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THE FISCAL YEAR 2013 DEPARTMENT OF ENERGY 

BUDGET 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MARCH 8, 2012 

Serial No. 112–125 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

JOHN SULLIVAN, Oklahoma 

Vice Chairman 

JOHN SHIMKUS, Illinois 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MICHAEL C. BURGESS, Texas 

BRIAN P. BILBRAY, California 

STEVE SCALISE, Louisiana 

CATHY MCMORRIS RODGERS, Washington 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JAY INSLEE, Washington 

KATHY CASTOR, Florida 

JOHN D. DINGELL, Michigan 

EDWARD J. MARKEY, Massachusetts 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

CHARLES A. GONZALEZ, Texas 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 5 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 8 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 10 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 10 

WITNESSES

Steven Chu, Secretary, Department of Energy ..................................................... 12 

Prepared statement .......................................................................................... 15 

Answers to submitted questions ...................................................................... 91 

SUBMITTED MATERIAL

Letter, dated March 6, 2012, from Lorinda Wichman, Chairman, Nye County, 

Nevada, Board of County Commissioners, to Steven Chu, Secretary, Department of Energy, submitted by Mr. Shimkus ...................................................... 37 

Findings from Nevada Statewide Survey conducted by Public Opinion Strategies February 21-23, 2012, submitted by Mr. Whitfield ................................... 86 

(1) 

THE FISCAL YEAR 2013 DEPARTMENT OF 

ENERGY BUDGET 

THURSDAY, MARCH 8, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND POWER, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:07 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Ed Whitfield 

(chairman of the subcommittee) presiding. 

Members present: Representatives Whitfield, Sullivan, Shimkus, 

Walden, Terry, Burgess, Bilbray, Scalise, Olson, McKinley, Gardner, Pompeo, Griffith, Barton, Upton (ex officio), Rush, Inslee, Dingell, Markey, Engel, Green, Doyle, and Waxman (ex officio). 

Staff present: Anita Bradley, Senior Policy Advisor to the Chairman Emeritus; Maryam Brown, Chief Counsel, Energy and Power; 

Allison Busbee, Legislative Clerk; Patrick Currier, Counsel, Energy 

and Power; Garrett Golding, Professional Staff Member, Energy 

and Power; Mike Gruber, Senior Policy Advisor; Cory Hicks, Policy 

Coordinator, Energy and Power; Heidi King, Chief Economist; Ben 

Lieberman, Counsel, Energy and Power; Dave McCarthy, Chief 

Counsel, Environment/Economy; Mary Neumayr, Senior Energy 

Counsel; Jeff Baran, Democratic Senior Counsel; Phil Barnett, 

Democratic Staff Director; Greg Dotson, Democratic Energy and 

Environment Staff Director; Caitlin Haberman, Democratic Policy 

Analyst; and Angela Kordyak, DOE Detailee. 

Mr. WHITFIELD. I will call this hearing to order, and the subject 

of today’s hearing is ‘‘The Fiscal Year 2013 DOE Budget.’’ And we 

only have one witness today, and that is Secretary Chu. And we 

appreciate very much your being here with us this morning, Mr. 

Secretary. We certainly have a lot of questions, and we look forward to your comments as well. 

And at this time I would recognize myself for an opening statement. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

I would start off by simply saying that I think just about everyone agrees that America’s air quality is among the best in the 

world, and there is no question that the Obama administration is 

totally focused on transforming the energy delivery system in 

America. And the reasons given for that are, number one, to make 

the air quality even cleaner; and number two, Ms. Jackson and othVerDate Aug 31 2005 14:32 Jan 22, 2013 Jkt 037690 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\1194B7~1\112-12~1 WAYNE
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ers frequently talk about regulations create more jobs. And I might 

also say that I have never, ever seen an administration go after one 

industry the way this administration is going after the coal industry. 

President Obama, when he was campaigning, was in San Francisco and he said they can build coal plants but they will go bankrupt. And even you have made comments about how bad coal is 

and many other people in the administration and, you know, that 

is fine. That is you all’s views and many of us disagree with that. 

And from looking at the budget that you have proposed, you are 

asking for an increase I guess of about $856 million, and in the 

scheme of things that is not that much money. But we have a $16 

trillion Federal debt and any kind of increases are significant in today’s atmosphere. And when I look at that budget, when I read 

that budget, it appears to me that America is moving as fast as it 

can to adopt the European model for energy production. And I recently have read a number of articles about the things that are 

going on in Europe. We know that in Spain they place great emphasis on wind energy. They have an unemployment rate of 22 percent. There was the study from Juan Carlos University that talked 

about for every green job created there was a loss of two jobs in 

traditional industries. 

And one of the things that I find most disturbing about this is 

it looks like EPA is setting the energy policy for America. Now, the 

most comprehensive regulation coming out of EPA relates to Utility 

MACT. And Mrs. Jackson has never been able to give us a total 

cost. In fact, no one has been able to give us a total cost outside 

experts who have testified that it would be up to $90 billion. But 

EPA said that they could expect to close maybe 14 gigawatts of coal 

plants and even NERC is saying that it will be more like 36 or 59 

gigawatts. And NERC also, in a November report, indicated reliability was going to be a serious issue. 

And yet, whether it is in transportation or it is in electricity production, this administration is totally moving to, on the transportation side, provide all sorts of grants and loan guarantees to technologies, many of which have not proven to be able to deliver. 

Solyndra. We have got Fisker not going to open up the Delaware 

plant. We have got A123 Battery Systems that is reducing their 

employment. 

And my time is running out here, but I was just reading some 

of the headlines in Europe. ‘‘EU Faces 20 Years of Rising Energy 

Bills,’’ ‘‘Wind and Solar Subsidies Drying Up in Europe,’’ ‘‘Wind 

Turbines in Europe do Nothing for Emission Reduction Goals,’’ 

‘‘Germany’s Rising Cost of Going Green,’’ ‘‘Czech Electricity Grid 

Company Ready to Block German Wind Power.’’ And so my whole 

point is that this administration is moving so fast and is so determined to transform the energy sector in America that I don’t think 

they are giving adequate consideration to the consequences of that. 

So that is what I, as one individual representing 700,000 people, 

am most concerned about. 

[The prepared statement of Mr. Whitfield follows:] 

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And my time has expired, so at this time I would like to recognize Mr. Rush for his 5-minute opening statement. 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. Thank you, Mr. Chairman. 

And thank you, Mr. Secretary, for being here. Mr. Secretary, it 

is always a pleasure to have you appear before this subcommittee. 

And I want to take a moment just to commend you for your knowledge, your expertise, and your leadership in directing this important agency at such a critical time in our Nation’s history. 

As you know, high gasoline prices are on the minds of every 

American, my constituents and others. I am concerned about these 

high gas prices. And although we all understand that fuel prices 

are influenced by a variety of geopolitical factors, to hear my Republican colleagues tell it, it is the President and his energy policies that are contributing enormously to these sky-high prices. And 

of course, Mr. Secretary, you and I will agree that does not explain—the definition does not explain why gas prices skyrocketed 

from just over $1.50 a gallon in 2001 when President Bush took office to just under $4.00 a gallon in spring of ’08 before the Bush 

recession took our economy over the cliff. But that is an argument 

for another time. I don’t want to belabor that at this moment. 

Mr. Secretary, as the person who heads the Energy Department, 

I would like to hear your thoughts on how the Obama administration’s policies have helped the American consumers through fuel efficiency measures to promotional renewable sources of energy and 

other forward-thinking policies that are necessary to move America 

forward and to wean us off of imported oil. I would like also to get 

your comments on the record regarding the levels of fuel consumption, importation of foreign oil, and oil and gas production during 

the Obama administration. The research I have seen show that 

under President Obama we are importing less oil now than any 

other time in the last 13 years. Research also shows that we are 

producing more oil now domestically than we were at any time in 

the last 8 years. In fact, since President Obama opened up millions 

of new acres for oil and gas exploration, the U.S. now has more 

working oil and gas rigs than the rest of the world combined. 

Additionally, your agency recently reported that the average fuel 

demand has actually dropped 6.7 percent as compared to the same 

time last year. Yet, despite all of these effects, gas prices have continued to climb much faster and far earlier than in previous years. 

And of course, my friends on the other side, those who want to 

blame the President and those who have got a keen eye, a sharp 

eye toward these November 2012 elections are using this as a way 

to make political hail against the administration’s policies. As you 

will hear repeated time and time and time again, the constant refrain of those on the other side will be pointing the finger at the 

President and solely at the president. 

Mr. Secretary, again, I want to welcome you today and I look forward to your testimony. I look forward to you setting the record 

straight, finally I hope setting the record straight but I am not too 

confident that even though you are setting the record straight that 

it will remain set. Your comments in the past as they have been 

6 

will be distorted, taken out of context, and used for political violence and political verbiage and used for political gain. But please 

inform the American people of the true benefits of having an energy policy that is forward-looking, that will help us plan ahead for 

the future so the Congress will not have this same finger-pointing 

debate 10, 20, or 30 years down the road. 

Thank you, Mr. Secretary. And I yield back the balance of my 

time. 

Mr. WHITFIELD. Thank you. 

At this time, I recognize the chairman of the full committee, Mr. 

Upton of Michigan, for 5 minutes. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Well, thank you, Mr. Chairman. 

And Mr. Secretary, welcome. Today’s hearing on the Department 

of Energy’s fiscal year 2013 budget comes at a very critical time for 

energy policy in the country for sure. 

Gasoline prices continue their march toward and probably past 

$4.00 per gallon. We remain dependent on unstable foreign sources 

of oil despite abundant untapped domestic supplies, as well as Canadian supplies that this administration so far has blocked from 

coming into the U.S. And at the same time, residential electricity 

prices have been increasing every year over the last decade. 

Mr. Secretary, you have raised some eyebrows with your comments on gas prices early on and about the administration’s overall 

energy policy. Many of us were stunned by your past suggestion 

sometime ago that, ‘‘somehow we have to figure out how to boost 

the price of gasoline to the levels in Europe.’’ And more recently, 

last week you were asked whether your overall goal was to lower 

gasoline prices, and your answer was, ‘‘no.’’ You said the goal was 

to decrease dependency on oil—a long-term goal for sure—which 

means we are not necessarily focused on reducing prices for families and small businesses that are struggling today. 

Increased energy prices mean that energy households are spending a greater percentage of their income on energy costs, leaving 

them with less money for food, healthcare, education, other basic 

necessities. So what has the President done to help us? Well, he 

twice rejected the Keystone Pipeline project and the job creation 

and secure energy supplies that it would deliver. His solution to 

higher gas prices appears to certainly threaten our emergency oil 

supplies by tapping SPR rather than opening more Federal lands 

to domestic energy development. 

Instead of eliminating regulatory red tape, he has imposed costly 

new regs on our power sector that certainly are going to drive up 

the electricity prices. He recently did begin to brag about—that he 

supports an ‘‘all-of-the-above’’ energy policy, but these actions look 

more like a policy of ‘‘nothing from below.’’ Oil production opportunities remain blocked, layers of new Federal regs contemplated for 

natural gas development, costly rules designed to squeeze out coal, 

and the sad saga of Yucca Mountain, halting development of a 

long-term repository and raising questions about our long-term nuclear prospects. 

7 

So the President’s proposed fiscal year 2013 budget for the DOE 

is not ‘‘all-of-the-above.’’ Rather, it seeks to transform the energy 

portfolio based on unproven and more expensive alternatives. Certainly, his budget proposes to slash funding for proven energy resources such as coal, nuclear, hydro, while significantly increasing 

funding for high-cost, high-risk energy alternatives. And although 

many of us do support alternative energy sources—they are laudable goals—there is a place for research, for sure, but questions are 

placed as to whether or not they really produce a healthy overall 

economy 

So we welcome your testimony today. We look forward to your 

answers. 

[The prepared statement of Mr. Upton follows:] 

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And I yield the balance of my time to Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Mr. Chairman. 

And Secretary, it is always good to see you. We love to have you 

come before us and give us your views on the state of the Department of Energy. 

Today, we are going to talk about DOE’s budget. We saw that the total budget request by the President was a little over $27 billion and just coincidentally is saw that overall the Obama administration last year spent over $24 billion on alternative energy 

projects. It is obvious that some of that money hasn’t been too well 

spent. I continue to be concerned about Solyndra. I continue to believe that that project has been mismanaged by your department. 

I am going to ask you some questions when I am allowed to what 

changes if any have been made in the management of the Loan 

Guarantee Program. It is obvious that mistakes have been made 

and I think some laws have been violated with regards to the subordination situation. But I would hope that you would be able to 

tell me that things are being corrected and those practices of the 

past won’t happen again. 

But we are always glad to see you, sir, and we look forward to 

your answers. I would yield to whoever I am supposed to. If not, 

I yield back to the Chairman. 

Mr. WHITFIELD. The gentleman yields back. 

At this time, I would like to recognize the gentleman from California, Mr. Waxman, for a 5-minute opening statement. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman. 

And Secretary Chu, we are pleased to see you again at our committee. 

There are a lot of energy challenges that we are facing, and you 

are going to be asked about them by members of our committee. 

But the American people are concerned about high gasoline prices, 

and I think, because of our dependence on oil, oil itself, that is 

leading us to our higher prices in gasoline. 

Oil is priced in a world market, and so even if we produce more 

oil in the United States, that is not going to lower the price of gasoline here because we have oil priced based on what the world price 

is. Canada, for example, should be the utopia the Republicans pray 

for. In Canada, they produce more oil than they consume, and yet 

their prices are just as high as ours. And their people are complaining about the high price of gasoline as well. 

