```

[Senate Hearing 111-14]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 111-14
 
                     PROPOSALS ON ENERGY RESEARCH 
                            AND DEVELOPMENT

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   TO

   RECEIVE TESTIMONY REGARDING DRAFT LEGISLATIVE PROPOSALS ON ENERGY 
                        RESEARCH AND DEVELOPMENT

                               __________

                             MARCH 5, 2009

                      0Printed for the use of the
               Committee on Energy and Natural Resources

                  U.S. GOVERNMENT PRINTING OFFICE
48-687                    WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gov Phone: toll free (866) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 20402-0001

               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bartis, James T., Senior Policy Researcher, Rand Corporation, 
  Arlington, VA..................................................    32
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Chu, Hon. Steven, Secretary, Department of Energy................     3
Corradini, Michael L., Chair, Nuclear Engineering and 
  EngineeringPhysics, University of Wisconsin Madison, WI........    46
Crabtree, George W., Senior Scientist, Associate Division 
  Director and Distinguished Fellow, Materials Science Division, 
  Argonne National Laboratory, Argonne, IL.......................    24
Fri, Robert M., Visiting Scholar, Resources for the Future.......    29
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Wince-Smith, Deborah L., President, Council on Competitiveness...    39

                               APPENDIXES
                               Appendix I

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

                              Appendix II

Additional material submitted for the record.....................    83

              PROPOSALS ON ENERGY RESEARCH AND DEVELOPMENT

                              ----------                              

                        THURSDAY, MARCH 5, 2009

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:38 a.m. in room 
SH-216, Hart Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

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

    The Chairman. Why don't we go ahead and get started. I know 
Senator Murkowski is on her way. There she is right there.
    Let me thank everyone for coming. This is an oversight 
hearing to review future directions of energy research and 
development to identify key scientific and technological 
hurdles that need to be overcome in order to pursue some of 
these new directions. We particularly thank Secretary Chu for 
being here to testify at this hearing on research and 
development within the Department of Energy. Of course the 
second panel as well.
    The purpose of the hearing, as I stated is to find out what 
is happening with regard to research and development. Also to 
get comments to the extent that witnesses have comments on the 
draft legislation that the Committee has posted on its website. 
This is legislation that the staff has developed to address 
some of these issues.
    Last year I was fortunate to travel to both Japan and Korea 
to understand some of the initiatives being pursued there to 
advance energy research and development programs. In Japan we 
were given a copy of this cool Earth 50 program that we've 
given copies of to, at least the front page of the brochure 
that was provided to us, where they are trying to coordinate 
their energy industries to produce technologies that will 
enable Japan to reduce its greenhouse emissions by at least 50 
percent by the year 2050. Obviously an additional benefit of 
this program as they see it would be the payback of being a 
leader in world markets in energy technologies that have 
minimal carbon emissions associated with them.
    I hope we can benefit from learning from what others, 
including Japan are doing in this regard. Let me again thank 
the witnesses, and call on Senator Murkowski for any statement 
she has before hearing from Secretary Chu.
    [The prepared statement of Senator Udall follows:]

   Prepared Statement of Hon. Mark Udall, U.S. Senator From Colorado
    Mr. Chairman, thank you for holding today's hearing on energy 
research and development (R&D).
    Energy R&D is the future of our energy industry, but is also 
critical to our national security, our environment, and our economy. 
This work will help us address climate change, lessen our dependence on 
foreign oil, and help make energy m ore affordable and efficient.
    These R&D issues are important for our nation, but also for 
Colorado. Colorado is home to some of the nation's top universities and 
several federal laboratories. This includes the National Renewable 
Energy Laboratory (NREL), our nation's premiere renewable energy R&D 
facility.
    NREL has lead the way on research into making wind power safer and 
more efficient, lowering the cost of solar energy production, and 
advancing hydrogen energy production from renewable sources, as well as 
storage of hydrogen energy.
    This is not a mew subject to me. During my ten years in the House, 
I was a member of the Science and Technology Committee, which oversaw 
several of DOE's science offices, including the Office of Science and 
Office of Energy Efficiency and Renewable Energy. I helped fight for 
funding for these offices and encouraged them to succeed.
    for example, the 2007 energy bill included a provision that I 
pushed in the U.S. House of Representatives to expand and improve the 
Department of Energy's carbon capture and storage (CCS) research and 
demonstration program. CCS will be critical to helping us continue to 
use our vast domestic sources of coal while also working to address 
rising greenhouse gas emissions.
    I should add that the development side of R&D is critically 
important, though sometimes lost in our efforts to find the next big 
discovery. Development is the first step towards commercializing a 
product and getting new technology int the hands of Americans, both in 
our homes and businesses. I believe development includes creating a 
workforce capable of managing these technologies.
    There is much more we can do to move this effort forward.
    Recently, NREL joined with our state's research universities--
University of Colorado, Colorado State University, and Colorado School 
of Mines--to form the Colorado Renewable Energy Collaboratory. This 
partnership has already combined the best from universities and the 
national labs to work with the state government and private businesses 
on furthering research, development, and commercialization on new 
renewable energy technology.
    I believe Colorado's Collaboratory provides a example of the 
partnerships we need to encourage to move our energy economy forward.
    I am looking forward to hearing from today's witnesses about the 
future of energy R&D and what we in Congress can do to help advance 
that work.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman, and I 
appreciate the hearing this morning. I also want to welcome 
you, Dr. Chu, Secretary Chu.
    This is the first time you've been before us since the 
confirmation hearing. I've had a couple opportunities to 
discuss issues with you, and I appreciate your openness and 
your being here this morning.
    I've got lots of questions over a variety of issues 
including questions about the Administration's view on the 
renewable electrical standard. If we have some time I'd like to 
get into those. But very hopeful that this Committee will have 
the opportunity perhaps at another hearing with Administrative 
witnesses to talk about those issues and perhaps some others.
    The legislative proposal that we're considering today, not 
only reauthorizes the research and development components of 
the Energy Policy Act of 1905. But it doubles the authorization 
funding from 2009 to 2013, hopefully countering the drop in 
government funding for energy research and development efforts 
that we've seen since the 1970s. This increase in my mind 
anyway, is a necessary one.
    All of our goals to become a more energy efficient nation 
and to be less dependent on unstable, foreign sources of energy 
rely on advances in technology advances in the know how. If 
we're going to be the leader in energy technology investment, 
in R and D, is a must. The two are certainly not mutually 
exclusive.
    On another front as we get into the details of energy 
efficiency, alternative fuels and other specifics of energy 
policy, it can be easy to overlook the people power that are 
needed to make this work. It's an issue that we recognize that 
we can't neglect. Half of electric utility workers and oil and 
gas workers are eligible and likely to retire in the next 2 to 
5 years. The subsurface geotechnical work force faces a similar 
challenge. Our challenge then is to figure out how we attract, 
how we retain new workers in those fields.
    The legislative proposal we're looking at seeks to support 
programs that provide this training from secondary schools and 
trade schools on up to graduate programs. So what we're trying 
to do is figure out how we grow the work force. We know that 
the workers are going to be needed. The jobs certainly in this 
economy are needed. So hopefully with the support of this 
proposal we'll be able to bring the two together to meet our 
future energy work force needs.
    I've expressed my support for reauthorization of the R and 
D programs and expansion of the work force development pieces. 
I have been looking at the proposal. I've got some level of 
concern about the Grand Challenges Research Initiative.
    Not because I don't support the idea or the concept. But 
because of the funding mechanism that is to be used. So I just 
throw that out there as a concern for discussion. But I think 
the proposal that we have before us is a very good starting 
point, not yet a final product but I look forward to hearing 
from the witnesses from our second panel on their perspectives, 
ways to improve the product.
    Again, Secretary Chu, welcome to the committee.
    The Chairman. Secretary Chu, go right ahead. We're glad to 
have you testify today. Please give us any thoughts you have.

 STATEMENT OF HON. STEVEN CHU, SECRETARY, DEPARTMENT OF ENERGY

    Secretary Chu. Chairman Bingaman, Ranking Member Murkowski 
and members of the Committee, thank you for the opportunity to 
appear before you today. During his address to the joint 
session of Congress last week, President Obama reiterated his 
commitment to reducing our dependence on oil and sharply 
cutting greenhouse gas emissions. I'm looking forward to 
working with others in the Administration, this Committee and 
the Congress to meet the President's goal of legislation that 
places a market based cap on carbon pollution and drives the 
production of more renewable energy in America.
    Such legislation will provide the framework for 
transforming our energy system, making our economy less carbon 
intensive and America less dependent on foreign oil. In the 
near term President Obama and this Congress have already taken 
a key step in passing the American Recovery and Reinvestment 
Act of 2009. This legislation will put Americans back to work 
while laying the groundwork for a clean energy economy.
    I'd like to highlight a few of the energy investments in 
that law.
    First, the Recovery Act will put people to work making our 
homes and offices more energy efficient. It includes $5 billion 
to weatherize the homes of low income families. A $1,500 tax 
credit to help homeowners invest in efficiency upgrades. $4.5 
billion to green Federal buildings including reducing their 
energy consumption and $6.3 billion to implement state and 
local efficiency and renewable programs.
    The Recovery Act also includes $6 billion for loan 
guarantees and more than $13 billion in tax credits to finance 
assistance instruments that may leverage tens of billions in 
the private sector investment in clean energy and job creation. 
This will help clean energy businesses and projects get off the 
ground in these difficult economic times. The investments in 
key industries such as $2 billion in advanced battery 
manufacturing and the $4.5 billion to jump start our efforts to 
modernize the electrical grid.
    Getting this money into the economy quickly, carefully and 
transparently is the top priority for me. I know that your 
constituent States, cities and businesses are eager to move 
forward and are seeking more information on how to access this 
funding. I've met with many of them already and we will have 
much more detailed information in the coming weeks.
    With that, I would like to turn to a topic that's near and 
dear to my heart. How can we better nurture and harness science 
to solve our energy and climate change problems? I strongly 
believe that the key to our prosperity in the 21st century will 
lie in our ability to nurture our intellectual capital in 
science and technology.
    Our previous investments in science led to the birth of the 
semiconductor, computer and biotechnology industries that add 
greatly to our economic prosperity. Now we need similar 
breakthroughs on energy. We're already taking steps in the 
right direction, but we need to do more.
    First we need to increase funding. It's part of the 
President's plan to double Federal investments in the basic 
sciences. The 2010 budget provides substantially increased 
support for the Office of Science, building on the $1.6 billion 
provided in the Recovery Act for the Department of Energy's 
basic science programs.
    We also need to refocus our scarce research dollars. In 
April a more detailed FY 2010 budget will be transmitted to 
Congress. This budget will improve science research development 
and deployment at the DOE by developing science and engineering 
talent, by focusing on transformational research, by pursuing 
broader, more effective collaborations and by improving 
connections between DOE research and the private sector energy 
companies.
    Several years ago I had the honor and privilege of working 
on ``Rising Above the Gathering Storm'', a report commissioned 
by Chairman Bingaman and Senator Alexander. One of the key 
recommendations was to step up efforts to educate the next 
generation of scientists and engineers. The FY 2010 budget 
supports graduate fellowship programs that will train students 
in energy related fields. I will also seek to build on DOE's 
existing research strengths by attracting and retaining the 
most talented scientists.
    The next area that I want to discuss is the need to support 
research on transformational technology. What do I mean by 
transformational technology? I mean technology that's game 
changing as opposed to being incremental.
    For example, in the 1920s and 1930s when AT & T Bell 
Laboratories was focused on extending the life of vacuum tubes, 
another much smaller research program was started to 
investigate a completely new device. This device was based on 
revolutionary advances in the understanding of the quantum 
world, quantum mechanics. The result of this transformational 
research was the transistor which transformed communications, 
allowed the commuter industry to blossom and changed the world 
forever.
    DOE must strive to be the modern version of the old Bell 
Labs in energy research. Because of the payoffs in 
transformational research are both higher risk and longer term, 
government investment is critical and appropriate. As this 
committee knows we have funded three bioenergy research 
centers. One at Oak Ridge National Laboratory, one led by the 
University of Wisconsin in close collaboration with Michigan 
State University and one led by the Lawrence Berkeley National 
Lab. Each of these centers is targeting breakthroughs in 
biofuel technology development that will be needed to make 
abundant, affordable, low carbon biofuels a reality.
    We need to do more transformational research at the DOE to 
bring a range of clean energy technologies to the point where 
the private sector can pick them up.
    This includes gasoline and diesel like biofuels generated 
from lumber and crop waste and non food crops.
    Automobile batteries with two or three times the energy 
density that can survive 15 years of deep discharges.
    Photovoltaic solar power that is five times cheaper than 
today's technology.
    Computer design tools for commercial and residential 
buildings that will enable reductions in energy consumption of 
up to 80 percent with investments that will pay for themselves 
in less than 10 years.
    Large scale energy storage systems so that variable, 
renewable energy resources such as wind and solar power can 
become base load power generators.
    This is not a definitive list or a hard set of technology 
goals. But it gives a sense of the types of technologies and 
bench marks I think we should be aiming for.
    DOE also needs to foster better research collaborations 
both internally and externally. My goal is to build research 
networks within the Department, across the Government, 
throughout the Nation and around the globe. We will better 
integrate national, lab, university and industry research. We 
will seek partnerships with other nations. For example, 
increased international cooperation on carbon capture and 
storage technology could reduce both the cost and time of 
developing the range of pre and post combustion approaches that 
will be needed for cost effective carbon capture and 
sequestration.
    While we work on transformational technologies the DOE must 
improve its efforts to help deploy demonstrated, clean, 
technologies at scale. The Loan Guarantee Program will be 
critical in these efforts by helping to commercialize 
technologies. The Recovery Act funding for weatherization and 
energy efficiency block grant programs will accelerate the 
deployment of energy efficient technologies.
    I'm excited about the prospect of improving DOE's clean 
energy research development and deployment efforts. I thank you 
and would be glad to answer your questions at this time.
    [The prepared statement of Secretary Chu follows:]

     Prepared Statement of Hon. Steven Chu, Secretary, Department 
                               of Energy
    Chairman Bingaman, Ranking Member Murkowski and Members of the 
Committee, thank you for the opportunity to appear before you today to 
continue the conversation we began at my confirmation hearing.
    During that hearing, I touched on the enormous challenges and 
threats we face--to our economy, our security, and our climate. In the 
20th century, America's economic engine was powered by relatively 
inexpensive domestic fossil fuels. Today, we import roughly 60 percent 
of our oil, draining resources from our economy and leaving it 
vulnerable to volatility in oil prices. Additionally, the potentially 
adverse effects of global greenhouse gas emissions and their cost to 
the world economy were not widely realized until the end of the past 
century but are well-established today.
    If we, our children, and our grandchildren are to prosper in the 
21st century, we must decrease our dependence on oil, use energy in the 
most efficient ways possible, and decrease our carbon emissions. 
Meeting these challenges will require both a sustained commitment for 
the long-term and swift action in the near-term.
    During his address to the Joint Session of Congress last week, 
President Obama reiterated his commitment to reducing our dependence on 
oil and sharply cutting greenhouse gas emissions. I look forward to 
working with others in the Administration, this Committee, and the 
Congress to meet the President's goal of legislation that places a 
market-based cap on carbon pollution and drives the production of more 
renewable energy in America. Such legislation will provide the 
framework for transforming our energy system to make our economy less 
carbon-intensive, and less dependent on foreign oil.
    In the near term, President Obama and this Congress have already 
taken a key step by passing the American Recovery and Reinvestment Act 
of 2009. This legislation will put Americans back to work while laying 
the groundwork for a clean energy economy.
                 american recovery and reinvestment act
    I would like to highlight a few of the energy investments in that 
law.
    First, the Recovery Act will put people to work making our homes 
and offices more energy efficient. It includes $5 billion to weatherize 
the homes of low-income families; a $1,500 tax credit to help 
homeowners invest in efficiency upgrades; $4.5 billion to ``green'' 
federal buildings, including reducing their energy consumption; and 
$6.3 billion to implement state and local efficiency and renewable 
programs.
    The Recovery Act also includes $6 billion for loan guarantees and 
more than $13 billion in tax credits and financial assistance 
instruments (grants and cooperative agreements) that may leverage tens 
of billions in private sector investment in clean energy and job 
creation. This will help clean energy businesses and projects to get 
off the ground, even in these difficult economic times. The bill also 
makes investments in key technologies, such as $2 billion in advanced 
battery manufacturing, and $4.5 billion to jumpstart our efforts to 
modernize the electric grid.
