general 
proposition. Then I will yield back my time, Mr. Chairman.
    Senator Abraham. Senator, I agree wholeheartedly, as I 
indicated in my opening statement, the need for us to develop a 
comprehensive energy strategy that is balanced, that focuses on 
both the supply and demand side.
    But I think we--you know, one of the thoughts that went 
through my mind as you were commenting, as I was looking at you 
and Senator Cantwell, is that in the area of technology and the 
new economy, one of the challenges we are going to have I think 
is going to be to address the demand side in light of new 
technologies that are being developed that are extraordinarily 
attractive to the people of our country. And I think, again, I 
mentioned and used as a statistic in my earlier opening 
statement that the ten percent of the electricity used in this 
country now appears to be linked to just the use of the 
Internet.
    How we address the demand on that particular and singular 
challenge seems to me to be a pretty difficult, to say the 
least, problem. Because I look at just my own friendship 
circle, my family, and all people that all of us certainly know 
whose use of Internet will be very difficult to curb or to 
reduce.
    So it will be tough and it will call upon all of us to be 
optimists I think probably is the best word as we move ahead. I 
think there are two ways we can look at this situation, as a 
challenge to America. We can look at it in a very pessimistic 
way in a sense that we cannot address these challenges they are 
so onerous. I do not believe that to be the case at all. I am 
very optimistic we can make some progress. I look forward to 
working with you as we have talked.
    Senator Schumer. Well, thank you. And I would just make the 
comment technology works both ways.
    Senator Abraham. Right.
    Senator Schumer. One in terms of the demand, the new use of 
the Internet and everyone has a computer and a fax machine. But 
it also has tremendous potential. You know, New York State, 
where General Electric has had its labs, we have a lot of 
electricity oriented new companies, particularly in the Albany 
area, because of the GE labs in Mistyuna.
    And two companies that are very interesting and have 
potential, one is really on the verge of being able to create 
economical fuel cells which produce electricity in your home.
    You know, it is a very simple little chemical equation. 
They take the oxygen. You have a little pot of water or 
container of water. I am sure I am not doing justice to this in 
its full scientific flourish, but they take apart the oxygen 
and hydrogen atoms, put them back together, take them apart, 
put them back together, and generate energy as a result of that 
and use a small amount of natural gas to do it. And you do not 
need all the transmission and everything else.
    And it costs about $20 a month for the supply of natural 
gas to do it. Much cheaper to the consumer. Of course, the 
machine itself is so expensive right now that it does not quite 
work. But every year the cost goes down and it is something 
that we might want to look at and encourage.
    Then they have another company over there in Latham, a 
suburb of Albany, where they are developing the ability using 
super conductivity to send eight times the amount of power 
through existing transmission lines that they can do right now. 
And that presents tremendous potential for areas like New York, 
particularly downstate New York City and Long Island, where one 
of our problems is even if you build a new powerplant upstate, 
they do not have the transmission capacity to get it downstate.
    So there are a whole lot of things, exciting things, 
optimistic things as I think you accurately put it, that we can 
look at and work towards together. If we have a little bit of 
will and a little bit of compromise, I think we can lick this 
crisis before it occurs. Thank you, Mr. Chairman. And thank 
you, Mr. Secretary.
    Chairman Bingaman. Thank you, very much. Let me just advise 
all members that if you wish to submit additional questions for 
the record, they can be filed with the committee staff anytime 
before 5 o'clock tomorrow, Friday. We will now have another 
round of questions here and these will be limited to 5 minutes 
per member.
    Let me start with a couple of questions and then go to 
Senator Murkowski. One issue that is very much in your 
jurisdiction relates to the non-proliferation programs in the 
Department of Energy. Former Senator Baker, our Majority Leader 
here for many years, and Lloyd Cutler chaired a task force that 
has looked into this issue and made some recommendations.
    I do not know if you have had a chance to look at their 
report. A major recommendation to the new Congress and the new 
President says the President in consultation with Congress and 
in cooperation with the Russian federation should quickly 
formulate a strategic plan to secure and/or neutralize in the 
next 8 to 10 years all nuclear weapons usable material located 
in Russia and to prevent the outflow from Russia of scientific 
expertise that could be used for nuclear or other weapons of 
mass destruction.
    I would ask if you have seen that recommendation, if you 
have any position on the recommendation, and if you intend to 
follow it.
    Senator Abraham. Senator, I have not read the entire 
report, but I am certainly familiar with it and with the basic 
recommendations it makes. And they are obviously consistent 
with some of the work that has been done and continues to be 
done at the Department of Energy.
    As you know, in the context of non-proliferation, we have 
worked on a number of fronts, primarily with respect to Russia. 
We have programs that are designed to provide support for the 
actual security of existing or past facilities to protect the 
material that is there.
    We have programs that are designed to address the issues of 
the technicians and scientists, also alluded to in the comments 
you made that are part of the report to try to--to the degree 
we can--prevent the talent from somehow becoming available to 
those who would use weapons of mass destruction 
inappropriately, the rogue nations and other questionable 
acquirers of such talent.
    I know that there have been concerns expressed about the 
effectiveness of that particular program. It is one of my 
priorities to become more familiar with.
    We have the ongoing program designed to purchase highly 
enriched uranium from the Russian sources with a pretty 
substantial commitment in terms of the magnitude of what we 
might purchase. I think we have already purchased 110 or so 
tons of highly enriched uranium which has in effect made that 
industry in America more or less recede.
    And we, of course, are in and have negotiated with Russia 
with respect to weapons grade plutonium conversion. We have not 
gotten to the point where although we have kind of agreed upon 
numbers and I know we have moved forward with respect to the 
design of facilities that might be used for such conversion and 
resources for that to be done on the Russian side do not exist 
at this point. And I know that we are looking to others to 
perhaps help in that process.
    So that is a kind of long about way of saying that this is 
a high priority. Each of these categories will be. Whether 
every component of the report is one that I would recommend to 
the President or to the inclusion in our budget, I would have 
to defer until I have analyzed every part of the report.
    I have talked or actually did not have a chance to meet 
with, but I know that Senator Baker wanted to have a discussion 
at some point. As soon I am confirmed, I will talk with Lloyd 
Cutler and him to examine these. And, of course, General 
Gordon's role in this is very important as well. He and I have 
briefly discussed this as an extraordinarily important part of 
the national security issues we face.
    Chairman Bingaman. We passed a law in the 103rd Congress 
prohibiting research and development of low yield nuclear 
weapons. Can you assure the committee that under your 
leadership the Department of Energy will abide by that 
provision of law?
    Senator Abraham. That was prior to my arrival here. So I 
will not try to comment beyond indicating it would be my 
intention to fulfill the commitments that are statutorily 
required of the department and if that is a statutory 
commitment, then certainly it would be my duty to fulfill it.
    Chairman Bingaman. Thank you, very much.
    Senator Murkowski.
    Senator Murkowski. I will try and be brief. Senator Wyden 
brought up an interesting point that I think deserves 
examination by your Department. And that covers the issue of 
the alleged West Coast price adjustments on oil from my State 
of Alaska that would be exported. And I would like the record 
to reflect that there has been no oil exported from Alaska 
since roughly April of this year. Excuse me, of last year.
    As a consequence, there seems to be a little necessity to 
bring some background into the Alaska oil historical picture. 
Alaska when it came online produced about two billion barrels a 
day. That production is down to roughly one million barrels. At 
that particular time, the West Coast refineries could not 
accommodate the excess oil. There was surplus oil.
    From a business point of view, all Alaskan oil has to move 
in U.S. flag vessels. It cannot move in a foreign carrier. So 
the cost of transportation is higher than it would be if you 
moved it in a foreign carrier. The Jones Act requires a 
carriage of U.S. products and passengers in U.S. flag vessels. 
There is no exception to that.
    So as a consequence, a significant maritime fleet was built 
up. Most of that fleet was raised for shipyard use in the 
Portland shipyard that was built by public funds from Portland 
as I think a pretty good investment.
    But since my time is limited, I do want to advise you that 
the production has dropped to a million barrels a day. The 
surplus that was formerly excess to the West Coast, moved for a 
while through the Panama Canal. Then a pipeline was built 
across the isthmus of Panama and the excess oil was moved into 
the Atlantic and then in the Gulf Coast refineries.
    But as the markets for production increased from Venezuela, 
from Mexico and so forth, they were able to supply the 
refineries in the Gulf Coast.
    But the point is the Alaska oil production declined as 
Prudhoe Bay production declined. It is currently about a 
million barrels a day.
    Now, as a consequence, we formally had a law that 
prohibited the export of Alaskan oil. It was Alaska specific, 
did not require California or any other State, but just Alaska. 
Congress in 1995, passed, and the President signed, legislation 
lifting the ban on exports of Alaska and the north slope crude 
oil.
    As a result of that legislation, we brought in GAO as a 
watchdog. And they reviewed the impacts and found the 
following. And these are quotes. One, ``lifting the ban raised 
the relative price of ANS and comparable California oils 
between 98 cents and $1.30''. That was crude oil only. That is 
not gasoline.
    Secondly, ``West Coast consumers appear to have been 
unaffected by lifting the ban because the price of important 
petroleum products they use has not increased''.
    Finally, third, ``Future oil production should be higher 
because higher crude oil prices have given producers an 
incentive to produce more oil''.
    Now, that is what they found. Additionally, in the statute, 
it provided the President with the authority to revoke or 
modify ANS exports based on recommendation from the Secretary 
of Commerce and Energy--which of course would be you--if the 
President determines they are responsible for supply shortages 
or oil price increases.
    So as a consequence, I assume you will uphold the law 
regarding the ANS export issue. Unless the law has changed.
    Senator Abraham. I will.
    Senator Murkowski. Now, the FTC, currently with my support 
and Senator Wyden's, is investigating gasoline prices on the 
West Coast. And I think that is an appropriate thing to do.
    I would remind my colleagues--and this is their business 
within their own States--that Oregon has no refineries. That is 
a rather dangerous situation. In my own mind, it is somewhat 
similar to California who has decided that they do not want to 
produce power. They would rather get it from outside. But that 
is the business of the State of Oregon.
    All products shipped come from some other area outside the 
State of Oregon. And Oregon's gasoline taxes are some of the 
highest in the Nation, about 42.4 cents a gallon.
    Now, as we look at this issue, again I would advise you 
that there is currently no oil exported Alaska oil. Nor in my 
opinion is there a likelihood of it. Because we do not have a 
surplus anymore. And we are consuming and using more.
    I want to use the balance of my time, however, to request 
that you folks take a look at the role of public power vis-a-
vis investor owned power. Because you are going to get into it. 
And this committee has been into it for a long time.
    And I am not degrading the role of the PMAs, but we should 
remind ourselves that power marketing, which Bonneville is one, 
was paid for by all the taxpayers of this country, designed to 
serve a region. And it certainly served the Pacific Northwest. 
It has given them an aluminum industry. It has given them very 
bountiful agriculture and various other things which are 
meritorious. And as a consequence, when we try in Alaska to tie 
our 1,000 miles of coastline with some kind of an inter-tie, we 
need Federal help, taxpayers from all the States.
    So I do not begrudge that. But I think you are going to 
have to look at various aspects that have developed. Because 
there has been times when Bonneville had surplus power. As a 
consequence, they have negotiated contracts, take or pay 
contracts. As a consequence, we have seen some of the aluminum 
industry quit producing aluminum and sell electricity. It is a 
good business. They can make money at it.
    We have seen a situation with new energy ventures in Los 
Angeles where you should look into the circumstances because it 
appears that there was a negotiated deal made for surplus power 
to be wielded from Bonneville down to Los Angeles and resold. 
Who is entitled to that profit? Is it Bonneville? Or is it 
individuals in an office somewhere simply making a buck? I do 
not begrudge them that, but we need to have some clarification 