So when we hear Republicans saying, ‘‘Produce more oil,’’ they 

are doing what the oil companies want, but it is not going to reduce 

the price of gasoline. 

Energy economists tell us the Republican plan is not even ‘‘remotely possible’’ to reduce the price of gasoline. It will have zero 

effect on gasoline prices, so we need to face reality. And the reality 

is that oil prices are determined on a global market. And no matter 

11 

how much we drill here, our gasoline prices are going to rise if 

there is a crisis in the Middle East, if there is a fear about disruption from Iran, if there is a labor unrest in Nigeria, if OPEC sees 

that there is too much oil and they decide to reduce the supply and 

the demand is increased in China and in India. 

So there is only one way we can protect ourselves from the impacts of rising oil prices, and that is if we reduce our demand for 

oil. 

That brings us to another energy challenge that we face. We 

have to invest in clean energy to diversify and reduce our energy 

use. We are locked in a competition with China and other countries 

in the future of clean energy. And if clean energy is our future and 

we are not investing in that as House Republicans call on us to 

strike those investments, we are going to lose out on jobs and the 

future. 

We have to also confront the enormous challenge of climate 

change, which threatens our economic strength, our national security, and the health of our citizens. Yet rather than confront this 

challenge, the Republicans deny the science and they vote to block 

all action on climate change. 

Democrats and Republicans in Congress seem to have two completely different visions of our future. The President says we need 

to listen to scientists and energy experts and become the world 

leaders in clean energy economy of the future. House Republicans 

deny the science, and they seem to want to obstruct the President 

every step of the way. 

In spite of these constant obstructions and attacks on commonsense policy, the administration has made significant advances. 

The President has acted to cut the emissions of cars and trucks, 

doubling the fuel efficiency of our fleet. As a result, our energy dependence on oil has declined. 

The Department of Energy has made significant investments in 

renewable energy and we are seeing the results. Even while our 

economy has struggled during the last 3 years, the solar industry 

doubled the number of American solar jobs from 46,000 to more 

than 100,000. U.S. wind industry has added more than 35 percent 

of all new generating capacity over the past 4 years, second only 

to natural gas. The percentage of those wind components manufactured in the U.S. has more than doubled. 

The Department of Energy is looking at a weatherization program to improve energy efficiency of more than 750,000 homes 

across the Nation. That is a savings for low-income families on average of $437 a year in heating and cooling costs alone. 

You won’t hear much about these accomplishments from the Republicans. They are going to talk about Solyndra and Keystone. We 

will hear the President’s budget didn’t include enough money for 

fossil fuels or nuclear power. We are not going to hear about real 

solutions from the Republicans. They are playing politics with this 

issue. We need to get on with the job of making sure America is 

less dependent on oil, that we have a future in the clean energy 

sector, that our consumers can face lower gasoline prices as we 

move away from our dependence on oil. 

I yield back my time. 

Mr. WHITFIELD. Thank you, Mr. Waxman. 

12 

That concludes the opening statements. And as I said earlier, we 

only have one witness today, and that is the Honorable Steven 

Chu, Secretary of Energy. 

And so, Mr. Secretary, you are recognized for 5 minutes for an 

opening statement. 

STATEMENT OF STEVEN CHU, SECRETARY, DEPARTMENT OF 

ENERGY 

Mr. CHU. Thank you. Chairman Whitfield, Ranking Member 

Rush, Chairman Upton, Ranking Member Waxman, and members 

of the committee, thank you for the opportunity to discuss the Department of Energy’s fiscal year 2013 budget request. 

To promote economic growth and strengthen security, President 

Obama has called for an ‘‘all-of-the-above strategy’’ that develops 

every source of American energy. The President wants to fuel our 

economy with domestic energy resources while increasing our ability compete in the clean energy race. The Department’s fiscal year 

2013 budget request of $27.2 billion is guided by the President’s—— 

Mr. WHITFIELD. Mr. Secretary, excuse me for interrupting just a 

minute. Mr. Rush said that he cannot hear you. Is your microphone 

on? 

Mr. CHU. I am wondering actually—I have been having difficulty 

hearing you as well. If the person in charge of the audio-visual can 

crank it up a little bit? That seems to be better. 

Mr. WHITFIELD. All right, thank you. 

Mr. CHU. To promote economic growth and strengthen security, 

President Obama has called for an ‘‘all-of-the-above strategy’’ that 

develops every source of American energy. The President wants to 

fuel our economy with domestic energy resources while increasing 

our ability compete in the clean energy race. The Department’s fiscal year 2013 budget request of $27.2 billion 

is guided by the President’s vision, our 2011 Strategic Plan and our 

inaugural Quadrennial Technology review. It supports leadership 

in clean energy technologies, science, and innovation, and nuclear 

security and environmental cleanup. 

Decades ago, the Energy Department’s support helped to develop 

the technologies that have allowed us to tap into America’s abundant shale gas—and I might add—oil resources. Today, our investments can help advance technologies that will unlock the promise 

of renewable energy and energy efficiency. The budget request invests approximately $4 billion in our energy programs. It advances 

progress in areas from solar to offshore wind to carbon-capture utilization and storage to smart grid technologies, and it helps develop 

next-generation biofuels, advanced batteries, and fuel efficient vehicle technologies to reduce our dependence on foreign oil, which 

every day places a crushing burden on families and on our economy. 

As the President and I have said, there is no silver bullet, but 

we can and must pursue a serious, long-term, all-of-the-above approach that diversifies our transportation sector, protects consumers from the high gas prices, harnesses American resources, 

and creates jobs here and at home. That is exactly what this budget does. 

13 

The budget request also invests $770 million in the Nuclear Energy Program to help develop the next generation of nuclear power 

technologies, including small modular reactors. It includes funding 

for continued nuclear waste R&D, which aligns with the recommendations of the Blue Ribbon Commission on America’s Nuclear Future. As we move to a sustainable energy future, America’s 

fossil fuel energy resources will continue to play an important role 

in our energy mix. 

The budget request includes $14 million as part of a $45 million 

priority R&D initiative by the Departments of Energy, Interior, 

and EPA to understand and minimize potential environmental, 

health, and safety impacts of natural gas development through hydraulic fracking. The budget also promotes energy efficiency to help 

American’s save money by saving energy and it sponsors R&D on 

industrial materials and processes to help U.S. manufacturers cut 

costs. 

To maximize our energy technology efforts in areas such as batteries, biofuels, electric grid technologies, we are coordinating research and development across our basic and applied research programs and ARPA–E. And to encourage the manufacturing and deployment of clean energy technologies, the President has called for 

extending proven tax incentives, including the Production Tax 

Credit, the 1603 program, and Advanced Energy Manufacturing 

Tax Credit. 

Competing in the new energy economy requires our country to 

harness all our resources, including American ingenuity. The budget request includes $5 billion for the Office of Science to support 

basic research that could lead to new discoveries and help solve energy challenges. It continues to support Energy Frontier Research 

Centers, which aim to solve specific scientific problems to unlock 

new clean energy development. It also supports the five existing 

Energy Innovation Hubs and proposes a new hub in electricity systems. Through the hubs, we are bringing together our Nation’s top 

scientists and engineers to achieve game-changing energy goals. 

Additionally, the budget request includes $350 million for ARPA– 

E to support research projects that could fundamentally transform 

the ways we use and produce energy. Taken together, our research 

initiatives will help rev up America’s great innovation machine to 

accelerate energy breakthroughs. 

In addition to strengthening our economy, the budget request 

also strengthens our security by providing $11.5 billion for the National Nuclear Security Administration. Finally, the budget requests include $5.7 billion for the Office of Environmental Management to protect public health and the environment by cleaning up 

radioactive legacy waste from the Manhattan Project and the Cold 

War. 

This budget request builds on progress that has been made by 

the EM program. By the end of 2011, the program had reduced its 

geographic footprint by 66 percent, far exceeding its goal of 40 percent. The budget request makes strategic investments to promote 

our prosperity and security. At the same time, we recognize the 

country’s fiscal challenges and are cutting back where we can. We 

are committed to performing our work efficiently and effectively. 

14 

Countries around the world recognize the clean energy opportunity and are moving aggressively to lead. This is a race we can 

win but we must act with fierce urgency. 

Thank you, and I will be pleased to answer your questions. 

[The prepared statement of Mr. Chu follows:] 

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Mr. WHITFIELD. Thank you, Secretary Chu. And I recognize myself for 5 minutes of questions. 

I had mentioned in my opening statement about the Utility 

MACT, which is indeed one of the big regulations coming out of 

EPA. And the thing that bothers me the most about it is that it 

was basically explained that the reason we had to do this was primarily for mercury reductions and some acid gas reductions. And 

whenever Lisa Jackson talked about it or anyone else, they talked 

about this is the reason, because we are going to save x thousands 

of people, premature death and whatever and whatever and whatever. And yet, in their own documentation, it was very clear that 

mercury reduction had no significant benefit from Utility MACT; 

that any of the benefits came from double counting reductions of 

particulate matter. And I would just like to know, were you involved at all in formulating Utility MACT or discussing the implications of Utility MACT or the benefits of Utility MACT? 

Mr. CHU. We were involved to the extent that when asked to provide technical information on, for example, potential impacts having to do with the reliability of transmission distribution of energy, 

we provided that technical information to the EPA. I remember especially that was some of the concerns of the EPA, what power generating stations—was there any threat to the delivery system for 

the continued reliability for the system. 

Mr. WHITFIELD. Well, are you concerned that EPA had estimated 

that there would be a 14 gigawatt reduction in coal production of 

electricity and NERC is saying it would be more in the neighborhood of 36 to 58 gigawatt reduction? And NERC has also raised 

issues on reliability. As Secretary of Energy and responsible for reliability in a lot of these issues, does that concern you? 

Mr. CHU. Again, in discussions with NERC and EPA we looked 

at the mechanisms and felt that there were procedures and mechanisms in place so that the American public—that, you know, should 

something occur because it is not taking the average—the aggregate—for each particular sector that receives electricity, would the 

companies be able to supply electricity in a reliable manner? And 

so we certainly worked with those agencies to say that there were 

mechanisms in place to respond should something occur. 

Mr. WHITFIELD. So you don’t—— 

Mr. CHU. In the planning—— 

Mr. WHITFIELD [continuing]. Have any concerns about the reliability issue from the information that you have? 

Mr. CHU. No. Of course we have concern about the reliability. 

That is one of the very important duties of the Department of Energy. 

Mr. WHITFIELD. I am disturbed that I think EPA misled the 

American people on Utility MACT because all they ever talked 

about—and even many of our friends on this side of the aisle, not 

all of them, but every time there is a public statement they talk 

about what the reduction of mercury emissions is going to be. And 

all of the analysis, all of the data indicates that there is insignificant benefit from mercury reduction. So if EPA is selling it based 

upon that benefit and that benefit is not there, then why would you 

be moving forward with such an expensive regulation that will potentially affect reliability, as well as increase electricity prices? 

24 

Mr. CHU. Well, Mr. Chairman, I can’t speak directly to the mercury standards that the EPA is talking about, and mainly because 

that is in the purview of the EPA to protect the air, to protect 

Americans’ health. And our role is in determining power distribution reliability, our role is in developing technologies to make 

coal—so we can help industry reduce the price to continue to use 

coal but in a much cleaner way. 

Mr. WHITFIELD. Well, you know, I mean I just have a philo- sophical difference, I guess, with you also because we have this $16 

trillion debt. ARPA–E, you are asking for a plus-up of 27 percent 

on that. Basically, that is used for very speculative technology. You 

have asked for a 30 percent increase on energy efficiency and renewable energy grants. And I was reading a biography of Henry 

Ford, and when he started Ford Motor Company, he did it all with 

private investment. And just like on Fisker, you had Kleiner Perkins putting up venture capital there and I am just questioning, 

why should the Federal Government be putting up these millions 

of dollars when we are in the financial situation that we are in and 

it is very speculative? So what is your view? 

Mr. CHU. Well, I am very supportive of ARPA–E. There was a 

very recent ARPA–E third summit. It was at the end of February. 

There was great excitement and enthusiasm, leaders in American 

industry including Fred Smith of FedEx. I am going to paraphrase 

what he said when he gave a talk there and he said, you know, 

pound for pound, dollar for dollar, he felt that ARPA–E was the 

most effective use of government resources he has seen in a long 

time. That is a paraphrase that we can get you the exact quote, but 

strongly supportive of ARPA–E. Lee Scott similarly strongly supportive of ARPA–E. Many, many people thought that it was very 

important to help America get a leg up and increase our competitiveness and help our prosperity. 

Mr. WHITFIELD. Thank you, Secretary Chu. 

Mr. Rush, you are recognized for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

Mr. Secretary, as I stated in my opening statements, I am eager 

for you to set the record straight in regards to the levels of oil and 

gas production importation and consumption during the time that 

President Obama has been in office. While my Republican colleagues may engage in a scorched-earth strategy and an endless 

and senseless blame game gamut and point to the administration’s 

policies as the singular cause for rising gas prices, I believe that 

in fact it is your agency’s programs and policies that will help 

America move past our dependence on foreign oil and fossil fuels 

in general so that we will not continue to have this debate every 

year as gas prices inevitably rise. 

So Mr. Secretary, can you talk about the levels of oil and gas reduction under President Obama’s administration. Has production 

increased or decreased? And have new lands been opened up for 

drilling under this administration? 