    Getting this money into the economy quickly, carefully, and 
transparently is a top priority for me. I know that your constituent 
States, cities, and businesses are eager to move forward, and are 
seeking more information about how to access this funding. I have met 
with many of them already, and we will have much more detail in the 
coming weeks.
    I know the Title XVII loan guarantee program is of great interest 
and concern to this committee. We are already in the process of making 
improvements to this important program that I believe will satisfy many 
of these concerns.
         reshaping energy research, development, and deployment
    With that, I would like to turn to a topic that is near and dear to 
my heart: how we can better nurture and harness science to solve our 
energy and climate change problems. I have spent most of my career in 
research labs--as a student, as a researcher, and as a faculty member. 
I took the challenge of being Secretary of Energy in part for the 
chance to ensure that the Department of Energy Laboratories and our 
country's universities will generate ideas that will help us address 
our energy challenges. I also strongly believe that the key to our 
prosperity in the 21st century lies in our ability to nurture our 
intellectual capital in science and engineering. Our previous 
investments in science led to the birth of the semiconductor, computer, 
and bio-technology industries that have added greatly to our economic 
prosperity. Now, we need similar breakthroughs on energy.
    We're already taking steps in the right direction, but we need to 
do more.
    First, we need to increase funding. Dan Kammen of U.C. Berkeley has 
conducted studies showing that while overall investment in research and 
development is roughly three percent of gross domestic product on 
average, it is roughly one-tenth of that average in the energy sector. 
As part of the President's plan to double federal investment in the 
basic sciences, the 2010 Budget provides substantially increased 
support for the Office of Science, building on the $1.6 billion 
provided in the Recovery Act for the Department of Energy's basic 
sciences programs.
    We also need to refocus our scarce research dollars. In April, a 
more detailed FY 2010 budget will be transmitted to Congress. This 
budget will improve energy research, development, and deployment at 
DOE: by developing science and engineering talent; by focusing on 
transformational research; by pursuing broader, more effective 
collaborations; and by improving connections between DOE research and 
private sector energy companies.
    Developing Science and Engineering Talent: Several years ago, I had 
the honor and privilege of working on the ``Rising Above the Gathering 
Storm'' report commissioned by Chairman Bingaman and Senator Alexander. 
One of the key recommendations was to step up efforts to educate the 
next generation of scientists and engineers. The FY 2010 budget 
supports graduate fellowship programs that will train students in 
energy-related fields. I will also seek to build on DOE's existing 
research strengths by attracting and retaining the most talented 
scientists.
    Focusing on Transformational Research. The second area that I want 
to discuss is the need to support transformational technology research. 
What do I mean by transformational technology? I mean technology that 
is game-changing, as opposed to merely incremental. For example, in the 
1920's and 1930's, when AT&T Bell Laboratories was focused on extending 
the life of vacuum tubes, another much smaller research program was 
started to investigate a completely new device based on a revolutionary 
new advance in the understanding of the microscopic world: quantum 
physics. The result of this transformational research was the 
transistor, which transformed communications, allowed the computer 
industry to blossom, and changed the world forever.
    DOE must strive to be the modern version of the old Bell Labs in 
energy research. Because the payoffs from research in transformational 
technologies are both higher risk and longer term, government 
investment is critical and appropriate.
    Here is an example of current DOE transformational research. As 
this Committee knows, we have funded three BioEnergy Research Centers--
one at the Oak Ridge National Laboratory in Oak Ridge, Tennessee; one 
led by the University of Wisconsin in Madison, Wisconsin, in close 
collaboration with Michigan State University in East Lansing, Michigan; 
and one led by the Lawrence Berkeley National Laboratory. Each of these 
centers is targeting breakthroughs in biofuel technology development 
that will be needed to make abundant, affordable, low-carbon biofuels a 
reality. While these efforts are still relatively new, they are already 
yielding results, such as the bioengineering of yeasts that can produce 
gasoline-like fuels, and the development of improved ways to generate 
simple sugars from grasses and waste biomass.
    We need to do more transformational research at DOE to bring a 
range of clean energy technologies to the point where the private 
sector can pick them up, including:

    1. Gasoline and diesel-like biofuels generated from lumber waste, 
crop wastes, solid waste, and non-food crops;
    2. Automobile batteries with two to three times the energy density 
that can survive 15 years of deep discharges;
    3. Photovoltaic solar power that is five times cheaper than today's 
technology;
    4. Computer design tools for commercial and residential buildings 
that enable reductions in energy consumption of up to 80 percent with 
investments that will pay for themselves in less than 10 years; and
    5. Large scale energy storage systems so that variable renewable 
energy sources such as wind or solar power can become base-load power 
generators.

    This is not a definitive list, or a hard set of technology goals, 
but it gives a sense of the types of technologies and benchmarks I 
think we should be aiming for. We will need transformational research 
to attain these types of goals. To make it happen, we will need to re-
energize our national labs as centers of great science and innovation. 
At the same time, we need to seek innovation wherever it can be found--
the new ARPA-E program will open up research funding to the best minds 
in the country, wherever they may be. I pledge to you we will have this 
program up and running as soon as possible.
    Broader, More Effective Collaboration.--DOE also needs to foster 
better research collaboration, both internally and externally. My goal 
is nothing less than to build research networks within the Department, 
across the government, throughout the nation, and around the globe. 
We'll better integrate national lab, university, and industry research. 
We will seek partnerships with other nations. For example, increased 
international cooperation on carbon capture and storage technology 
could reduce both the cost and time of developing the range of pre-and 
post-combustion technologies needed to meet the climate challenge.
    Speeding Demonstration and Deployment.--While we work on 
transformational technologies, DOE must also improve its efforts to 
demonstrate next-generation technologies and to help deploy 
demonstrated clean energy technologies at scale. The loan guarantee 
program will be critical to these efforts by helping to commercialize 
technologies, and the Recovery Act funding for weatherization and 
energy efficiency block grant programs will accelerate the deployment 
of energy efficient technologies.
                               conclusion
    I am excited about the prospect of improving DOE's clean energy 
research, development, and deployment efforts. The Nation needs better 
technologies to fully meet our climate and energy challenges, and DOE 
can be a major contributor to this effort.
    We already have ample technology to make significant, near-term 
progress toward our energy and climate change goals. The most important 
of these is energy efficiency, which will allow us to reduce costs and 
conserve resources while still providing the same energy services. The 
potential there is huge, as is the potential to increase the use of 
existing technologies such as wind, solar, and nuclear. We will move 
forward on all of these fronts and more, as we invest in the 
transformational research to achieve breakthroughs that could 
revolutionize our Nation's energy future.
    Thank you. I would be glad to answer your questions at this time.

    The Chairman. Thank you very much. Let me start with a 
couple of questions. I know one of the issues that you have 
been focused on and that we've also heard a lot about in this 
committee is the gap between basic research and applied 
research and development and how that can be bridged and more 
effectively dealt with.
    Sandia Livermore has a combustion research facility that 
has tried to address this in something of an ad hoc fashion by 
getting funding from the Office of Science also getting funding 
from EER and E, the vehicles program there and also working 
with industry. We've tried to figure out a way through 
legislation to promote that kind of an effort in other 
technology areas. That's this Grand Challenges Program that is 
in the draft bill that we submitted.
    I'd be interested in any thoughts you've got as to whether 
this would be helpful or if there's a better way to do this or 
is this something that can't be done legislatively and just has 
to be done administratively? What's your thought about how we 
bridge this gap between basic and applied R and D?
    Secretary Chu. As I've said in the confirmation hearings 
and in my discussions with you. I think that is a major focus 
in how we can link the basic research that's done in the Office 
of Science and in universities around the country. The Office 
of Science supports both universities and national labs and how 
we can better link that research with things that actually get 
out into the marketplace, the more applied research that leads 
to innovation.
    We're completely aligned in terms of using, for example, 
the bioenergy fuel centers as an example of a very successful 
program. In the details of the FY2010 budget you will hear 
about our plans to do that. So I do want to ask for some 
flexibility in these programs, but the nature of where we're 
going is very much in line like that.
    I think from what I've already seen in the bioenergy 
institutes that is a very good way of focusing attention and 
really bringing together a cluster of scientists to work on 
these problems. I do feel though it's best if it comes from the 
Department of Energy. But you'll see that we're very, very 
closely aligned, almost perfectly aligned.
    The Chairman. Ok. Very good. Let me ask about ARPA-E.
    I believe you were a part of the National Academy's panel 
that recommended the establishment of ARPA-E. We authorized 
that as part of the Competes Act in the last Congress. We 
funded that at $400 million as part of the Stimulus bill. Could 
you give us your thoughts as to how/what topics or what 
objectives you see being pursued through ARPA-E and how that 
would be managed?
    Secretary Chu. The way it's going to be managed is we are 
in the process of trying to identify a director. That director 
will be reporting directly to me. There will be a very lean set 
of contract people under that director.
    The philosophy of ARPA-E is that if you look at what either 
industry or venture capitalists are willing to pick up there is 
a gap. There are innovative things that have too high a risk 
for investors to be willing to put in. So just like the old 
DARPA program invested in things that do have a risk of failure 
but they also have a higher probability of bringing on those 
transformational technologies.
    So we will be investing in that very short time scale, 2 or 
3 years and see what's going to happen. If it doesn't look 
promising one pulls the plug and moves on. If it looks 
promising there could be another tranche of money.
    But ARPA-E will have a very similar philosophy to what 
DARPA has been doing. In the end the success of this program 
really depends on the success of the program managers and the 
quality of the program managers. The good news is that if it's 
a very lean organization that has a lot of freedom and 
authority, I think we can attract those program managers to 
this program because it's very exciting possibility to be 
investing that kind of money to actually lead to something 
truly transformational.
    The Chairman. Ok. Let me ask one other question. We provide 
in this draft bill that we've had put on the website funding 
levels for energy research and development authorization 
levels. It essentially calls for a doubling of that funding 
over the 4-year period.
    Are the levels we're talking about here consistent with 
what you are going to try to accomplish in the Administration? 
I mean we've got sort of three things that happen here. The 
Administration gives us their proposals in the budget. Then we 
try to, in some cases at least, authorize a certain level. Then 
we try to appropriate a different level to the extent we can 
I'd like to try to get those in sync.
    Are what we have in this Authorization bill, proposed 
Authorization bill consistent with what you think the 
Administration would want to see?
    Secretary Chu. I'm not going to--I applaud the 
authorization levels. Let me be very frank about that. It 
really depends on what Appropriations will actually 
appropriate.
    But I think I cannot overly impress upon this committee, 
upon the Nation the critical need to do energy research. The 
good news is that many of the most talented scientists in the 
country are realizing our energy problem and all it facets. 
It's one of the most important things that science and 
technology has to solve.
    Because of that we're beginning to see extraordinarily 
talented people, mid-career people who are shifting their 
fields. Say I've got to work on this problem. We're seeing a 
lot of young people with an idealism, quite frankly, I haven't 
seen since the 1960s and 1970s. They are saying I've got to 
work on this problem. They want to enlist. So the increases in 
funding that are being authorized are the instrument that will 
allow us to open up recruiting stations and allow them to 
volunteer for this task.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Mr. Chairman, I'm going to defer to 
Senator Barrasso who has got to get upstairs for a tribal 
blessing in Indian Affairs.
    The Chairman. Alright. Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman. Thank 
you, Senator Murkowski. Mr. Secretary, thank you for being here 
with us today.
    I have 3 questions. One has to do with small businesses. To 
me, small businesses are the engine that drives our economy and 
in these economic times they want to be involved in this. We 
come from a number of different States, long distances away. I 
believe that small businesses can also be very involved in the 
innovation of the technologies where we're working on this.
    You had said that you were going to be putting, in terms of 
the stimulus funding, putting together a release of details for 
allocating some of that money. Could you give us a little bit 
of information about what competitive processes may be 
available so that all of our States are able to be involved in 
that competitive process, so our small businesses have an 
opportunity?
    Secretary Chu. Sure. I mean, we're planning on being very 
transparent in requests for proposals and in the feedback of 
the proposals. But really to get it out there, we will have 
web-based information that anyone can look up and apply. We are 
going to be setting up essentially help lines, if you will, 
frequently answered questions to help people apply for that 
money.
    So we're in the process of changing the way we actually 
solicit proposals to be much more transparent and much more 
what I call, customer friendly. So if there are questions, and 
this is not only is in the grants that we will be giving out in 
contracts, but also in the Loan Guarantee Program. So we intend 
to help everybody try to learn what it takes to make these 
applications.
    So I agree with you by the way. Small businesses in many 
respects are really the engine of true innovation. That, you 
know, results in some of the out of the left field approaches.
    Senator Barrasso. Right. Let me get next to clean coal 
technology. The Chairman and others of us met with former Prime 
Minister Tony Blair the other morning to talk about what's 
coming online in China in the next 10 years, coal fired power 
plants equal to two and a half times the amount of coal fired 
power plants that we have now in the United States.
    So as you look forward, as we look forward to your research 
and development and really the transformational technology that 
you talk about. In your confirmation hearings you said you 
wanted to work very hard to extensively develop clean coal 
technology. You're hopeful and optimistic that we can figure 
out how to use coal in a clean way.
    I believe very much, we need to do that. Do you have some 
thoughts on how you're going to work toward that goal?
    Secretary Chu. Yes. First I'd like to thank Congress for 
the Economic Recovery Act. We have $3.4 billion in that 
stimulus package for piloting clean coal technologies another 
essentially billion dollars for that.
    So I've begun to look very seriously at how to best 
allocate those funds. Once you start building pilot plans, the 
costs build up. So I've already started engaging discussions 
with foreign ministers, science ministers, energy ministers 
abroad and have gotten a good response.
    The European Union is thinking of 10 to 12 clean coal 
demonstration experiments, if you will, or pilot projects. 
China is thinking of them. What I would like to see, and we're 
moving in this direction, is to have a truly international 
alliance that we'd look at all these technologies.
    We do not know currently what the best technology is. But 
we do know that if we don't get this one, the environmental 
risk is incredible. China, India and the United States will not 
turn their back on coal. So we've got to get it right.
    There's a realization internationally how important that 
is. What that means is--think of this as a common goal, that 
all countries around the world can really align themselves with 
and collaborate. So that means intimate sharing of knowledge.
    You know what needs to be done is to invest in this. Get 
the pilot plants going. Really see what are the lessons that 
are learned? What can work? As you go down this learning curve 
and drop the price of this, all countries will benefit.
    So it's a completely shared intellectual property. The good 
news is you don't buy a coal plant like you buy a car or 
refrigerator. Most of that investment is done locally.
    It's like a building. So if we all develop these 
technologies then each country as they apply this, the benefit 
of that intellectual property, if you will, will go to 
servicing that country. The entire effort will be going to 
helping us conquer this problem.
    Senator Barrasso. Thank you, and Mr. Secretary, just 
finally there's a Department of Energy facility in Wyoming, the 
Rocky Mountain Oil Field Testing Center. I was going to alert 
you of that and maybe supply a question in writing because my 
time is up.
    But thank you, Mr. Chairman. Thank you, Senator Murkowski 
for allowing me to get in front. Thank you.
    The Chairman. Senator Udall.
    Senator Udall. Thank you, Mr. Chairman. I want to 
acknowledge the leadership you're providing to hold this 
important hearing today. Secretary Chu, great to see you again.
    I wanted to acknowledge that the last time you appeared 
before the committee we had a short conversation about the 
Rocky Flats Environmental Technology Site in my home state and 
the Federal Government's obligation to address the health 
impacts and needs of the former workers there at that nuclear 
weapons complex. I look forward to continuing to work with you 
on that important challenge. I want to thank you again for your 
commitment to work with those of us in Colorado and frankly, 
more broadly in the nuclear weapons complex.
    I did also want to note the excitement I felt when you 
mentioned that people are lining up to enlist in this important 
work to create a new energy economy. There's a saying that's 
been making the rounds over the last few years which is, 
``Green is the new red, white and blue.'' In other words one of 
the most patriotic things we can do is to develop this new 
energy economy. Maybe we'll see you soon on a poster Uncle Sam 
needs you because this is so important. There's such great 
opportunity presenting itself to us.
    Let me build if I could on Chairman Bingaman's question 
about the opportunity that applied research presents to us. But 
also the need for the longer term R and D investment in R and D 
work in the context of the national labs. It's clear to me that 
they will play an increasing role.
    I wanted to ask you to think out loud with us a bit about 
how do we ensure that we strike the right balance in the roles 
and in the funding in this diverse group of national 
laboratories. Between the science we require for the long term, 
the applied science and the critical commercialization and 
deployment of clean energy technology which we know that we 
need today. Could you speak to that?