on these side deals if we have no access to what the prices 
were, what the terms of the contract were. And this is a quasi-
government activity. The activities associated with a PMA.
    We have situations where we know the Seattle power, the 
municipal power and light company, does a great job in Seattle. 
Buys power from Bonneville because they can get it cheaper than 
they produce it. And they wield it down to Southern California 
and sell it to the Nordstrom stores under contract. Nothing 
wrong with that, but it displaces investor owned.
    As we look at the situation in the Northwest where the 
shortage is becoming more apparent, even in Washington and 
Oregon, let alone California, we ought to take a look at the 
appropriate role of these PMAs. And I am sure my friend from 
Oregon, both of them, would support this. Because there are 
some inconsistencies. And I happen to believe that charity 
begins at home, whether it be Oregon, Washington, Alaska, 
California or New Mexico. But there are just too many 
unanswered questions out there at a time when our friend says 
the reservoirs are at an all time low. And when summer comes, 
look out. Because you are not going to be able to meet your own 
current demand.
    So I just leave you with that rather profound elongated and 
muddy statement relative to realities associated with your new 
responsibility. Thank you, Chairman Bingaman.
    Chairman Bingaman. Thank you, very much.
    Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. As I said to the 
nominee, this question of Alaskan oil exports has never been a 
subject for the faint hearted. And that you have gotten a sense 
of that.
    Look, the chairman is absolutely right in saying there are 
no exports taking place today. The problem is we wanted to put 
in place a permanent ban to ensure that in effect the Federal 
Government's position with BP Amoco was not just we will trust 
them. And so that is why we are asking for a re-examination.
    Chairman Bingaman. I assume you are talking about all 
exports of oil outside the United States.
    Senator Wyden. I was just getting to that point, Mr. 
Chairman. Because I think that one area where there may be some 
common ground--and we ought to explore it. And the chairman and 
I were just visiting about it--is the question of perhaps given 
this dependence that our country has on foreign oil, 60 percent 
or thereabouts, there ought to be a complete ban on the export 
of domestically produced oil given the national security 
ramifications.
    Mr. Secretary, what would be your reaction to something 
like that? And understand, the chairman and I have just visited 
about this informally. This is going to take a considerable 
amount of research and analysis. But what would you think about 
that conceptually?
    Senator Abraham. It will take a considerable amount of 
research and analysis I think is my reaction. I think that as 
we develop--as we try to accomplish what virtually every member 
of this committee, either today or in the private meetings I 
had leading up today, has said to me we need both a balanced, 
but a comprehensive policy that analyzes very source, 
determines how we get there.
    And I think that as we examine sources, we have to examine 
them, not just from the standpoint of how to produce more in 
terms of permit processes or of tax laws, but also in terms of 
how market forces would apply. And I mean no disrespect to the 
position of either the Senator from Oregon or the people, the 
Oregonians' position or anybody else. I would want to analyze 
the market impact. Because it certainly sounds like at least 
the study that Senator Murkowski alluded to had found perhaps 
that there were some effects that were not necessarily 
anticipated when you think of this in a kind of abstract sense. 
But at least my first blush reaction is that I would need to 
certainly find out a lot more about the issue before I would 
hazard a judgment in terms of whether or not it is----
    Senator Wyden. I understand that. Know that this GAO report 
that was cited was done before the Oregonian put the e-mail on 
the front page of the paper attesting to BP Amoco's desire to 
deliberately stick it to the West Coast consumer by discounting 
sales to Asia knowing they could more than make up for it with 
higher prices on the West Coast.
    I would like us to work on some approaches that find common 
ground. And I think one of the areas we ought to take a look at 
and examine is the question of saying that when you produce oil 
in this country, it stays in this country. I hope that we can 
look at it.
    One other issue that I would like to raise with you and 
that is this question of transporting gasoline products from 
the Gulf of Mexico to the West Coast. Our understanding is that 
it costs between 7 and 8 cents per gallon. As you can 
understand, a big part of the concern in the West that we are 
paying the highest prices in the country, 10 to 20 cents higher 
than the national average, so transportation costs, while not 
the entire driving force behind these increases, is certainly 
significant.
    Would you look into the question of whether there are 
legal, logistical or other kinds of constraints to figuring out 
a way to get the gas by tanker or pipeline to the West and 
provide some relief to our region?
    Senator Abraham. I would. This is an area of some interest 
to me because we confronted gasoline prices back in the Midwest 
last summer that I am sure many of you not only observed, but 
probably recall me preaching about on the Senate floor at the 
time. In fact, suggesting we should temporary suspend gas taxes 
to abate the problem to some extent temporarily.
    And what we discovered, at least what I discovered, in that 
period, was that there were a number of factors that we really 
had not even recognized that compounded this problem that were 
logistical in nature to a certain extent, that were regulatory 
in nature to a certain extent.
    Probably the biggest problem was actually a rupture in a 
pipeline that was supplying the southern part of Michigan. And 
so that on top of other factors, including OPEC's decision to 
reduce production that took place shortly before the prices 
spiked were the big parts of it that kind of got my interest in 
this area peaked. And so it would be something that I would 
like to see us examine, not exclusively with respect to the 
West Coast challenge.
    Senator Wyden. Mr. Chairman, my time is up, but I look 
forward to supporting Spence Abraham this afternoon. I think 
there will be strong bipartisan support in the committee and it 
is very much deserved. And I thank you.
    Chairman Bingaman. Thank you, very much. I know Senator 
Domenici indicated right now that he would be right back and 
does have another question or two. While he is on his way, did 
you have an additional question? I can ask you one just so we 
are not cooling our heels. You are familiar with the nuclear 
cities initiative that the Department of Energy has engaged in 
with Russia to accomplish work there.
    Much of the success of that is a result of the efforts of 
the Department of Energy employees working with officials in 
these secret cities, former secret cities, on non-weapons 
research and commercialization activities.
    There have been some difficulties, however, in arranging 
for Department of Energy employees to meet with those 
officials, not problems with the Russians, but problems with 
our own Department of State. I do not know if you are familiar 
with any of that, but I have discussed it with others in the 
administration and the incoming administration as well.
    I would just ask that once you are in the position of 
Secretary of Energy if you would look at that issue and see if 
you could not come to a better agreement with the Department of 
State. So that they would be more cooperative in allowing 
Department of Energy officials to go to Russia and do this 
work.
    Senator Abraham. I know that you have particular knowledge 
about and expertise in this area. And I would be more than 
receptive to getting your guidance as to whatever impediments 
we have on our side and then to carry forth with the new 
Secretary and the appropriate officials at State to try to 
address it.
    Obviously, the nuclear cities issue as I mentioned a few 
minutes ago in my comment about non-proliferation challenges is 
one that has suffered a certain amount of criticism and 
concern. And if we can find ways to address some of those 
concerns, if they are impediments that we are creating 
ourselves, then it makes sense to me to me that we would want 
to try to do that as soon as possible.
    Chairman Bingaman. Senator Domenici, go ahead.
    Senator Domenici. Thank you, Mr. Chairman. And thanks for 
waiting for me. I apologize. I have three questions I am going 
to submit for you in writing. At your leisure, you could answer 
them.
    I would just want to make two closing observations. You 
have heard a lot today about the challenges and how tough a job 
you have undertaken. I think you know tough jobs make heroes. 
Tough jobs are what make people do great things. And frankly, I 
think you have one of the most difficult situations right now 
in terms of our future growth and prosperity that we have had 
in a long, long time. And I hope you succeed. Because if you 
do, the country will be much better off.
    I want to tell you in the process you will experience some 
very exciting and fun things. Because you will attend that the 
national laboratories, all ten of them, I am very familiar with 
all of them but most familiar with the nuclear ones which do 
much civilian work. You will experience some of the most 
exciting science that you could imagine coming into your life.
    At some of the labs, the next generation of computer chips 
are now a working product between a national laboratory that 
you will be running and all of the computer chip companies of 
the world. And what they say they will soon have for the world 
is incredible in terms of computer chip capacity. And you will 
be able to mark part of that as having been done by the stars 
in science at the Department of Energy. In fact, that one I am 
talking about is international. So everybody is going to put 
money into get the next computer chip and it is incredibly more 
powerful than what we have got and will be ready for the world.
    In addition, you have heard a lot about genome. You 
remember when I used to talk a lot about it. Believe it or not, 
in short order the computer capacity of one of the major 
laboratories will be melded with the genome research that is 
going on to determine much more quickly the relationship of 
chromosomes, which are very complicated, to illness. And that 
will be a great big venture that will be announced shortly 
between one of the national labs and one of the companies that 
does that. That is exciting. If you were Energy Secretary, you 
could be present at that. And instead of worrying about all of 
this, you could be very excited about doing it.
    And my last remarks have to do with something that also is 
subject to your control, but Secretaries of Energy have not had 
to do a thing about it. And that is the nuclear navy of the 
United States. And I want to just tell you something about it 
because I think it will help you as you think of nuclear power.
    And although a small group of people who tremble when you 
talk it and who worry so much about low level radiation they 
have stymied everything, anything that has to do with nuclear, 
since 1954 when the Nautilus put the first atomic engine in it 
was put into the oceans of the world, we have continued to put 
them in. We have over 120 right now sailing the seas of the 
world with one or more--believe it or not--nuclear reactors 
onboard running the boat with the waste that comes from it on 
the boat until they dispose of it.
    And guess what? They go to every seaport in the world 
loaded with these nuclear reactors and nobody worries about 
them except one place in Australia which has a non-nuclear 
policy, non-nuclear power policy.
    So it serves notice that if we are looking for the next 
generation of power for Americans, we really ought to look to 
the next generation of nuclear power also. You will be told 
much about this. And, of course, you will probably be told do 
not touch it because of politics.
    I say touch it. Let us get a waste disposal policy to start 
getting rid of the nuclear waste. France is doing it with 
immunity and has 78 percent of their energy is nuclear. Why 
could not the country that invented it, that put all the 
technology into it, whose Energy Department or its predecessor 
actually made them, and whose U.S. Navy sails the seas and 
everybody lets them in all the ports because there is nothing 
dangerous about them?
    I am just hopeful that you will begin to get some positive 
reactions to this. Because our Energy Department without a sign 
up there that says we are also looking at nuclear energy is not 
an energy department of the United States. At least it is not 
gifted enough to be called an American energy facility or 
department.
    I am sorry to give you speeches today, but I guess you know 
I feel pretty strongly about this. Because I think we are 
making a mistake. Good luck.
    Senator Abraham. Thank you.
    Senator Domenici. I look forward to voting for you and 
working with you. Thank you.
    Senator Abraham. Thank you, Senator.
    Chairman Bingaman. Thank you, very much. Before we 
conclude, I wanted to particularly thank some of the people who 
helped prepare for the hearing today. Andrew Lundquist, of 
course, from this committee, Paul Longworth with the Armed 
Services Committee, Clay Sell from the Appropriations Committee 
in particular. Senator Abraham, subject to your assurance that 
you will respond to any additional questions we have in writing 
some time in the next week, we would go ahead at 2:30 with a 
vote here in committee on reporting your nomination.
    Senator Abraham. Thank you. I will be happy to respond. And 
I might also if I could just have the opportunity to submit for 
the record the names of some other individuals who participated 
in the efforts on behalf of the preparation team here to make 
today's hearing on our side more effective.
    Chairman Bingaman. We would be glad to receive that. And 
the committee will stand in recess now until 2:30.
    Senator Abraham. Thank you, Mr. Chairman.
    [The information referred to follows:]