Mr. CHU. Well, Mr. Rush, as you yourself pointed out, during the 

Obama administration, the production of petroleum liquids in the 

United States have increased. Now, I believe it is the highest it has 

been in over 8 years. Also, as you pointed out, the fraction of the 

oil we import has declined from 60 percent as a high. Now, it is 

25 

down below 50 percent—48 percent—and they are showing signs of 

further decline. This is very good because this means we are exporting fewer dollars abroad. And as we produce more oil here domestically, that is jobs in America, wealth creation in America. And 

so the administration is very supportive of this increase in gas and 

oil. 

Mr. RUSH. Well, as it relates to the importation of oil, can you 

discuss the amount of oil that is being imported today as compared 

to before President Obama took office? Are we importing more or 

less oil from foreign countries under this administration? 

Mr. CHU. We are importing less. Again, roughly I believe less in 

the last 16 years as my memory serves to be correct. 

Mr. RUSH. For the record, to straighten out the record, has 

American consumption of gas increased or decreased over the past 

year and if it has changed, what do you attribute to that change? 

Can you discuss some of the policies that have gone into effect 

under President Obama that are impacting consumer habits and 

lowering U.S. consumption of gas? 

Mr. CHU. Are you speaking of gas as in gasoline or as in natural 

gas? 

Mr. RUSH. Gasoline. I am sorry. 

Mr. CHU. Well, our consumption of gasoline has decreased in 

part due to two reasons. First, there was a dramatic decrease, unfortunately, due to a very severe recession that we are very slowly 

climbing out of. But there is another very important part, and that 

is we want to climb out of this recession as quickly as we can. 

There is another important part and that is the efficiency. The use 

of gasoline is improving. And this goes directly to help every American family in reducing the amount they spend on gasoline every 

week. And so again, the Obama administration has been very supportive and helpful and leading the way in improving the efficiency 

of automobiles, trucks, and other vehicles. 

Mr. RUSH. A part of your responsibility and a part of your concern I am sure is the weaning of the American consumer off of fossil fuel and our heavy dependence on fossil fuel and also foreign 

sources of energy. What policies do you have in place and give us 

a recipe for how you view these polices as being a top priority for 

the American people and for this Congress? 

Mr. CHU. Well, the policies the President has taken in terms of 

increasing our production of oil and natural gas include the making 

available for lease an increase in the Federal lands being made 

available for lease for oil and natural gas. And so that has continued to increase and will continue so that the American oil and gas 

companies have more access to Federal lands. 

Mr. RUSH. My time is up. 

Mr. WHITFIELD. Thank you, Mr. Rush. 

At this time I recognize the gentleman from Michigan, Mr. 

Upton, for 5 minutes. 

Mr. UPTON. Well, thank you, Mr. Chairman. 

Mr. Secretary, again, welcome. I learned literally in the last few 

minutes that apparently President Obama is personally weighing 

in on Members of the Senate to vote no on the Keystone Pipeline 

amendment, which is going to be an amendment as part of the 

highway bill. And I am not happy about that at all. I will say that 

26 

for the record we passed that bill out of this committee a couple 

of times with bipartisan support. We saw the same thing on the 

House Floor. Are you weighing in at all with any Senators on this 

amendment vote today? 

Mr. CHU. No, I am not. 

Mr. UPTON. I know it has been reported that oil production on 

Federal lands has dropped 14 percent since 2010. And in reading 

from the Greenwire last week—let me just read a couple things to 

you here—‘‘domestic oil production may be at an all time high nationwide, but the increase is primarily occurring on State and private lands rather than on Federal land and waters where production appears to have dropped significantly in 2011. According to the 

most recent government data, production of natural gas on public 

lands and waters in fiscal year 2011 dropped 11 percent from the 

previous year,’’ according to the Interior Department. Oil production dipped nearly 14 percent. The reduction in oil production was 

most significant in the Gulf of Mexico where it declined nearly 17 

percent to 514 million barrels from 618 million barrels the previous 

year. And in a chart on oil and gas production on Federal lands 

and waters, it appears it has declined in oil by 100 million barrels 

from 2010 to 2011. 

Now, we agree that sadly, because of—our decline in our economy is the main reason why I think consumption has gone down. 

We didn’t get the growth; we didn’t have the jobs. I know in my 

State we had 38 consecutive months of double-digit unemployment. 

But as I look at your own EIA, if you look out the next couple of 

decades, your department says that we will be using the same 

amount of gasoline in 2030 as we are now. I presume that in large 

part that is because we are going to have more energy efficient vehicles, a whole number of different things that are there that of 

course we want. But demand can’t be the only answer. 

And I guess my question is that with this oil production decline 

on Federal lands, people understanding supply and demand report 

that you all put out just 2 or 3 weeks ago, predicted that oil prices 

would hit $4.25 by Memorial Day. We are one penny away in my 

district from $4 gas, at least this last weekend, and some predict 

that we are going to hit $5 gas as early as perhaps the 4th of July. 

In large part it is because of declining production primarily on Federal land. Would you not disagree? 

Mr. CHU. Well, Chairman Upton, I first want to say that both 

I and the President and everyone in the administration wants very 

much to do what we can to lower the price of gasoline because it 

has a severe effect on the pocketbooks of Americans. It affects 

American businesses. In terms of the Federal lands production, 

what the government does, as you well know, is we lease land to 

oil companies and it is up to them to produce the oil. Currently, 

they—— 

Mr. UPTON. But right now, just to interrupt for a second, it is 

proposing a 5-year leasing plan that would delay sales in the Atlantic or Pacific through at least 2017. So it is looking for yet another moratorium for 5 more years. How does that help us? 

Mr. CHU. Well, it is not my understanding. My understanding is 

a bit different. This is a plan that will be, for example, in the Gulf 

of Mexico, the Federal jurisdiction being made available is 75 perVerDate Aug 31 2005 14:32 Jan 22, 2013 Jkt 037690 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 F:\1194B7~1\112-12~1 WAYNE
27 

cent of the area in the Gulf of Mexico that is under Federal jurisdiction. And so it is a plan to increase the leasing. Now—— 

Mr. UPTON. I was in the Gulf last summer and I went out on a 

rig that was 120 miles off the coast of Louisiana. That day they 

pumped 110,000 barrels. And looking out a couple miles away 

there was another drilling ship that was there and they were waiting for the permits, just waiting. This was a Chevron rig. They 

were literally waiting for weeks and weeks paying millions of dollars every day so that that ship wouldn’t un-anchor and go off to 

Brazil where they would never see it again, in essence trying to tap 

the same vein that Tahiti drill rig was drilling that particular day. 

And the frustration from so many folks there is that the permits 

are not being approved, this new moratorium is there knowing that 

a third of our oil comes from that region. You have got Keystone 

literally could be a million barrels a day that otherwise will go to 

China. It just seems that we are turning our back on independence 

from the rest of the world that would clearly help our consumers 

as it relates to their own pocketbook. 

And I know my time is expired. I will yield back. 

Mr. WHITEFIELD. Thank you, Mr. Upton. 

At this time I recognize the gentleman from Michigan, Mr. Dingell, for 5 minutes of questions. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. Welcome, Mr. Secretary, delighted to see you here. I have a number 

of questions which I will ask that you respond to by yes or no. 

It has been a year since your Loan Program Office approved the 

loan from the Advanced Technology Vehicles Manufacturing Program. As you know, that program was created to provide the auto 

industry with incentives to build or expand manufacturing facilities 

here in the United States instead of taking those jobs overseas. 

Loan recipients such as Ford and Nissan have successfully built 

and expanded facilities in Michigan, Tennessee, Illinois, Kentucky, 

and other States. Question: Is the Loan Program Office working to 

streamline the approval process so that applicants can be assured 

they will not be waiting for years to find out if their application 

will be approved? Yes or no? 

Mr. CHU. The Loan Program is working to improve their processing in all aspects. 

Mr. DINGELL. Mr. Secretary, I will ask that you submit something on this for the record. And I ask unanimous consent that my 

letter with those questions and your responses be inserted in the 

record. 

Next question: Has the Loan Program Office implemented any of 

the recommendations of the Allison Report to protect taxpayer dollars and to provide a uniform system for evaluating loan applications? Yes or no? 

Mr. CHU. We have actually begun to change over the past year 

and a half many of the things that the Allison Report discusses. So 

we internally have been doing that and we are reviewing all the 

things that the committee did. It is very valuable concentration 

and we continue to improve our loan program. 

Mr. DINGELL. Now, Mr. Secretary, I am very much concerned 

about this. The lack of funding for the Facility for Rare Isotope 

Beams, or FRIB, within the Nuclear Physics Program, I am told 

28 

that the funds allocated for that program in fiscal year 2013 budget 

are not enough for them to start construction in this year. As of 

now, the program and the project is on time and under budget. 

Furthermore, the facility will generate 5,000 construction jobs, 400 

permanent scientific positions and have a $1 billion economic impact. 

I noticed that in other programs within the Office of Science, the 

President is proposing to increase funding for scientific projects 

overseas. I believe that we should first ensure that we are meeting 

our project obligations here at home before sending our money and 

scientists abroad. Do you agree with that? 

Mr. CHU. We are very supportive of FRIB. We have asked for $22 

million to continue this project going forward and we hope that 

Congress votes and appropriates that money. And so we want this 

project to continue going forward. 

With regard to this other project you spoke about, it is a different 

part of this—but the thing I do want to point out is it is an international collaboration, but 80 percent of the funds will be spent in 

the United States, both in national laboratories, universities, and 

in industries in the U.S. 

Mr. DINGELL. Now, Mr. Secretary, your department has already invested $50 million in FRIB. I am concerned about the progress 

at FRIB. What is the commitment that the Department makes 

with regard to FRIB? Are we going to let it sort of strangle on the 

vine or are we going to see to it that it continues to be funded even 

though this year we have not given them enough to commence the 

construction? 

Mr. CHU. Well, sir, as I said, we think that FRIB is a worthy 

project. We have asked for continued funding and we hope that 

Congress allows us to have that funding that we can keep this 

project going forward. 

Mr. DINGELL. Now, Mr. Secretary, you know I have great affection and respect for you, but you can’t lay this one off on Congress. 

I am talking about what the budget does and not what the Congress might do. 

Now, Mr. Secretary, FRIB will have national security implications and applications such as studying the detection of a nuclear 

weapon or dirty bomb detonation. I do not believe that we can pursue these types of national security opportunities and applications 

at facilities overseas. Doesn’t that tell us that we should put our 

money here locally rather than giving it to other countries to do 

this kind of critical research in programs that will have such a significant impact upon our national security? 

Mr. CHU. The funds, as I said, the lion’s share of the funds for 

ITER, this International Fusion project, will be spent in the United 

States. But the Department of Energy agrees with the other ITER 

partners that this is a very important experiment that could perhaps unlock fusion energy for the future. 

Mr. DINGELL. Again, Mr. Secretary, with great affection and respect, we are going to spend some money in the United States, we 

are going to build a facility abroad, and the work and the benefits 

that will be achieved from this will be spent abroad and will 

strengthen foreign scientific applications as opposed to Americans’. 

I find this distressing. 

29 

I thank you for being here. I will follow this up with a letter indicating further distress to you, Mr. Secretary. Thank you for your 

presence. 

Mr. WHITFIELD. At this time I recognize the gentleman from 

Texas, Mr. Barton, for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. 

Again, thank you, Mr. Secretary for being here. 

In my opening statement I referenced the alternative energy 

budget and specifically said concerns about the Loan Guarantee 

Program. As you know, we continue to have an ongoing investigation with regards to Solyndra. At the last hearing that you attended I believe where the focus was on Solyndra, you were very 

supportive of the way the Loan Guarantee Program had been managed, but I think you did indicate that there might be some 

changes forthcoming. Have there been changes in the way you and 

your department have managed the Loan Guarantee Program for 

alternative energy, and if so, could you tell us what those are? 

Mr. CHU. Yes, sir. There were changes. Let me give you a few 

examples. We know that sometimes the economics of a particular 

industry—for example, in the case of Solyndra solar photovoltaics— 

can change very rapidly. A 40 percent decline in the price of solar 

modules, essentially a commodity, in one year; 75, 80 percent decline in 3 years. And one of the things we now do on a weekly basis 

is we look very, very closely at changing market conditions. We established a Risk Committee that includes people both within in the 

Loan Program and outside the Loan Program, subject matter experts in the Department of Energy. 

Also, I now have a special advisor on financial matters that looks 

very closely at this, as, again, an independent set of eyes to make 

sure we monitor closely before future disbursements all the things 

that could affect the loan, including things outside the control of an 

individual company like this very rapid decline in prices. 

Mr. BARTON. Concerning this independent advisor you just referenced, has he prepared—and if so, could you present to the committee for our review—a list of the additional loan guarantees and 

the status of those? And what if any of those might be in danger 

of following Solyndra in defaulting and going into bankruptcy? 

Mr. CHU. Well—— 

Mr. BARTON. I know at least one other has, since Solyndra, and 

I am told that there are a number of others that are on the problem list. 

Mr. CHU. Well, there are companies, again, as I said which we 

watch very closely because of a wide range of issues. We also have 

to respect the confidentiality of any of the people that we have 

made loans to or commitments to make loans to. So—— 

Mr. BARTON. How about how many loans are on the what I think 

you call the ‘‘watch list?’’ That shouldn’t be proprietary. 

Mr. CHU. Well, I don’t have the exact number but the—— 

Mr. BARTON. Is it a double-digit number? You know, is it between 1 and 10, 10 and 20? 

Mr. CHU. Well, I don’t again recall the exact number. I am going 

to be briefed by my senior advisor, Richard Kauffman, on this matter, but again any company that we think has a chance of being 

30 

subject to market change or market conditions, or other issues internal within the company, we do watch very closely. 