    Secretary Chu. Sure. I think we really need a balanced 
portfolio of things. There are a number of technologies we 
already have today that we should be getting out there, 
especially on the energy efficiency side. We know a lot about 
energy efficiency. The Department of Energy will increase its 
efforts to help grease the wheels to get that stuff deployed.
    Then there's near term research and development where it 
might be on the cusp of getting picked up by the private 
sector. Those things, again, we will be working very hard. One 
of the things to remember is that when you go from very basic, 
out of the box, research to more applied research to 
development and piloting, each time you go up the chain the 
price increases sometimes by a factor of 5, sometimes by a 
factor of 10.
    So once you start piloting commercial scale, now you're 
talking billions of dollars, hundreds of million dollars for 
smaller pilot plans. So the portfolio that I really believe is 
important is that on the more basic side, you should be trying 
really new, innovative, essentially crazy stuff. It doesn't 
cost much.
    But you have to, on the flip side, on the development and 
deployment side, you have to show that as you approach 
commercial scale that when you're asking for the private sector 
to invest billions of dollars they have to have some comfort 
that they won't lose their shirt. So I think everywhere in 
between there has to be this balanced approach. Yes, the 
Department of Energy has to invest in some of these larger 
pilot scale plants.
    So, I feel very committed to this balanced portfolio. It is 
absolutely essential. One of the weaknesses, previously in the 
Department of Energy is that there was a gulf between the 
really great science that the Department of Energy supports and 
the development and transformation of that science into things 
that look like they might fly.
    So again, with the ARPA-E, we need the integration of the 
applied science side with the basic side. We're setting up a 
structure now where undersecretaries will have to share some 
money. That they don't have total budget control and in order 
to share a significant amount of that money they have to both 
agree on it. They have to both say that this is worthy.
    This is the only way I see one can really integrate this 
gulf between the basic science and the applied science. So 
those structures are being designed today.
    Senator Udall. I also assume that there's even more work in 
regards to the outreach to the private sector to the VC leaders 
to the other private capital interest on the part of the DOE. I 
hear more about it from lab directors. Those who know the 
private sector will eventually, hopefully soon, lead the way 
because that's where the great reservoirs of capital lie.
    Would you care to comment on that as well?
    Secretary Chu. I think, you know, in my history when I was 
at Stanford I was the Scientific Advisor for one of the venture 
capital firms and an incubator firm. When I became a lab 
director, of course, I couldn't do that anymore. But I know a 
lot of the people in these startup companies.
    I have to say that these people work 70, 80 hours a week. 
They are totally devoted to what they're trying to do. The 
Department of Energy and the Federal Government should be 
assisting.
    ARPA-E is a mechanism for doing this. A lot of the sections 
in the more applied areas can be a way of helping them. In 
certain cases where they might be cash limited we could see 
about helping them boot up and get there faster so that instead 
of having 12 people working in a garage they can have 24 people 
working in a garage.
    But I think when I see this total dedication, living, 
eating, breathing what they want to have happen. That is really 
money well invested. So I'm a big fan of that.
    Senator Udall. Thank you, Mr. Secretary.
    The Chairman. Senator McCain.
    Senator McCain. Thank you, Mr. Chairman. Thank you Doctor 
for being here. We're all very impressed and appreciative of 
your credentials and your willingness to serve in this very 
important position.
    Doctor, according to a report by the Department of Energy, 
Report of Subcommittee, the Basic Energy Science Advisory 
Committee, it says that as important as solar is that it would 
still only provide approximately 5 percent of the carbon free 
energy by the year 2015. Do you agree with that assessment?
    Secretary Chu. By 2015.
    Senator McCain. Yes. I've only got 5 minutes.
    Secretary Chu. I'm a little bit more optimistic than that.
    Senator McCain. A little bit more.
    Secretary Chu. Yes.
    Senator McCain. But it certainly wouldn't be nearly the 
contribution that some envision, unfortunately. I come from a 
State where it's very important.
    Secretary Chu. The potential, it really depends on the 
timeline that we're talking about.
    Senator McCain. Is it not somewhere around 5 percent? Ten 
percent? Let's say 15 percent.
    Secretary Chu. By 2015.
    Senator McCain. Ok.
    Secretary Chu. Yes.
    Senator McCain. That means that clean coal and nuclear 
power, it seems to me then, are far more important than maybe 
some people appreciate today, right?
    Secretary Chu. I agree with that in the short term.
    Senator McCain. Good. Then did you agree, is it true that 
the Department of Energy's spokeswoman told Bloomberg that 
President Obama and you, ``have been emphatic that nuclear 
waste storage at Yucca Mountain is not an option, period.''
    Secretary Chu. That's true.
    Senator McCain. That's a true statement. So now we're going 
to have spent nuclear fuel sitting around in pools all over 
America. Also tell the nuclear power industry that we have no 
way of either reprocessing or storing spent nuclear fuel around 
America. We expect nuclear power to be an integral part of this 
nation's energy future.
    What's wrong with Yucca Mountain, Dr. Chu.
    Secretary Chu. We have learned a lot more in the last 20, 
25 years since Yucca Mountain.
    Senator McCain. I know that. What is wrong with Yucca 
Mountain, Dr. Chu.
    Secretary Chu. I think we can do a better job.
    Senator McCain. Where?
    Secretary Chu. But going to your original question about 
what to do with the spent fuel. The Nuclear Regulatory Agency 
has said that we can solidify the waste at the current sites 
and store it without substantial risk to the environment. So 
while we do that we----
    Senator McCain. Has any nuclear power plant made any plans 
for solidification of the nuclear waste?
    Secretary Chu. Yes. They have. There are solidification 
plans going on today.
    Senator McCain. There are plans going on? Also you don't 
see any--is there any plans for reprocessing of spent nuclear 
fuel?
    Secretary Chu. There is--well, I support reprocessing 
research. I think it's an important part of the nuclear----
    Senator McCain. Why would we need research when we know the 
Europeans and the Japanese are already doing it in a safe and 
efficient fashion?
    Secretary Chu. I believe the Europeans and the Japanese are 
doing it, but they're doing it in a way that lends to risk of 
proliferation, nuclear proliferation. The Japanese have already 
said----
    Senator McCain. You balance that risk of proliferation 
verses spent nuclear fuel sitting around in pools in nuclear 
power plants all over the country and telling industry that we 
may do some research on reprocessing?
    Secretary Chu. Let's separate the issues. First----
    Senator McCain. I don't think they are separable. I think 
they are inextricably tied because it's clear that industry 
today is not interested in construction of nuclear power plants 
because we have no place to store it and we have refused to 
adopt what is already a proven technology of reprocessing.
    Secretary Chu. The storage of waste, the interim storage of 
waste, the solidification of that waste is something we can do 
today. The NRC has said that it can be done safely. That buys 
us time to formulate a comprehensive plan in how we deal with 
the nuclear waste.
    The recycling, which I think in the long term is very 
beneficial. It has the potential for greatly reducing the 
amount of waste is something that we have to press on. But the 
time scale of the recycling development is different such that 
we have a couple of decades, quite frankly in my opinion to 
figure that one out.
    Senator McCain. I couldn't disagree more strongly, Doctor. 
But I certainly have the greatest respect and admiration for 
your work and your knowledge and background. Nuclear power has 
got to be an integral, vital part of America's energy future if 
we're going to reduce greenhouse gas emissions. To say that 
after 20 years and nine billion dollars spent on Yucca 
Mountain, that there's not an option, period to me is 
remarkable statement.
    I'm running out of time here. But I just want to say 
another great disappointment that I have is that we're going--
the President's budget assumes nearly $650 billion in revenue 
from a cap and trade system for controlling greenhouse gas 
emissions. I'm proud to have been one of the first to propose 
cap and trade to support it. Be deeply concerned about the 
issue of climate change.
    So now I see cap and trade, not to be used to encourage 
technology or development of other technologies, but or frankly 
to be fundamentally a reason to reduce greenhouse gas 
emissions. The budget submission now is for $650 billion in 
revenue into general revenues. You're not going to get support 
by a lot of us in that kind of proposal.
    I deeply regret it. Because when business people all over 
America who are struggling today who are going to see if they 
engage in cap and trade, those revenues will just be another 
tax source for the Federal Government. I think it's a 
significant mistake.
    I'd be glad to hear your views of using $650 billion in 
revenue from a cap and trade system when we should be using it 
not for revenues, but to developing technologies and 
specifically devoted off budget to technologies that will 
reduce greenhouse gas emissions. I know that my time is 
expired. I thank you, Mr. Chairman.
    The Chairman. Did you wish to respond to the latest 
comment?
    Secretary Chu. Very briefly.
    The Chairman. Go ahead.
    Secretary Chu. Very briefly the President's proposed budget 
allocates $15 billion per year for research and development of 
new green technologies. So that is putting back that money into 
developing better solutions. The rest of it as you know is to 
offset in the poorest sectors of the population some of the 
consequences of that.
    The Chairman. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman. Welcome, 
Secretary Chu. I have two questions for you. One is not exactly 
on point for energy research and development, but since that 
seems to be an option this morning I guess it's ok. It's a 
little parochial.
    The $5 billion that was included in the Economic Recovery 
and Reinvestment Act for weatherization, I think is a very 
important investment. Certainly agree with your comments about 
the significance of energy efficiency. I met with some folks 
from New Hampshire at one of our community technical colleges 
where they actually have a degree in energy efficiency and 
energy services. They were talking about their concerns that as 
we're trying to do the weatherization and use the money 
effectively that's in the bill, that we don't have the number 
of people trained to do that that we really need to make the 
most effective use of those dollars.
    So what's DOE doing to help States as we're trying to 
effectively spend those dollars in a way that makes the best 
use of weatherizing homes for the future?
    Secretary Chu. What we're doing is we're looking at the 
inventory of people that can do proper energy audits that--so 
with those energy auditors and looking at the training programs 
and how you can get intense training programs going this spring 
and early summer. With those energy auditors--and this is 
replicating in many instances what is already on the ground 
today, but in greater numbers. They can help specific 
homeowners spend the dollars most wisely.
    It's certainly very important to us that all those dollars 
are spent not only to create green jobs, but actually reduce 
the energy consumption and reduce the energy bills as much as 
possible. So we are very keenly aware of the need for training 
a larger corps of energy auditors. I've begun these 
discussions.
    Senator Shaheen. A related concern in talking to our 
community action agencies which are the folks in New Hampshire 
who are doing the low income housing weatherization. They 
expressed a concern about the cap on the amount that can 
currently be used to weatherize homes. We have a lot of old 
housing stock in New Hampshire.
    A $6,500 cap is a challenge for many of those homes. You 
can't adequately do the work that you need to have done. Are 
you willing to or have you given any thought to increasing that 
cap to say $10,000 which is what they tell me would be most 
effective in New Hampshire?
    Secretary Chu. In all honesty I don't know what the 
limitations of the statues that have been passed. I would 
certainly look into that.
    [The information referred to follows:]

    The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) by 
statute, changed the program's average state cost per unit from $2,500 
to $6,500. DOE does not have the authority to grant waivers to 
statutory changes made by Congress.

    Senator Shaheen. Thank you. I think that's two questions. 
But I actually have a third.
    I want to follow up on Senator Udall's question about 
venture capital and how do we better leverage the private 
sector as--I appreciate your commitment to the research that 
can be done through the Energy Department and through our own 
government laboratories. But how can we better leverage private 
capital to help with what the government is going to be 
spending to encourage energy research.
    Secretary Chu. I think there are a number of tools that 
have been proposed by the Administration. I think renewable 
energy standards is a way to draw on and to encourage the 
investment because it creates a market. I think tax credits are 
also a way to encourage the market.
    The research and development is a way to essentially push 
from below because you're inventing new things that could look 
to be more promising than what we have today. So both the draws 
and the pushes and the assistance in loan guarantees, all those 
instruments are going to be used.
    Senator Shaheen. Thank you.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. Secretary Chu I 
wanted to follow up with Senator McCain's comments on nuclear 
because when the budget blueprint, the FY2010 came out your DOE 
press office put out a statement that said, the new 
Administration is starting the process of finding a better 
solution for management of our nuclear waste. I will certainly 
share the concerns of my colleague that after decades and 
millions and billions of dollars that have gone toward Yucca to 
know that it is considered not an option. To know that where 
we're starting the process is concerning.
    We've got, as you know, we've got a good handful of 
applications that are out there to move forward new projects 
within the industry. But boy, if I were looking to advance a 
new nuclear facility these comments from the Administration 
that we're starting the process of finding a better solution 
would be very disconcerting. I don't know what we have done to 
our nuclear renaissance that Senator Domenici worked so hard to 
advance by pulling the plug on Yucca.
    Can you give me any kind of a timeline? Can you speak to 
what you feel the Administration will be doing to advance this 
so that we're not in this limbo so that you don't have an 
industry that is absolutely necessary and essential? As you 
have stated before this committee and the President has stated, 
nuclear has got to be part of the solution as we work to reduce 
our emissions.
    Secretary Chu. First we are finalizing or certainly moving 
as fast as we can on the $18.5 billion loan guarantee program 
for nuclear reactors. That we'll get first.
    As I said before as we know a lot more than we did 20, 25 
years ago. There is now becoming a very strong possibility that 
with fast neutron reactors, a small fraction being fast neutron 
reactors, one can actually burn down the nuclear waste. So 
based on what we know today I think it is prudent to step back 
and say, let's develop a comprehensive policy toward how we 
reduce the amount of nuclear waste, how we store it. It will 
probably be a mixture of short term, interim waste followed by 
essentially permanent storage.
    Senator Murkowski. But we're already doing the short term. 
It is happening. But we recognize that it is not the long term 
solution that we will need that that permanent facility.
    Secretary Chu. I was talking short term in a sense that 
gives the option of taking that back as we get the recycling 
and the ability to burn down some of that waste to split the 
long lived actinide nuclei to make it very much shorter lived 
to recover a lot of that energy. So short term in that sense. 
Then after that one can think of repositories that are 
essentially, you would say, we don't ever want to recover it.
    Senator Murkowski. No.
    Secretary Chu. So I would say the time scale I think would 
be this year to get a really esteemed bunch of people to look 
at this based on what we know today and to think of what is 
going on. Other countries I think would participate in this 
fresh look.
    Senator Murkowski. I would urge a level of expediency and 
absolute urgency. Because otherwise we will as a country by 
shutting the door on nuclear which I think would be 
irresponsible. It's one thing to convene smart people together 
to look at the problem. It's another thing to make it a 
commitment of the Administration that we need to resolve this 
issue otherwise we will not be able to resolve, meaningfully, 
the issue of our carbon emissions.
    I wanted to ask one question to you about the renewable 
electric standard. You've stated and I would agree with you 
that we've got some challenges with meeting a 20 percent RPS 
due to the intermittent nature of what we have with renewables. 
I think you made a statement that during the snowstorm this 
winter in the Pacific Northwest we had a situation where the 
wind didn't blow for three straight weeks. So we recognize 
we've got some issues there.
    Can--and I'd ask you to address two things. First, the 
transmission infrastructure and whether you acknowledge that 
we're just woefully behind or the transmission infrastructure 
right now is inadequate to allow us to achieve a 20 percent 
standard by the 2021 requirement. Then how we deal with the 
multiple States.
    There's 29 States plus the District of Columbia that have 
some kind of clean energy requirement right now. Each one of 
these States has different targets. They've got different 
definitions of resources. In fact every one of the States that 
has a program has at least one eligible resource that wouldn't 
qualify under this Federal RPS program definition.
    How do you reconcile dealing with the different mandates 
from 30 different areas?
    Secretary Chu. First let me say that I agree with you that 
the transmission system, as it is today, is not suitable for 
getting the renewable energy to the parts of the population 
centers in the United States. So this is something we have to 
concurrently build up. The United States is blessed with 
incredible renewable energy resources but they are localized in 
certain areas in the upper Midwest and the Pacific Southwest 
when solar becomes economically viable.
    So we have to start building that. By 2020 I hope we would 
be well along in getting the line sited, getting agreements in 
local communities and States. We will be building up this 
transmission system.
    We will have to look at the financing mechanisms for the 
transmission. Right now my understanding is that the 
transmission lines are paid for by point of origin of energy 
production. That was based on a time when we produced and used 
energy very locally.
    But now we recognize in order to take full advantage of 
renewable energies which will take some time, we--this is a 
national issue. So we need a comprehensive plan nationally to 
port energy around and it does take time. So--and what was the 
other part?
    Senator Murkowski. The second one was how you deal with the 
30 some odd States that have different mandates?