    Listed below are the people who helped with the initial 
confirmation:

    Andrew Lundquist
    Paul Longsworth
    Joe Kelliher
    Clay Sell
    Henry Gandy
    Francis Norris
    Ted Garrish
    Kyle McSlarrow
Joe McMonigle
Ceasar Conda
Bill Martin
Kevin Kolevar
Chase Hutto
Majida Dandy
Michael Ivahnenko
  

    [Whereupon, at 12:34 p.m. the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                                   The Secretary of Energy,
                                  Washington, DC, January 30, 2001.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: I want to thank you and Senator Bingaman for the 
opportunity to appear before the Committee on Energy and Natural 
Resources as Secretary-designate for the Department of Energy.
    Enclosed for the record are the answers to the post-hearing 
questions submitted to me in writing by members of the Committee.
    Please let me know if I can be of any further assistance.
            Sincerely,
                                                   Spencer Abraham.
[Enclosure]
              Response to Question From Senator Murkowski
    Question 1. There has been lot a concern about maximizing all of 
our sources of energy. Nuclear energy, as you know, provides over 20% 
of our nation's electricity. Nuclear energy is safe, reliable, and non-
emitting and produces high volumes of electricity that are an essential 
part the nation's base-load generating capability. In the current 
energy crisis, there is much talk about new generation nuclear 
reactors. Over the past decade, operating gains in the current fleet 
have created the equivalent of 23 additional nuclear plants in the U.S. 
There is potential in the near term for building new, proliferation and 
incident, resistant nuclear plants. The indemnification for our current 
fleet and any new commercial plant initiatives is covered under the 
Price-Anderson Act that expires on August 1, 2002. Nuclear-related 
contracts under the DOE are also covered by this Act. Both the NRC and 
DOE have submitted reports that recommend extending the provisions for 
an additional 10 years.
    As Secretary of Energy, will you support coverage under the Price-
Anderson Act?
    Answer. Indemnification of DOE contractors under the Price-Anderson 
Act is essential to the achievement of DOE's statutory missions in the 
areas of national security, energy policy, science and technology, and 
environmental management. I look forward to working closely with 
members of both parties and with individuals from inside and outside 
government to secure the early renewal of the Price-Anderson Act.
              Responses to Questions From Senator Domenici
                  science at the weapons laboratories
    Question 1. Within the Department of Energy are laboratories 
primarily funded by the national security side of the Department and 
others that are primarily funded by the civilian side. Many of the more 
basic research areas of the Department's mission areas are found on the 
civilian side of the funding.
    I've seen many examples where the national security labs have made 
superb contributions to civilian science and vice versa. I think it's 
very important that the weapons labs maintain their ability to 
contribute to civilian science areas. Their research programs in these 
areas frequently assist in recruitment of staff and it's not at all 
unusual for a breakthrough on the civilian side to impact key aspects 
of our defense missions.
    Legislation crafting the National Nuclear Security Administration 
took great pains to encourage the continued role of the weapons labs in 
civilian science programs, and I believe that General Gordon supports 
this approach.
    Is this integration of civilian research into the weapons labs, and 
vice versa, something that you are comfortable with within the 
Department and are you willing to encourage the weapons labs to 
maintain their strong multi-program characteristics?
    Answer. I am convinced that it is very important for the continued 
strength and vitality of the weapons laboratories, the Department's 
programs, and the nation's science base that the weapons laboratories 
maintain their multi-program status. Both basic science and applied 
research benefit by the sharing of staff, equipment, and facilities 
between civilian and defense programs. General Gordon has assured me 
that the National Nuclear Security Administration will continue to 
encourage the weapons laboratories to take advantage of shared research 
opportunities that strengthen their ability to perform their primary 
national security mission.
                             nuclear energy
    Question 2. Your statement notes many of the serious trends that 
have contributed to the current national energy crisis. You noted your 
intent to increase the use of renewable energy, decrease our reliance 
on imported oil, and develop new technologies that conserve fossil 
fuels and reduce energy-related pollution. You did not mention the role 
of nuclear energy in your statement.
    Nuclear energy, as you know, contributed about 22 percent of our 
electricity last year, and did it without emission of pollutants into 
the atmosphere.
    Nuclear energy is poised for a rebirth, with serious consideration 
being given to construction of new plants for the first time in 
decades. These may be very different plants than we now have, they may 
be much smaller modular plants that are absolutely passively safe. They 
may be even safer than our present plants with their superb record of 
safety and availability.
    For nuclear energy to continue as a viable energy option, their 
safety record must continue and the nation must develop approaches to 
spent fuel issues. I've personally favored development of interim 
storage of spent fuel, which will promptly move fuel away from the 
current reactor sites, while we evaluate a range of technologies that 
may contribute to long range spent fuel strategies.
    Are you interested in working with the Congress to continue nuclear 
energy as a clean source of a significant fraction of our electrical 
supply?
    Answer. Nuclear energy is a vital and essential component of the 
U.S. energy mix. The Department of Energy is eager to work closely with 
Congress to ensure that nuclear energy remains fully viable as a clean 
energy option. U.S. nuclear power plants are the lowest-cost source of 
baseload electric energy available on the grid today and we must 
maintain this option for now and in the future.
    I am aware that in recent years the Department has initiated key 
programs in the area of nuclear energy, including the Nuclear Energy 
Research Initiative, the Nuclear Energy Plant Optimization programs and 
the Generation IV Nuclear Power Systems Initiative. Combined, these 
programs address not only the continued and improved operation of 
existing nuclear power plants, but also the need to maintain nuclear 
power as a viable energy option for the future. These are important 
programs, recommended and endorsed by the Nuclear Energy Research 
Advisory Committee (NERAC)--an independent panel that is comprised of 
the leading nuclear science and technology experts in the United 
States.
                     comparisons of energy sources
    Question 3. Every energy source has both risks and benefits. For 
some energy sources, like nuclear, some groups focus only on discussion 
of risk areas, without discussion of benefits or discussion of 
technically sound approaches to addressing risks.
    I strongly suggest that the Department should set about a careful 
evaluation that compares the full life-cycle costs of all energy 
sources. Such a study should include careful treatment of both the 
risks and benefits of each source.
    In the recent past, we've seen some energy sources treated as 
``politically correct,'' while others are treated as ``politically 
incorrect.''
    Would you favor such an evaluation of our future energy options?
    Do you agree that such an evaluation might enable the Department 
and the marketplace to decide among competing energy options?
    Answer. I agree that every energy source has risks and benefits. I 
also agree that there is opposition to continued use of some energy 
sources, such as hydropower, coal, and nuclear energy. However, the 
reality is these energy sources account for 47 percent of the total 
U.S. energy supply. There are advantages to diversifying our energy 
supplies, and I believe it would be a mistake to rule out any energy 
sources, particularly energy sources that are the mainstays of our 
economy. However, I have reservations about conducting the analysis you 
propose. First, I have doubts that this analysis would be relied on by 
the energy industry. Energy companies make decisions on developing 
various energy sources based on their own analysis of risks and 
benefits, particularly economic risks and benefits. It is unlikely they 
would substitute the Department's conclusions for their own analysis. 
Second, as you suggest in your question, in the past the Department has 
championed certain energy sources over others. That kind of advocacy 
could threaten to skew any analysis of risk and benefits.
               public recognition of doe's contributions
    Question 4. The Department of Energy operates one of the world's 
largest scientific organizations. Some of their contributions rival in 
importance to the nation those of agencies who are more of a ``house-
hold'' name--like the National Institutes of Health or the National 
Science Foundation.
    With few exceptions, the Department of Energy has not emphasized 
public understanding of their contributions, from scientific 
breakthroughs to new technologies for nuclear power.
    Furthermore, when the Department is in the news lately, it has 
usually been related to a security issue or poor management of a 
project, like the NIF fiasco.
    I'm sure that you agree that part of your focus in Departmental 
leadership must be directed to avoiding the ``bad'' news, through 
better management of all aspects of your enterprise, from management of 
construction projects to excellence in security.
    But would you also agree that the Department should expand its 
efforts to publicize its successes in key areas of technology that 
impact national priorities?
    Answer. First of all, I wholeheartedly agree with you that the 
Department has made significant contributions in the advancement of 
science in many areas. The national labs are a national treasure and 
they can be proud of the work that they have done. The Public deserves 
to know about these scientific achievements to the extent possible and 
the Department can, and should, do a better job of publicizing them.
                  competition with the private sector
    Question 5. Several companies have questioned the Department's 
sponsorship, through its Office of Scientific and Technical Information 
(OSTI), of PubSCIENCE. PubSCIENCE offers U.S. taxpayer-subsidized, free 
access to peer-reviewed journal literature. Services providing such 
access to peer-reviewed literature have long been available within the 
private sector, but, of course, these services cannot compete with a 
federally subsidized free service. I've expressed concern about the 
PubSCIENCE activities within the DOE, as have several other Senators. 
Do you support actions by the government to develop and maintain a 
world-wide free public access to journal literature in competition with 
private sector services?
    Answer. I have not yet had an opportunity to closely review the 
specifics of the PubSCIENCE Program. However, as a general matter, I do 
not support actions by the government that compete with the private 
sector. I have been told that PubSCIENCE works in voluntary partnership 
with 41 publishers of peer-reviewed journal literature. Science cannot 
thrive without the sharing of information and the cross-fertilization 
of research.
    The Department is already working with the Software and Information 
Industry Association (SIIA), which is a trade association representing 
the companies that compile citations and which have expressed concerns 
about PubSCIENCE. The Department is also working with other parts of 
the Administration on this issue as well since many of the protesting 
companies also object to Web-based information dissemination products 
from the National Institutes of Health, the U.S. Department of 
Agriculture, the Department of Education, the Department of 
Transportation, and others. I will continue the Department's work with 
the companies in an effort to balance the public's rights, the 
Department's needs, and the companies' interests.
               Responses to Questions From Senator Craig
                        environmental management
    Question 1. Like other DOE sites with environmental contamination, 
clean up at the Idaho National Engineering and Environmental Laboratory 
(INEEL) is governed by a legally enforceable settlement agreement 
between the DOE, the Navy and the State of Idaho. Continuing to make 
progress on meeting the clean up milestones set out in the agreement is 
critical to continuing the good will between the lab and the state but 
progress in the next few years will require securing a sufficient 
budget for DOE's clean-up commitments nationwide.
    As Secretary, will you be committed to continued progress in DOE's 
environmental management program, and working with Congress, OMB and 
the Administration to secure the funds needed?
    Answer. Cleaning up the legacy of nuclear weapons research and 
production will be one of my priorities. I believe that the Department, 
working closely with the Congress, the Administration, regulators, and 
stakeholders, can do a better job of accelerating the clean up of 
contaminated sites. This is one of the challenges facing the department 
and providing adequate funding to achieve these goals will be 
essential.
                              buried waste
    Question 2. I have discussed with you the need to deal responsibly 
with DOE's buried waste legacy, both in Idaho and at other DOE sites. I 
have supported funding for the construction of a Subsurface Geosciences 
Laboratory at the INEEL and research into the science of how pollutants 
move through underground, subsurface environments. I think DOE could 
make a contribution to the contaminated soils problem we face 
nationwide by discovering more cost effective solutions for underground 
pollution.
    You have referred to DOE's laboratories as national treasures. Do 
you agree that we should focus the resources of the labs on solving 
these kinds of environmental challenges?
    Answer. The national laboratories can play a key role in improving 
our ability to address the nation's environmental challenges. I support 
efforts by the Idaho National Engineering and Environmental Laboratory 
and other national laboratories to develop solutions to these 
challenges.
                    advanced nuclear reactor design
    Question 3. Americans today are forced to deal with electricity 
shortages in California due to insufficient generation capacity, 
astonishing increases in natural gas prices, record high gasoline 
prices this past summer and now, cutbacks in OPEC oil production. At 
the same time, nuclear power is performing economically and safely.
    What will you do in the Department to accelerate the development 
and deployment program for Generation IV advanced nuclear reactors 
which will be cheaper to build and operate and, safer, produce less 
waste, and be more proliferation resistant?
    Answer. The Department is leading a research and development (R&D) 
effort --the Generation IV Nuclear Power Systems Initiative--that has 
two distinct tracks. The first is aimed at the near-term deployment 
(NTD), by 2010, of nuclear power plants that incorporate technical and 
economic improvements over today's operating and advanced light water 
reactors. The NTD study is designed to support owners/operators who are 
preparing to license and build new nuclear power plants in the near 
future. The second track is to make commercially available, in the 
longer-term future, a select number of innovative nuclear power plant 
designs. When complete, these efforts will result in an 
internationally-supported technology roadmap to develop and make 
available advanced nuclear energy technologies.
    The first fruits of this R&D effort should arrive later this year 
when the NTD effort makes its recommendations. The technology roadmap, 
which will set the stage for future activity, will be completed by 
fiscal year 2003. 1 will examine the results of this roadmap closely 
and assure you that the Department will fulfill its responsibilities to 
help bring both the near-term and later designs to the market as early 
as possible.
                             yucca mountain
    Question 4. Many proponents, as well as opponents, of nuclear power 
believe that until the waste issue is resolved, the construction of new 
nuclear plants will not occur.
    What are your plans for addressing the long-term disposal issue at 
Yucca Mountain?
    Answer. It should be emphasized that sound science governs the 
program. I understand that the Department has been conducting site 
evaluation and characterization activities for the past 18 years, under 
legislative authority provided by the Nuclear Waste Policy Act of 1982, 
as amended in 1987. We are nearing a point where sufficient scientific 
and technical information may be available to support a decision on 
whether the site is suitable. There are a number of additional 
intermediate steps between site recommendation and actual waste 
acceptance, including a rigorous safety licensing process with the 
Nuclear Regulatory Commission, which must still be met. Again, my 
commitment is to make progress on the nuclear waste program while 
ensuring that sound science governs each step in the process.
                           new nuclear energy
    Question 5. The total electrical output from U.S. nuclear plants 
has risen from 300 billion kwh in 1980 to about 750 billion today, even 
though no new plants have been ordered in that time. This, as well as 
other dynamics, points to a bright future for the universal use of 
nuclear power.
    What is your view of the expanded use of nuclear energy in 
California and outside of the United States to meet the growing 
electricity demands in domestic and foreign markets?
    Answer. For the past several years, nuclear power has accounted for 
roughly 20% of total electricity generation in the U.S., in spite of 
the fact that several plants have recently been retired. The average 
capacity factor at U.S. nuclear plants has risen from 56% in 1980 to 
86% in 1999--resulting in record levels of generation. Clearly, nuclear 
power is a critical component of our energy supply mix.
    A sound national energy strategy must reflect a number of diverse 
goals, such as ensuring fuel diversity and energy security, and 
maintaining adequate, reliable supplies of energy at reasonable costs. 
Nuclear power can be an important contributor to these goals. In 
selecting what generating plants are built, power producers should be 
able to select from a diverse set of technologies in their efforts to 
balance cost, efficiency, and risks.
                           nuclear fuel cycle
    Question 6. The role of nuclear power for the nation's energy 
security is very clear. Indeed, to me it is clear that expanding our 
nuclear generating capacity is essential for the future. I am concerned 
however that the value of such an expansion could be undermined by the 
loss of the nation's capability to produce and process nuclear fuel for 
its own reactors. Indeed, the continued viability of the sole remaining 
uranium converter in the U.S. appears to be currently in doubt.
    How important do you think it is to maintain our own nuclear fuel 
cycle in the U.S.? What do you think DOE should do to maintain the 
viability of our fuel cycle in the U.S.? Do you think temporary 
assistance to the U.S. uranium mining and conversion industries to 
ensure their continued viability may be appropriate?
    Answer. I support the objective of maintaining reliable and 
competitive domestic uranium conversion and enrichment industries. I 
share your concern for the depressed state of these important 
industries and understand that over the past year the Department has 
worked diligently with Congress and industry to evaluate options that 
address the depressed uranium and conversion markets. In this respect, 
the Department recently submitted two reports to Congress [``Effect of 
U.S./Russia Highly Enriched Uranium Agreement'' and ``Maintenance of 
Viable Uranium, Conversion and Enrichment Industries''] that focus on 
these very issues.
    I plan to review the two reports carefully and the issues 
concerning these domestic industries and look forward to continuing to 
work with Congress to maintain a viable domestic nuclear fuel industry.
                          gas reactor research
    Question 7. Under the Department of Energy's materials disposition 
program, the U.S. is currently funding work to develop the high 
temperature gas cooled reactor for the purpose of burning up surplus 
Russian weapons plutonium. The Russians are matching part of the U.S. 
contribution and the French and Japanese are contemplating substantial 
contributions to this program. As you may be aware, this reactor type 
brings with it several advantages in the form of increased safety, 
efficiency and reduced waste production which may make it a promising 
candidate for a next generation power reactor.
    What is your position on the need for international collaboration 
in advanced rector development and on this reactor development, 
specifically?
    Answer. International cooperation is needed because the GT-MHR 
cannot succeed as a plutonium disposition option, in the time frame 
required, without significant financial contributions from 
international participants.
                            fusion research
    Question 8. The fusion energy sciences program has received more 
high-level, independent reviews over the past 6 years than any other 
DOE science or energy program (there have been 5 such reviews). Each 
one of these reviews has praised the program for the quality of its 
science, the progress that has been made towards the ultimate goal of 
fusion energy and has reminded us of the importance of fusion research 
for the future. Each of these reports has also pointed out that the 