Mr. BARTON. Well, do you think that the American taxpayer 

should have a reasonable expectation that all of these loans should 

be repaid as opposed to any loan that is made is just money down 

the tubes and it is not going to be repaid. I mean you have to admit 

that the history so far of the initial projects has not been good. 

Mr. CHU. First, I do say that the American taxpayer has every 

right to expect that there is a reasonable chance for repayment of 

the loans we give out. I would also say that many of the loans we 

have given out have been very good successes. It has already been 

mentioned, loans, for example, to Ford Motor Company, to Nissan—— 

Mr. BARTON. That wasn’t an alternative energy loan. 

Mr. CHU. We have other loans that were—— 

Mr. BARTON. I don’t think they came through your department 

either, Mr. Secretary, but—— 

Mr. CHU. Sir, actually, the ATVM loans do. But in regard to alternative energies, there are a number of loans that we feel and 

the Allison Report also recognizes that are low-risk, have a very 

high probability of being paid back. 

Mr. BARTON. Well, my time is expired but we will follow up in 

writing and we will ask that these problem loans on the watch list 

be provided to the committee so that our people can review them 

and hopefully work with your agency to take steps to protect the 

taxpayer money. 

Thank you. 

Mr. WHITFIELD. At this time, I recognize the gentleman from 

Massachusetts, Mr. Markey, for 5 minutes. 

Mr. MARKEY. Thank you, Mr. Chairman. 

Mr. Secretary, there are only two tools the President has to bring 

down gas prices right now—deploy the strategic petroleum reserve 

and get other countries in the world to use their Strategic Petroleum Reserves to help to put pressure on the marketplace; and two, 

curbing excess speculation in oil futures markets through the Commodities Futures Trading Commission. The SPR has proven effective in helping to bring down prices and we have plenty of oil in 

the SPR right now, 700 million barrels. You have said, Mr. Secretary, deploying SPR is on the table as an option. Senator 

Geithner, Secretary Salazar have said the same thing, that you 

have got it on the table. 

Now, the oil companies and the Republicans, they oppose deploying the SPR but their oil-above-all policy doesn’t help drivers right 

now. None of this oil they are talking about is coming online this 

year. And people are looking for relief at the pump right now. So 

Mr. Secretary, Senators Vitter, Hoeven, Lugar, Crapo, and Thune 

have introduced legislation that would prevent the President from 

deploying any oil from the Strategic Petroleum Reserve until he approves the Keystone XL Pipeline permit. Do you believe, Mr. Secretary, that the authority of the President to deploy the Strategic 

Petroleum Reserve should depend on the permitting of the Keystone Pipeline even if Iran cuts off the Strait of Hormuz and blocks 

20 percent of the world’s oil supply? 

Mr. CHU. No, I don’t. 

31 

Mr. MARKEY. Do you believe that it makes any sense to say to 

our young men and women that we export into the Middle East to 

protect this supply of oil that we are not going to use the weapon 

we have here in the United States—the Strategic Petroleum Reserve—in order to keep the price of oil low and not allow Iran to 

threaten us unnecessarily? 

Mr. CHU. Well, as you noted, the administration has said repeatedly that the Strategic Petroleum Reserve is on the table but it is 

a very complex issue. 

Mr. MARKEY. Right, but it would be a bad idea, would it not—— 

Mr. CHU. Pardon? 

Mr. MARKEY [continuing]. To strip the President of his authority 

to use it unless it approved the Keystone Pipeline? 

Mr. CHU. I agree. 

Mr. MARKEY. Thank you. Now, on the CFTC, the Republicans 

have a bill that has come out of Agriculture Committee and come 

out of the Financial Services Committee that would stop all 

rulemakings to give the CFTC the authority on speculation, on 

margins, on position limits, on gauging, on protecting the public in 

the futures oil market where so much of this is just speculation 

being driven up, driving up the price of oil. Do you think it is a 

bad idea to strip the CFTC legislatively of their authority to be 

able to protect against gauging in the marketplace? 

Mr. CHU. Well, no one would be in favor of gauging. 

Mr. MARKEY. The Republicans believe you don’t need the 

rulemakings at the CFTC. Are they right or wrong, Mr. Secretary? 

Mr. CHU. Everyone is very concerned—— 

Mr. MARKEY. No, everyone is not concerned, Mr. Secretary. The 

Republicans want to strip out the authority of the CFTC to go 

against manipulation, to deal with these margin issues, to deal 

with the position limits. Is that a bad idea? 

Mr. CHU. Well, as I said, if you please let me finish, everyone is 

concerned about speculation unnecessarily driving the price of oil 

up. This is why the administration and one of the things that can 

counter speculation is more transparent information, and this is 

why the administration is very focused on that. 

Mr. MARKEY. So we need the SPR and we need the administration to have the authority to be able to crack down on the speculation, make sure there is more transparency and no game-playing. 

And I will also say that there is a proposal out there to create 

an international natural gas market. Right now, you know, Mr. 

Secretary, there is no natural gas market. The price of natural gas 

in China is six to seven times higher than in the United States. 

It is three times higher in Europe than it is in the United States. 

That is leading to a boom in manufacturing in our country. It is 

really leading to all new planning on natural gas vehicles because 

the price is so low and many utilities are really contemplating how 

fast to switch over from coal over to natural gas. There is an application for eight new licenses that are before you to export this natural gas, which your own agency says could raise the price upwards of 54 percent. I urge you to call a time-out, Mr. Secretary, 

to make sure that we get this right. 

You had an Assistant Secretary that made a statement last week 

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32 

censes until we put together a plan for the United States on liquefied natural gas exported from our country. 

Mr. WHITFIELD. Gentleman’s time is expired. 

At this time, I recognize the gentleman from Texas, Dr. Burgess, 

for 5 minutes. 

Mr. BURGESS. I thank the chairman for the recognition. 

Yes, Secretary, way back here. Let me ask you because Mr. Barton was asking you some questions about the loan guarantees at 

Solyndra. When you came to us in November of last year it seemed 

to be news to you that there were postponement of layoffs that occurred at the company, those postponements to take the layoffs 

past election day before they were announced. And you seem to be 

surprised that that had in fact occurred. And I think if I recall correctly you said you were going to look into that, so can you share 

with us the results of your investigation, what information you 

have uncovered as to why those layoffs were postponed past the 

election day? 

Mr. CHU. We turned the matter over to the IG, the Department 

of Energy IG, and they are looking into the matter, and when they 

tell us what they find, we could share that with you. 

Mr. BURGESS. And I pray that you do. But so far have you identified any of your staff, Department of Energy, that were involved in 

making that decision? 

Mr. CHU. No. As I said, we turned the matter over to the IG and 

so that is an independent look at what happened. 

Mr. BURGESS. Have you yourself been interviewed by the Inspector General on this issue? 

Mr. CHU. No, I have not. 

Mr. BURGESS. Have you been informed that that is likely to happen? 

Mr. CHU. No, I have not. 

Mr. BURGESS. Are you willing to talk to the Inspector General 

about this? 

Mr. CHU. I have always cooperated with the IG. 

Mr. BURGESS. Let me ask you a question about the Allison Report and Congressman Barton was asking about the watch list. 

Can I just ask you—and I respect the fact that you are concerned 

about some proprietary issues—but would you provide to the committee or committee staff this watch list, provide the copy of the 

list to the committee? 

Mr. CHU. Well, actually, I was slipped a note and I misread it. 

It appears as though this committee’s staff will be getting a briefing from Richard Kauffman, my special advisor, next week on this, 

on the Loan Program and the Allison. 

Mr. BURGESS. Is that the full committee staff or just the Democratic staff? 

Mr. CHU. I think it is the full committee staff. 

Mr. BURGESS. May I ask as a member of the committee, then, 

that you would have your guys bring that list to that briefing? 

Mr. CHU. Well, we will do what we can but again we are going 

to give you a briefing—— 

Mr. BURGESS. We need your commitment, sir, that we will be 

able to see that list because it is important as far as congressional 

oversight on this process going forward. 

33 

Mr. CHU. Well, as I said—— 

Mr. BURGESS. We can all be criticized about the way things have 

been handled so far. I would like to be able to stop the bleeding 

at some point. So let me just ask you for your commitment to make 

that list available to the staff. 

Mr. CHU. We have to look at—again, we don’t want to violate the 

company confidentialities. The dynamics of what happens to these 

companies changes very rapidly and so it is, again, part of our 

loan—— 

Mr. BURGESS. If I may, sir, the taxpayer has taken a pretty bad 

hit on this, and while I want the companies to do well, I think at 

some point we may have to put the taxpayers’ needs and wants 

ahead of those of the companies’. Again, I cannot see a reason why 

you could not bring that list and I for one as a committee member 

am going to be expecting you to bring that list. 

Let me ask you a question. You have had the chief financial officer of your department, the Department of Energy, had produced 

a report on uncosted balances in 2010 and just in the purpose and 

the background notes at the beginning of this report it said your 

approach was developed in ’96. As a response to the GAO criticism, 

the Department did not have a standard effective approach for 

identifying excess carryover balances that might be available to reduce future budget requests to address this concern. You establish 

percentages thresholds. So where are we with that? Are you prepared to produce for this committee those numbers that met that 

percentage threshold that might be available to offset the numbers 

you are requesting in your budget? 

Mr. CHU. Yes. We have been working very aggressively at reducing these uncosted balances in the last several years. 

Mr. BURGESS. Well, the GAO estimated that this current fiscal 

year it is in excess of $680 million from carryover programs. What 

is your justification for asking for funding increases in programs 

with significant carryover balances? 

Mr. CHU. I believe the lion’s share of that amount has to do with 

a program, carbon-capture and sequestration, which means that, 

according to the statute, we need significant private sector investment matching funds of over half. And some of that has not materialized. We have an uncosted balance because if the private sector 

doesn’t want to co-invest, there is not much we can do about that. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time I recognize the gentleman from California, Mr. Waxman, for 5 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

Mr. Secretary, people are complaining about the high price of 

gasoline, understandably so, and we want to help. But do you see 

any short-term way to lower gasoline prices? 

Mr. CHU. As you said, everybody is concerned about the high 

price of gasoline and diesel fuel and we do want to help in any way 

we can. But as the President said, as I have said, there is no single 

magic bullet that can instantaneously do this. And so we work very 

hard and all the tools at our disposal—the most effective tool is 

that we want to improve the efficiency and to diversify the energy 

we use in transportation. The boon in natural gas we think is wonderful because we now see and are very supportive and are helping 

34 

offload some of the demand for petroleum onto natural gas used in 

transportation. We see great movement in heavy trucking and in 

delivery trucks, things of that nature. 

Mr. WAXMAN. Well, the Republicans have said over and over 

again we just need more oil. If we had more oil, we wouldn’t have 

this problem. And then, of course, they go on to say it is the President’s fault we don’t have more oil. Well, the reality is we are producing more oil in the United States than ever before and we are 

using less because of the greater efficiency in the automobiles. So 

if we had more oil and the oil is priced at the world price, would 

that lower the world price? 

Mr. CHU. Well, the price of oil is very, very complex. It is certainly driven by supply and demand. It is also affected by uncertainty in the Middle East and several—— 

Mr. WAXMAN. Well, if we produced more oil and OPEC decides 

to produce less, that won’t help us; that will hurt us. If we produce 

more oil and more oil is being demanded by China and India, the 

world is going to divert oil there as well. I mentioned in my comments earlier that Canada produces more oil than they use and yet 

they are paying the same price for gasoline that we are paying. So 

it seems to me—and you made this point—that we have got to look 

beyond just producing more oil. We have got to look at using less 

oil. And the way to use less oil would be to invest in clean energy 

to diversify and reduce our energy use. It is a tough challenge. 

The Congress should be helping you and the President accomplish that goal. Instead, Republicans in Congress attack every proposal you and the President make, every idea you offer, every initiative you take. For example, battery manufacturing is an industry that has been dominated by Southeast Asia for decades. The 

United States has essentially no capacity so the administration 

changed all that. And the way I understand you changed it is to 

use the Recovery Act to incentivize the development of a manufacturing supply chain for vehicle batteries. 

And here in the United States we have a domestic production of 

the Chevy Volt, innovative, award-winning, plug-in hybrid electric 

vehicles. But the Republicans seem to be rooting for failure. They 

are attacking GM on this groundbreaking product. Does it make 

sense for us to be rooting against American manufacturing at a 

time like this? 

Mr. CHU. No, of course not. We should all be rooting for very innovative products that could be sold worldwide. It would show industrial leadership and great wealth. 

Mr. WAXMAN. It makes just common sense. But this isn’t the 

only example. The President proposed a clean energy standard to 

increase the amount of energy we get from renewable sources of 

energy, as well as from nuclear and advanced natural gas plants, 

similar to what Mr. Barton proposed from the last Congress. And 

it is really an all-of-the-above strategy. But the Republicans don’t 

even want to discuss this idea. 

The President proposes to eliminate unnecessary subsidies for 

the oil industry. Last year, the top five oil companies made $137 

billion in profits. The price of oil is over $100 a barrel. With oil at 

such a high price, do we need to be giving out $4 billion in tax 

35 

breaks for oil companies each year to have an incentive for them 

to drill more oil? Can you explain that to me? 

Mr. CHU. I believe the oil industry is doing very well financially 

and they have a lot of incentive. 

Mr. WAXMAN. They have a lot of incentive now so we would be 

better off repealing those subsidies and using that money to develop sources of clean energy that reduce our dependence on oil 

and move us forward to a clean energy economy, and yet the Republicans oppose that as well. I think the President is on the right 

track. I appreciate what he has been doing. Even though Congress 

tries to frustrate him and I applaud his statements about how we 

need to move forward at this time. 