    Secretary Chu. This is the way our country works that in 
many times our States have their rights as States to have these 
mandates. I look upon it as the States have been a good 
laboratory in many instances for what eventually is done 
federally. They can try what works or what doesn't work for 
them.
    In the end, yes, I think we need to develop more 
comprehensive policies. But historically if I think of a lot of 
issues that the country has dealt with like clean air, clean 
water, those things; the States actually did take the lead and 
develop things that then became national standards, appliance 
standards similarly.
    So it's essentially the way our country has been working 
over the last century.
    Senator Murkowski. Mr. Chairman, I'd have some follow up, 
but I have well exceeded my time. So I will----
    The Chairman. Senator Risch has not had a chance to ask 
questions. Go ahead, please.
    Senator Risch. Thank you, Mr. Chairman. Secretary Chu, I 
know you're familiar with the Idaho National Laboratory and its 
two missions of obviously research and of clean up. The 
Department of Energy very wisely has separated those two over 
the last decade or so.
    We've--and you also know that the State has had some 
difficulty with the Department. In fact we litigated the issue 
of the clean up over at the laboratory. I'm wondering if you're 
familiar with the agreement that was entered into and was court 
approved that resolved the issue of clean up over at the INL 
site in Eastern Idaho?
    Secretary Chu. No, I'm not familiar with the details.
    Senator Risch. Secretary let me--you're not going to be 
able to answer my questions then. But I'm going to ask you to 
follow up on it.
    [The information referred to follows:]

    At your request, I have followed up on the agreement entered into 
with the State of Idaho that was court approved and resolved the issue 
of cleanup of the buried waste at the INL site in Eastern Idaho. My 
staff has provided me with detailed information which I will briefly 
summarize here. On July 1, 2008, the United States Department of Energy 
(DOE) and the State of Idaho announced their Agreement to implement the 
United States District Court Order of May 25, 2006, in coordination 
with the ongoing Superfund cleanup of the area. The Agreement marked 
the end of 6 years of litigation related to interpretation of the 1995 
Settlement (or Batt) Agreement. Implementation of this Agreement will 
satisfy DOe's commitment to Idaho to remove waste containing 
transuranic and other contaminants that was buried at Idaho National 
Laboragtory (INL) several decades ago.
    Under the 2008 Agreement, DOE and its contractor will continue 
retrieving drums of radioactive waste and hazardous chemicals from the 
burial ground. The transuranic waste is repackaged and sent to the 
Waste Isolation Pilot Plant--DOE's deep geologic transuranic waste 
repository in Carlsbad, New Mexico. The other targeted waste, which may 
contain volatile organics and uranium, is being shipped out of Idaho to 
other licensed or permitted disposal facilities. The Department intends 
to excavate 5.69 acres and remove a minimum of 6,238 cubic meters of 
targeted radioactive and hazardous waste over the life of the buried 
waste cleanup.The Agreement requires that all targeted waste retrieved 
by December 31, 2017 be shipped out of the state by December 31, 2018, 
and all waste retrieved after that be shipped within one year of 
retrieval. I also recognize that through February 2009, DOE has 
excavated about 15% of the 5.69 acres, retrieved over 2,500 cubic 
meters of targeted waste, and shipped in excess of 500 cubic meters of 
the waste out of the State of Idaho. Our plans include continuation of 
this significant progress to ensure we meet the obligations in the 
Agreement to Implement with the State of Idaho.

    Senator Risch. Let me tell you briefly after a considerable 
amount of litigation the State and the DOE entered into an 
agreement whereby the DOE would remove the--all of essentially 
the nuclear waste that was left over from the cold war. The INL 
played a role just as Rocky Flats and Hanford and all the other 
sites did. We're the only one with an agreement.
    The DOE agreed that they would remove the waste. They're 
doing well. They're keeping up with the contract. The waste is 
being removed to the wip site.
    Unfortunately there's material that is not qualified for 
the wip site and it was anticipated that that would go into 
Yucca Mountain. Now I understand in answer to Senator McCain's 
question you indicated that the United States has no plans to 
activate Yucca Mountain. So the question I have for you which I 
suppose you can't answer at this point is what are you going to 
do about the contract that requires you to remove materials 
that are of such a level that they can't go into the wip site?
    Secretary Chu. This goes to the sense of urgency that 
Senators McCain and Murkowski talk about in terms of developing 
an approved approach to dealing with high level nuclear waste. 
So it's certainly going to be--we'll be looking at this very 
intensely over this next year.
    Senator Risch. Secretary, with all due respect, I 
appreciate that. But I can tell you that this contract is very 
clear. It is in the form of a court order that it has to be 
moved.
    Do you have any thoughts right now as to where, if you're 
not going to go to Yucca Mountain. This whole thing with Yucca 
Mountain not going to be used is a relatively new thing. 
Certainly when somebody made that decision, when the new 
Administration made that decision, somebody must have had some 
thoughts as to where--how you were going to keep your 
agreements on removing the high level stuff from places like 
Idaho where you are required to by court order.
    Secretary Chu. In addition to that I should also add that 
we have obligations to the utility companies for similar 
disposition of their waste. So I hope----
    Senator Risch. But with the utility companies all you have 
to do is pay a fine. That's been going on for some time. Not so 
with the Idaho contract. You've got to move it.
    So what was going through people's mind when they said 
we're not going to use Yucca? Where you thinking you're going 
to go?
    Secretary Chu. I think, as I said before, that there are 
other options that we will have to look at. Quite frankly I 
think there would be better options. But at this time I'm not 
willing, again I would want to seek the advice of some deeply 
knowledgeable people on this.
    Senator Risch. Will these options you refer to--can you 
tell us what these options are so that we can be thinking about 
them too?
    Secretary Chu. I think it would--first, it's going to be a 
mixture of short term sites. There are several layers of short 
term sites of longer term and then finally, final disposition. 
I think it probably will have to be geographically distributed 
in some way other that you know, one location, one site will 
probably not work.
    Senator Risch. But these are sites that you have not 
located or identified or----
    Secretary Chu. That's correct.
    Senator Risch [continuing]. Gotten at this point.
    Secretary Chu. That's correct.
    Senator Risch. Ok. Have you got an idea of how long this is 
going to take because you're under some real time constraints 
in the Idaho agreement?
    Secretary Chu. As I said that we will be assembling this 
and getting a report sometime this year. I agree there are real 
time constraints.
    Senator Risch. Ok, thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you. Senator Risch, let me just ask. My 
impression was that the obligation to move that waste under the 
Idaho agreement was effective in 2035. Is that wrong?
    Senator Risch. That is incorrect. There is a series of 
deadlines that have to be met in that.
    The Chairman. Ok. Alright. Let me ask another question then 
I believe Senator Murkowski had another question or two and 
maybe Senator Udall, I'm not sure.
    I just wanted to ask one of the issues that you and I have 
discussed before and you know is near and dear to my heart is 
the whole issue of the role of our NNSA laboratories, Los 
Alamos, Sandia and Lawrence Livermore in particular. The 
involvement of those laboratories in the scientific work that 
is pursued the basic scientific work that's pursued in the 
Department of Energy. I'd appreciate it if you could just give 
us a short statement as to your thoughts as to the 
appropriateness of them being involved in that scientific work.
    Secretary Chu. I think the--first their core function of 
our National Nuclear Security intimately depends on having an 
intimate coupling with science. The stockpiled stewardship is a 
science based program. It is essential that the science 
connection with our nuclear weapons be kept, maintained, 
possibly even strengthened as you go into these, an aging 
arsenal.
    In addition to that the scientific expertise has become 
quite useful in non proliferation work. It's been quite useful 
in the interpretation of intelligence gathered by the United 
States. So again anything that threatens the science component 
of those NNSA laboratories I would be very much opposed to.
    The science component of those laboratories actually was a 
mechanism for attracting some of the best scientists into our 
National Security programs. Again, I think that's a vital 
component of particularly those 3 weapons laboratories. This is 
as tradition goes way back to the very beginning with Robert 
Oppenheimer. It has served the country well.
    So any discussions about how those labs evolved should not 
sever that intimate tie. The weapons labs are an important 
national asset, not only to our nuclear security, but to our 
science in general.
    The Chairman. Thank you very much. Let me call on Senator 
Murkowski for her additional questions.
    Senator Murkowski. Thank you, Mr. Chairman. Secretary Chu I 
wanted to follow up with the question that we were discussing 
about the RAS and what is happening out in the respective 
States. I think the word that you used was that the States are 
good laboratories. I would certainly agree with that.
    They look to their resources. They figure out what is 
possible within their areas. Many of these States have moved 
forward with setting their own standards and working toward 
them.
    But we recognize that all sources of energy in terms of 
their location are not equal. In my State we're about 20, 
almost 25 percent renewable if we're allowed to count the 
definition of hydro. So, so much of this comes down to the 
definitions.
    I just received a letter, actually the Chairman and I 
received a letter signed by 13 members here, 11 of them 
Democrats urging us as we look toward a national renewable 
electricity standard to expand the definition to include ways 
to energy. As we debate how we define renewables can you give 
me some of what you consider to be the parameters? I have a 
difficult time understanding why we would not include hydro as 
renewable.
    I have a difficult time understanding why if our goal with 
an RES is to move toward reduced emissions why we would not 
include nuclear in the definition. So could you just speak to 
that issue because I think it is incredibly important as we 
discuss the RES? Then if you could also address the concept, if 
you will, of regional standards as opposed to a national 
standard?
    I understand that what we have in the Northwest is entirely 
different than what we have in the Southeast. Can you address 
both of those, please?
    Secretary Chu. I was not part of the discussion of the 
definitions of renewable.
    Senator Murkowski. I understand that.
    Secretary Chu. I would certainly work with this committee 
to look at it. I agree that anything which greatly reduces 
carbon emissions is something that we should nurture. Anything 
that would increase the reduction of carbon emissions, new 
hydro is something we should nurture. But I will be perfectly 
happy in wanting to work with the committee in looking at how 
these things are defined.
    Senator Murkowski. Can you speak a little about just a 
regional concept as opposed to a national standard and where 
you might fall on that?
    Secretary Chu. I certainly know, again I agree with you 
that the amounts of renewable energy, like wind and solar, vary 
greatly in different regions. So again one could look at that. 
The Southeast does not have one resource it has biofuel 
resources, but not wind resources. One has to look at this with 
a finer eye to really see what are going to be the 
consequences.
    Again I will be working with the committee on this.
    Senator Murkowski. We do want to work with you on this. It 
is an issue that one thing I've determined it's not partisan. 
It really is much more regional issue.
    Those parts of the country that aren't blessed with 
sufficient renewable resources are looking at this and saying 
this is troubling to us because what it will be for all intense 
and purposes is a tax on us. Because we're not blessed with as 
much as the East has or the North has. It is something that I 
think we've got to really focus, not only on the definition but 
what the goal is.
    If our goal is reduced emissions than we need to be making 
sure that what we are doing is encouraging just that. If our 
goal is to get more wind turbines erected, if our goal is to 
get more solar panels up, than that's completely different than 
the goal of working to reduce our emissions. So we want to work 
with you on this to make sure that we're not unduly hampering 
efforts in certain parts of the country or challenging them in 
a way that is going to financially unfair.
    Thank you, Mr. Chairman.
    The Chairman. Senator Udall, did you have additional 
questions?
    Senator Udall. Mr. Chairman, I do have a brief final 
question. I'm reluctant to have the last word here. So I hope 
you and Senator Murkowski will feel if you need to say more you 
can and should.
    I've been listening with real interest to Senator 
Murkowski's points that she's making. I think we are 
undertaking a challenging process here, one where in the end we 
perhaps arrive at a hybrid energy policy much like we want us 
to develop a series of hybrid energy systems all over the 
country. I think we do have a dual goal, Senator, which is to 
promote renewable energy technologies that have emerged over 
the last 10 years but also to reduce carbon emissions.
    All of these technologies perhaps are at worse distant 
cousins of each other and perhaps are siblings. But I take 
seriously your concerns in the important questions that you're 
raising here today. In that spirit, Dr. Chu, I'll submit for 
the record a question about the hydrogen R and D.
    I feel like I've been, some cases whip sawed by the 
excitement about hydrogen and then those who say that's not 
realistic. I do know you have, I think, a billion dollars plus 
in your budget to do R and D. There's some recent reports that 
suggest we should refocus on hydrogen, not in the short term, 
perhaps not even the medium term, but in the long run that may 
be where we land in 50 to 75 to 100 years. So if I might, I'd 
submit that question about the use of those dollars and what 
you foresee.
    One final comment. I listened with interest to Senator 
McCain's questions about solar. One of the dynamics here that 
we should acknowledge is that there may be and this is an 
overused term these days, but it's effective term and there may 
be game changers. As you note in your statement if you develop 
photovoltaic solar power that is five times cheaper than 
today's technology and more efficient as well if we raise the 
efficiency levels from 12, 13 percent to 18 or 19 or 20 you get 
exponential gains.
    That technology may well be much more deployable, much less 
expensive and therefore make up a bigger portion of our energy 
needs. So I just want to note that for the record as well that 
there are advances that we can't even foresee. I believe that 
when we make this investment at the Federal level, make this 
investment internationally and this is why this is such an 
exciting field. It is why I'm so excited that you're leading 
the Department of Energy at this important time in our history.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much. Secretary Chu, thank you 
for spending this time with us. We will stay in close touch as 
we try to proceed to develop some legislation in this area.
    Why don't we excuse you and bring forward the second panel?
    Secretary Chu. Thank you.
    The Chairman. Thank you.
    On our second panel let me just introduce folks as they are 
taking their seats at the table here.
    Dr. George Crabtree is a Senior Scientist and Associate 
Division Director at Argonne National Laboratory in Illinois. 
We appreciate him being here.
    Mr. Bob Fri is a visiting scholar with the Resources for 
the Future. Thank you for being here.
    Dr. Jim Bartis is Senior Policy Researcher with RAND 
Corporation. Thank you.
    Ms. Deborah Wince-Smith is President of the Council on 
Competitiveness.
    Professor Mike Corradini is Director of the Wisconsin 
Institute of Nuclear Systems. Originally hails from Albuquerque 
which we wanted to note for the record. But he's at the 
University of Wisconsin in Madison.
    So why don't we just take--if each of you would take maybe 
about 5 minutes and tell us the main points you think we need 
to be aware of on this set of issues. We will include a full 
statement, any full statement you have in the record as if 
read. But Dr. Crabtree why don't you start and we'll hear from 
all of you. Then we'll have some additional questions.

 STATEMENT OF GEORGE W. CRABTREE, SENIOR SCIENTIST, ASSOCIATE 
 DIVISION DIRECTOR and DISTINGUISHED FELLOW, MATERIALS SCIENCE 
       DIVISION, ARGONNE NATIONAL LABORATORY, ARGONNE, IL

    Mr. Crabtree. Chairman Bingaman, Ranking Member Murkowski 
and members of the Energy and Natural Resources Committee, I'm 
grateful for the opportunity to contribute to the national 
discussion on the role of science and technology in meeting 
America's energy, environmental and economic challenges. Let me 
begin by expressing my thanks to the members of the Senate 
present today and to the entire Congress for their strong 
support of basic science and technology. The crises we face 
today are a perfect storm of unpredictable energy supply, 
global warming and severe economic recession.
    Translational basic science and technology are essential to 
meet these demands. A single number captures the magnitude of 
the energy challenge, $700 billion per year. That's the cost of 
imported oil at last summer's peak prices. That money is 
removed from the United States economy where it cannot turn 
over and stimulate additional economic activity.
    Even at today's prices imported oil will remove about $200 
billion a year from the United States Beyond cost however, lies 
a serious security threat. We import nearly 60 percent of our 
oil making us vulnerable to interruption caused by natural 
disasters, terrorist acts or interim political decisions in 
producer countries.
    Carbon dioxide emissions are an equally serious threat. The 
evidence for global warming is unequivocal. The United States 
is the second largest carbon dioxide emitter behind China. We 
need to regain international leadership in tackling this 
important global threat.
    There's an opportunity hidden in these challenges. Next 
generation energy technologies will not only solve our own 
energy and environmental problems but also create a new export 
market of enormous capacity and enduring strength. The world 
faces the same energy and economic and environmental challenges 
that we do. Meeting these global needs with next generation 
technologies exported by U.S. companies will generate long term 
economic growth that can protect the economy from stagnation or 
recession and reverse the drain of imported oil.