fusion program is, in their view, under-funded.
    If you are confirmed, would you work to increase the funding and 
support for this program? What do you think the government's role 
should be in fusion energy?
    Answer. Because of the long-range nature of fusion energy research, 
as well as the pivotal role that this program plays in support of 
fundamental plasma science in the United States, the government should 
continue to support fusion energy research. I will work hard to 
maintain the high quality of DOE's scientific research efforts in this 
regard, including the Fusion Energy Sciences Program.
    Question 9. If confirmed as Secretary of Energy, will you continue 
the practice of having the Power Marketing Administrations report 
directly to the Deputy Secretary of Energy?
    Answer. I have no plans to change it. I understand this reporting 
arrangement has worked very well in bringing the PMAs' time-sensitive 
concerns to the attention of the highest levels in the Department.
            Responses to Questions From Senator Gordon Smith
    Question 1. The Bonneville Power Administration, as well as other 
Power Marketing Administrations, currently report to the Deputy 
Secretary of Energy. Will you commit that Bonneville and the other 
PMA's will continue to report to the Deputy Secretary in order to 
assure that power marketing issues receive a high level of visibility 
in the Bush Administration?
    Answer. I have no plans to change it. I understand this reporting 
arrangement has worked very well in bringing PMAs' time-sensitive 
concerns to the attention of the highest levels in the Department.
    Question 2. In my region of the country--the Pacific Northwest--the 
Bonneville Power Administration and investor-owned utilities have 
worked with the regional stakeholders to develop a regional 
transmission organization, or RTO. Movement to a RTO will be a 
significant change for my constituents and cannot be done without 
considerable input and participation from regional interest. Do you 
agree to work with me and my colleagues from the Northwest on this 
issue and, in particular, that regional processes and solutions should 
be respected and acknowledged?
    Answer. Electricity systems around the country differ by region and 
state. National policies should recognize these regional differences 
and regional stakeholders need to work together to the extent possible 
in helping to meet the nation's priorities. I assure you that I will 
work with you and your colleagues from the Pacific Northwest on both 
national and regional policy objectives affecting your region.
              Responses to Questions From Senator Bingaman
                  stockpile stewardship program--ctbt
    Question 1a. Last Fall, the Senate held a few brief hearings on the 
Comprehensive Test Ban Treaty and ultimately voted against 
ratification. In my view, that action was very detrimental to the 
nonproliferation goals we talk so much about here in Congress. As part 
of that process, the Senate held a single hearing on the subject of the 
Stockpile Stewardship Program--a critical element supporting the CTBT 
by assuring us that the nation's nuclear weapons stockpile is safe and 
reliable. Laboratory directors have certified the stockpile to be safe 
and reliable for four years now.
    I was disturbed that many of my colleagues seemed to get the 
impression during that hearing that the Stockpile Stewardship Program 
is a sort of computer simulation exercise that can't provide the level 
of confidence we need to know that our weapons will would work if we 
needed to use them.
    Are you confident that the current certification process is 
sufficient to give the nation full confidence in the safety and 
reliability of our nuclear weapons?
    Answer. As I stated previously during the hearing, I view 
certification of the stockpile as a paramount priority. The stockpile 
was recently certified by my predecessor, and I have been assured by 
those officials involved that they have the utmost confidence in that 
decision. As Secretary, I will review the certification process to 
assure that it provides the confidence and reliability that was 
intended.
    Question 1b. Will you work with the Congress to ensure that 
sufficient funding is available to support the Stockpile Stewardship 
Program such that we maintain the level of confidence that we need 
regarding the stockpile and that any fixes that are needed are 
identified and funded?
    Answer. I look forward to working with Congress to make sure the 
Stockpile Stewardship Program is funded at a level that will ensure its 
continued success. The Stockpile Stewardship Program is crucial to 
maintaining the necessary level of confidence in the stockpile.
    Question 1c. We have a bipartisan working group looking at CTBT 
issues in the Senate. Will you work with our group and with the whole 
Senate to keep us educated about the elements and performance of the 
Stockpile Stewardship Program in order for us to better understand its 
effectiveness in support of a Comprehensive Test Ban Treaty?
    Answer. I and General Gordon, the Administrator of the National 
Nuclear Security Administration, will be pleased to keep your group and 
the Senate fully informed on all aspects of the Stockpile Stewardship 
program. The program's whole purpose is to ensure the continued safety, 
security and reliability of the nation's nuclear deterrent.
    funding for the initiatives for proliferation prevention program
    Question 2. DOE's Initiatives for Proliferation Prevention (IPP)--
The Initiatives for Proliferation Prevention program began in 1994 with 
the goal of bringing U.S. and Russian laboratory scientists and the 
private sector together to move technologies from concepts to 
sustainable businesses. In the past, there has been concern that IPP 
has not achieved the goals underlying the program--that a great deal of 
research is being done, but there is little commercial success achieved 
thus far. This program--a critical element of our overall 
nonproliferation strategy--is beginning to produce significant 
commercial successes involving U.S. companies. Many of IPP research 
programs have reached R&D maturity but lack the funds and business 
expertise to make the transition to commercial success--the goal set 
for the program in 1994.
    Would you support additional funding to assist the transition of 
IPP programs to commercial applications consistent with the law and DOE 
administrative regulations?
    Answer. I am acutely aware that the Department has a critical role 
in addressing the challenge of nuclear nonproliferation. I am advised 
that the IPP program has made significant progress in the recent past 
in connection with the goal of creating commercially viable 
enterprises. In sustaining these important efforts, I will be pleased 
to work with you and the cognizant committees.
                            renewable energy
    Question 3. What are your views on the technology advancements that 
have been made in renewable energy? Do you believe that renewable 
energy can and should play and important role in our nation's energy 
mix?
    Answer. Twenty years ago renewable energy was generally produced at 
a very high cost and in an inefficient manner. Since then, renewable 
energy technologies such as wind, solar, biomass, and geothermal have 
made remarkable progress. Advances from research and development 
conducted by the Department of Energy and its partners have led to 
significant improvements--in production costs, system reliability and 
in reduced energy production costs.
    I know that the role of each technology has to be put in 
perspective with regard to the current energy prices and situations. 
Clearly, competition and a number of technology advances in the 
electric power sector have led to dramatic decreases in the price of 
power from new sources of generation. The incredible growth and demand 
for additional power across the Nation suggest the need to develop a 
wide-ranging portfolio of domestic-based options to meet the different 
needs, and match the resources, of the various regions of our country. 
Renewable energy technologies--including advanced hydropower and 
renewable/fossil hybrid systems--can and should play an important role 
in the future of energy in the U.S.
                               wind power
    Question 4. Wind power is the fastest growing source of energy in 
the world, with over 17,500 megawatts of installed capacity. U.S. 
capacity is just over 2,500 megawatts, which provides nearly 6 billion 
kilowatt-hours of electricity annually or enough to power 600,000 
homes. Those domestic totals are expected to nearly double in 2001. 
Furthermore, the cost of wind is currently 3-5 cents per kilowatt-hour, 
comparable to new coal and natural gas facilities. Under your 
leadership will the Department of Energy continue to support 
initiatives to increase the percentage of electricity derived from 
wind?
    Answer. President Bush has reaffirmed his commitment to increased 
production from conventional and alternative domestic energy sources. 
This Administration believes strongly in a balanced approach to meeting 
our energy needs. As a rapidly growing source of energy in the world, 
as well as one of the quickest to install, I expect wind energy to play 
an increasingly important role in domestic power production.
                       tax credits for renewables
    Question 5. Under present law, an income tax credit of 1.5 cents 
per kilowatt-hour adjusted for inflation is allowed for the production 
of electricity from qualified wind facilities, ``closed-loop'' biomass 
facilities, and poultry waste farms. The current credit will expire on 
December 31, 2001. An extension of the credit has been included in a 
number of legislative proposals, including S. 2557, introduced in the 
106th Congress by Senator Murkowski, which you cosponsored. Do you 
support an extension of the wind energy Production Tax Credit?
    Answer. President Bush supports expanded production of all energy 
supplies--and clearly supported an extension of this production tax 
credit. I look forward to supporting this tax proposal and working with 
the Congress to assure its enactment.
               Responses to Questions From Senator Akaka
                            energy research
    Question 1. The United States is becoming increasingly dependent on 
foreign oil, while competition from other nations for the available 
energy supplies is increasing. What is needed is increased energy 
research and development.
    What new approaches do you plan to implement with respect to energy 
research and development, and what areas of research will receive 
priority attention?
    Answer. President Bush and I are deeply committed to developing an 
energy policy that includes increasing domestic production of energy in 
an environmentally responsible manner, increasing our use of renewable 
energy, decreasing our reliance on imported oil, and developing new 
technologies that conserve fossil fuels and reduce energy-related 
pollution.
    The Department of Energy is the principal Federal agency charged 
with responsibility for the development of a national energy policy. 
However, development of a national energy policy requires coordination 
with other Federal agencies and working with Congress. We will need to 
work with the agencies on issues such as federal land use, meeting our 
environmental responsibilities and how to provide appropriate 
incentives for production of our domestic energy resources.
    Question 2. I have sponsored laws that promote research and 
development for new sources of energy such as hydrogen and methane 
hydrates. These sources of energy have the potential to provide 
abundant and clean energy for decades. These programs need appropriate 
financial and managerial support.
    Will you ensure that these R&D programs are provided appropriate 
funding and high level managerial support?
    Answer. I recognize the potential of hydrogen as an important long-
term energy source and understand that the Department has a plan for 
developing the critical technologies for realizing this potential. The 
Assistant Secretary for Energy Efficiency and Renewable Energy, and the 
Assistant Secretary for Fossil Energy will both continue to see that 
the managers of the Hydrogen Program interact with the Hydrogen 
Technical Advisory Panel to help realize the potential of these energy 
sources.
    Question 3. Hydrogen and methanes hydrates are decades away from 
becoming major sources of energy. We would need other sources of energy 
to help us in transition to utilizing these sources of energy. Natural 
gas is a good source of energy for many applications. It is 
particularly good for use in the transportation sector.
    What plans do you have to encourage the use of clean sources of 
energy such as natural gas in the transportation sector?
    Answer. Natural gas has made significant progress in recent years 
as a transportation fuel. In addition to active research and 
development on natural gas vehicle technologies, I am informed that the 
Department administers several programs--in partnership with natural 
gas vehicle (NGV) manufacturers and fleet stakeholders--to assist with 
the deployment of these vehicles and the development of the 
infrastructure necessary to support them. Currently all of the U.S.-
based automakers have NGV product lines, as do several foreign 
manufacturers. In addition, all of the major transit motor coach 
suppliers now offer a natural gas option to their customers.
    Despite the progress, many barriers to increased use of NGVs still 
exist--such as the higher initial cost of the vehicles and the limited 
availability of refueling stations in most areas of the country. To 
address these issues we would need to investigate ways to expand the 
natural gas refueling infrastructure, to continue to reduce costs 
through R&D activities and deployment partnerships, and to ensure that 
consumers and fleet users have access to accurate information about 
these vehicles. The proper emphasis of these actions, of course, will 
depend on the judgments made, with the Congress, in the formation of an 
overall energy strategy for the Nation.
    Question 4. Certain regions of our country are overly dependent 
either on one source of energy or on an imported source of energy. For 
instance, the Northeast is overly dependent on heating oil. Hawaii is 
overly and dangerously dependent on imported oil. Hawaii's residents 
and visitors use oil to meet 90 percent of their energy needs. Hawaii's 
dependence on oil poses risks to Hawaii's economy from sudden price 
increases or from supply problems. It is imperative that we make all 
efforts possible to diversify the energy resource mix.
    Will you support initiatives that will allow Hawaii to diversify 
its energy mix by introducing other sources such as natural gas?
    Answer. As you know, Hawaii has an abundance of renewable energy 
resources--geothermal, solar, wind, and biomass--that I believe can 
help diversify the state's energy mix and offset its dependence on 
costly imported fuels. In particular, Hawaii would benefit from energy 
systems that generate power at or near the end-user which eliminates 
the need for significant new transmission and distribution systems. 
Additionally, there are a number of renewable resources in Hawaii that 
can be used to produce hydrogen, an energy source that can be used for 
both power and transportation purposes.
    The Department of Energy has funded the University of Hawaii to 
conduct research on several methods to produce hydrogen: direct 
dissociation of water using sunlight; biological methods of hydrogen 
production; and the use of gasification technologies to produce both 
hydrogen and electricity from biomass. The Department is also 
researching hybrid distributed energy systems using a combination of 
natural gas and renewables and on combined heating, cooling and power 
systems which will use natural gas, syngas and propane resources (used 
extensively in Hawaii) much more efficiently than most current 
technologies.
        mixed plutonium/uranium oxide (moX) shipments
    Question 5. Under the terms of the 1988 U.S.-Japan Agreement for 
Peaceful Nuclear Cooperation, the United States must approve the 
comprehensive transportation plan for transfer of plutonium from U.S.-
supplied nuclear fuel provided by British and French reprocessing 
plants to Japan for use in Japanese power plants. The agreement also 
requires the application of strict physical protection measures, 
including the use of an armed, military-type vessel or alternative 
security measures.
    In February 1999, the Departments of Energy and State briefed the 
Congressional delegations of Hawaii and the Pacific territories on the 
shipments of mixed plutonium/uranium oxide (MOX) from Europe 
to Japan. At that time, I expressed concern about the review and 
consultative process being pursued by the Executive Branch. Despite 
these concerns, the U.S. government approved a transportation plan that 
did not require a dedicated armed escort vessel, such as the $100 
million Japanese Coast Guard ``plutonium escort vessel'' that the 
United States approved for a 1992 shipment to Japan. Instead, the 
United States approved use of two British freighters, armed with light 
cannons and machine guns and armed with civilian guards, in clear 
contravention of the intent of the U.S.-Japan agreement.
    There is a pending departure this week of the second MOX 
shipment to Japan, and many more are anticipated in the future.
    Question 5a. Will the Bush Administration undertake a new review of 
security and safety arrangements for MOX fuel shipments from 
Europe to Japan?
    Question 5b. Will the Bush Administration insist upon a dedicated 
armed escort vessel?
    Question 5c. Will the Bush Administration continue the present 
policy of not permitting shipments of plutonium or MOX fuel 
to transit the Panama Canal for security/safety reasons?
    Answer a-c. I understand the concerns in this regard. The 
Department of State is the federal agency which has the responsibility 
and the authority to review and make changes to the conditions and 
precautions necessary for international shipments of MOX. I 
will ensure that your concerns about this issue are brought to the 
attention of the State Department.
                             global warming
    Question 6. The effects of major global climate change on the U.S. 
and the rest of the world will be devastating. Hawaii, being an island-
state with limited land mass, is extremely sensitive to global climate 
changes. Hawaii is a tropical paradise. The worldwide problem of 
greenhouse gases threatens its well-being.
    The World Meteorological Organization and the United Nations 
Environment Program established the Intergovernmental Panel on Climate 
Change (IPCC) in 1988. The function of IPCC is to assess available 
information on the science, impacts, and crosscutting economic issues 
related to climate change, in particular to a possible global warming 
induced by human activities. The IPCC completed its first assessment 
report in August 1990 which indicated with certainty an increase in the 
concentration of greenhouse gases due to the human activity. The report 
assisted the governments of many countries in making important policy 
decisions, in negotiating, and in the eventual implementation of the UN 
Framework Convention on Climate Change which was signed by 166 
countries at the UN Conference on Environment and Development at Rio de 
Janeiro in 1992. The convention was ratified in December 1993 and took 
effect on March 21, 1994. IPCC issued another assessment in 1995. It 
also developed another assessment in 2000.
    The conclusions of the panel's latest assessment are alarming. One 
of its most striking findings is its conclusion that the upper range of 
warming over the next century could be even higher than the panel's 
1995 estimates. IPCC also reached the consensus that it is likely that 
increasing concentrations of anthropogenic greenhouse gases have 
contributed substantially to the observed warming over the last 50 
years.
    Question 6a. Would you support efforts to address the concerns 
raised by the conclusions of the panel?
    Question 6b. What mandatory measures would you consider as part of 
responsible U.S. policy to deal with the problem of global warming?
    Question 6c. Would you support legislation that would require 
significant mandatory reductions in the emissions of four pollutants 
(SOX, NOX, Mercury, and CO2) from 
power plants?
    Answer a-c. The Department of Energy is currently in the process of 
reviewing the IPCC's latest report that was completed January 19, 2001. 
As President Bush indicated during his campaign, global climate change 
is an important concern that must be addressed. I expect to be involved 
in formulating this Administration's policies addressing climate 
change. Any effective response must involve the international community 
and both developed and developing countries. It must also be cost-
effective, in order to mobilize the private sector in support of the 
objective, rather than merely putting the private sector in a 
regulatory straight jacket.
                        environmental management
    Question 7a. The cleanup of the legacy of nuclear weapons 
production is one of the most technically challenging and expensive 
problems facing this country. This problem was created during more than 
50 years of nuclear weapons production. The Department has had a 
program for the last decade or so with the goal of cleaning up the 
contaminated facilities in the weapons complex. You have said that we 
can do a better job of accelerating the cleanup of contaminated 
facilities. I welcome that statement.
    What are the most important environmental cleanup issues that still 
remain to be addressed by DOE?
    Answer. The Department's cleanup program is one of the most 
technically challenging and costly programs in the world. The 
environmental legacy of 50 years of nuclear weapons research, 
production, and testing, and DOE-funded energy research includes large 
volumes of nuclear materials, spent nuclear fuel, radioactive waste, 
and hazardous waste. These are challenges that cannot be remediated 
overnight. While significant progress has already been made, some of 
the most difficult challenges are still ahead. These include:

   safely storing, treating, and disposing of the high-level 
        radioactive waste in tanks and packaging spent nuclear fuel in 
        pools at the Hanford site in Washington State;
   stabilizing nuclear materials, continuing treatment of high-
        level radioactive waste and packaging spent nuclear fuel at the 
        Savannah River Site in South Carolina;
   continuing the packaging of spent nuclear fuel and treatment 
        of high-level radioactive waste at the Idaho site in Idaho;
   remediating contaminated ground water at numerous sites 
        including those in Idaho, Tennessee, South Carolina, 
        Washington, Kentucky, and New York;
   completing the cleanup at sites with near-term closure dates 
        like Rocky Flats in Colorado and the Fernald and Mound sites in 
        Ohio; and
   developing and applying new technologies to treat types of 
        waste for which no effective technology currently exists.

    Numerous other clean-up challenges also exist and must be 
addressed. I will pursue an active program to remediate all sites--big 
and small.
    Question 7b. How do you plan to ensure long-term stabilization and 
safety of highly contaminated DOE sites? What kinds of administrative 
structures and funding regimes do you believe will be necessary to 
protect the public and the environment for the indefinite future?
    Answer. Each DOE site presents unique cleanup challenges. When 
assessing these challenges, I believe the Department needs to continue 
to work with EPA, State and Tribal governments, local communities, the 
Congress, and other stakeholders in selecting cleanup remedies. These 
remedies should be consistent with reasonably foreseeable land use 
while ensuring the protection of public safety. In some cases, even 
after cleanup is completed, unrestricted use of the land may not be 
possible because of the nature and extent of the contamination make it 
technically or economically infeasible to restore the site to an 
unrestricted condition. These sites may also require post-cleanup 
management and monitoring (i.e., long-term stewardship) to protect the 
environment and public health. The Department should work to identify 
opportunities during cleanup to avoid costly long-term stewardship 
where possible.
    Question 8a. The Department is involved in research and development 
of innovative and cost effective environmental technologies. These new 
technologies can be used not only in the cleanup of DOE sites, but also 
on other sites in our country as well as have potential for use 
overseas.
    Are these technologies being effectively utilized in the cleanup 
process?
    Answer. I understand that the Department has made significant 
progress over the past several years in deploying new technologies 
within its facilities to solve or accelerate cleanup challenges. DOE 
currently has over 280 new technologies available for use and has used 
these technologies over 500 times in cleanup activities since the 
program was established in 1989. 1 will continue to press to use the 
best available science and technology to the cleanup challenges facing 
the Department and the private sector where possible.
    Question 8b. Does the Department have a process in place to ensure 
that technologies it develops are being used? If such a process is in 
place, is it being widely used?
    Answer. I understand that widespread deployment of new technologies 
in which DOE invests has been a major focus of the Environmental 
Management (EM) program for the past several years. The EM science and 
technology program also provides technical assistance in the form of 
Deployment Assistance Teams to provide site-specific assistance in 
evaluating new technologies to address local environmental problems--as 
well as the training or customizing of new technologies to satisfy a 
unique site-specific purpose.
    Question 8c. Are there any DOE initiatives to enhance our 
competitive position with foreign countries with respect to 
environmental technologies?
    Answer. The primary mission of DOE's environmental science and 
technology program is to provide innovative technologies to clean up 
the Department's weapons complex more efficiently. However, because the 
Department partners with private industry in developing new 
technologies, most of these technologies become commercialized and 
available to anyone, from U.S. vendors themselves to foreign users. For 
instance, the Oxy-Gasoline Torch--a technology sponsored by the DOE 
science and technology program with Petrogen International Ltd., in 
Richmond, California--is being used in Russia to dismantle buildings 
undergoing deactivation and decommissioning.
              Responses to Questions From Senator Cantwell
    Question 1. In recent weeks, the Secretary of Energy has declared 
an emergency in west coast wholesale energy markets and ordered 
utilities outside of California to make sales of their surplus power to 
California, often without adequate financial security. Consequently, 
these utilities outside of California are also placed in financial 
trouble. Do you plan to extend Secretary Richardson's order and, if so, 
do you plan to make any changes to it?
    Answer. On January 23, I issued a two-week extension of emergency 
orders requiring certain energy suppliers to provide natural gas and 
electricity supplies to California utility companies. Both of the 
emergency orders will expire on February 7.
    The extension was granted at the request of California Governor 
Gray Davis in order to provide sufficient time for California to 
complete actions on steps designed to, among other things, restore the 
financial health of the utility companies and develop other sufficient 
sources of energy to meet their needs.
    In granting the extensions, I emphasized that while the federal 
government has provided help to the State, only the State of California 
can implement the policies necessary to resolve its short term as well 
as its long term energy supply challenges--a view shared by the 
previous Administration.
    Question 2. What are your views on a short-term, west-wide price 
cap for electricity and would you support it in one form or another? If 
not, what measures would you support to help bring the situation under 
control?
    Answer. Rising demand and the lack of new generating capacity over 
the last 10 years is the primary cause of the current situation in 
California. There are, however, a number of market design problems that 
have exacerbated the situation. For example, until recently, California 
generally prohibited distribution utilities from entering into long-
term contracts or undertaking other sound risk-management practices. 
Instead, they were forced to purchase all of their electricity in day-
ahead and real-time spot markets--exposing them to significant price 
volatility risk. Most California consumers also pay fixed rates that do 
not vary based on the amount of electricity that is available. 
Consumers therefore have little financial incentive to conserve 
electricity when wholesale prices rise due to tight supplies. As a 
result, supply and demand are not balanced in the market.
    California needs to correct these and other market design problems 
in order for power prices to stabilize and return to reasonable levels. 
As a fundamental matter, this problem can only be solved by California.
    Question 3. I appreciate your commitment to support the Power 
Marketing Administrations (PMA's) as well as your positive response on 
supporting the regional preference for the Bonneville Power 
Administration. On a related noted, some have proposed that PMA's move 
from cost-based rates to market-based rates which would negatively 
impact the Northwest economy. Will you oppose proposals that would 
alter the cost-based rate structure for Bonneville and other PMA's?
    Answer. The Federal government has created a statutory requirement 
that the Bonneville Power Administration and the other Power Marketing 
Administrations sell power at cost-based rates. As Secretary of Energy, 
I will continue to support the cost-based rate structure for the Power 
Marketing Administrations.
    Question 4. The Bonneville Power Administration, as well as the 
other Power Marketing Administrations, currently reports to the Deputy 
Secretary of Energy which has worked extremely well for managing 
Bonneville and PMA business decisions. Will you commit that Bonneville 
and other PMA's will continue to report to the Deputy Secretary in the 
Bush Administration?
    Answer. I have no plans to change it. I understand this reporting 
arrangement has worked very well in bringing PMA's time-sensitive 
concerns to the attention of the highest levels in the Department.
    Question 5a. The State of Washington, U.S. Environmental Protection 
Agency and the Department of Energy are all parties to a comprehensive 
clean-up and compliance document called the Tri-Party Agreement. This 
document is a legally binding agreement and consent order committing 
the Department of Energy to clean up the Hanford Nuclear Site and to 
achieve compliance with State and Federal environmental laws. As 
Secretary of Energy, will you commit to working with top officials from 
the State of Washington to repair the damage to the relationship 
between the State and the Department of Energy done by the Department's 
failure to live up to its obligations under the Tri-Party Agreement?
    Answer. Let me assure you that I take the obligations under the 
Tri-Party Agreement very seriously and will work closely with the 
Governor of Washington and other top State officials, as well as the 
U.S. Environmental Protection Agency, to address the cleanup of the 
Hanford Site through the Tri-Party Agreement.
    Question 5b. Also, will you direct the staff of the Department's 
Environmental Management Program to make the Hanford site a top 
priority, as well as provide the Hanford Nuclear Site Office of River 
Protection adequate finances and authority to successfully manage the 
Hanford tank clean-up project?
    Answer. The high level radioactive waste tanks at Hanford pose one 
of the most pressing and complex problems facing the environmental 
management program. To ensure that cleanup of these tanks proceeds 
apace, the Assistant Secretary and the Manager of the Office of River 
Protection have been delegated appropriate authority to manage the 
project and will have my full support in implementing these 
responsibilities.
    Question 5c. Lastly, in FY 02, the budget for building the 
vitrification plant on schedule will require approximately $1.1 
billion. Do you support maintaining our existing legal commitments to 
build this vitrification plant on schedule?
    Answer. The Department recently signed a contract to design and 
construct a vitrification plant for the highly radioactive tank wastes 
managed by the Office of River Protection at Hanford. I understand the 
contract incorporates key dates for treating the waste and provides the 
contractor with significant incentives to perform the work on the 
required schedule and with penalties for failure to perform.
              Responses to Questions From Senator Thompson
    Question 1. The largest construction project in the Department of 
Energy's Science budget is the Spallation Neutron Source (SNS), located 
at the Oak Ridge National Laboratory in Oak Ridge, Tennessee. This 
facility, which will be used by scientists from across the country and 
around the world, will restore America's leadership in the field of 
neutron science and enhance our global competitiveness. Construction 
began in 2000, and the project will be completed in 2006.
    Do you support keeping the SNS on its current schedule, including 
the budget profile that includes approximately $300 million in fiscal 
year 2002?
    Answer. Completing the SNS project on time and within its Total 
Project Cost will remain one of the Department's top priorities.
    Question 2. A number of recent studies have documented serious 
infrastructure deficiencies across the Department of Energy's nuclear 
weapons complex. The Y-12 plant in Oak Ridge is a critical part of that 
weapons complex, but many of its facilities date back to the original 
days of the Manhattan Project and are either crumbling or are simply 
obsolete.
    The Department and the National Nuclear Security Administration, 
led by General Gordon, have made an initial commitment to modernizing 
the weapons complex, including several significant construction 
projects currently planned for Y-12. I strongly believe that these 
projects are critical to ensuring that Y-12 and the other weapons 
facilities can continue to perform their vital national security 
missions in the future.
    Will you commit to supporting the modernization of the nuclear 
weapons complex, including the production plants, to preserve our 
nuclear deterrent and ensure that our stockpile remains safe and 
effective?
    Answer. Ensuring the safety and reliability of our nuclear weapons 
stockpile and preserving this nation's nuclear deterrent is the 
paramount mission of the Department.
    I am aware that the Department is considering a facilities and 
infrastructure recapitalization initiative and I have requested a 
detailed briefing on it. I understand that the initiative's purpose is 
to reverse the long decline in investment in the deteriorating weapons 
production infrastructure. A modernized infrastructure would help 
improve overall operational efficiency and help attract and retain the 
skilled engineers and production technicians that will be needed to 
maintain the nation's nuclear stockpile. I plan to examine options to 
modernize the weapons complex and will work with the Congress on ways 
to address the problem.
    Question 3. As you know, the Environmental Management (EM) program 
is the largest program run by the Department of Energy. While 
significant progress has been made in cleaning up DOE sites that were 
involved in past weapons production activities, serious environmental 
challenges remain in a number of states, including Tennessee.
    I am concerned that, if the EM program does not receive adequate 
funding over the next several years, compliance agreements with state 
regulators and the Environmental Protection Agency will be jeopardized 
and the long-term costs to the taxpayers will increase.
    How important a priority will you make cleanup of the Department's 
former weapons sites? Recognizing that you must balance the funding 
requirements of all of the important programs that the Department 
oversees, will you attempt to ensure that EM activities receive 
sufficient funding over the next several years?
    Answer. Environmental cleanup will be a priority at the Department 
of Energy. I understand the critical importance of addressing the risks 
posed by contamination at DOE's sites and meeting our cleanup 
commitments to the communities and the states that have supported the 
nation's national security efforts. I am committed to meeting the 
Department's obligations arising under compliance agreements and 
environmental laws. I am prepared to work with the Congress on the 
funding issues presented by those problems.
    Question 4. Last year, Congress created the Energy Employees 
Occupational Illness Compensation Program to compensate Department of 
Energy nuclear weapons workers whose health was harmed in the course of 
their service to our country.
    Pursuant to the legislation that was enacted and a subsequent 
Executive Order, this program will be run by several different Cabinet 
agencies led by the Department of Labor. However, the Department of 
Energy will play a critical role in identifying eligible employees, 
providing information about employee exposures, and in assisting 
exposed workers not eligible for federal benefits in accessing the 
appropriate state workers' compensation system.
    Ill workers at DOE sites have been waiting years--and in many cases 
decades--for the federal government to step up to the responsibility it 
has to help those it has put in harm's way. Will you make every effort 
to ensure that the Department of Energy acts as expeditiously as 
possible to carry out the responsibilities assigned to it under the 
Energy Employees Occupational Illness Compensation Act and the 
associated Executive Order?
    Answer. The Compensation Program will be administered by the 
Department of Labor, the Department of Health and Human Services, and 
the Department of Energy. I recognize the importance of ensuring that 
DOE carry out its responsibilities under the Program, and have 
designated my staff office--the Office of the Assistant Secretary for 
Environment, Safety and Health (EH)--as the lead for ensuring that the 
Department's obligations under the Energy Employees Occupational 
Illness Compensation Program Act, and the associated Executive Order, 
are carried out quickly and completely.
              Responses to Questions From Senator Johnson
    Question 1a. What do you see as the primary reasons behind 
skyrocketing energy prices--doubling and even tripling of natural gas 
prices--and what package of solutions would you propose to alleviate 
the problem?
    Answer. Over the last decade oil consumption has increased by more 
than 14 percent while domestic oil production has declined by more than 
18 percent. These trends have increased our dependence on imported oil 
to 57 percent--our highest level ever. We now import more than 11 
million barrels of oil each day--and DOE estimates that imports will 
increase to 15 million per day by 2010. Natural gas prices have more 
than doubled over the last year in most areas of the country and in 
some places are much higher. All of this will drive up the price of 
goods through increased production and transportation costs.
    President Bush and I are deeply committed to developing an energy 
policy that includes increasing domestic production of energy in an 
environmentally responsible manner, increasing our use of renewable 
energy, decreasing our reliance on imported oil, and developing new 
technologies that conserve fossil fuels and reduce energy-related 
pollution.
    The Department of Energy is the principal Federal agency charged 
with responsibility for the development of a national energy policy. 
However, development of a national energy policy requires coordination 
with other Federal agencies and working with Congress. We will need to 
work with the agencies on issues such as federal land use, meeting our 
environmental responsibilities and how to provide appropriate 
incentives for production of our domestic energy resources.
    Question 1b. What do you think about decreasing U.S. exposure to 
fossil fuel price shocks by increasing fuel diversity with greater 
reliance and production from domestic alternative energy resources?
    Answer. We can and should continue to encourage the use of 
renewable energy, including biomass, solar, geothermal and wind--for 
environmental purposes as well as to reduce our demand for foreign oil.
    Question 2. Since the cost of oil has a much greater impact on our 
transportation system--as opposed to our electric system--would you 
support a significantly increased use of alternative fuels, such as 
biofuels?
    Answer. The Department of Energy (DOE) has supported the 
development of alternative fuels, including biofuels. These programs 
are vital for implementation of the Biomass Research and Development 
Act of 2000, which calls for closer coordination between DOE and the 
Department of Agriculture (USDA). Industry, in collaboration with DOE, 
USDA, and other agencies, has developed a vision for biobased products 
and bioenergy that calls for a tripling of the use of biomass by the 
year 2010. DOE is implementing a $100 million FY 2001 research budget 
for this purpose, which includes research and development of ethanol 
and biodiesel fuels. As I have said previously in regard to the 
nation's overall energy policy, we need a balanced approach to meeting 
our energy needs that uses renewable alternatives and non-fossil energy 
sources. The same kind of approach is needed in the transportation 
sector as well.
    Question 3. Many farm-belt states are net energy importers, costing 
billions of dollars to these already strapped rural economies, and high 
energy prices are making the situation even worse. Despite the fact 
that several studies have documented tremendous potential for renewable 
energy in these states--South Dakota, for instance, is ranked as one of 
the highest states for wind energy potential--the region has had 
trouble capitalizing on these resources. Do you support federal 
initiatives that would lead to significant growth in the industry--
especially in these states where the potential is so great?
    Answer. There is an excellent opportunity for renewable energy 
technologies to become an important new industry that can strengthen 
local and state economies throughout rural America. While each state 
will ultimately have the responsibility to assure that its individual 
policy, legislative, and regulatory framework supports renewable 
energy, the Federal government can and should help introduce new 
opportunities in the states by providing leadership and coordination in 
overcoming the barriers often faced by renewable technologies. This 
past year, DOE co-sponsored wind and biomass energy workshops in 
several states throughout the Midwest and Upper Great Plains, including 
South Dakota, North Dakota, Nebraska, Montana, and Kansas. In each 
instance the response was overwhelming, the information and assistance 
we provided was well received, and the workshops have led to a focused 
state effort to seriously explore wind and biomass development.
    Question 4. Natural gas--among its many uses--is a major cost 
component in the production of nitrogen fertilizer. And as you know, 
for the last several years natural gas has been touted as the fuel of 
the future because it is clean-burning, cost-effective, and relatively 
plentiful right here at home. Indeed, natural gas heats around half of 
American homes and is used to generate around 16% of our nation's 
electricity.
    However, since this time last year, spot prices for natural gas 
have increased dramatically. This specifically increases the cost of 
natural gas to fertilizer manufacturers in the U.S. Nitrogen 
fertilizer, particularly anhydrous ammonia, is a critical input to 
agricultural producers in South Dakota and the entire country. Much of 
the corn, wheat, and cotton grown in this nation depends upon the 
application of fertilizer to boost yields which can translate into 
increased profit potential. Nonetheless, farmers in South Dakota and 
elsewhere are very concerned about the access to affordable nitrogen 
fertilizer. As a consequence of higher natural gas costs, fertilizer 
producers are decreasing production and even shutting down plants. Some 
farmers have remarked to me that their fertilizer costs will increase 
between 33-100% from 2000 to 2001. Other farmers cannot even get bids 
to purchase fertilizer for the next crop year.
    As Energy Secretary, it is very likely you'll need to tackle this 
pressing problem immediately. What steps can be taken to ensure farmers 
have access to affordable nitrogen fertilizer in the future?
    Answer. A Bush Administration priority is to increase domestic 
production of oil and natural gas which will help address our needs for 
both energy and fertilizer.
                              APPENDIX II