Mr. WHITFIELD. At this time I recognize the gentleman from Illinois, Mr. Shimkus, for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Welcome, Secretary Chu. I love following my friend, Mr. Waxman, because for us to move in the clean energy world, we have 

to pay for that. Isn’t it true, Secretary Chu, that you espouse European gas prices for the United States? I mean briefly. Yes or no? 

Have you been quoted saying that it would be good for us to have 

European gas prices? 

Mr. CHU. At no time when I was Secretary of Energy have I ever 

said—— 

Mr. SHIMKUS. OK. Prior to? 

Mr. CHU. Prior to that I was—— 

Mr. SHIMKUS. We all know the answer is yes. And obviously that 

is to move to a clean energy future based upon Americans paying 

more at the pump, which is the desire and the goal of this administration. I didn’t want to go in that direction but my friend from 

California empowered me to go. 

Let me move to—— 

Mr. WAXMAN. Mr. Shimkus—— 

Mr. SHIMKUS. No, reclaiming my time. I have got to go to—— 

Mr. WAXMAN [continuing]. Are you going to give him time to answer it? 

Mr. SHIMKUS. I would like to reclaim my time. 

Mr. Secretary, if the D.C. Circuit rules against the DOE in pending Yucca Mountain litigation, will the Department abide by that 

ruling? 

Mr. CHU. Yes, it will. 

Mr. SHIMKUS. If the Federal court orders you to pursue the 

Yucca application at NRC, do you have the staff to pursue it? 

Mr. CHU. If the Federal court orders us to do so, we will do so. 

Mr. SHIMKUS. Describe the funds that could be made available 

from the prior years to pursue the application. 

Mr. CHU. That I would have—— 

Mr. SHIMKUS. This would include any carryover funds that were 

made available until expended, any unobligated balances from 

prior years’ funds that may have been obligated but not spent and 

therefore subject to redirection. 

Mr. CHU. I would have to get back to you on the details. 

Mr. SHIMKUS. Would you do that for me, please? Thank you. 

As you hopefully know, this past Tuesday, the Board of County 

of Commissioners from Nye County, Nevada, unanimously sent you 

36 

a letter notifying you of their consent to host a proposed repository 

at Yucca Mountain and requesting that you initiate the cooperative 

negotiations process recommended by the President’s Blue Ribbon 

Commission. And I would like to submit that, Mr. Chairman, for 

the record. 

Mr. WHITFIELD. Without objection. 

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Mr. SHIMKUS. And will you meet with Nye County to initiate a 

cooperative negotiated process? 

Mr. CHU. Well, first, we are in the process now of reviewing the 

recommendations of the Blue Ribbon Commission. We would also 

like to work with Members of Congress in order to see because the 

Blue Ribbon Commission has said very clearly that they would like 

to see Congress look at a revision of the Nuclear Waste Act. And 

so—— 

Mr. SHIMKUS. Well, yes—— 

Mr. CHU [continuing]. These are very important steps—— 

Mr. SHIMKUS [continuing]. We have got the Blue Ribbon Commission—we had great testimony here with the commissioners. On 

page 48 it says, ‘‘the importance of the local communities,’’ and so 

we have Nye County saying we are ready to go into direct negotiation with you and looking at what you can able afford to bring to 

the arena. 

On page 48 it says, ‘‘this unwavering local support helped to sustain the project during periods when Federal and State agencies 

had to work through disagreements over the issue.’’ So the Blue 

Ribbon Commission really highlights the importance of local communities in saying we will accept this nuclear waste. Let us get involved in negotiations. That is what your commission suggested. 

We have a local county that is taking you up on the offer of the 

Blue Ribbon Commission. I hope that you would then talk to the 

good folks of Nye County and get into negotiations as the Blue Ribbon Commission had suggested, which is the commission that you 

asked for. 

Mr. CHU. Well, we have to set up a process that can do this. Certainly, the Blue Ribbon Commission says that you need local support. I would also add I think the Blue Ribbon Commission said 

this as well—you also need State support. And—— 

Mr. SHIMKUS. Well, let me quote from this. On page 48 it says, 

‘‘this unwavering local support helped to sustain the project during 

periods when Federal and State agencies had to work through disagreements over the issue.’’ So the Blue Ribbon Commission said, 

you know, Norway, Finland, Spain, local communities very helpful 

in working through the disagreements from the States or the national government. I think that we have a local community that is 

fulfilling the intent as identified by the Blue Ribbon Commission. 

I would think that the Department of Energy would welcome that 

because the Blue Ribbon Commission said two things, right? It said 

that we are not disregarding Yucca. We have so much nuclear 

waste we need a second long-term geological repository. 

Mr. CHU. Right. 

Mr. SHIMKUS. That is what it said. 

Mr. CHU. They did say that and we welcome a local community’s 

support. 

Mr. SHIMKUS. So you will welcome Nye County when they come 

visit with you? 

Mr. CHU. You are looking for a very big answer. Again, I think 

we need to set up a procedure so that we can deal with this thing 

as rapidly as possible. 

Mr. SHIMKUS. I would hope you would consider Nye County. 

67 

Mr. WHITFIELD. The gentleman from Texas, Mr. Green, is recognized for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. And I regret our ranking 

member from California on our side is not here because I know this 

is not Ways and Means Committee but, you know, I know California benefits from the high-tech industry and motion picture industry and they have been pretty financially successful. And I don’t 

know if we are going to take away their incentives for producing 

their products in our country like I hear all the time on oil and gas. 

I would like to have those incentives continue. 

But let me ask you one specific question. For many years, the 

Texas Center of Superconductivity at the University of Houston 

has been doing great work in a field that shows promise. From 

1993 to 2011, the Federal Government financially supported the 

need for continuing science and development demonstrations in 

this field to keep the technology leadership in the U.S. and laid the 

foundation for the growth of well paying research and manufacturing jobs. Unfortunately, the line item for superconductivity technology funding was eliminated 2 years ago. What is the U.S. Government and the DOE doing to maintain that U.S. competitive advantage on superconductor technology that will have a major impact on energy generation, transmission, storage in light of the 

substantial overseas government investment to push technology in 

the commercial products? What is DOE doing with—— 

Mr. CHU. In the Department of Energy we support research in 

superconducting technology primarily in the Office of Science. We 

continue to do this. Many of the discoveries made in superconductivity and the understanding is developed in the United States. We 

think this has great promise and we will continue to support that 

research. 

Mr. GREEN. OK. I will probably get a letter to you and ask you 

about that because having watched what happened with another 

Dr. Chu at University of Houston for many years and the success 

they have done both with State funding and with Federal funding. 

I appreciate it. 

The President’s fiscal year 2013 budget includes an inner-agency 

study that the DOE, EPA, and U.S. Geological Service are 

partnering on to examine environmental and health effects of hydraulic fracturing. Can you explain the purpose behind this study 

and how is different than what the EPA has been already doing? 

And then what is your Energy Advisory Board has already addressed, that combination of the inner agencies compared to what 

EPA has done and what Department of Energy has already done 

with their Energy Advisory Board? 

Mr. CHU. Well, the Subcommittee of the Secretary of Energy Advisory Board felt that the Department of Energy, in collaboration 

with other agencies—notably USGS—would be in a good position 

to help industry develop the natural gas and oil resources safely. 

We want to see those resources developed but we want to see them 

developed in an environmentally safe way. So we are requesting 

funding to help the companies extract those resources in an environmentally responsible way. 

Mr. GREEN. And believe me, in Texas we want to extract it safely. I know there are some things that we need to work on. The 

68 

State law actually changed in Texas requiring posting of the ingredients. You know, I know companies already published them or 

had them available through OSHA requirements. But will there be 

peer review and stakeholder input incorporated into this study? 

Mr. CHU. Absolutely. We feel that this is using science to help 

develop new methodologies again so we can continue to extract natural gas, but as we both agree in an environmentally safe way. And 

so it is these very rapidly improving technologies that I think you 

and I both agree can be done. 

Mr. GREEN. Carbon capture and sequestration is constantly discussed in a context that can possibly be used as carbon control 

technology under the EPA rules for utilities and refiners. The problem is it is still too expensive to commercially be used. Can you describe current DOE carbon capture and sequestration activities? 

Mr. CHU. Yes, I can. But unfortunately there is 47 seconds. I 

could do it in probably 4 hours. But let me just briefly say that we 

are very committed and focused to reducing those costs, reducing 

them greatly so that one can continue using our fossil fuel resources. 

Mr. GREEN. OK. Mr. Chairman, I know I am out of time but CCS 

still is not commercially viable but hopefully we can get to that 

point sometime before you get mandates there that at least the 

technology needs to be there. 

Thank you, Mr. Chairman. 

Mr. WHITFIELD. Thank you very much. 

At this time I recognize the gentleman from California, Mr. 

Bilbray, for 5 minutes. 

Mr. BILBRAY. Thank you, Mr. Chairman. 

Secretary, I am still very happy that you are where you are not 

just because you are a Californian but you have been brave enough 

to stand up on energy issues that were politically incorrect, pointing out the great shortfalls with ethanol and the great opportunity 

of nuclear power. And I am glad to hear you talk about the small 

reactors. Hopefully, the initiative with the United States Navy and 

Navy bases will look at that opportunity. In San Diego, we have 

20 nuclear reactors within a mile of downtown San Diego being run 

by 20-something-year-old kids. But we can’t power our streetlights 

with it yet. 

But let me just say this. I think there are a lot of partisan cheap 

shots always go back and forth across here, so let me try to bridge 

the gap and find a place where Democrats, Republicans, independents and Americans across the board can agree, and most importantly you. You agree that the crisis with finding a replacement for 

gasoline is a supply, how clean it is, and the infrastructure to be 

able to distribute it, major problem. I am a big ethanol guy, opposed to it, and the environmental issues and the supply issues 

and the infrastructure issues I have a real problem with. But 

algae, which I have supported strongly, is very clean but we don’t 

have supply and won’t have supply in a long time, and it is compatible with the infrastructure. But we have natural gas, which we 

have massive sources of, it is super clean—it is even cleaner than 

propane, which is permissible under Federal law to be used in interior spaces—and the thing we miss out is that 85 percent of the 

urban homes in America are plumbed with natural gas. The infraVerDate Aug 31 2005 14:32 Jan 22, 2013 Jkt 037690 PO 00000 Frm 00072 Fmt 6633 Sfmt 6633 F:\1194B7~1\112-12~1 WAYNE
69 

structure is there. The trouble is you have a 3-foot barrier between 

the water heater and the car parked in the garage and we have not 

bridged that gap. 

And all of the money we have spent and we are proposing to 

spend, are you looking at what we are doing for research and development of home dispensing to allow the American consumer not 

20, 30 years from now but 10 years from now to be able to say I 

don’t want to fill up with gasoline; I am going to plug in my car 

and fill up with natural gas over the night. What in your budget 

is committed to bridging that 3-foot gap between the automobile 

and energy independence in the next decade and the water heater 

that 85 percent of city dwellers use today? 

Mr. CHU. I am very glad you asked that question. The programs 

we have in our budget are in energy efficiency, renewable energy, 

and also in ARPA–E. Specifically, what we are doing about that— 

and I share your excitement that our abundant natural gas in the 

United States, which looks to remain at low prices for at least another decade or two—has a great opportunity to help with transportation costs, to reduce the transportation costs. And so what we 

are specifically doing in terms of the home use is that right now 

the barrier, beyond that wall, it is the cost of the natural gas tank. 

Honda sells a Honda Civic, natural gas, but that carbon tank is 

very expensive. So we are—— 

Mr. BILBRAY. You are talking about the tank in the vehicle. 

Mr. CHU. In the vehicle. 

Mr. BILBRAY. I am not talking about the tank in the vehicle. I 

drove a natural gas with that tank in 1992. This isn’t brain surgery. I am talking about the home dispensing pump that will be 

able within the nighttime, 6 hours, bring the pressure up from the 

home into the tank of the car. Is there anything in your budget 

that specifically is addressing an aggressive attitude towards that 

home dispensing pump so—— 

Mr. CHU. Yes. 

Mr. BILBRAY [continuing]. They can get it at their house every 

night? 

Mr. CHU. Yes, there is but I was taking too long to explain it. 

So the short answer is the commercially available pump has to be 

able to pump to 3,500 pounds per square inch, 4,000 pounds per 

square inch. It is very, very expensive and after 3,000 equivalent 

gasoline miles it has to be refurbished for another couple thousand 

dollars. So it is like $6,000 for the dispenser and then after a while 

you have got to send it back to the factory. The tank we are trying 

to develop is something that can allow compression at not 3,500 

pounds per square inch but maybe several hundred pounds per 

square inch. We know that when you decrease the pressure to that 

and still have the range, then things become very inexpensive and 

accessible. And so that is what I was trying to get at. 

Mr. BILBRAY. Isn’t it true that if we had home dispensing the big 

advantage with this is flex fuel? You do not have to have twin systems in the car. The same system that would burn natural gas has 

the ability to burn regular gasoline with a flip of the switch? 

Mr. CHU. That is true. You just need two tanks, one for the natural gas—— 

Mr. BILBRAY. Right. 

70 

Mr. CHU [continuing]. And one for the—— 

Mr. BILBRAY. But you don’t have to have separate motors? 

Mr. CHU. Correct. 

Mr. BILBRAY. Thank you. 

Mr. WHITFIELD. The gentleman’s time is expired. 

The gentleman from Pennsylvania, Mr. Doyle, is recognized for 

5 minutes. 

Mr. DOYLE. Thank you, Mr. Chairman. 

Secretary Chu, thank you and thank you for being with us today. 