    Next generation energy technologies are an unprecedented, 
global economic opportunity. The question for us is whether the 
United States will be buying them or selling them. The report 
the New Science for a Secure and Sustainable Energy Future here 
issued recently by the Department of Energy's Basic Energy 
Sciences Advisory Committee outlines the transformational 
opportunities to address these challenges and recommends a path 
forward.
    We know what many of the next generation sustainable energy 
technologies will be carbon sequestration, high efficiency coal 
and nuclear electricity, renewable solar, wind and geothermal 
power generation, solar fuels and biofuels, solid state 
lighting, energy storage and high temperature superconductivity 
for a 21st century electric grid. Why have we not deployed 
these technologies? The answer is simple. The current versions 
of these technologies do not perform well enough to compete 
with conventional fossil energy alternatives.
    The performance road blocks to next generation sustainable 
technologies are extremely challenging. Otherwise they would 
have been solved by the extensive research and development 
already devoted to the energy sector. Some of the most 
important challenges are inexpensive catalyst ten times more 
active than platinum, electrodes for batteries that accept and 
release large quantities of lithium to increase the energy 
density, new superconductors that operate at twice the 
temperature of the current generation for long distance 
transmission with solar and wind electricity.
    The materials and chemistry that overcome these performance 
road blocks will be much more complex than those in use today. 
High temperature superconductors contain four or five elements 
instead of the usual one or two for conventional 
superconductors. The best battery electrodes have intricately 
nanostructured surfaces that promote the injection and release 
of lithium.
    The catalytic activity of platinum can be increased by a 
factor of ten by altering its subsurface composition in subtle 
and still largely unexplored ways. The lesson of the last 10 
years of materials in nanoscience research is clear. Greater 
complexity enables higher performance.
    Thomas Edison gave us a wonderful model when he said, 
Genius is 2 percent inspiration and 98 percent perspiration.'' 
These words motivated the technology of his day and described 
his remarkable success with the light bulb, the phonograph and 
the movie camera. The complexity of today's materials in 
chemistry however, is much greater than it was in Edison's 
time.
    It's no longer possible to try one variation after another 
and eventually hit the jackpot. Instead we need to raise the 
inspiration quotient significantly. Instead of 2 percent 
inspiration we need at least 50 percent inspiration to 
dramatically reduce the perspiration of perfecting the new 
energy technologies.
    This inspiration can come only from basic science. We need 
to understand the why and how of materials. Why they do what 
they do at nano scale dimension and ultra fast time scales that 
are beyond the reach of the human eye. This knowledge of how 
and why is the tipping point for creating new materials and 
chemistries that will change the performance equation of 
sustainable energy.
    What are the basic science challenges we need to solve? 
They're laid out in 12 basic research needs workshop reports 
and summarized by this new science report. They provide the 
road map for investments in inspirational basic science that 
will transform the energy game.
    The energy frontier research centers proposed by the DOE 
Office of Basic Energy Sciences are a first step in promoting a 
new level of inspiration. These centers will launch dream teams 
of the best scientists drawn from diverse institutions working 
in interdisciplinary teams, using the most advanced tools and 
focused on the most important problems outlined in the Basic 
Research Needs workshops and the New Science Report. These 
dream teams are a new concept on the energy research landscape 
representing not only the will but also the critical mass to 
overcome the materials and chemistry road blocks to competitive 
sustainable energy performance.
    But the Department of Energy must do more than establish 
dream teams and EFRCs. It must recruit the next generation of 
talented scientists, post docs and early career scientists to 
inspire them to become tomorrow's energy innovators. The 
challenges we face dependence on imported oil, carbon dioxide 
emissions and growing ourselves out of the recession are among 
the most serious that we have faced in 6 decades. The solution 
will require basic science inspiration on a grand scale and a 
new generation of energy scientists to achieve it.
    Thank you again for the opportunity to provide testimony. 
I'll be pleased to answer questions at the right time.
    [The prepared statement of Mr. Crabtree follows:]

 Statement of George W. Crabtree, Senior Scientist, Associate Division 
Director and Distinguished Fellow, Materials Sciences Division, Argonne 
                    National Laboratory Argonne, IL
    Chairman Bingaman, Ranking Member Murkowski, and members of the 
Energy and Natural Resources Committee. I am grateful for the 
opportunity to contribute to the national discussion of the role of 
science and technology in meeting America's energy, environmental and 
economic challenges.
    Let me begin by expressing my thanks to the members of the Senate 
present today and to Congress for their strong support of basic science 
and technology. Basic science and technology have given us remarkable 
innovations that have dramatically raised the quality of our personal 
lives, increased the productivity of our businesses, and created long 
term economic growth. However, the combined challenges of energy, 
environment and the economy that we face today are greater perhaps than 
at any time in the last six decades. They will require a new generation 
of inspirational breakthroughs from basic science to replace the 
economic recession with economic growth, to replace uncertain and 
costly imported oil with a secure and sustainable energy supply, and to 
reduce carbon dioxide emissions that threaten global climate.
    Congress has taken a bold step toward meeting these economic, 
energy and climate challenges with the recent passage of the American 
Recovery and Reinvestment Act. Along with the pending FY09 Omnibus 
Appropriations Act, these acts have the power to transform science and 
technology into the vibrant and aggressive engines of change envisioned 
by the America COMPETES Act passed by Congress in 2007.
    But such daunting goals cannot be achieved in a year. A sustained 
and aggressive investment in basic scientific research, manpower and 
infrastructure is needed, like that triggered by Sputnik or devoted to 
the Manhattan project. Today's combination of energy, environment and 
economic challenges is much greater than either of these landmark 
historical events.
Energy and Environmental Challenges
    A single number captures the magnitude of the energy challenge: 
$700 billion/yr, the cost of imported oil at last summer's peak prices. 
That money is removed from the U.S. economy, where it cannot turn over 
and stimulate additional economic activity. Even at today's prices, 
imported oil will remove about $200 billion/yr from the U.S. economy, a 
significant drain on the economic recovery. Last year we imported 
nearly 60% of our oil, used primarily to power our cars and trucks. 
Imported oil has become the lifeblood of our transportation system, 
making us vulnerable to interruptions caused by natural disasters, 
terrorist acts or internal political decisions in producer countries. 
Our energy security requires markedly reducing this dependence on 
imported oil.
    Carbon dioxide emissions are an equally serious threat. The 
evidence for global warming cited by the Intergovernmental Panel on 
Climate Change is unequivocal: rising average temperatures and sea 
levels, shrinking polar ice and snow cover in the northern hemisphere, 
and pole-ward migrations of animals and plants to maintain their 
preferred habitat. The U.S. is the second largest carbon dioxide 
emitter behind China, but we have remained remarkably passive in 
addressing this issue. We need to regain international leadership by 
tackling this global threat.
    There is a transformative opportunity hidden in these challenges. 
Next-generation energy technologies not only solve our own energy and 
environmental problems, but also create a new export market of enormous 
capacity and enduring strength. The world's energy and environmental 
problems reflect our own--a reliance on uncertain imported oil and the 
threat of climate change. Meeting these global needs with next-
generation technologies exported by U.S. companies generates long term 
economic growth that can protect the economy from stagnation or 
recession and reverse the drain of imported oil. Next-generation energy 
technologies will be developed--the question is whether the U.S. will 
be buying or selling them.
The Path Forward
    The report New Science for a Secure and Sustainable Energy Future*, 
issued recently by the Department of Energy's Basic Energy Sciences 
Advisory Committee, outlines the opportunities to address these 
challenges and recommends a path forward. We know what many of the 
next-generation sustainable energy technologies are: carbon capture and 
sequestration; high-efficiency coal and nuclear electricity; renewable 
solar, wind and geothermal power generation; solar fuels and biofuels; 
solid state lighting; energy storage for plug-in hybrid and battery 
electric cars, and high-temperature superconductivity for a 21st 
century electric grid. Many of these technologies have been proven in 
principle in the laboratory or in small scale demonstrations. Why have 
we not deployed them? The answer is remarkably simple and universal: 
the current versions of these technologies do not perform well enough 
to compete with conventional fossil energy technologies.
---------------------------------------------------------------------------
    * See Appendix II
---------------------------------------------------------------------------
    The performance roadblocks to next-generation sustainable 
technologies are extremely challenging--otherwise they would have been 
solved by the extensive research and development already devoted to the 
energy sector. Inexpensive catalysts ten times more active than 
platinum are needed for producing electricity in hydrogen fuel cells 
that operate without emitting pollutants or carbon dioxide. Electrodes 
that accept and release large quantities of lithium are needed for high 
energy density batteries to enable plug-in hybrids and all-electric 
vehicles. New superconductors that carry high current at low loss are 
needed for long-distance transmission of solar and wind electricity 
from remote generation sites to population centers.
    The materials and chemistry that will overcome these performance 
roadblocks will be much more complex than those in use today. High-
temperature superconductors contain four or five elements instead of 
the one or two of conventional superconductors. The best battery 
electrodes have intricately nanostructured surfaces that promote 
injection and release of lithium. The catalytic activity of platinum 
can be increased by a factor of ten, by altering its sub-surface 
composition in subtle and still unexplored ways. The lesson of the last 
ten years of materials and nanoscience research is clear: greater 
complexity enables higher performance.
    The complexity demanded of next-generation materials is so great 
that conventional trial and error approaches to their discovery and 
development are failing. Edison gave us a wonderful model when he said 
``Genius is 2% inspiration and 98% perspiration.'' These words 
motivated the technology of his day--and described his remarkable 
success with the light bulb, the phonograph and the movie camera. The 
complexity of today's materials and chemistry, however, is much greater 
than in Edison's time. The number of possible variations is enormous. 
It is no longer possible to try one variation after another and 
eventually hit the jackpot. Instead, we need to raise the inspiration 
quotient. Instead of 2% inspiration we need at least 50% inspiration to 
dramatically reduce the perspiration of perfecting new energy 
technologies. This inspiration comes from basic science. We need to 
understand why and how materials do what they do, at nanoscale 
dimensions and ultrafast time scales beyond the reach of the human eye. 
The basic science of how and why materials behave as they do is the 
inspiration for developing new materials and chemistries that will 
change the performance equation of sustainable energy.
The Basic Science Solutions
    What are the basic science challenges we need to solve for next-
generation energy technologies? They are laid out with remarkable 
clarity and detail in the twelve Basic Research Needs Workshop reports 
that are summarized by the ``New Science'' report. Each of these 
workshops selected a sustainable energy challenge such as electrical 
energy storage, solar energy, advanced nuclear power, 
superconductivity, solid state lighting, or catalysts for energy. Each 
workshop then convened a group of 100 or more experts drawn from 
universities, national laboratories, industry and foreign countries to 
identify the materials and chemistry challenges in the selected field 
and the promising research directions to overcome them. These workshops 
and reports are textbooks for next-generation sustainable energy 
technologies. They provide the roadmap for investments in inspirational 
basic science that will change the energy game.
    The importance of basic science inspiration for next-generation 
sustainable energy technologies cannot be overemphasized. History has 
shown that breakthrough materials and chemistries, once found, are 
quickly snatched up by entrepreneurs looking for a competitive 
opportunity. The laser, digital electronics, and fiber optics 
communication are all examples of materials advances spawning new 
technologies. These technologies flowed from basic research. Try to 
imagine, for example, the information revolution based on vacuum tubes.
    In the rush to do something about the daunting problems of imported 
oil and carbon dioxide, we often emulate Edison's emphasis on 
perspiration--redoubling our efforts on technologies based on existing 
materials and chemistry. These efforts often improve technologies 
incrementally, but just as often they miss the opportunity for game-
changing breakthroughs to an entirely new material or chemistry that 
dwarfs the old approaches. The big solutions come from high risk-high 
payoff basic science on new materials and chemistries--catalysts for 
fuel cells, electrode materials for batteries, superconductors for 
electricity transmission. These basic science inspirations are the 
tipping points that create the next-generation energy technologies that 
will replace imported oil, reduce carbon dioxide emissions, and grow us 
out of the recession. To have the biggest effect, we must go after the 
biggest challenges, and that means investing in basic science.
Energy Frontier Research Centers
    The Energy Frontier Research Centers (EFRC) proposed by the DOE 
Office of Basic Energy Sciences are a model for promoting inspiration. 
These centers will create ``dream teams'' of the best scientists, 
working with the best tools and focused on the most important problems 
outlined in the Basic Research Needs Workshops and the ``New Science'' 
report. The EFRCs are basic science inspiration machines, examining how 
complex materials and chemistry work at nanometer length scales and 
ultrafast time scales. The scientific knowledge and understanding they 
generate will be the basis for overcoming the materials and chemistry 
roadblocks to next-generation sustainable energy technologies.
    The scientific community has responded enthusiastically to the 
concept and opportunity of EFRCs. The Office of Basic Energy Sciences 
has received approximately 260 proposals representing 3800 senior 
investigators from 385 research institutions in 41 States and the 
District of Columbia. The proposals reflect an unusually high degree of 
interdisciplinary cooperation--the average proposal has nearly 15 
senior investigators from 4.8 institutions. The EFRCs will deliver the 
``dream teams'' needed to overcome the challenging performance 
roadblocks to next-generation sustainable energy technologies.
    The Department of Energy must do more than establish ``dream 
teams'' and EFRCs. It must recruit the next-generation of talented 
early career scientists and inspire them to become tomorrow's energy 
innovators. The challenges we face--dependence on imported oil, carbon 
dioxide emissions that accelerate global warming, and growing ourselves 
out of the recession--are the biggest we have faced in six decades. The 
solution will require basic science inspiration on a grand scale--and a 
new generation of energy scientists to achieve it.
    Thank you again for the opportunity to provide this testimony and I 
will be pleased to answer any questions.

    The Chairman. Thank you very much.
    Mr. Fri.

STATEMENT OF ROBERT M. FRI, VISITING SCHOLAR, RESOURCES FOR THE 
                             FUTURE

    Mr. Fri. Thank you, Mr. Chairman, Senator Murkowski.
    Although I'm a visiting scholar Resources for the Future, 
I'm here today representing the National Research Council where 
I participated in a number of energy studies and served as the 
vice chair of the Council's Board on Energy and Environmental 
Systems. As you know the Council is nearing the end of its 
major energy project, America's Energy Future and reports from 
the first phase of that study will soon be available to the 
Congress. But for today's purposes I'm going to draw on some 
background of a series of energy R and D studies we have 
conducted over the years together with the first product of the 
America's Energy Future project, a summary of the National 
Academy's Summit on America's Energy Future held a year ago.
    Now my task today, as I understand it is to try to distill 
from these reports and my own experience some lessons that may 
be useful as you consider the programs that you are in the 
process of reauthorizing. In that regard I only want to make 3 
points.
    The first is a familiar one. Taken together all of these 
studies forcefully remind us that it is still too early to pick 
winners in our search for energy technologies that will 
adequately address the challenges of energy security, economic 
viability and climate change. For this reason the fundamental 
objective for the research programs that this committee is 
considering remains the same. To sustain and advance a 
portfolio of technology options from which the Nation can 
ultimately select those that best meet our energy goals.
    Now, and this is the second point. Although the importance 
of a broad energy portfolio is a familiar observation, these 
Council reports also strike a new theme that the Nation is 
getting closer to the point at which we can, in fact, 
distinguish a few winners and losers. For the essential next 
step in several key fossil, nuclear and electric grid 
technologies is to build them at a scale that will demonstrate 
their cost and performance for commercial deployment. 
Integrated gasification combined cycle plants, carbon capture 
and storage, the next generation of nuclear plants and the so 
called SMART grid are at this point in their development.
    Now the Summit report also underscores the importance of 
getting on with these programs with a real sense of urgency. 
Many speakers asked whether the urgency being expressed by the 
public and by policymakers is sufficient. Now in my view the 
year since the Summit has seen our collective sense of urgency 
grow substantially.
    Nevertheless it is important to realize that there is no 
benefit in delaying the demonstration of these key 
technologies. We need to know. Industry needs to know how these 
new fossil, nuclear and grid technologies perform and an 
especially important target for research, we need to get them 
on the experience curve of continuing efficiency improvement. 
Waiting will not answer these questions. It will only make more 
difficult applying the answers when we finally get them.
    Finally as important as these first commercial projects are 
they will not be the final answers to our energy problems. We 
will depend, as the Secretary has said, as Dr. Crabtree has 
said, on innovations as yet unknown to create technologies that 
are even more efficient and environmentally friendly. My own 
analysis of technology innovation convinces me that basic 
research is the foundational source of this needed innovation.
    Moreover basic research is the conical example of a public 
good that won't get done unless government does it. A vigorous 
basic research program is an essential part of an energy 
research portfolio. I applaud the committee's support of this 
crucial program.