              Additional Material Submitted for the Record

                              ----------                              

       California Association of School Business Officials,
                                   Sacramento, CA, January 2, 2001.
Hon. Frank H. Murkowski,
Chairman, Senate Committee on Energy & Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Senator Murkowski: On behalf of the California Association of 
School Business Officials, I am very pleased to advise you and the 
committee of our strong support for the confirmation of Senator Spencer 
Abraham as the next United States Secretary of Energy. Senator Abraham 
understands the many energy issues that impact public schools across 
the nation and has been an enthusiastic supporter of public education.
    In California, our aging public schools combined with the most 
intensive student population growth in the nation combine to challenge 
energy utilization while we are attempting to maximize every dollar for 
instructional purposes. In addition, our public schools transport more 
people daily than most of the major metropolitan transportation systems 
in the state combined. The need for less expensive and cleaner burning 
fuels on our school buses demand creative ways to enable districts to 
retire old, inefficient buses and reduce the overall expense of student 
transportation. Senator Abraham has always understood that public 
education policy spans agencies well beyond the Department of 
Education.
    During his service in the United States Senate, Senator Abraham was 
always eager to assist public education on a variety of issues that 
impacted schools in California and all across the country. He assisted 
us with issues including transportation, energy, health and technology. 
He is a strong advocate of public schools and has always been 
responsive to the importance of local control.
    For these reasons, we enthusiastically urge the committee to 
confirm Senator Abraham as the Secretary of Energy. If you have any 
questions regarding our support for Senator Abraham's nomination, 
please don't hesitate to contact me at 916-447-3783.
            Sincerely,
                                           Kevin R. Gordon,
                                                Executtve Director.
                                 ______
                                 
                   Information Technology Industry Council,
                                   Washington, DC, January 8, 2001.
Senator Frank Murkowski,
Senate Energy and Natural Resource Committee, Washington, DC.
    Senator Murkowski: ITI is the association of leading IT companies. 
Our main mission is to promote the understanding of the digital world 
and advance policies that enhance the competitiveness of our industry.
    I am writing today to add our perspective on Senator Abraham's 
nomination to be the next Secretary of Energy. During his tenure in the 
Senate and his service on the Judiciary and Commerce Committees, 
Senator Abraham has been a leader on technology issues. He was a leader 
on a number of fronts including digital signatures legislation, H-1b 
Visa legislation and free trade initiatives. In addition, he also 
realizes that our industry has become so pervasive in the economy that 
every policy arena--including energy--is critical to Americas 
continuing leadership in the Information Age.
    Senator Abraham is someone our industry has worked well with in the 
past and someone we look forward to continuing to work with during his 
service in the Bush Administration.
            Sincerely,
                                              Rhett Dawson,
                                                         President.
                                 ______
                                 
                                                      USEC,
                                    Bethesda, MD, January 11, 2001.
Hon. Frank Murkowski,
Committee on Energy and Natural Resources, U.S. Senate, Washington, DC.
    Dear Senator Murkowski: It is my great pleasure to strongly endorse 
the proposed nomination by President-elect Bush of Senator Spencer 
Abraham to be Secretary of Energy.
    As demonstrated by current events, the United States is faced with 
a great need for a comprehensive energy policy. This policy must 
address our strategic need for energy security while at the same time 
accommodating the needs of the environment and the productivity of our 
citizens. The complexity of the required effort mandates the selection 
of an individual as Secretary of Energy who can bring to the table the 
diversity of interests necessary to achieve this extraordinary, and in 
the past, elusive goal. Senator Abraham, with his experience in the 
Vice President's office during the previous Bush administration and his 
six years in the United States Senate where he held a leadership 
position clearly will bring to the office of the Secretary of Energy 
the ability to lead this quest for energy security.
    As President and CEO of USEC Inc., the Nation's sole producer of 
enriched uranium for use as fuel in civilian nuclear power plants, I 
strongly endorse the new Administration's emphasis on the relationship 
between our national security and our energy security. I am looking 
forward to working with Senator Abraham as Secretary of Energy, and I 
have every confidence in his ability to serve the American people with 
distinction.
            Sincerely,
                                        William H. Timbers,
                               President & Chief Executive Officer.
                                 ______
                                 
                                      Friends of the Earth,
                                  Washington, DC, January 11, 2001.
Hon. Frank H. Murkowski,
Ranking Member, Senate Committee on Energy and Natural Resources, 
        Washington, DC.
    Dear Senator Murkowski: On behalf of the thousands of members of 
Friends of the Earth, I would like to formally express this 
organization's opposition to the nomination of former Senator Spencer 
Abraham as Secretary of the United States Department of Energy (DOE). 
As a United States Senator for the state of Michigan, Spencer Abraham 
has a record of defending polluting, resource extractive energy sources 
over renewable energy.
    Growing bodies of evidence demonstrating the impacts of global 
warming and current energy crises throughout the country emphasize the 
importance of sound energy conservation strategies. The U.S. is at a 
crossroads in terms of its national energy policy: will there be a 
substantial move towards sustainable and renewable energy sources, or 
will we continue to rely on fossil fuels at the expense of our air, 
water, and natural resources? In light of his record, Senator Abraham's 
nomination would be a step in the wrong direction.
    Senator Abraham's abysmal record on energy issues includes:

   Voting to block consideration of an amendment that would 
        have increased spending on the DOE's Solar and Renewable Energy 
        program by $62 million, bringing it within range of the 
        Administration's FY00 budget request (Roll Call Vote No. 171, 
        June 16, 1999). This policy stance is in direct conflict with 
        President-elect Bush's own Comprehensive National Energy 
        Policy, which states that Bush ``understands the promise of 
        renewable energy and believes strongly in encouraging 
        alternative fuel sources such as wind, biomass, and solar.''
   Voting against a resolution calling for an end to the freeze 
        on Corporate Average Fuel Economy (CAFE) standards (Roll Call 
        Vote No. 275, September 15, 1999). Currently, emissions from 
        U.S. cars and sport utility vehicles (SUVs) contribute 20 
        percent of U.S. global warming pollution in the form of carbon 
        dioxide. Improving the vehicle mileage per gallon of cars and 
        SUVs by raising CAFE standards would reduce the amount of 
        fossil fuels burned, saving gas and preventing further 
        pollution.
   Consistently siding with the oil industry and voting to open 
        the Arctic National Wildlife Refuge (ANWR) in Alaska to oil 
        drilling (most recently: Roll Call Vote No. 058, April 6, 
        2000). ANWR is a 19 million-acre wildlife refuge of unequaled 
        beauty and importance to the arctic and subarctic ecosystems of 
        that region. It is home to hundreds of animal species and 
        millions of migratory birds. It serves as a polar bear denning 
        habitat and is the primary calving grounds for the Porcupine 
        caribou herd, long a cultural treasure for the native Gwich'in 
        people of Alaska and Canada. To allow oil drilling in this area 
        when alternative fuel sources exist would be to senselessly 
        destroy one of our nation's priceless natural treasures.
   Protecting the mining industry from efforts to enact 
        environmental safeguards and bonding requirements for hardrock 
        mines on public lands (most recently: Roll Call Vote No. 224, 
        July 20, 2000). In addition, Senator Abraham voted to legalize 
        unlimited mine waste dumping on public lands by eliminating the 
        ``millsite claim'' provision from the Mining Law of 1872 (Roll 
        Call Vote No. 223, July 27, 1999).
   Defending the coal industry by supporting efforts to exempt 
        hardrock mining operations from the Clean Water Act and the 
        Surface Mining Control and Reclamation Act (Roll Call Vote No. 
        370, November 18, 1999).
   One of the three cosponsors of a bill to abolish the 
        Department of Energy (see: S. 896, the Department of Energy 
        Abolishment Act in the 106th Congress).