Mr. Secretary, the National Energy Technology lab in Pittsburgh 

is funded by your department’s Office of Fossil Energy, and unfortunately, the President’s fiscal year 2013 budget request continues 

the very troubling trend of decreasing the Department’s fossil energy budget. A large portion of the research at the NETL is in advanced coal technologies. In fiscal year 2010 the coal portion of the 

fossil energy budget was $404 million but the fiscal year 2013 request is only 240 million, representing a 41 percent reduction in 

funding for advanced clean coal and R&D. Specifically, the President’s fiscal year 2013 request zeroes out critical research in fuel 

cells and fuels programs and significantly reduces funding for carbon capture, carbon storage, and advanced energy systems and 

cross-cutting research. Some of these cuts appear to be especially 

poorly timed. 

Mr. Secretary, are you aware that the EPA is preparing to issue 

a proposed rule any day now setting emission limits for greenhouse 

gases from coal-fired power plants? 

Mr. CHU. I am not sure of the exact timing of the EPA’s schedule. 

Mr. DOYLE. But it is imminent? And to the best of your knowledge, Mr. Secretary, that rule will require coal-fired power plants 

to either capture their carbon emissions or utilize pre-combustion 

technology that allows them to emit less carbon to begin with. Yes 

or no? 

Mr. CHU. I think it is mostly—I would have to get back to you 

on the exact ruling that the EPA is contemplating and see. 

Mr. DOYLE. Well, I guess what I am trying to say is we can’t 

have it both ways here. I support EPA’s effort to reduce greenhouse 

gases but if the administration is going to issue a regulation requiring carbon capture and sequestration from power plants this 

year, can you explain to us why the budget request for carbon capture and sequestration is the lowest this administration has ever 

requested? 

Mr. CHU. Well, we are very supportive and I am personally very 

supportive of carbon capture and sequestration, as you probably 

know. And we think this is still a very important part of what we 

do in the Department of Energy. We remain committed to developing the technologies to lower the cost so we can continue using 

our abundant fossil fuel. 

Mr. DOYLE. Well, it just seems to me that if we are going to ask 

our power sector to reduce their greenhouse gas emissions, which 

I support, but at the same time we are nearly eliminating the research funding for the technologies that do this, I just think it is 

not fair or there is a lack of coordination going on between EPA 

and the Department of Energy. 

71 

Mr. Secretary, let me ask you another question. This administration has championed regulations to reduce pollution for power 

plants and from idling trucks. One way to do this is using solid 

oxide fuel cell technology, which is being developed through the 

Solid State Energy Conversion Alliance in the Office of Fossil Energy. This program is developing and commercializing technology 

to produce highly efficient power from natural gas and eliminate 

idling emissions with auxiliary power units. Seeing as this technology could be used to meet regulations coming from the administration, can you explain to us why the funding for this program 

was eliminated in the President’s fiscal year 2013 budget? 

Mr. CHU. Well, solid oxide fuel cells have made tremendous 

progress. We are very excited about this. There are both major and 

smaller companies that are heavily investing in this and we think 

it is evolving to the point where the private sector is taking this 

over rather well. And so we actually applaud the development. 

Most of the applications, by the way, of solid oxide fuel cells will 

be stationary applications, auxiliary power, other things. But we do 

like that. 

Mr. DOYLE. Well, Mr. Secretary, you probably know South Korea 

has made solid oxide fuel cells a major part of their clean energy 

plan and we have just completed—not with my vote—a free trade 

agreement with South Korea resulting in lower tariffs and quotas 

and easing trade relations. Are you concerned that eliminating support for this technology here in the United States will drive that 

industry overseas to South Korea? 

Mr. CHU. I certainly hope not. But if I look to the United States 

and the manufacturers in the United States—for example, United 

Technologies, Rolls-Royce America, others—some very significant 

players in the development of this solid oxide fuel cell technology. 

And so we are very hopeful that the United States can manufacture these fuel cells and sell them not only in the United States 

but abroad as well. 

Mr. DOYLE. I hope that is right. Mr. Secretary, thank you for 

your time. I appreciate you being here. 

I yield back. 

Mr. WHITFIELD. At this time, I recognize the gentleman from 

West Virginia, Mr. McKinley, for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. And with due respect 

for time I am a little concerned. 

When the Department of Energy was formed in 1977 under the 

Organizational Act of 1977, there were three paragraphs I found 

interesting with it. The first was it was set up because the increasing dependence on foreign energy supplies presents a serious threat 

to the national security of the United States, health, safety, and 

welfare of its citizens. It was also charged to provide for a mechanism to deal with short-, mid-, and long-term energy problems, OK, 

of the Nation. And I think we can see long-term we are going with 

renewable. Short-term I think we should be worried about coal. 

The third is to foster the continued good health of the Nation’s 

small business firms, public utility districts, municipal utilities, 

private corporations, private cooperatives involved in energy production. 

72 

Mr. Secretary, I think you have gone away from those principles. 

I think you have allowed what we heard earlier with some of the 

testimony about the use of the EPA, their predictions of their 

greenhouse gas closures of plants that were talked about here that 

were said that the EPA says only this level. So based on this level 

compared to all the other national organizations, EPA has been 

emboldened to continue to drive for greenhouse gas emissions when 

all the others are saying if you do that, you are going to see the 

closures that are occurring like this all across America, that this 

questioning—they are challenging the reliability of our energy 

across America based on that information. I am concerned that 

whether or not you have in fact a real interest in reining in a rogue 

agency that is allowing this kind of activity without based on 

science and agreeable comprehensive knowledge of how all the 

other people are looking at it across America. 

I go back to your remark that you made at the NETL in Pittsburgh and you said, ‘‘I want all of the above.’’ I applaud that. I just 

wish it were backed with action because I want to go back to your 

statement that you made back in ’07 when you said, ‘‘coal is my 

worst nightmare.’’ ‘‘Coal is my worst nightmare.’’ And we have the 

comment here from Harry Reid. ‘‘Coal makes us sick; oil makes us 

sick. It is ruining our country. It is ruining our world.’’ Coal and 

oil? Is that the mindset of why on the short-term goal you have 

abandoned that and cutting the research money as Mr. Doyle just 

said 41 percent reduction in spending on R&D in coal? I am awed. 

I just can’t comprehend where this administration and you and 

your leadership are with it, with all due respect. 

With all due respect, Mr. Secretary, I think the DOE and the 

EPA have become the worst nightmare for the working men and 

women in our coal fields across America. What you are doing is 

challenging them, causing them to not know whether tomorrow 

they are going to have a job. I really do hope you go back to the 

requirements of the DOE and look at the short-term requirements. 

And those short-term requirements looked at coal and taking care 

of the families for the life, safety, and welfare of the American public and our national security. 

Mr. CHU. Let me try to explain what I said. That was taken out 

of context, the quote. And what I said is that coal, as it is being 

used today, as it is being used today in China and India and everywhere around the world in terms of its pollutants, is a big worry 

of mine. And so that is why—even before I became Secretary but 

certainly after I became Secretary—I remain very committed to developing those technologies to bring the prices down so that we can 

continue to use resources—— 

Mr. MCKINLEY. OK. I just hope, Mr. Secretary, you will be able 

to get back to Mr. Doyle and others and be able to explain how we 

have a 41 percent reduction with National Energy Technology. 

Let me just in the 36 seconds, will you be able to get back to us 

as to what—we hear a lot of the folks on the other side talk about 

how fossil fuel, particularly coal, is subsidized. Will you be able to 

tell us how American coal companies are being subsidized? 

Mr. CHU. I will be glad to get back to you on that. 

Mr. MCKINLEY. Thank you very much. 

I yield back my time. 

73 

Mr. WHITFIELD. Thank you. 

At this time, I recognize the gentleman from New York, Mr. 

Engel, for 5 minutes. 

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

Mr. Secretary, let me first say that I am one person who has followed you and I think you are doing a fine job and I think your 

agency is doing a fine job and I think there have been a lot of political cheap shots at you, unfortunately, and the administration from 

the other side of the aisle and I just don’t think that is reflective 

of the job that you are doing. So I wanted just to say that. 

I want to also spend the next minute talking to you about an 

issue that you and I have spoken about in the past and that is 

open fuel standard for cars. I believe—and I am doing a bill with 

Mr. Shimkus—that every car produced in America should be a flex 

fuel car. I believe if a car can run on ethanol, methanol, gasoline, 

natural gas, whatever, competition helps bring down prices and it 

would bring down prices. I have seen that happen in Brazil and I 

think it could happen here. And it would cost $100 or less per car 

to manufacture a car with flex fuel features. I know the President 

has issued an executive order to have the Federal fleet be flex fuel 

cars, and I would hope we can continue to move in that direction. 

So I would just like you to briefly comment on that if you could. 

Mr. CHU. Certainly. The ability to own a flex fuel vehicle, especially if the cost of the new car would be something—as you indicated, $100 or less, gives the American consumer more options. It 

makes them more in control of what they can do just in case the 

world oil price does increase. As we said, we are very concerned 

about the price of gasoline and one of the options that we have to 

bring relief to the American public is to allow them to have a diverse source of energy for transportation. And a flex fuel vehicle allows that. 

Natural gas, also very enthusiastic about. And so the ability to 

have this conversion, you can fill up with natural gas or fill it up 

with higher blends of ethanol is something that will help American 

businesses and consumers. 

Mr. ENGEL. Thank you very much. I couldn’t agree more. 

Let me ask you about renewable energy investment. A survey of 

global climate policies by Deutsche Bank included that clean tech 

innovations are more likely to emerge and succeed in Brazil, China, 

India, Germany, and the U.K. than they are in the U.S. These 

countries have used a combination of investments and national energy standards, feed-in tariffs, efficiency standards, and a price on 

carbon. According to Ernst & Young, China now leads the world as 

both the largest source of and destination for clean energy investment. China attracted 54 billion clean energy financing in 2010, 

which is a 39 percent increase over ’09 and such financing in the 

U.S. stagnated last year at 34 billion, approximately equal to 2007 

levels. 

Your budget proposes to invest in energy efficiency, renewable 

energy technologies, science, and clean energy research development and deployment and it eliminates 40 billion over 10 years in 

tax subsidies to Big Oil, with which I agree. Big Oil is making 

record profits and they don’t need the tax subsidies. However, some 

people have argued that if you eliminate subsidies for Big Oil it 

74 

means the government is wrongly in the business of picking winners or losers. They say—I don’t agree—but they say that if we remove these subsidies for Big Oil, then out of fairness, we should 

remove subsidies from every other specific industry or business, 

green technologies or whatever. How do you respond to this? 

Mr. CHU. Well, I think the government over the past decade— 

really over the past century—has always looked at subsidies and 

it is a part of Congress and the President to try to decide what will 

be appropriate subsidies, but also how long. The subsidies have 

been used in the past to encourage new industries to get started. 

And so the oil subsidies began roughly 100 years ago and for the 

express intent of actually helping this industry get started. But as 

you pointed out, they are doing very well on their own. 

Mr. ENGEL. Yes, they did make 137 billion last year. 

Mr. CHU. Right. 

Mr. ENGEL. I mean God bless them, but I don’t think they need 

any help from the government anymore. 

Let me ask you this. About 2/3 of the Department of Energy’s 

budget is directed at nuclear weapons or nuclear cleanup activities, 

and there are some who argue that those activities would be better 

handled by the Department of Defense, by DOD. How do you respond to that? 

Mr. CHU. Well, I respectfully don’t agree with that. I think the 

nuclear weapons and the nuclear cleanup needs a very sciencebased approach to this, that we have felt since the Manhattan 

Project, a lot of expertise. I think that we should continue to have 

it within the NNSA and also within the Department of Energy, Environmental Management. 

Mr. ENGEL. Again, thank you. Thank you very much, Mr. Secretary, and again thank you for the good job that you are—— 

Mr. WHITFIELD. Recognize the gentleman from Colorado, Mr. 

Gardner, for 5 minutes. 

Mr. GARDNER. I thank the Chairman for his time. And thank 

you, Secretary Chu, for your time and testimony today. 

A couple of questions. We heard our colleague from Massachusetts refer to the impact the Strategic Petroleum Reserve had on 

the price of oil. When that was released, it reduced the price of gas 

at the pump? 

Mr. CHU. You are talking about the last—— 

Mr. GARDNER. Yes, in June of 2011 the price did drop. 

Mr. CHU. Yes. 

Mr. GARDNER. OK, thank you. And is the President considering 

releasing—you said it before—he is considering releasing the SPR 

right now to respond to gas prices? 

Mr. CHU. As we said, that option remains on the table. 

Mr. GARDNER. Is the SPR intended to be used only during times 

of severe supply disruptions and real emergencies? 

Mr. CHU. It is a little more complicated than that but that is the 

primary use. There also are—— 

Mr. GARDNER. Do those circumstances exist now? 

Mr. CHU. Let me just finish. Certainly, the primary use is for 

supply disruption. There are also issues for severe economic disruptions—— 

Mr. GARDNER. Due to a severe energy disruption, correct? 

75 

Mr. CHU. Not—well, for example, we released SPR before when 

there was—— 

Mr. GARDNER. For Hurricane Katrina? 

Mr. CHU. Yes. 

Mr. GARDNER. Do we have a hurricane that is taking refineries 

out now? 

Mr. CHU. No, we don’t. 

Mr. GARDNER. OK, thank you. The President said yesterday that 

the only solution to high gas prices is decreased demand. Last year, 

though, together with our allies, 60 million barrels of the world’s 

strategic reserve was released. The price of oil dropped by $4 from 

$95, and even though it returned to $95 6 days later, supply made 

a difference. Don’t you agree? 