    Those are my brief remarks, Mr. Chairman. I'd be happy to 
answer your questions later.
    [The prepared statement of Mr. Fri follows:]

 Statement of Robert M. Fri, Visiting Scholar, Resources for the Future
    Good morning, Mr. Chairman and members of the committee. I am 
Robert Fri, a Visiting Scholar at Resources for the Future. Today, 
however, I am representing the National Research Council, where I have 
been active in a succession of Council studies of energy and energy R&D 
over the last decade. I currently serve as vice-chair of the Council's 
Board on Energy and Environmental Systems.
    As you know, the National Research Council is nearing the end of a 
major energy project, America's Energy Future. Reports from the first 
phase of that study will soon be available to the Congress. For 
purposes of today's discussion, however, I want to draw on three other 
Council projects--our retrospective and prospective assessments of the 
benefits of fossil fuel and energy efficiency R&D programs at the 
Department of Energy; an evaluation of the nuclear energy research 
program at DoE; and the first product of the America's Energy Future 
project, the summary of the National Academies Summit on America's 
Energy Future held a year ago. Thank you, Mr. Chairman, for joining us 
at the Summit last March. For the record I have included summaries of 
these three reports.
    My task today is to distill from these reports, and from my own 
experience with energy research and development, some lessons that may 
be useful as you consider the programs that your committee is in the 
process of reauthorizing.
    The first lesson is a familiar one. Taken together, all of these 
studies forcefully remind us that it's still too soon to pick the 
winners in our search for energy technologies that will adequately 
address the challenges of energy security, economic stability, and 
climate change. For this reason, the fundamental objective for the 
research programs this committee is considering remains the same--to 
sustain and advance a portfolio of technology options from which the 
nation can ultimately select those that best meet our energy goals.
    Although the importance of a broad research portfolio is a familiar 
observation, these Council reports also strike a new theme--that the 
nation is getting closer to the point at which we can in fact 
distinguish a few winners and losers. For the essential next step in 
several key fossil, nuclear, and electric grid technologies is to build 
them at a scale that will demonstrate their cost and performance for 
commercial deployment. Integrated gasification combined cycle (IGCC) 
coal-fired power plants, carbon capture and storage (CCS) technology, 
the next generation of nuclear power plants, and so-called smart grid 
technology are at this point in their development.
    The Council's analyses of prospective benefits of the IGCC and CCS 
technologies suggest that the benefits of government investment in 
critical research areas greatly outweigh the costs. Specifically:

   Our assessment of gasification technology suggests that 
        federal investment in research to improve the efficiency of the 
        process--especially of the carbon capture step--would yield on 
        the order of $4-7 billion in net present value of economic 
        benefit under almost any scenario of deployment. If natural gas 
        prices rise, this benefit could be several times larger.
   Similarly, federal investment in the development of carbon 
        sequestration technology could yield discounted economic 
        benefits on the order of $2-4 billion. This result assumes only 
        a modest acceleration of the availability of the technology, 
        recognizing that the private sector would have a strong 
        incentive to develop carbon sequestration in the event of a 
        national policy to reduce net carbon emissions. Under some 
        scenarios, the benefit could be much larger.

    In addition, the Council's evaluation of the DoE nuclear R&D 
program assigns the highest budget priority to the NP2010 program and 
to research in support of the commercial fleet of nuclear power plants. 
The report on the Summit on America's Energy Future is one of several 
sources stressing the centrality of the electric grid in delivering 
economic and reliable electricity. Furthermore, the so-called ``smart 
grid'' is essential to realizing the potential for energy efficiency, 
to bring renewable energy on line, and to managing carbon and other 
emissions.
    The Summit report also underscores the importance of getting on 
with these programs with a real sense of urgency. To quote the Summit 
report, ``many speakers . . . asked whether the urgency being expressed 
by the public and by policymakers is sufficient''. In my view, the year 
since the Summit has seen our collective sense of urgency grow 
substantially. Nevertheless, it is important to realize that there is 
no benefit in delaying the demonstration of these key technologies. We 
need to know how new fossil, nuclear, and grid technologies perform, 
and we need to get them on the experience curve of continuing 
efficiency improvement. Waiting will not answer these crucial 
questions, only make more difficult applying the answers when we 
finally get them.
    But as important as these first commercial projects are, they will 
not be the final answers to our energy problems. We will depend on 
innovations yet unknown to create technologies that are even more 
efficient and environmentally friendly. My own analysis of technology 
innovation convinces me that basic research is the foundational source 
of this needed innovation. Moreover, basic research is the canonical 
example of a public good that won't get done unless government supports 
it. A vigorous basic research program is an essential part of the 
energy research portfolio, and I applaud committee's support of this 
essential program.
    Finally, the Council's research, and especially our retrospective 
study of DOE's energy R&D programs, provides some insight into managing 
the energy research enterprise successfully.\1\
---------------------------------------------------------------------------
    \1\ The discussion of managing DOE's energy research is based on 
views I have developed from Council studies and other research. A more 
complete summary of my conclusions is available in the Fall 2006 issue 
of Issues in Science and Technology (http://www.issues.org/23.1/
fri.html)
---------------------------------------------------------------------------
    As noted earlier, fossil, nuclear, and grid technologies are at the 
point of conducting demonstration that will provide information that 
the private sector needs to invest in commercial plants. As such, 
government research needs to be surgically targeted on removing market 
failures that inhibit private sector investment. As an example, 
consider the large benefits that our studies assigned to research into 
carbon capture technologies. The major reason is that the private 
sector does not now have a strong incentive to develop this technology, 
and will not until a carbon price is established. Yet current IGCC 
technology pays a stiff economic premium because of the inefficiency of 
the carbon capture step. Federal investment can accelerate improvements 
in this very specific process step that, in turn, will make the IGCC 
technology more affordable sooner when a carbon control regime is 
finally established.
    The history of energy research developed in our retrospective study 
shows that government programs with clearly focused goals can yield 
substantial benefits. The converse is true, as well; a lack of focus is 
often associated with lackluster results. While in its early days, DOE 
programs often lacked this focus, in my opinion it has improved 
greatly. I commend the Climate Change Technology Program strategic plan 
as an excellent roadmap for actions that DOE and other departments can 
constructively take.
    Managing basic research is an entirely different matter, of course. 
Unlike the applied research discussed above, basic research cannot be 
tied to specific technologies. On the other hand, it has to have some 
relevance to national energy goals. A good way to walk this line is to 
identify the physical limits that must be overcome to create 
technologies that are more efficient and less polluting than exist 
today. The report of DOE's Basic Energy Sciences Advisory Committee New 
Science for a Secure and Sustainable Energy Future is an admirable 
example of this kind of thinking. Similar thinking should be extended 
to the application to energy issues of scientific disciplines not 
usually thought of as energy research. The committee's consideration of 
the Grand Challenges Research Initiative seems to be in this spirit.
    That conclude my remarks, Mr. Chairman, and I would be happy to 
respond to the committee's questions.

    The Chairman. Thank you very much.
    Dr. Bartis, go right ahead.

 STATEMENT OF JAMES T. BARTIS, SENIOR POLICY RESEARCHER, RAND 
                   CORPORATION, ARLINGTON, VA

    Mr. Bartis. Mr. Chairman, distinguished members, thank you 
for inviting me to testify on the future of fossil energy R and 
D and the challenges that must be addressed. My remarks today 
are based on my own experience in energy policy and technology 
development including some recent research carried out by the 
RAND Corporation.
    In shaping the overall energy R and D program the greatest 
emphasis is now being given to reducing greenhouse gas 
emissions. Fossil fuels, namely petroleum, coal and natural gas 
are associated with about 90 percent of the greenhouse gas 
emissions of the United States. The magnitude of the energy 
transformation that we are about to embark on is enormous. As 
we go forward with this transformation enhanced support to R 
and D directed at how we produce and use fossil fuels is 
crucial to maintaining our goals for reducing greenhouse gas 
emissions while at the same time assuring our national security 
and economic well being.
    If the only option available to reduce greenhouse gas 
emissions is to eliminate coal use and turn our backs on this 
energy resource, consumers in the United States will pay a 
heavy price. Not only will our electricity rates rise much 
higher than they would otherwise, but also the price of natural 
gas will rise dramatically. These higher prices will affect all 
users including residential and commercial customers. High 
natural gas prices will also cause certain industries to move 
production to outside the United States.
    In my written testimony I have provided the committee with 
13 areas where in my judgment R and D in fossil energy 
addresses essential national needs. I give highest priority to 
establishing the technology base so that we can use fossil 
fuels for electricity generation and greatly reduce greenhouse 
gas emissions. Most important is enhanced funding and staffing 
for large and long duration demonstrations of the geologic 
sequestration of carbon dioxide.
    Additionally for both new and existing power plants, R and 
D needs to be directed at advanced approaches that enable 
simultaneously carbon dioxide capture and high efficiency 
electricity production. Considering both research and 
demonstration needs of the next 10 years. In my judgment, at 
least two billion dollars per year is a prudent estimate for 
the annual Federal investment directed at the future of fossil 
powered generation.
    Next I would like to say a few words about a resource that 
could fundamentally change the game for the United States. 
Under elevated pressures and low temperatures natural gas forms 
a solid complex with water known as a methane hydrate. These 
conditions of pressure and temperature occur off shore and in 
the Arctic regions including Alaska.
    We don't know much about this resource, but we should. 
Because some of the estimates of the United States resource 
base are enormous, enough to supply the United States with 
natural gas for hundreds of years if not longer. If R and D can 
successfully show the way to develop methane hydrates the 
national benefits are overwhelming. Greenhouse gas control 
costs in the power sector would likely be reduced by more than 
50 percent.
    For energy security both oil shale and coal derived liquids 
offer the opportunity to significantly enhance our posture 
without increasing and more likely decreasing greenhouse gas 
emission as compared to importing crude oil. But this 
opportunity can, of course, can only be realized if carbon 
dioxide sequestration can be demonstrated to be commercially 
and environmentally viable highlighting again, the importance 
of Federal support for early, long term, long duration 
demonstration. We have in the United States an enormous oil 
shale resource, roughly 800 billion barrels. But moving forward 
with commercial development requires research directed at 
understanding and mitigating or preventing adverse 
environmental impacts.
    Coal derived transportation fuels are another important 
opportunity for energy security. RAND's recent work in this 
area shows that with carbon dioxide capture and sequestration 
hybrid systems, they use a combination of coal and biomass, 
offer very large reductions in greenhouse gas emissions at 
costs that are much lower than using only biomass. For coal 
derived liquids R and D priorities should center on gaining 
early, albeit limited, commercial experience. Furthering the 
technology base for coal biomass hybrid systems is another 
important research opportunity.
    In my written testimony I've also highlighted the 
importance of strengthening the management of energy technology 
development providing a stronger role for our research 
universities in establishing an overall framework that promotes 
private sector investment in energy R and D. This concludes my 
remarks. I'd be pleased to answer any questions that you might 
have.
    [The prepared testimony of Mr. Bartis follows:]

  Prepared Statement of James T. Bartis\1\, Senior Policy Researcher, 
                    RAND Corporation, Arlington, VA
---------------------------------------------------------------------------
    \1\ The opinions and conclusions expressed in this testimony are 
the author's alone and should not be interpreted as representing those 
of RAND or any of the sponsors of its research. This product is part of 
the RAND Corporation testimony series. RAND testimonies record 
testimony presented by RAND associates to federal, state, or local 
legislative committees; government-appointed commissions and panels; 
and private review and oversight bodies. The RAND Corporation is a 
nonprofit research organization providing objective analysis and 
effective solutions that address the challenges facing the public and 
private sectors around the world. RAND's publications do not 
necessarily reflect the opinions of its research clients and sponsors.
---------------------------------------------------------------------------
                research priorities for fossil fuels\2\
---------------------------------------------------------------------------
    \2\ This testimony is available for free download at http://
www.rand.org/pubs/testimonies/CT319/.
---------------------------------------------------------------------------
    Mr. Chairman and distinguished Members: Thank you for once again 
inviting me to testify before this committee, on this occasion to 
address critical research and development (R&D) needs and opportunities 
associated with fossil energy. I am a Senior Policy Researcher at the 
RAND Corporation and specialize in energy technology and policy issues. 
My doctoral degree is in chemical physics, granted by MIT.
    When I joined the U.S. Department of Energy 31 years ago, the 
challenge was energy security. Although energy security remains an 
important problem, we now also have a compelling need to reduce 
greenhouse gas emissions. Each year, the United States releases the 
greenhouse gas equivalent of over 7 billion metric tons of carbon 
dioxide. Almost 90 percent of these emissions are associated with the 
production and use of petroleum, coal, and natural gas, in order of 
decreasing contribution. So, of course, there is a clear need for 
research on technologies that allow us to use less of these three 
fossil fuels, as well as research on other energy sources, such as 
solar and nuclear energy, that lessen our dependence on fossil fuels. 
We all hope for a future in which we will depend much less on fossil 
fuels while simultaneously maintaining our goals for national security 
and economic well-being. My goal today is to make the case that the 
path to that future crucially depends on enhanced federal support to 
research and technology development directed at how we produce and use 
fossil fuels.
    Currently, over 77 percent of the nation's electric generating 
capacity is based on fossil fuels. Coal plants alone meet nearly 50 
percent of our electricity demand. The good news is that we have plenty 
of coal, more than any other nation. We also have reasonable amounts of 
natural gas. From an energy security perspective, the electric power 
sector is today in fairly good shape. From an economic perspective, the 
costs of generating power from coal and natural gas are quite 
attractive. But the bad news is that these fossil-fuel power plants 
account for almost a third of the greenhouse gas emissions released 
within the United States. If the only option available to reduce 
greenhouse gas emissions is to eliminate coal use and turn our backs on 
this energy resource, consumers in the United States will pay a heavy 
price. Not only will electricity rates rise higher than they would 
otherwise, but also the price of natural gas will rise dramatically and 
these higher prices will affect all users, including residential and 
commercial customers, and will cause industries that depend on natural 
gas to build plants outside the United States.
Highest Priority: Low-GHG Power Production
    For these reasons, our highest priority in fossil energy R&D should 
be to establish a technology base so that we can use fossil fuels for 
power production at greatly reduced greenhouse gas emission levels. 
Such a program needs to be directed at four major goals:

          1. Establish the technical, environmental, and commercial 
        viability of geologic sequestration of carbon dioxide in United 
        States, as well as public acceptance of it. The fundamental 
        challenge is developing the knowledge base required to 
        confidently select underground locations that will store large 
        amounts of carbon dioxide for many hundreds of years. This is a 
        daunting challenge. The U.S. Department of Energy has underway 
        an R&D and demonstration program to capture and sequester 
        carbon dioxide emitted by new and existing power plants. In my 
        view, this program has been grossly underfunded at every level 
        of research, from basic studies to demonstration. While 
        considerable progress has been achieved, the planned tests are 
        neither large enough nor of long enough duration sufficient to 
        establish the viability of geologic sequestration. If this 
        program is shortchanged, either with regard to funds or 
        staffing, there is a real possibility that the public will 
        neither gain confidence in the technology nor trust the 
        Department to execute sequestration projects competently. We 
        cannot afford to have the Department's efforts in geologic 
        sequestration of carbon dioxide follow the path the Department 
        took with Yucca Mountain.
          2. Develop advanced power-generation technology that enables 
        both carbon dioxide capture and highly-efficient power 
        production from new power plants. We have a problem with 
        current technology, including even our advanced combined-cycle 
        systems. Capturing carbon dioxide and preparing it for 
        transport drains energy from the power plant, increasing coal 
        or natural gas requirements, raising power costs, and 
        increasing the amount of carbon dioxide requiring geologic 
        sequestration. Expanded federal R&D efforts should be 
        considered, especially R&D directed at high-risk, high-payoff 
        opportunities for cost reduction and improved efficiency and 
        environmental performance. Fruitful areas for longer term R&D 
        include advanced high-temperature fuel cells, oxygen production 
        at reduced energy consumption, improved gas-gas separation 
        technologies, higher temperature gas-purification systems, and 
        reduced or eliminated oxygen demand during gasification.
          3. Develop carbon capture technology that can be retrofitted 
        onto existing power plants. About 800 GigaWatts of electric 
        generating plants powered by fossil fuels currently operate in 
        the United States. Representing over 77 percent of total 
        electric generating capacity, these are the plants responsible 
        for about a third of U.S. greenhouse gas emissions. Replacing 
        these existing plants will require an investment of many 
        trillions of dollars. Approaches are available for capturing 
        the greenhouse gas emissions from these plants. The R&D 
        challenge is to discover and bring to the market carbon dioxide 
        capture systems that drain less power from the plant and cost 
        less to install and operate.