    Given Senator Abraham's position on renewable energy and his 
unfettered defense of resource extractive industries, ratifying his 
nomination as Secretary of United States Department of Energy would be 
a grave mistake for the direction of our nation's energy policy. 
Friends of the Earth therefore urges you to oppose his nomination.
            Sincerely,
                                        Brent Blackweldeer,
                                                         President.
                                 ______
                                 
             National Coalition for Advanced Manufacturing,
                                  Washington, DC, January 12, 2001.
Hon. Jeff Bingaman,
U.S. Senate, Hart Office Building, Washington, DC.
    Dear Senator Bingaman: As you begin considering Senator Spencer 
Abraham's nomination to serve as Secretary of Energy, we can testify to 
his strong leadership skills and sound policy judgment from the many 
years that we have worked together.
    In his recent role as Chairman of the Senate Subcommittee on 
Manufacturing and Competitiveness, we worked with the Senator to 
explore the close link between the health of the nation's industrial 
base and the nation's infrastructure for basic R&D. The national lab 
system under the DOE is an integral part of that infrastructure. It is 
important that Sen. Abraham and the Bush Administration recognize the 
contributions of the laboratories and commit, within the bounds of 
DOE's missions, to allowing the laboratories to build on their history 
of collaborative relationships with industry, universities, and other 
research organizations.
    Sen. Abraham's confirmation hearings will begin defining the policy 
direction of DOE under the Bush Administration. We encourage you to 
acknowledge the important contributions of the basic research at the 
national labs to supporting DOE missions and the spinoff benefits of 
that research to societal and economic well-being. To that end, please 
find attached a NACFAM background paper that may help in preparing 
questions for the confirmation hearing. The paper provides concrete 
examples of the benefits of lab research spinoffs.
    The National Coalition for Advanced Manufacturing (NACFAM) has 
spent the last two years analyzing the factors that will sustain U.S. 
industrial strength and productivity growth in the years to come. Our 
work reveals important roles and responsibilities for the public and 
private sector in shaping, positioning, and strengthening the 
infrastructure for basic research. Our recommendations in this area are 
the product of the Advanced Manufacturing Leadership Forum (AMLF) 
process.
    As we worked with leading manufacturers and research organizations 
to develop the recommendations on R&D policy, it became quite clear 
that the laboratories operated by the DOE were critical to the health 
and vitality of the nation's basic research infrastructure. It also 
became clear that upgraded lab facilities and a robust basic research 
portfolio is a magnet for attracting to the national labs some of the 
nations brightest scientists and engineers.
    Given NACFAM's in-depth research and long experience with lab-
university-industry R&D, we would be pleased to brief you or a 
designated representative on these issues. We look forward to working 
with you in the years ahead.
            Sincerely,
                                   Eric Mittelstadt,
                                           Co-Chair, NACFAM.
                                   Leo Reddy,
                                           President, NACFAM.

Enclosure: Background Paper on Positive Impact of National Lab R&D
 Background on Positive Impact of Research Conducted By Department of 
                      Energy National Laboratories
    From the industry perspective, the national labs, together with the 
nation's universities and industry R&D facilities, represent the 
backbone of the America's infrastructure for basic research. The 
national laboratories of the Department of Energy provide important 
research and technologies to advance a number of diverse missions, the 
most notable of which is their contribution to the national security,
    In meeting the complex challenges of their missions, the 
laboratories have developed competencies across a broad array of basic 
research disciplines and as a result guided a number of technological 
spinoffs that benefit both society at large and industrial productivity 
and quality. A few pertinent examples illustrate these spinoffs that 
have a broad societal benefit:

   The same encryption technologies that were developed to 
        safeguard codes for nuclear weapons are now being used to 
        protect the nation's financial system;
   Sensors developed to detect bioweapons are now used to 
        detect disease by the medical community;
   The vast computational resources developed to simulate 
        nuclear explosions were critical to the speed at which the 
        Human Genome was mapped;
   Laboratory research in chemistry and combustion science 
        developed to model explosions is now being used to increase 
        energy efficiency and reduce pollution in industrial processes; 
        and
   The labs knowledge of geosciences is essential to 
        determining whether the repositories for nuclear waste and 
        other hazardous materials are safe.

    In particular, the DOE's science and technology infrastructure also 
plays a major role in safeguarding our economic prosperity, which rests 
on a foundation of technology-driven productivity growth. While making 
a major contribution to its own mission, especially the modernization 
of the nuclear stockpile, DOE's research on basic manufacturing science 
and technology enhance industrial strength and productivity. A few 
examples that illustrate the broad economic benefit:

   Meso-scale devices have the potential to revolutionize the 
        industrial economy by allowing production at minute scales;
   Nanotechnology, which is the control or fabrication of 
        structures at the molecular or atomic level, allows changes in 
        the very material composition of structure leading to new 
        engineered materials.
   Work on intelligent machines and automation science will 
        enable more rapid production, customization of products on a 
        broad scale, and increased worker safety and environmental 
        protection.
   Advances in the understanding of the interactions of 
        materials as well as the design of more efficient processes 
        will improve the efficiency of resource use and decrease wastes 
        from industrial processes.
   The combination of advanced information-technology with 
        breakthroughs in new materials, sensors, simulation, modeling 
        and chemistry will speed advances in the efficient production 
        of biomedical devices and the bioprocessing of new materials.
                                 ______
                                 
                         Chamber of Commerce of the
                                  United States of America,
                                  Washington, DC, January 16, 2001.
Hon. Frank Murkowski,
Chairman, Energy and Natural Resources Committee, U.S. Senate, 
        Washington, DC.
    Dear Chairman Murkowski: On behalf of the U.S. Chamber of Commerce, 
the world's largest business federation, representing more than three 
million businesses and organizations of every size, sector, and region 
of the country, I am writing in strong support of the nomination of 
Senator Spencer Abraham to serve as the next Secretary of Energy.
    Spencer Abraham is a proven legislator that is highly respected for 
his extraordinary dedication, tenacity and intelligence. He has worked 
in a bipartisan fashion to successfully advance and enact initiatives 
to protect public safety, reduce government waste and improve our 
nation's economic competitiveness.
    One of the biggest threats to our continued economic vitality is 
current and proliferating energy supply problems across the nation. 
These serious problems urgently demand an effective and comprehensive 
national energy strategy. Given his track record, Senator Abraham is 
highly capable of leading the Administration's efforts to implement a 
national policy that will ensure affordable and secure energy supplies.
    Accordingly, the U.S. Chamber urges your Committee to report 
favorably the nomination of Senator Spencer Abraham and that this 
letter be included in the hearing record. We look forward to our 
continued work with you in developing a comprehensive national energy 
policy.
            Sincerely,
                                         Thomas J. Donohue,
                             President and Chief Executive Officer.
                                 ______
                                 
                      National Community Action Foundation,
                                   Washington, DC, January 17, 2001
Hon. Jeff Bingaman,
Chairman, Senate Committee on Energy and Natural Resources, Washington, 
        DC.
    Dear Mr. Chairman: On behalf of the nation's 1100 Community Action 
Agencies (CAAs), the National Community Action Foundation urges your 
Committee's approval of the nomination of Senator Spencer Abraham as 
Secretary of Energy.
    From his work in the Senate, we know that Senator Abraham will 
consider all points of view in making policy, and our Michigan network 
of local Weatherization Assistance providers has witnessed his concern 
for the energy needs of the most disadvantaged Americans.
    We are certain we will be able to work productively with Senator 
Abraham, and look forward to future opportunities for collaboration 
when it addresses the energy challenges facing low-income consumers.
            Sincerely,
                                             David Bradley,
                                                Executive Director.
                                 ______
                                 
   Statement of Marcia Baker and John Hoefle, Executive Intelligence 
                                 Review
    Chairman Bingaman, and Members of the Committee,
    Our publication, Executive Intelligence Review, has forewarned for 
over two decades, against the kinds of policies that led to today's 
acute energy crisis: namely, the policies of dumping nuclear power, of 
deregulation, of speculation, and all the consequences of ``casino 
economics.'' In recent weeks, emergency energy proposals based on 
guidelines by Lyndon LaRouche, EIR Founding Editor, and now newly-
announced Presidential candidate, have been introduced before the 
Boston City Council, passed in California Democratic Party County 
meetings, and are being debated in state capitals throughout the 
country.
    Millions of Americans are hit directly by the energy crisis, and 
chain-reactions of shut-down are spreading throughout the economy. As 
of January, 2001, electricity rate hikes in the range of 10-40% have 
been imposed in California, Massachusetts, Washington, and many other 
states; these come on top of natural gas, heating oil and propane 
prices sky-rocketing. Factory shutdowns, agriculture dislocation, and 
threats to vital services (schools, hospitals, water and sanitation) 
are now the order of the day.
    It is from this crisis perspective--and also based on the larger 
context of the unprecedented global financial and economic-breakdown 
crises now breaking, that we urge you to reject the nomination of 
Spencer Abraham for the position of Energy Secretary. Our testimony 
opposing the Abraham nomination, has been prepared to provide the 
Senate with summary documentation of the nature of the energy 
emergency, and the urgency of facing the larger crisis.
    We conclude our testimony with excerpts from Lyndon LaRouche's 
statements on energy policy, made on a live international Webcast Jan. 
3, in specific response to a question from Detroit News reporter George 
Weeks, about former Michigan Sen. Abraham and Bush energy policy. On 
that same Webcast, at the time the news broke of Federal Reserve 
Chairman Alan Greenspan's Jan. 3 interest rate cut, LaRouche stated, 
that President Clinton should immediately take two measures:

   First, he should use Presidential powers to create an 
        emergency fund of credit which would be directed into urgently 
        needed, major employment projects, like construction of power 
        plants in California.
   Second, he should immediately re-regulate those sections of 
        the economy, particularly the energy utilities, in order to 
        prevent a power emergency.