Mr. CHU. I think the supply did make a difference but—— 

Mr. GARDNER. On July 14, 2008, when President Bush lifted the 

moratorium, the price of oil dropped $9, more than two times the 

drop from the SPR release last year and it kept going down even 

though people knew that the increased supplies would not come online for years. The anticipation of supply made a difference, didn’t 

it? 

Mr. CHU. That is true. 

Mr. GARDNER. If long-term decreased demand has an effect on 

price, then don’t the basic laws of supply and demand dictate that 

so will long-term increased supplies? 

Mr. CHU. I absolutely agree. Long-term—— 

Mr. GARDNER. So if you are going to pursue short-term policies 

such as using the SPR for market manipulation, shouldn’t you at 

a minimum couple that with long-term supply solutions such as increased production? 

Mr. CHU. Well, as you yourself are pointing out, the primary uses 

of the SPR are to deal with supply interruptions and other economic emergencies. 

Mr. GARDNER. So we would need a long-term supply solution because you have said that supply matters? 

Mr. CHU. We need a long-term supply solution—— 

Mr. GARDNER. And we need to increase supply at that point—— 

Mr. CHU. The world—— 

Mr. GARDNER [continuing]. Is that correct? 

Mr. CHU [continuing]. Needs a long-term demand solution as 

well to—— 

Mr. GARDNER. If you—— 

Mr. CHU [continuing]. Moderate our demand. 

Mr. GARDNER [continuing]. Increase supply, it will decrease cost. 

That is what you have admitted to; that is what the SPR did. Is 

that correct? 

Mr. CHU. I agree that both supply and demand matter. 

Mr. GARDNER. Thank you. And last year, when you drew down 

from the SPR, oil prices were $95. You haven’t replaced those 30 

million barrels, have you? 

Mr. CHU. No, we didn’t. 

Mr. GARDNER. How do you plan to replace those barrels now that 

the price of oil is even higher? 

Mr. CHU. There is a plan put forward in our fiscal year 2013 

budget over a period of years to begin to buy back that oil. 

76 

Mr. GARDNER. So you are buying back that oil but not increasing 

production. What about the Royalty-In-Kind program Secretary 

Salazar’s office was in charge of? 

Mr. CHU. I am not intimately aware of that. 

Mr. GARDNER. You are not familiar with it? Will you meet with 

Secretary Salazar to reinstate the Royalty-In-Kind program so that 

these barrels of oil can be replaced before you draw down again? 

Mr. CHU. I will certainly get informed of the situation. 

Mr. GARDNER. Would you please report to us about your conversation—— 

Mr. CHU. Sure. 

Mr. GARDNER [continuing]. With the Department of Interior? 

Based on what the President said yesterday and this morning at 

a press conference he called it phony to try to get down to $2 in 

gasoline. Is it phony to want to reduce the price of gasoline? 

Mr. CHU. I think the President is very clear as I have been very 

clear. We do want the price of gasoline to go down. 

Mr. GARDNER. And we need to do that by increasing supply, as 

you have said, by releasing the SPR or perhaps increasing domestic 

production? 

Mr. CHU. Well, as the President is pointing out, as many people 

in this session have pointed out, the United States’ supply by itself 

is not going to—it will affect the world’s demand—— 

Mr. GARDNER. Like the release of SPR? 

Mr. CHU. But it in itself doesn’t control it. We certainly—— 

Mr. GARDNER. But you said that increased supply decreases price 

as exemplified by the SPR? 

Mr. CHU. But as you well know, the production of U.S. petroleum 

products, petroleum has increased over the last 8 years and yet the 

price has—— 

Mr. GARDNER. So the SPR didn’t then cause gas prices to go 

down like you just said it did. We know it did and you have said 

that supply causes prices to go down. 

Mr. CHU. SPR release caused a—there was a short-term—if you 

look at the historical record—— 

Mr. GARDNER. Because of a supply infusion into the market? 

Mr. CHU. No, I think it—— 

Mr. GARDNER. So it wasn’t supply? 

Mr. CHU. If you would let me finish. So what happened—— 

Mr. WHITFIELD. Sorry, the gentleman’s time is expired. 

At this time I recognize the gentleman from Washington State, 

Mr. Inslee, for 5 minutes. 

Mr. INSLEE. Mr. Secretary, if you would like to finish your answer. You weren’t given an opportunity go ahead, if you would like 

to do that. 

Mr. CHU. Yes. Very quickly, during that release and an international, coordinated release and the IEA, the SPR was meant to 

deal with the temporary disruption in supply with Libya. And now 

Libya is coming back in petroleum reserves and the SPR release 

served its intended purpose. 

Mr. INSLEE. And Mr. Secretary, I appreciate the work you are 

doing on advanced forms of energy. Bill Gates was at our Advanced 

Energy Research Consortium last week talking about the need for 

77 

greater national investment. And I certainly echo that, and I appreciate you to the extent possible advancing that cause. 

I want to ask you specifically about biofuels. There is a potential 

bioreactor. We are looking at various bioreactors either commercial 

or pre-commercial. We are ready to go out into the Northwest. 

Could you comment? And obviously, I would like you to come out 

and take a look at our State opportunities in that regard. What 

should be in the near term for bioreactors? 

Mr. CHU. Sure. We think the idea of making transportation liquid fuel using biological sources has great promise. And the Department of Energy over the years has been supporting this. And 

we think that these technologies do have—you know, from algae, 

from grasses, from using residual agricultural waste, all these 

things have the potential again of having alternative supply of 

transportation fuel that would go further to our lesser dependency 

on oil and especially less dependency on foreign oil, because these 

things can be made in the United States. 

Mr. INSLEE. So we like the idea of bio-refineries, a product designed by Targeted Growth, a company in Seattle was the first biofueler to partially fuel a jet, Boeing 747 flew across the Atlantic 

Ocean last summer, first ever in human history. 

So Washington State University and others are leading a consortium of Boeing and Alaska Airlines to work for a bio-refinery out 

in the Northwest. What could you advise us to try to make sure 

the Department of Energy looks at the State of Washington as far 

as an opportunity there? 

Mr. CHU. We will certainly look at that particular project, but we 

will look at all the projects. And I have a real avid interest in this 

because I think it does have great potential for decreasing our dependency on oil. And we will need liquid transportation fuel in the 

coming decades, I would say in this century. 

Mr. INSLEE. I think you will find out in Washington State probably about as an advanced consortium from the genetic designer to 

the grower to the aeronautics company ready to accept delivery. 

You are going to find a very welcome network that is pre-prepared 

for this adventure and I hope you will take a good look at Washington State. 

One more question about Washington State. We have some very 

good success out at the Hanford site. We are freeing some land now 

to be ready for development, and your agency is moving forward to 

allow about 1,600 acres to be allowed for commercial development. 

Very excited about that because we need to transition from the 

cleanup to new industries in the Tri-Cities. We are told it could be 

a year and a half before we actually get that done. We hope that 

you can do anything you can to expedite that transfer because we 

have got some companies looking at good things in the old Hanford 

site. I hope you could take a look at that. 

Mr. CHU. I would. 

Mr. INSLEE. Last, I just want to thank you. I haven’t agreed with 

everything you are doing there. We have a disagreement on our 

Yucca issue. I won’t bring that up today. But I just want to thank 

you. I have got a 1-month-old granddaughter and I want to thank 

you for your efforts giving her a shot to enjoy a world when she 

is my age of 61 that looks something like the one we have got here 

78 

today. My friends across the aisle talked about something ruining 

the world and you are doing some work to make sure it is not ruined by the time she is 60. 

The work you are doing on solar energy is spectacular. You look 

at the ALTEC Company, the world’s most durable solar cell made 

in Marysville, Washington, the silicon energy company; REC; 

Nanosys doing advanced nanotechnology for lithium ion battery 

storage; EnerG2 Company doing ultracapacitors. These are spectacular things you are doing. And because of your success, which I believe we are going to have, my granddaughter is going to have a 

shot of having a world that looks like the one we have got. And I 

know you are going to be catching a lot of arrows in your back for 

those who are naysayers and believe that a negative voice is the 

American one. I believe a positive voice is the American one and 

we are going to grow this economy and we are going to give my 

granddaughter a shot and everybody else’s at a world that looks 

like ours. 

So I just want to thank you and keep it up. 

Mr. CHU. Thank you. 

Mr. WHITFIELD. The gentleman’s time is expired. 

At this time, I recognize the gentleman from Kansas, Mr. 

Pompeo, for 5 minutes. 

Mr. POMPEO. Thank you, Mr. Chairman. 

Thank you, Secretary Chu, for being here today. I want the world 

to look great for my son as well, and to do that, I think we have 

to do things that work. And so I am going to ask you about some 

projects, places that your budget is intending to spend money and 

talk about whether they are working or not. 

In the President’s budget—I assume your handiwork—it says 

that the goal is to have 1 million electric vehicles on the road by 

2015. Is that correct? 

Mr. CHU. That is correct. 

Mr. POMPEO. How are we doing? 

Mr. CHU. Pardon? 

Mr. POMPEO. How are we doing? Are we on track to make that 

goal? 

Mr. CHU. Well, we are going to wait until 2015 but in terms of 

what is happening both technically I think things are developing 

and I remain hopeful. 

Mr. POMPEO. Are we going to make it? How many do we have 

today? How many electric vehicles on the road today? 

Mr. CHU. I don’t know the exact number. I can get back to you. 

Mr. POMPEO. Less than a million by multiple orders of magnitude, is that right? 

Mr. CHU. It is certainly significantly less than a million. 

Mr. POMPEO. Would the administration support higher gas prices 

to achieve this goal of 1 million electric vehicles on the road by 

2015? 

Mr. CHU. The administration wants lower gas prices. 

Mr. POMPEO. Your actions belie those words in my judgment, but 

I appreciate that you state that as your objective. The President 

said he would buy Chevy Volt. He said he would buy one 5 years 

from now when he is not the President anymore. I am not sure 

about the timeline but in any event, last week, Chevy announced 

79 

that the Volt would be suspended from production because of demand, temporary layoff workers. How many taxpayer dollars have 

gone in support of the Chevy Volt? 

Mr. CHU. You know, I don’t know. I know that the Chevy Volt 

is a great car. I think that there is, you know, a huge investment 

of GM and the leadership of GM to invest in this, and right now, 

I am still very hopeful that the Chevy Volt will be adopted. 

Mr. POMPEO. Well, I appreciate it if you would get back to us, 

let this committee know how much money has been extended so far 

on the Chevy Volt. Do you drive one? 

Mr. CHU. No. I don’t own a car at the moment. 

Mr. POMPEO. Fair enough. Fisker Automotive received over $500 

million in DOE loans in 2010. You cut off the funding last May because it had not met its sales target. At least that was one of the 

stated reasons for the cutoff of the loans if I understand it correctly. Do you think we are looking at another Solyndra? 

Mr. CHU. Well, it is much more complicated than what you said. 

We have milestones within our Loan Program, and as we disperse 

funds of any of our people that we give loans to, we work with the 

companies and do that. And so, you know, we are hoping Fisker 

can work through the things, temporary blips, and continue. 

Mr. POMPEO. I hope so, too. How much exposure does the United 

States taxpayer have to Fisker today? 

Mr. CHU. I can get back to you on the exact number. 

Mr. POMPEO. Great. I appreciate that. 

Just so you know, it was sometime before I was here, but we 

heard these same reassurances about Solyndra up and through 

times the DOE was still making loans and advancing money 

against those credits. We heard that you were monitoring, watching, taking good care that that money be repaid to the Treasury 

and that is not going to happen. So I hope that you are right about 

Fisker and that the taxpayer doesn’t end up another $500 million 

short. 

Thank you, Mr. Secretary. I appreciate your time today. 

Mr. CHU. Thank you. 

Mr. WHITFIELD. Mr. Secretary, we appreciate your time. Unfortunately, we have four votes on the floor and we do have about four 

members that wanted to come back to finish asking questions. And 

I was wondering, would you be able to be back here at 15 to 1:00 

for a little while or not? 

Mr. CHU. I have just heard from my staff that we have agreed 

to do it. I was worried of another appointment. 

Mr. WHITFIELD. No, I understand. And we appreciate it. And as 

you know, we have some of the finest restaurants here in the Rayburn Building, so if you want to get something to eat. But we will 

be back just as quickly as we possibly can. And we do thank you 

for your time. And there may or may not be four coming back, but 

thank you very much. 

Mr. CHU. Thank you, Mr. Chairman. 

[Recess.] 

Mr. WHITFIELD. I am not even going to wait for our friends on 

the other side of the aisle. I am going to recognize Mr. Griffith of 

Virginia for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

80 

Thank you for coming back, Secretary Chu. Those of us at the 

end of the list appreciate it very much. 

As you know, the United States is blessed with huge coal reserves and I note with some interest that as technology has become 

available that coal to gas, coal liquification I think is becoming 

more affordable in the world marketplace. And in fact South Africa 

gets just about a third of its gasoline from coal to oil processes. And 

in fact the President, when he was a Senator, on two different occasions introduced legislation to do just that. So I guess my question 

is what do you see the Department of Energy doing to help get coal 

to liquids to play a vital and additional role in the supply of gasoline in the United States? 

Mr. CHU. Well, first, we agree that the United States is blessed 

with great fossil fuel resources, and we are looking at the potential 

for both coal-to-liquid and gas-to-liquid. And we want to support research that would enable—the issue is high capital cost. The plants 

are very, very complex, and when I talk to the oil companies, you 

know, Shell, ExxonMobil, they uniformly say that the very high 

capital cost is a problem. Now, having said that, we also of course 

want to do this in a way that not only—even without capturing the 

carbon, it is less than marginal and we would actually like to capture the carbon and helping enhance our recovery and other utilization, but ultimately, we also need to capture the carbon. 