          4. Develop new markets and uses for captured carbon dioxide. 
        If we are going to capture carbon dioxide, it would preferable 
        to put it to some good use. One opportunity already exists, 
        namely, using carbon dioxide to extract crude oil that remains 
        in place after normal petroleum pumping operations cease. 
        Considering advanced methods for enhanced oil recovery, one 
        recent study sponsored by the Department of Energy suggests 
        that as much as 200 billion barrels of petroleum might be 
        recoverable while simultaneously sequestering billions of tons 
        of carbon dioxide. A longer term option is to use captured 
        carbon dioxide to support the production of renewable liquid 
        fuels from sunlight. For example, carbon dioxide can be used to 
        promote rapid growth of algae that is genetically engineered 
        for high-yield oil production.
Increasing Natural Gas Supplies
    When it comes to greenhouse gas emissions, not all fossil fuels are 
equal. When burned, coal yields the greatest amount of carbon dioxide 
per unit of energy released, while natural gas yields the least. In 
particular, for the same amount of energy, natural gas releases about 
56 percent of the carbon dioxide that would be released using coal. 
Moreover, because natural gas is an ashfree fuel, it can be used at 
much higher energy efficiencies than coal. The bottom line: 
Substituting natural gas for coal generally will halve greenhouse gas 
emissions. But it would be shortsighted to believe that natural gas can 
displace coal in power generation without serious adverse economic 
consequences, unless technology development efforts can greatly expand 
the amount of natural gas supply resources that can be recovered in 
North America. Under higher pressures and lower temperatures, natural 
gas forms a solid complex with water that is known as a methane 
hydrate. These conditions of pressure and temperature commonly occur 
offshore and in the arctic regions of North America, including Alaska. 
At present, we do not have a good understanding of how much natural gas 
is available to us in the form of these methane hydrates. But we ought 
to, because some of the estimates of the U.S. resource are enormous, 
enough to supply the United States for thousands of years.
    The National Methane Research and Development Act of 2000 
authorizes a federal research program to determine the potential of 
this resource to contribute to our energy needs. Equally important, 
that Act also provides the basis for research directed at the potential 
adverse environmental consequences of these resources. Although the 
intent of that Act was reconfirmed in the Energy Policy Act of 2005, 
this research area has never seen adequate funding. In 2007, the 
Federal Methane Hydrate Advisory Committee reported its findings to 
Congress.\3\ They emphasized the ``critical need for more funding'' and 
the detrimental effects of the current level of funding (about $10 
million per year) on R&D progress. I fully concur with this finding, as 
well as with their recommendations for program emphasis, which I quote 
directly:
---------------------------------------------------------------------------
    \3\ Federal Methane Hydrate Advisory Committee, ``Report to 
Congress, An Assessment of the Methane Hydrate Research Program and an 
Assessment of the 5-Year Research Plan of the Department of Energy,'' 
June 2007

          5. ``Field testing of concepts and technologies for producing 
        hydrates economically.'' Production tests are essential for 
        developing data required for further scientific progress. Here 
        we have an opportunity to build on promising work occurring 
        abroad, especially work done under the support of the 
        government of Japan.
          6. ``An accurate assessment of the economic viability of 
        marine hydrates, which exceeds the permafrost resource by 
        several orders of magnitude.'' Present estimates are extremely 
        speculative. Better estimates are required, especially so we 
        can understand whether this resource can provide the United 
        States and other Nations with a means of deeply cutting 
        greenhouse gas emissions at much lower costs than would 
        otherwise be the case.
          7. ``A quantifiable assessment of the environmental impact of 
        possible leakage of methane from uncontrolled hydrate 
        decomposition.'' Compared to carbon dioxide, methane has a 
        twenty-fold greater greenhouse gas effect. Understanding 
        mechanisms that lead to methane leakage, especially from 
        permafrost, must be a high priority research topic, especially 
        in light of recent observations of methane releases in Arctic 
        regions.

    One of the reasons methane hydrate research has not been adequately 
funded in the United States is the view that any research in this area 
should be fully carried out and funded by the oil and gas industry. 
While the oil and gas industry is participating and making R&D 
investments in methane hydrate research, their investment levels are 
small, as they should be, given the high risks of success, the 
uncertainties of obtaining access to the resource, and the long time 
span required to realize profits. Methane hydrate research should not 
be viewed as a subsidy to fossil fuel production, but rather as an 
integral part of the federal strategy to reduce dramatically greenhouse 
gas emissions.
    The Department of Energy also has underway research directed at 
extracting natural gas from unconventional formations. However, I have 
not recently had the opportunity to familiarize myself with the details 
of this program, and therefore suggest that the committee turn to 
another expert qualified to make a recommendation about critical R&D 
opportunities or needs in this area.
For Energy Security: Unconventional Liquid Fuels
    Over the past few years, RAND has examined opportunities for the 
United States to produce liquid transportation-quality fuels from 
abundant domestic resources, in particular oil shale and coal. If 
carbon dioxide sequestration can be demonstrated as commercially and 
environmentally viable, our findings indicate that the very large oil 
shale and coal resources located within the United States offer the 
potential to produce strategically significant amounts of liquid fuels 
while not increasing, and more likely decreasing, greenhouse gas 
emissions as compared to fuels produced from imported crude oil.
    Oil Shale.--RAND's work on oil shale was supported by the National 
Energy Technology Laboratory. The largest known oil shale deposits in 
the world are located in the Green River Formation, which covers 
portions of Colorado, Utah, and Wyoming. We estimate that this resource 
base may eventually yield between 500 billion and 1.1 trillion barrels 
of useful fuels. The mid-point of this range is 800 billion barrels, 
which is more than triple the oil reserves of Saudi Arabia.\4\ The 
richest and thickest oil shale deposits are on Federal lands. 
Protecting the public interest in these oil shale lands is important, 
considering both environmental issues as well as the potentially 
profound impact on federal revenues and energy security. Oil shale 
development falls squarely on the dual purview of this committee: 
Energy and Natural Resources.
---------------------------------------------------------------------------
    \4\ For further information, see James T. Bartis, Tom LaTourrette, 
Lloyd Dixon, D.J. Peterson, and Gary Cecchine, Oil Shale Development in 
the United States: Prospects and Policy Issues, Santa Monica, Calif.: 
RAND Corporation, MG-414-NETL, 2005.
---------------------------------------------------------------------------
    Two weeks ago, the prospects for successful development of oil 
shale in the United States increased as a consequence of the 
announcement by the Department of the Interior of a second round of 
research, development and demonstration leases. This will allow 
additional small tracts of federal lands to be made available for 
developing and demonstrating advanced oil shale extraction 
technologies. The private sector is clearly willing to invest in 
research directed at the economic extraction of oil shale. For this 
reason, it is important that any government-supported R&D be directed 
at areas where the public stake is highest. For these reasons, our 
recommended priorities for federally sponsored oil shale research are 
as follows:

          8. Conduct research required to understand and mitigate or 
        prevent the adverse impacts of oil shale development. This 
        includes research directed at better understanding of the 
        subsurface environment, assuring safe disposal of spent shale, 
        reducing the uncertainties associated with ecological 
        restoration, protecting water supplies, demonstrating carbon 
        dioxide sequestration in the vicinity of the Green River 
        Formation, and promoting higher recovery yields.
          9. Develop the information base required for a federal 
        leasing strategy. This includes regional air quality 
        monitoring, assessments of water availability and quality, and 
        evaluation of governance mechanisms for managing federal lands 
        and meeting infrastructure requirements in anticipation of 
        large industrial development.
          10. Provide federal incentives for early commercial 
        experience. The most promising oil shale technologies are not 
        yet ready for large-scale commercial development. Advancing any 
        one of them will require technology development and 
        demonstration efforts costing in the range of hundreds of 
        millions of dollars. While the terms of accessibility to 
        federal lands is important, there are many other instruments, 
        such as investment tax credits for first-of-akind commercial 
        plants, that the federal government should consider to 
        encourage continued private sector investment in advanced oil 
        shale technologies.

    Oil shale development is an area where continued policy analysis is 
required to protect the public interest. At present, oil shale 
resources have little value. The key to monetizing this publicly owned 
asset requires that the government put in place a federal land leasing 
and management framework, and possibly an investment incentive system, 
that assures that private firms that successfully develop commercially 
and environmentally viable oil shale technologies be rewarded 
commensurate with the considerable risk and expense of their efforts.
    Coal-derived liquids.--As is the case oil shale, the United States 
leads the world in the quality and quantity of its coal resources. 
Dedicating only 15 percent of recoverable coal reserves would yield 
roughly 100 billion barrels of liquid transportation fuels, enough to 
sustain three million barrels per day of fuel production for over 90 
years.
    A few months ago, RAND published its findings on a comprehensive 
examination of the prospects and policy issues associated with 
producing liquid fuels from coal in the United States.\5\ This work was 
supported by the National Energy Technology Laboratory and the Air 
Force. The study showed that coal-to-liquid (CTL) production facilities 
would emit very large volumes of carbon dioxide and that the viability 
of a CTL industry in the United States depends crucially on the 
successful demonstration that carbon dioxide can be sequestered in 
multiple locations in the United States. Our results show that for CTL 
facilities, capture and sequestration of carbon dioxide does not add 
significantly to liquid fuel production costs.
---------------------------------------------------------------------------
    \5\ James T. Bartis, Frank Camm, and David S. Ortiz, Producing 
Liquid Fuels from Coal: Prospects and Policy Issues, Santa Monica, 
Calif.: RAND Corporation, MG-754-AF/NETL, 2008.
---------------------------------------------------------------------------
    Another important finding of RAND's work on CTL is that liquid 
fuels produced using a combination of coal and biomass, when combined 
with capture and sequestration of carbon dioxide emissions, yield 
lifecycle greenhouse gas emissions that are much lower than those 
associated with conventional petroleum-based fuels. For example, we 
found lifecycle greenhouse gas emissions using a transportation fuel 
from a production facility using 75 percent coal and 25 percent biomass 
(on an energy input basis) would be roughly 60 percent less than the 
same fuel derived from conventional petroleum.
    These considerations support the following recommendations for 
research in coal-derived liquids:

          11. Promote early, but limited commercial operating 
        experience. Modern CTL technology is ready for initial use in 
        commercial production facilities. The government should 
        consider subsidizing early production experience from a limited 
        number of CTL plants. These early plants should include 
        approaches for managing greenhouse gases. Gaining early 
        experience will facilitate post-production cost improvements, 
        and posture the private sector for the possible rapid expansion 
        of a more economically competitive CTL industry.
          12. Develop the technology for combined gasification of coal 
        and biomass. At present the design base for combined use of 
        coal and biomass is weak. Here we are recommending a short 
        duration (roughly, five years) engineering development program 
        involving materials testing and the design, construction, and 
        operation of a few test rigs.

    If the United States government decides to promote early investment 
in CTL production, it should also consider expanding long-term R&D 
efforts directed at advanced technologies for producing liquids from a 
combination of coal and biomass. In my judgment, the most fruitful of 
the R&D opportunities for advancing liquids production are the very 
same ones that are appropriate for advanced power production, namely 
lower cost and more energy-efficient means of gasifying coal and 
biomass, as listed in my second recommendation dealing with low-GHG 
power production.
Leading the Transition: Hybrid Systems
    For automobiles, the concept of a plug-in hybrid vehicle provides a 
path by which advances in electric vehicle and battery development can 
immediately be put to use; so also may be the case with power 
generation. Specifically, the combined use of fossil and solar or 
nuclear technologies may make for cost-effective and environmentally 
superior approaches.
    For example, one approach to making electricity from sunlight 
involves building an array of parabolic troughs that heat a working 
fluid to about 750 degrees F. That working fluid is pumped through a 
heat exchanger that makes steam in the range of 650 to 700 degrees. 
This steam drives a steam turbine with the result being electric power. 
There are two problems with this system. First, the sun isn't always 
shining. Second, the steam cycle is inefficient because the steam 
temperature is too low. A possible solution is to use a combination of 
a solar and fossil energy. In this hybrid concept, the fossil fuel, say 
natural gas, would be used to raise the temperature of the steam to 
about 1000 degrees F, which allows much greater efficiency at possibly 
much lower overall costs.
    Another example is nuclear energy. The Department of Energy does 
not know whether hybrid plants that include both nuclear and fossil 
technologies can lead to lower cost, more efficient power production. 
It doesn't know this because of the way that the Department separates 
and isolates its various technology development efforts. This leads to 
my final technical recommendation.

          13. Fossil energy R&D should include exploiting opportunities 
        that promote renewable and nuclear power generation. This area 
        of research is especially appropriate as the amount of 
        intermittent power entering the electric transmission and 
        distribution grid increases.
Strengthening the Management of Energy Technology Development
    The foundation of a successful national energy R&D program requires 
more than sound goals and a financial commitment from Congress. 
Measures need to be taken to strengthen the management of federal 
energy technology development efforts.
    In the past, the Department of Energy has shown a tendency to 
downplay the scientific challenges associated with technology 
development efforts. Congress, the public, and the senior leadership in 
the Department itself are often provided with program plans with 
schedules that are too fast, with unrealistically low funding 
requirements, and with unduly optimistic technology development goals. 
A consequence of this tendency is that R&D funds are too often directed 
at large projects that are more ``show and tell'' than dedicated to 
advancing technical progress. Quick engineering fixes are attempted 
while the important research necessary for progress, such as materials 
research and applied research dedicated to truly understanding problems 
and developing sound solutions, is left under funded, or in many cases, 
unfunded.
    To remedy this problem, I urge the committee to consider steps to 
assure that the Department has adequate scientific and technical talent 
at all levels involving the management or oversight of R&D and 
technology development. Further, all technology development programs 
should be required to demonstrate that they are sufficiently addressing 
the fundamental research issues and materials development issues 
associated with their efforts.
    Our energy technology managers also need to be aware of extensive 
R&D efforts underway in other nations. In some cases, cost-shared 
efforts may be highly cost effective and productive. But to bring this 
wealth of information back to the United States and to afford 
technology transfer to our firms, Department of Energy technology 
managers must be able to travel internationally when R&D program needs 
so dictate.
Strengthening the Institutional Framework for Energy Technology 
        Development
    I would like to address briefly the important role that our 
research universities should have in energy technology development. In 
my judgment, not enough of the technology development budget has 
supported university-based research. Moreover, much of the funding that 
universities do receive is through contractual instruments that 
undercut the main values that universities offer to the program: 
creativity, scientific and engineering excellence, and education.
    The main reason so little funding goes to universities is that so 
little of the technology development program funds are devoted to 
fundamental research issues, as I have previously discussed. Taking 
care of this problem should move more funding towards our research 
universities. But to get the most of those funds, energy R&D program 
managers must take the longer view and build their relationships on 
grants and other flexible contractual instruments. I urge this 
committee to take measures so that the energy technology development 
programs are empowered to and expected to interact with our research 
universities in this more productive manner.
    The central pillar is, of course, the private sector. It will be 
private firms that will be responsible for manufacturing, distributing, 
selling, and maintaining the energy systems that will emerge from our 
national investment in energy R&D. Their participation in the federal 
program has always been important, but it will be stronger and more 
focused the sooner the Federal government clearly signals whether or 
not there will be a price on emitting greenhouse gas emissions, and if 
so how much; and whether or not the price of automotive fuels will 
include costs that reflect infrastructure requirements and energy 
security.
    In closing, I thank the committee for inviting me to testify today.

    The Chairman. Thank you very much.
    Ms. Wince-Smith, go right ahead.

    STATEMENT OF DEBORAH WINCE-SMITH, PRESIDENT, COUNCIL ON 
                        COMPETITIVENESS

    Ms. Wince-Smith. Chairman Bingaman, Senator Murkowski and 
members of the committee, thank you for inviting me to testify 
on the critical importance of research and development to 
addressing America's energy and climate challenge, change, 
responsibilities and opportunities. The Council on 
Competitiveness is the only group of corporate CEOs, university 
presidents and labor leaders committed to achieving United 
States competitiveness in the global economy. For the past 18 
months we have focused on the dual challenges of energy 
security and sustainability called out in our National 
Innovation Initiative over 4 years ago.
    Even as a Nation with an immense wealth of natural 
resources we face soaring energy demand, price volatility and 
supply instability. At the same time pressure is mounting 
around the world to mitigate greenhouse gas emissions from 
fossil fuels with the prospect of a 45 percent increase by 2030 
driven almost entirely by demand in developing countries. The 
current trajectory of global energy trends is unsustainable, 
environmentally, socially and economically.