    LaRouche put it this way:
    ``There's only one thing you can do. The system is going to blow. 
What do you do? You don't use monetarist methods. Monetarist methods 
caused the problem. Yes, you may use credit. You did what Roosevelt did 
with Jesse Jones and the Reconstruction Finance Corporation; that's 
what you do. You take and earmark--don't lower the interest rates. 
Create a special vehicle. Go to the Congress. Get a special fund 
authorized by the Presidential powers under the Constitution. Get some 
money allocated, real fast, an emergency fund, to get going, as seed 
money, to get some major employment projects in construction. . . .
    ``For example, let's take the case of California. We've got, right 
now, one of the major crises of the nation is the situation with the 
Edison of Southern California, and the PG&E. Now, there's a shortage of 
energy. Well, why not, immediately, through the Federal Government, 
create, first of all, two steps: Establish re-regulation, emergency re-
regulation. Do it under Clinton. Don't wait-for Bush. Do it now! I'd 
have Clinton do it right now, while he's still President. Re-regulate! 
On an emergency basis, under emergency powers of the President. You've 
got an emergency, California! A hell of an emergency. Re-regulate--it's 
a national emergency. And then get some money in there, we're going to 
fix this problem. We're going to get some power generation going in 
that area. We're going to ensure a safe and adequate supply of energy, 
to industry and to populations throughout the area. That's our 
mission.''
    In this testimony, we will not take up particulars of Sen. 
Abraham's personal record to call for his disqualification, even though 
he has several times called for the abolition of the very Department he 
has now been nominated to head. The relevant point about the man and 
his philosophy, in the case at hand, is that the energy and economic 
policies associated with George W. Bush, with which Sen. Abraham is 
aligned, are demonstrably at odds with the interests of the nation, 
even to the point of providing piracy-rate profits to Bush campaign-
associated Texas energy companies, at the expense of keeping the lights 
on. We document this below, in the case of California's electricity and 
gas crisis.
    Moreover, the Bush ``team'' profiteering goes beyond a conflict-of-
interest scandal--which is historically unprecedented. The danger 
presented is that, with the unfolding energy and economic crisis, and 
the financial blow-out, if a Cabinet is allowed to be formed of the 
disposition represented by Abraham, along with others proposed, 
especially John Ashcroft, then conditions are created for the federal 
government to be used to impose rule by force under circumstances of 
social upheaval. The analogy here is to 1933 ``emergency decree'' 
policies asserted by Hitler. That is the degree of crisis, and danger 
represented by the persons and policies nominated.
    The California and nationwide energy crisis, and the global 
financial and economic emergency, confront lawmakers with the task of 
re-asserting traditional U.S. general welfare policies. In the case of 
energy, there must be re-regulation, and infrastructure building. 
Spencer Abraham is not the man for that job.
    We here provide the essentials for evaluating the immediate tasks 
for the head of national energy policy at time of crisis.
    In order below:
          1. The California and nationwide energy crisis.
          2. The scandal of the Bush-associates' energy cartel.
          3. The national and international financial and economic 
        breakdown process.
          4. LaRouche proposals: Re-regulate, issue emergency credits 
        to rebuild
1. California, Nationwide Energy Crises
    California and the Northwestern states are now experiencing an 
extreme energy supply and price crisis. On Jan. 11, a Stage Three 
statewide electricity shortage emergency was put into effect in 
California, the second such extremity in six months. Washington and 
Oregon are similarly hit. Electricity prices (on the new, deregulated 
``wholesale'' market) have hyperinflated from, in the range of $30 per 
megawatt hour in 1999, to $1200--even $3000 per megawatt hour, as of 
December 2000. Two of the three major distribution utilities in 
California, Southern Edison and Pacific Gas & Electric, have racked up 
$12 billions in debt only from June to December, 2000, because of the 
Weimar-style hyperinflation. They can neither buy electricity nor 
natural gas--whose price likewise has hyperinflated, especially in the 
Western states. The total debt of these companies is in the range of 
$20 billions.
    As of Jan. 16--the time of preparation of this testimony--Southern 
Edison's parent company stood in default for a $100 million payment to 
a creditor; in upcoming days, both utilities face more due dates of 
unpayable obligations. In Sacramento, the state legislature was in 
emergency session to consider Gov. Gray Davis' proposal for the state 
to interpose in the markets in attempt to continue electricity 
supplies.
    In financial terms, the California and other U.S. utility debt 
default is enough to blow-up the U.S. and international financial 
system. Under certain ``cross-default'' clauses, the California 
utilities debt places up to $20 billions in default. Thus, technically, 
California is not at all a ``mere'' state energy crisis, but the 
manifestation, in energy, of the general economic breakdown process, 
and financial disintegration underway.
    Nationwide, variations of the so-called ``California crisis'' are 
worsening in all regions, and for all modes of energy--electricity, 
natural gas, oil, gasoline, propane, fuel oil. National U.S. utilities 
debt is in the range of $400 billions and growing, with other 
companies--outside California, and in natural gas as well as 
electricity, in stages of arrears.
    How did this come about? In brief, the immediate causes were the 
lack of expanding energy generation facilities, and de-regulation 
policies that resulted in marginalized supplies, and allowed 
speculation and hyper-profits. Beginning in the 1970s, generating 
capacity per household in the U.S. began to fall year by year. At the 
same time, there began changes particular to each mode of energy 
(fossil fuels, oil and gas, electricity, etc.) made in the name of 
increasing ``markets'' and competition. This was a ruse from the start, 
as is now evident. In reality, mergers and acquisitions, along with the 
deregulation of various kinds now underway in about 26 states, have led 
to increased, centralized private control, shortages and soaring 
prices.

   The average price of natural gas has soared from under $2.75 
        per 1,000 cubic feet in 1999, to over $10 in December, 2000. A 
        small group of newly-merged transmission and gas companies--
        directly interconnected with the Bush campaign and proposed 
        Administration, are raking in huge profits. (Detailed below).
   The rise in the per barrel price of oil over Y2000--fueled 
        by speculation in ``paper oil'' in London and on the New York 
        Mercantile Exchange, has resulted in severe hardship for 
        citizens, and economic activity, and huge profits for the 
        cartelized oil companies. E.g. BP-Amoco made 94% profit Third 
        Quarter 2000 over 1999.

    We are now seeing the chain-reaction effects throughout all sectors 
of the economy. Kaiser has placed a surcharge on fabricated metal 
products. The electricity hyperinflation in California--origin of 20% 
of all U.S. produced dairy products, will create severe national 
shortages in supply, and whopping high prices for milk goods. Nitrogen 
fertilizer production--dependent on natural gas--is so cut back and 
high-priced, that corn-planting will be far-reduced in acreage this 
spring (on top of very low winter wheat acreage last fall). Vital 
services, such as sewage treatment, hospital operations, and so on are 
threatened in many states.
2. The Bush League and the Energy Cartel
    The incoming Administration's stated policy is to continue the 
deregulation of energy, a policy of economic destruction of which the 
chaos in California is just the leading edge. Deregulation is a scam 
designed to let financial middlemen--the Enrons, Reliants, Dynegys and 
AESs of the world--skim off a large chunk of the billions of dollars 
Americans pay for energy every year, and Sen. Abraham has been given 
the assignment of protecting this scam. Anyone who would carry out such 
an assignment, is morally unfit for public office.
    Not only is Texas the center of those energy speculators which 
California Gov. Gray Davis has accurately characterized as ``pirates,'' 
but the circles around the coming--and the former--Bush Administration 
are in many ways indistinguishable from these energy privateers. 
California was the lead state to de-regulate in 1996, and by 1998 began 
the process of forced sell-off of generating capacity to the new 
echelon of private ``merchant generators.'' Some 40% of the state's 
generating capacity is now in the hands of these firms, posting 
fabulous profits. The following are prominent among the nation's energy 
profiteers:

   Enron, based in Houston, is the leading historical 
        contributor to the political campaigns of President-Elect 
        George W. Bush. Enron chairman Kenneth Lay is one of the chief 
        advisors of Secretary-nominee Abraham. Enron is also one of the 
        leading forces in ``energy futures''--namely, in transforming 
        the pricing of electricity from a ``cost of production plus 
        reasonable profit'' model, to a ``whatever the market will 
        bear'' speculators' dream.
   Reliant Energy, based in Houston, reported that its income 
        rose 37% in December 2000. Reliant bought five power plants 
        from Southern California Edison in 1998, and owns 17% of the 
        40% forced sell-off. On its directors, James A. Baker, III, was 
        chief of staff and Sec. of State in the Administration of 
        former President George H.W. Bush. Baker has also been a 
        consultant to Enron, as have a number of officials of the 
        former Bush Administration and even former President Bush 
        himself.
   Dynegy, based in Houston, owns California power generation 
        capacity in partnership with several others, including NRG 
        Energy, which posted a 221% third quarter income increase.

    Others that acquired generating capacity, and are now making killer 
profits are: 1) Charlotte-based Duke Energy, whose income rose 74%; 3) 
and Arlington, Virginia-based AES, the global energy mega-company whose 
third-quarter earnings were 131% higher than the previous quarter.
3. International Economic and Financial System Breakdown
    This looting of energy-payments occurs at a point in which the 
international economic and financial system is breaking apart, and the 
U.S. stands at ground zero of that collapse. The widely touted growth 
of the U.S. economy during the Reagan/Bush, Bush and Clinton years has 
been a growth in debt, financial claims and casino-like derivatives 
bets globally, but centered mainly in U.S. institutions.
    Globally, we estimate there are some $400 trillions of financial 
claims outstanding, ten times the size of the gross world product, 
which itself is a figure bloated by the effects of the financial 
bubble. The institution with the highest exposure to this bubble is the 
recently merged J.P. Morgan Chase & Co., which by itself has some $23 
trillions in derivatives bets, more than twice the U.S. GDP! The 
Federal Reserve's recent lowering of interest rates to protect the 
troubled Bank of America and its $7 trillion derivatives portfolio is 
indicative of the instability such uncontrolled betting creates.
    The fate of the U.S. banking system and financial markets is 
inextricably intertwined with this bubble; if the bubble pops, the 
banks, the markets and Wall Street go with it. The Senate knows it, the 
House knows it, the Executive Branch knows it, and the media knows it. 
But rather than take the steps repeatedly outlined by Lyndon LaRouche 
to put this system through bankruptcy and begin to rebuild the 
productive sector of the economy, the policy has been to pump up the 
bubble by escalating the looting of the population and the productive 
base. The energy deregulation scam is but one aspect of this looting 
scheme.
    Cannibalization of the population and the productive sector only 
works in the short term, however. The more you steal from the 
population, and the more you dis-invest in infrastructure, 
manufacturing, health care and education, the less able is the economy 
to service the enormous debt overhang of the bubble--day by day, the 
economy becomes more bankrupt. Eliminating ``useless eaters'' creates 
more ``useless eaters,'' and the process feeds upon itself. Eventually 
the point is reached--as it has now--where the physical economy itself 
begins to break apart.
    The California crisis, in which a physical-economic electricity 
crisis--combined with savage looting--has-created a financial crisis, 
represents just such an event, and serves as a warning to all that the 
piper is demanding payment for decades of foolish policies and ideas.
    The Establishment knows that its mountain of financial claims can 
never be paid, and that a serious crash is coming in one form or 
another, and that leads us to an even darker side of deregulation. With 
the rampant mergers among energy companies, and the shifting into a 
``whatever the market will bear'' pricing scheme, the Establishment is 
positioning itself to grab the income streams which remain after the 
crash. The rapid consolidation of control in energy, food production 
and distribution, telecommunications, strategic minerals, precious 
metals, raw materials and other essentials of life, represent 
preparations for exerting power after a crash. As the empires have 
known for ages, he who controls the necessities of life, controls the 
people. This is the policy to which the Bush Administration and its 
Energy Department are committed, and this is how civilizations end. 
This policy should be stopped now, by the Senate.
4. LaRouche: California Is A Test for Energy Policy
    Only the traditional, ``general welfare'' approach to dealing with 
the energy crisis will work. The principles are in U.S. standing law, 
including the Federal Power Act of 1935, the Public Utility Holding 
Company Act of 1935, the Atomic Energy Act of 1946, and other 
precedents. What is immediately required is to deal with the two causes 
of the worsening crisis: First, to remedy the lack of supplies of 
electricity and fuels (including transmission, refining and all such 
essential logistics); and secondly, to roll-back the deregulation. Even 
well-meaning stop-gap attempts to keep the lights on through tax-payer 
subsidies, or rate hikes, only line the pockets of Bush-team 
speculators, and hurry the nation down the road to destruction. 
Workable proposals must proceed from the economic national-interest 
overall.
    On Jan. 3, during a live Webcast, newly announced Democratic 
Presidential candidate Lyndon LaRouche gave his evaluation of Spencer 
Abraham and the Bush energy policy in response to a question from 
Detroit News reporter George Weeks.
    ``Look, talk about energy policy. Two major things are involved 
here, first of all. First of all, how many kilowatts are we generating? 
What does it take to support a community? What does it take to support 
an industry? What about the energy flux-density of our energy sources? 
What about reliability, in terms of supply and price? You know, these 
kinds of questions have to be faced first. And this is exactly the kind 
of thing you're not likely to get from Bush.
    ``Look, for example, one very--thing that sticks in your craw, when 
you look at Bush: What about Rainwater? What about the involvement of 
Enron? What about these things which are tied closely to Bush, which 
are the cancer destroying the energy system of the United States? I 
don't think that a Secretary of Energy under George Bush, be he good or 
bad, has any chance of doing a good job at this time.
    ``My view on the entire Bush Administration, is that members of the 
Congress--chiefly Democrats, but also honest Republicans--have to get 
together and put a leash on this Bush Administration, to make sure it 
knows where to do what on the lawn, and where not to do it. You have to 
create a condition under which Bush says, `Okay, I'm the President, but 
I have to heed what this angry bunch of constituents is telling me I 
better do, or else.' Under those conditions, you might be able to find 
a Cabinet appointment in the Bush Administration, which has enough 
independence of the Rainwater phenomenon and other things in the Bush 
background, to be able to make an honest decision on things like 
energy.
    ``But at present, the way the Administration is now constituted, 
the way it's framed up to be, given the situation in the Congress at 
this moment--it may improve later, but at this moment--I don't think 
the United States has a chance under a Bush Administration. I think 
we're looking at a short road to Hell, under George Bush--unless we can 
create the condition in the country, where the fact that a weakly-
elected, or quasi-elected President has to recognize that he doesn't 
carry much weight with the country as a whole, and the best thing he 
can do, is sit back in that office, and pay attention to some orders 
and pressures from his constituents--and the orders and pressures 
coming from his best advisers, who tell him, ``Mr. President, you 
better do this.'' And he says, `Why? I'm the President.' `Well, we call 
you President, but you really aren't. You're just the man that signs 
the checks, and signs the bills.' ''
    [When George Weeks further asked, ``Sir, when you say that we're on 
the short road to Hell under George Bush, are you talking energy, or 
over-all?'']
    ``Over-all, everything. Energy's just--Look at the California 
situation: What is the Bush policy on what are you going to do about 
PG&E and Southern Edison? What's he going to do about it? That's a 
test, that's a test on energy policy--right now. We've got a situation 
in New England, that's going to be developing on the heating oil 
question, that's going to rise up again. We've got all over the country 
an energy crisis.
    ``Well, let's take California. Let's take PG&E and Edison. That is 
the market which tells you exactly what the entire Bush Administration 
policy is going to be on energy--right than and there. You don't have 
to find out in Michigan, you can find our right there.''
    As you undoubtedly know, just today PG&E defaulted on $600 million 
in debt--and there is no clear policy coming from anywhere to guarantee 
the power-generating capacity in this region, which serves over 20 
million people. So the question is before you now: will you select an 
energy secretary who will re-regulate and provide the energy we need, 
or will you hand the system over to the energy pirates wholesale?
```