Mr. GRIFFITH. Absolutely. And in that regard, these bills that the 

President put in, particularly one in 2006 was actually a loan guarantee program and I am just wondering if any of the loan guarantees that you all did as part of the stimulus helped to defray any 

of the capital costs for any companies that might be looking to take 

coal and turn it into gas? 

Mr. CHU. I think the one I know of—there are a few still going 

forward. There are gasification and the use of the carbon dioxide 

enhanced oil recovery. I think Southern has a project that is going 

forward on that. 

Mr. GRIFFITH. All right. And of course that brings me to 

Solyndra. And, you know, you all have indicated that what was 

happening in the Chinese market, both your administration and 

you have indicated what was happening in the Chinese market was 

not anticipated in 2009 when the loan guarantee was done. One of 

the questions I have always had, Secretary Chu, is that was known 

based on the way I heard your testimony over the course of the last 

year. That was actually known, though, by late 2010 and certainly 

by February of 2011, and so that calls into question if you knew 

what was happening in the Chinese market and that the price was 

so low that Solyndra couldn’t manufacture its product for the price 

that the Chinese were selling their product for, why the subordination? 

Mr. CHU. You are absolutely right. Certainly by 2011, late 2010 

we did know that Solyndra was in deep trouble, that there was— 

by then the price was—— 

Mr. GRIFFITH. But you also knew that the Chinese market had 

basically made them—you may not agree but it had made their 

products cheaper than Solyndra could produce their product. The 

Chinese could sell their product for less than Solyndra could 

produce their product for, isn’t that correct? 

81 

Mr. CHU. It is correct that we knew that Solyndra was in deep, 

deep trouble and there was a chance of bankruptcy. And when it 

came time to decide how to do this, it was a judgment call on 

whether the fact—the loan was for a—— 

Mr. GRIFFITH. And I know that you have said that before and I 

respect you, but that being said, isn’t it a fact that in late 2010 and 

certainly by February of 2011 when the subordination was signed 

off on, when you look at the price of what the Chinese were able 

to sell their product at and the price of what Solyndra was able to 

produce their product at, the Chinese could sell cheaper than 

Solyndra could produce. Isn’t that a fact? 

Mr. CHU. That is correct. 

Mr. GRIFFITH. OK. Thank you. I appreciate that very much. 

And I would also ask you in that same vein, different aisle 

maybe of the church, but Chairman Upton and Stearns recently 

sent you a letter on the loan program for Prologis? I hope I am saying that right. And Solyndra was to be the supplier for the first 

phase of that project but then Solyndra went bankrupt. Knowing 

what they knew, why did DOE feel comfortable including Solyndra 

as the first-phase supplier for Prologis at a time when you knew 

they were about to fold or knew that they were in serious danger 

of folding even with the first subordination? But I know you were 

hoping that there would be the second August subordination from 

outside money coming in, but why did you go forward with Prologis 

and say, look, this ought to be your supplier? 

Mr. CHU. Well, first, we were uncomfortable with Solyndra being 

the supplier, quite frankly. And Prologis had a very small—the initial one was Solyndra but I was saying I believed the Prologis business model was a very good one. I was very supportive of that loan, 

but I was nervous if Solyndra went there that Prologis should line 

up a plan B. 

Mr. GRIFFITH. All right. I thank you. 

And I yield back. Thank you, Mr. Chairman. Thank you, Secretary Chu. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time, I recognize Mr. Olson of Texas for 5 minutes. 

Mr. OLSON. I thank the chair. 

And Dr. Chu, I would like to thank you for your testimony today 

and especially for waiting for us to come back after votes. It is appreciated. 

I would like to ask you a few questions related to the electric 

grid because, as you are surely aware, the potential for conflict between grid reliability needs and environmental rules is greater now 

than ever. And in the interest of time, I would appreciate it if you 

could simply answer yes or no to the following questions. 

Question number one, are you aware that under Section 202 of 

the Federal Power Act, DOE can issue emergency orders to require 

a generator to run. Yes or no? 

Mr. CHU. Yes, I am aware of that. 

Mr. OLSON. That is what I thought, sir. Thank you. 

Question number two, are you aware that a generator’s compliance with an emergency order could result in a violation of environmental laws and subject generators to citizen lawsuits? Yes or no? 

Mr. CHU. I am aware of that. 

82 

Mr. OLSON. That is what I thought as well. Thank you. 

Question number three, do you believe it is fair to make generators choose between complying with a DOE emergency order or 

complying with environmental laws and regulations? Is that fair? 

Mr. CHU. In most instances, we believe that it doesn’t have to be 

an either/or. And so as I said before, the Department of Energy’s 

job is to help the private sector ensure that we have a reliable 

source of electricity for our businesses and for our citizens. 

Mr. OLSON. I will count that as a leaning not fair. 

But question number four—not to put words in your mouth—are 

you aware that this situation has arisen twice in recent years 

where a generator was forced to pay environmental fines and settle 

a citizen lawsuit because they complied with an emergency order 

from your department. Are you aware of that? Yes or no? 

Mr. CHU. I am not sure, candidly, but it may have occurred. 

Mr. OLSON. It has occurred with a company called Mirant— 

which is now GenOn—and two issues in particular with them, one 

out of San Francisco, California. I could get you some details but 

I am sure staff can do that as well. 

And my final question for you is would you be supportive of efforts to remedy this potential conflict between the Federal laws? 

Mr. CHU. I am very supportive that we don’t want to order that 

a generator continue to be online to produce emergency backup 

power and face Federal fines from another branch. And we are very 

eager to work through those issues. 

Mr. OLSON. That is fantastic because I look forward to your support when I introduce legislation to address this issue in upcoming 

weeks. 

Thank you again for your patience for coming back. I yield back 

the balance of my time. 

Mr. WHITFIELD. Thank you, Mr. Olson. 

Mr. Scalise, you are recognized for 5 minutes. 

Mr. SCALISE. Thank you, Mr. Chairman. I appreciate you having 

the hearing. 

Secretary Chu, thank you for coming with us and for staying 

through the vote series. I appreciate that. 

I want to get into, you know, I guess the different definition of 

an all-of-the-above energy strategy because I think while we have 

been talking about and actually passing legislation out of the 

House to implement an all-of-the-above energy strategy so that we 

can not only create millions of American jobs but also lower prices 

of gas at the pump and eliminate our dependence on Middle Eastern oil, the President has recently started talking about an all-ofthe-above energy strategy. But if you look at the actual things that 

he has done, his policies have actually hurt energy production in 

this country. And I want to start by asking you, you know, the 

President is out there boasting that, you know, energy production, 

oil production has never been higher as if he supports that, yet 

when you actually look at the facts from what we have seen, numbers we have seen show that actual production on Federal lands, 

which the President has control over through his Department of Interior, is down 11 percent. And in fact in the Gulf of Mexico it is 

down 17 percent. Have you seen any numbers similar to that to inVerDate Aug 31 2005 14:32 Jan 22, 2013 Jkt 037690 PO 00000 Frm 00086 Fmt 6633 Sfmt 6633 F:\1194B7~1\112-12~1 WAYNE
83 

dicate just what is happening in areas where the Federal Government does have a jurisdiction? 

Mr. CHU. I have seen numbers that I glean from a recent Senate 

speech that were gleaned from what—— 

Mr. SCALISE. Well, the numbers that you have seen validating 

what I have seen, that there is an actual decline in production on 

Federal lands. 

Mr. CHU. If you start the clock when President Obama became 

President, the numbers I have seen show an increase in—— 

Mr. SCALISE. We have seen just from 2010 to 2011 an 11 percent 

reduction in oil production on Federal lands. In the Gulf of Mexico 

exclusively we have seen a 17 percent reduction in oil production. 

Where the increase has come is on private lands, you know, North 

Dakota and the shale plays, which, by the way, the President is 

trying to shut down through the EPA. So it is a little bit disingenuous for the President to go out there and say he is for all of the 

above and oil production has never been higher when on Federal 

lands where he has got an influence, he has actually used his influence to reduce production. And on private lands where he doesn’t 

directly have an influence, he is trying through the EPA to shut 

down the fracking process, which would mean there would be a reduction there, too, making us more dependent. 

And so, you know, I will go back to the comments that you have 

made in the past and the President have made in support of higher 

gas prices. And, you know, back in 2008, right after the President 

was elected you said—and let me make sure—‘‘somehow we have 

to figure out how to boost the price of gasoline to the levels in Europe.’’ Did you say that? 

Mr. CHU. I am not sure—as I said before—— 

Mr. SCALISE. You said it or you didn’t. It has been attributed— 

I mean it is not the first time you have heard this because many 

people have asked you—— 

Mr. CHU. Right. 

Mr. SCALISE [continuing]. About it and I have heard you—— 

Mr. CHU. No. 

Mr. SCALISE [continuing]. Confirm that you said it. 

Mr. CHU. I said something very similar to that. I am not sure 

when the date—— 

Mr. SCALISE. OK. So the prices in Europe are what right now? 

I have seen over $8 a gallon. 

Mr. CHU. I am not sure when the date was but everything I have 

done when I became Secretary of Energy and was named Secretary 

of Energy was to help control, bring down the prices of gasoline. 

Mr. SCALISE. That hasn’t happened but if you look at President 

Obama’s actual quote, President Obama said he would prefer a 

gradual adjustment to near-$4-a-gallon gasoline. President Obama 

said that. And unfortunately, the President has put policies in 

place that have gotten us now to $4 a gallon almost in gasoline 

prices. We have seen it. It was $1.83 when he started as President. 

It is over $3.70 now. So the President has gotten his wish and people are furious about it. It is killing the economy; it is killing jobs. 

And now that people are furious, the President is trying to blame 

somebody else. 

84 

But let’s look at the record. You know, if you look at what is happening in the Gulf of Mexico alone, we have lost about a dozen 

deepwater rigs, billion-dollar-plus assets that have left the Gulf of 

Mexico because they can’t get permits because of the President’s 

own policies. Now, they haven’t left to go to other places in America; they have left the country. They have gone to places like 

Egypt. You know, imagine it is better to do business in Egypt than 

in America because of the President’s policies. We saw what the 

President did on the Keystone XL Pipeline, saying no to that. You 

know, the President has implemented a policy that has actually reduced American energy production and supply. 

Now, of course, the President has been to Saudi Arabia. He has 

bowed down to their prince and, you know, he has begged them for 

more oil. I understand you have been to Saudi Arabia as well and 

had similar meetings. Is that accurate? Have you been to Saudi 

Arabia? 

Mr. CHU. I have been to Saudi Arabia. 

Mr. SCALISE. Asking them to produce more oil? What did you—— 

Mr. CHU. Well, certainly Saudi Arabia is one of the few countries—— 

Mr. SCALISE. But have you asked them to produce more oil? 

Mr. CHU. Well, it is—— 

Mr. SCALISE. Yes or no. I am almost out of time. 

Mr. CHU. Allow me to continue. 

Mr. SCALISE. I don’t have the time. It is a yes-or-no question. Did 

you ask them to increase production? 

Mr. CHU. We would like Saudi Arabia—— 

Mr. SCALISE. Mr. Secretary—and I am almost out of time; I 

apologize. I am sure you will have an opportunity to answer later 

but, you know, rather than going to Saudi Arabia, I have mapped 

out, it is only about a 5-minute walk from your office to the White 

House. I would suggest instead of going to Saudi Arabia and asking 

them to increase production, go to 1600 Pennsylvania Avenue and 

ask the President to reverse his policies that have reduced production in America and made gas prices higher with the permitorium 

in the Gulf where there is still no consistent policy to get permits 

and it is killing production. We have lost a dozen rigs. They have 

left America. We have lost thousands of jobs because of that. Keystone Pipeline, we lost a million barrels from Canada that we now 

have to get from Middle Eastern countries who don’t like us; this 

EPA attack on fracking, which is killing innovation. We talked to 

a company recently, an American energy company who left $3 billion on the table—— 

Mr. RUSH. Mr. Chairman, I am going to insist on regular order. 

Mr. SCALISE. So I would just ask that you go and pursue the administration policies that are killing energy production and causing 

higher gas prices instead of going to Saudi Arabia. 

Yield back. 

Mr. WHITFIELD. Gentleman’s time is expired. 

Mr. SCALISE. Yield back. 

Mr. WHITFIELD. Now, Mr. Secretary, if you want to try to respond, feel free to do so. 

Mr. CHU. Very, very quickly. We are talking about immediate 

spare production, and Saudi Arabia is one of the few countries that 

85 

has immediate spare production. To develop an oil field in the Gulf 

takes years, at least typically 5 years to actually explore, find, develop this. And so for immediate spare production we think that 

would have a way of moderating price spikes in the world oil market. 

Mr. WHITFIELD. Well, that concludes today’s hearing. And once 

again, I want to thank you and your staff for your patience. And 

I do want to ask unanimous consent to enter into the record a recent survey made in Nevada regarding the public’s views on Yucca 

Mountain. Without objection, that will be entered into the record. 

[The information follows:] 

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Mr. WHITFIELD. And then we will keep the record open for 10 

days for any additional materials that may be submitted. 

And once again, Mr. Secretary, thank you and we look forward 

to working with you as we move forward. 

Mr. CHU. All right. Thank you, Mr. Chairman. 

Mr. WHITFIELD. This hearing is adjourned. 

[Whereupon, at 1:08 p.m., the subcommittee was adjourned.] 

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