    We know energy and its efficient use is at the heart of 
industrial production, global supply chains, transportation 
modes and how we build and use the constructed environment. For 
this reason the Council launched an ambitious Energy Security 
Innovation in Sustainability Initiative. Our goal is to shape a 
private sector/public sector partnership for sustainable energy 
solutions while supporting the creation of new industries, 
global markets and skilled jobs here in America.
    This work is led by the CEO of Caterpillar, James Owens, 
the President of Rensselaer, Shirley Ann Jackson and the 
President of the United Workers of the Utility Union of 
America, Mike Langford with the steering committee of over 40 
leaders from industry, academia and labor. We're very honored 
that Secretary Chu served on this committee during his tenure 
at LBL. Our initiative has asked these questions.
    What enabling conditions are needed to spur private sector, 
demand driven innovation in investment?
    In essence what is the business case for energy 
transformation and sustainability?
    In September the Council released 100 day Energy Action 
Plan for the next President named, Prioritize. A copy of which 
is appended to my testimony. We've outlined a set of 
interrelated recommendations from energy efficiency, supply 
diversification, regulatory reform, R and D and work force 
investments at the frontier. I will focus on the one central to 
our hearing today that we must spur technological innovation 
and entrepreneurship by ramping up R and D in its 
commercialization.
    One of the areas that we strongly support are creating 
regionally based R and D test beds and large scale commercial 
pilots for deploying new energy technologies and systems. These 
test beds must address issues from the knowledge and 
application continuum all the way to industrial process of 
scale and scope. We want to solve the big game changing 
problems, next generation storage, battery density, carbon 
capture sequestration, solving clean coal and nuclear waste and 
storage.
    These test beds should be multidisciplinary, stakeholder 
and really be focused at the region. We have to be ready. Be 
poised to deploy innovations.
    Now we know of course that America is famous for being the 
laboratory to the world but we also want to be the place that 
captures the manufacturing of these new innovations. We 
remember how in the 1970s through the 1990s we lost our flat 
panel display market while we created all the underlying 
technologies. We certainly don't want that to happen in our 
energy transformation.
    Manufacturing right now is on the cusp of a tremendous 
transformation. Manufacturing and services are emerging. We 
have production and distribution networks spanning the globe, 
digitally infused manufacturing operations and science based 
manufacturing. Clearly we want to ensure that we use the tools 
of science and the tools of technology that support these 
challenges.
    So the graph I've put up really shows the critical 
importance of our government's high performance computing 
capabilities that support our research, our government missions 
and industrial competitiveness. We know that high performance 
computing presents a huge, competitive advantage to our 
companies as well as to solving these problems, the Nation that 
out computes will out compete. Other nations are rapidly using 
these capabilities but still the United States and Japan are 
the leaders in both the production of HP systems and using them 
for competitive advantage.
    So I would urge the committee as we go forward to really 
invest in the R and D. That we accelerate our high performance 
computing tools, we use this to solve these problems and we 
ensure that America will be, not only the R and D leader, but 
the manufacturing powerhouse of the world in the energy 
transformation. Thank you very much. I'm pleased to answer 
questions.
    [The prepared statement of Ms. Wince-Smith follows:]

   Prepared Statement of Deborah L. Wince-Smith, President, Council 
                           on Competitiveness
    Chairman Bingaman, Senator Murkowski and members of the committee, 
thank you for inviting me to testify today on the critical importance 
of research and development to addressing America's energy and climate 
change challenges.
    I'd like to start by providing a little background about the 
Council on Competitiveness--who we are, and how we operate--and on our 
Energy Security, Innovation & Sustainability Initiative, a top Council 
priority. The Council on Competitiveness is the only group of corporate 
CEOs, university presidents, and labor leaders committed to enhancing 
U.S. competitiveness in the global economy. Our scope of issues 
reflects many factors that affect a nation's ability to compete--
ranging from the business environment for innovation and advancing key 
enabling technologies, to building a world-class workforce and igniting 
regional innovation through entrepreneurship.
    We have been fortunate to have some of America's best executives as 
Council leaders. Our current chairman is Chad Holliday, chairman of 
DuPont. The Council carries out its agenda, and shapes the debate 
through several mechanisms:

   We analyze emerging challenges.
   We convene leaders who can envision and implement solutions.
   We catalyze and organize action.

    We strive to represent the voice of competitiveness and innovation 
in a wide range of technology, economic, trade, education, and 
international decision-making fora. For the past 18 months, we have 
focused this voice on the dual challenges of energy security and 
sustainability. These challenges were called out in the Council's 
National Innovation Initiative four years ago and the urgency for 
action has only grown in that time.
             energy security, innovation and sustainability
    The Council believes that energy security and sustainability are 
two of the defining and intertwined challenges of our time. For 
virtually every country, access to affordable energy is a basic need 
for economic growth, social development, improved standards of living, 
and increasingly for national security. However, neither an affordable 
nor a reliable supply of energy is a given for any country. As 
committee members well know, even as a nation with an immense wealth of 
natural resources, we face soaring energy demand, price volatility, and 
supply instability. At the same time, pressure is mounting around the 
world to mitigate greenhouse gas emissions from fossil fuels--with the 
prospect of a 45% increase in emissions by 2030, driven almost entirely 
by developing countries.\1\
---------------------------------------------------------------------------
    \1\ International Energy Agency, World Energy Outlook 2008, IEA/
OECD, Paris (2008).
---------------------------------------------------------------------------
    Without access to cost-effective cleaner energy solutions, 
developing economies will have no alternative but to increase their 
dependence on the most rudimentary fossil-fuel technologies, 
contributing significantly to increased pollution and environmental 
damage. To summarize, the current trajectory of global energy trends is 
unsustainable--environmentally, socially, and economically. They are 
impacting:

   the fundamental ability of American industry to compete in 
        the global economy
   the political ability of our government to play an 
        international leadership role
   the capacity of our military to carry out its missions

    Energy security and sustainability are now first-tier economic, 
national security, and competitiveness concerns. It is, therefore, 
inevitable that the world will undergo a systems transformation in the 
way we use and produce energy. As this country moves toward sustainable 
energy policies and programs, the Council does not believe there is an 
unavoidable trade-off among economic growth, energy savings, and 
environmental interests. Indeed, the pending systems transformation 
offers an opportunity to integrate energy security, sustainability, and 
competitiveness.
    For this very reason, the Council has launched an ambitious Energy 
Security, Innovation & Sustainability (ESIS) Initiative. Our goal is to 
shape an action agenda to drive private sector demand for sustainable 
energy solutions, while supporting the creation of new industries, 
markets, and jobs. This initiative is led by James Owens, CEO of 
Caterpillar; Shirley Ann Jackson, President of Rensselaer Polytechnic 
Institute and Vice Chair of the Council on Competitiveness; Mike 
Langford, President of the Utility Workers Union of America; and a 
steering committee of 40 CEOs, university presidents, labor leaders and 
national lab directors, the ESIS is focused on:

   The critical link between energy security and national 
        competitiveness
   Identifying drivers of private sector investment in 
        sustainable energy
   Clarifying and publicizing the business case for changing 
        how the private sector thinks about and uses energy
   Examining what leading companies are doing to integrate 
        energy security and carbon issues into their business 
        strategies for productivity and competitive advantage

    Most importantly for today's discussion,

   developing a policy and regulatory framework that will 
        unleash American investment and innovation across all sectors 
        of the economy

    We know:

   here is no ``silver bullet''
   There is no single technology that can solve the problem
   There is no one policy or regulatory measure that will 
        transform our energy system, protect the environment and 
        mitigate climate change
   We will need every resource we have--coal, oil, gas, 
        nuclear, solar, wind, biomass, ocean and hydropower--AND 
        increased energy efficiency to meet future energy demand.

    We also know that we have a tremendous opportunity before us. In 
fact, these challenges have created a perfect storm for innovation. We 
can move to a new era of technological advances, market opportunity, 
and industrial transformation if we can successfully unleash the 
investment and innovation potential of the private sector to meet the 
challenges and seize the opportunities arising from these new public-
private partnerships.
    The ESIS initiative has engaged over 200 of the nation's leading 
experts from a wide range of perspectives and asked them what enabling 
conditions are needed to exist to spur private sector innovation and 
investment. This work led to the September release of the Council's 
100-Day Energy Action Plan for the next President and Congress named 
Prioritize, a copy of which is appended to my testimony.
    Prioritize includes 18 specific recommendations, many of which are 
relevant to this committee's jurisdiction, but I will focus on one that 
is central to today's hearing: America must spur technological 
innovation and entrepreneurship by ramping up investment in energy R&D 
and commercialization. This means at least tripling the current federal 
investment in basic and applied energy R&D; enhancing public-private 
partnerships with baseline federal funding--to be matched by state and 
private sector investments--and creating regionally-based R&D test-beds 
and large-scale commercial pilots for new energy technologies.
    Central to this recommendation is the idea that we must be poised 
to deploy new ideas and innovations that come from the significant new 
investment in energy research into scalable products, goods and 
services. Research must be viewed as encompassing basic, applied, 
development and test beds. If we do not have in place the 
infrastructure to reap value from our investment, you can rest assured 
another country will. When that happens, the jobs and intellectual 
property will be lost; as well as the component subsystems leading to a 
hollowing out of the innovation enterprise.
america must not become just the laboratory to the world--renowned for 
     our ideas, but bleeding away jobs, industries and opportunity.
    As we enter a new era of technological innovation, driven by the 
twin challenges of energy security and climate change, we must be 
vigilant in ensuring that we support these nascent industries here at 
home. We do not want to repeat the errors of our past when despite 
having achieved scientific and technology breakthroughs in liquid 
crystal, plasma and other flat panel display technologies, we ceded 
market leadership to countries like Japan and Korea, as they rapidly 
scaled up their high quality manufacturing ability and captured the 
global display market.
    We have learned that we cannot divorce our investments in R&D from 
our efforts to support each stage of the manufacturing continuum. We 
must design-in manufacturing considerations upfront in the innovation 
process. We must ensure that we have the appropriate regulatory and 
financing framework in place to allow our entrepreneurs to move agilely 
from testing and pilots to manufacturing and large scale system 
deployment.
                     the evolution of manufacturing
    As the 20th century drew to a close, rising global competition and 
the broad opening of global markets challenged U.S. manufacturers. As a 
result, there has been continuing concern about the offshoring U.S. 
manufacturing and the loss of U.S. manufacturing jobs.
    With the growing strength of newly-developing low-cost competitors 
such as China, there are many who fear that U.S. manufacturing will 
spiral into further decline. It is becoming increasingly clear that the 
United States cannot compete with commodity products and low-wage mass 
production systems.
    Nevertheless, I believe we must put aside the growing perception 
that America will inevitably lose its manufacturing edge. Instead, 
prepare for a shift in manufacturing that embraces:

   production and distribution networks that span the globe
   digitally-infused manufacturing operations, and
   science-based manufacturing

    These could form a new foundation to support a revitalized 
manufacturing base, and U.S. competitiveness in the very highest-value 
production activities.
    Long-term national and economic security in the United States 
critically depends on our having innovative and agile manufacturing 
capabilities. Current economic conditions and energy security 
challenges have only heightened the need to accelerate competitive 
advantages for U.S. manufacturing companies in the global marketplace. 
Manufacturers can maintain their global leadership position only 
through technological differentiation, not through labor cost 
advantage.
    While energy-saving investments must compete for scare capital 
often against near-term priorities, the potential for substantial 
returns over the long run is real--lower production costs, lower 
environmental compliance costs, reduced waste, and improved 
productivity when production inefficiencies are eliminated.
    Then there are the rewards of helping customers control their own 
costs by redesigning products to reduce the energy they consume 
Revenues from GE's Ecomagination line of energy efficient, 
environmentally-friendly products and services have grown to $17 
billion (in 2008) since it was launched 2005. The company invested $1.4 
billion in cleaner technology research and development in 2008 and 
recently reported that its portfolio of 70 Ecomagination-certified 
products is four times the number of products it offered in 2005. 
Still, too many U.S. companies remain underinvested in energy 
efficiency, and few have adopted strategies that treat energy as a 
vital dimension of business.\2\
---------------------------------------------------------------------------
    \2\ ``GE's 2008 Ecomagination Revenues to Rise 21%, Cross $17 
Billion,'' GE News Center, October 21, 2008. http://
www.genewscenter.com/content/Detail.asp?ReleaseID=4266&NewsAreaID=2
---------------------------------------------------------------------------
    Wal-Mart launched a new green-packaging scorecard in February 2008. 
By August of last year, the scorecard software system included over 
8,000 vendors and more than 170,000 products. Because Wal-Mart is one 
of the most powerful forces in the world's supply chains, this 
initiative is a potential game changer in the design of packaging.\3\
---------------------------------------------------------------------------
    \3\ Connolly, Kate Bertrand. ``Wal-Mart's Scorecard Drives 
Sustainable Packaging,'' FoodProcessing.com, August 2008. http://
www.foodprocessing.com/articles/2008/371.html
---------------------------------------------------------------------------
    Yet, conventional wisdom holds that manufacturing is characterized 
by the four D's--dirty, dumb, dangerous and disappearing. Nothing could 
be further from the truth. Modern American manufacturing, which has 
dramatically changed from its earlier definition, is growing--in size, 
complexity and market importance. For the past 50 years, the value of 
manufacturing output has increased by 3.7 percent per year.\4\ Modern 
American manufacturing profits have outperformed those of other sectors 
and manufacturing productivity increased faster than the national 
average.\5\ In other words, a great many American manufacturers have 
made major adjustments to the changing needs of the marketplace and are 
doing very well. But they cannot do it alone.
---------------------------------------------------------------------------
    \4\ Strauss, William A. ``Is the U.S. Losing Its Manufacturing 
Base?'' Presentation at 61st Annual Meeting of the Midwestern 
Legislative Conference, Chicago, IL, August 21, 2006.
    \5\ Ibid.
---------------------------------------------------------------------------
    American public officials, opinion leaders and investors also need 
to understand and vigorously support these changes if we are to regain 
and retain our international leadership position. If America fails to 
adapt, we risk losing this critical underpinning of our economy and 
failing to reap the value from the investments in next generation 
energy technologies. America's edge lies with forward looking, high-
value manufacturing that looks well beyond traditional assembly and 
fabrication of products. Consider the new paradigms of manufacturing:

    Mass Production has evolved to Mass Customization.--As more 
countries enter the global marketplace, the competition has shifted 
rapidly to new kinds of added value that require new kinds of skills. 
Just as basic product design has moved beyond the work of draftsmen 
with pencils and T-Squares to highly sophisticated computer driven Cad-
Cam programs, more of the value-add within manufacturing began to come 
from the activities integrally associated with production: marketing, 
financing, customer service and managing quality, variety, 
customization, innovation, convenience, novelty and speeded operations. 
Each of those affects not only the quality of the product being made 
and its competitive price, but its value to customers as well. All of 
which are key elements in the process of modern manufacturing.
    Services and Manufacturing have merged.--The Council's National 
Innovation Initiative highlighted this convergence. Surveys by Deloitte 
Research found that the average profitability of service operations is 
more than 75 percent higher than overall business unit profitability. 
The most profitable service businesses (the top 25 percent) are more 
than three times as profitable as the average business unit. Across the 
manufacturing companies that were studied, what have traditionally been 
considered service revenues average just over a quarter of total 
revenues but deliver 46 percent of the profits.\6\ For many producers, 
there would be little or no profitability without the so-called service 
business. In other words, modern manufacturers have actually integrated 
elements of the service sector into the manufacturing process in order 
to maximize their competitiveness, and public policy must recognize and 
encourage that process.
---------------------------------------------------------------------------
    \6\ Koudal, Peter. The Service Revolution in Global Manufacturing 
Industries, A Deloitte Research Global Manufacturing Study, (2006). 
www.deloitte.com
---------------------------------------------------------------------------
    High Value Jobs.--Another way to look at this change is that 
approximately 75 percent of jobs in the United States are classified as 
service sector jobs, but a significant portion of these jobs, in 
reality, remain part of the extended manufacturing enterprise.\7\ As 
manufacturing companies restructured--outsourcing (not offshoring) 
functions that could be provided most cost-effectively outside the 
company--many jobs that did not directly deal with fabrication were 
simply reclassified as service jobs even though they remained as 
essential parts of the modern manufacturing process. It is also 
essential to note that in different areas of the country new jobs in 
the modern manufacturing sector have been created as new small and 
medium-sized companies are established to fill continuing and growing 
needs. America's data collection systems, a relic of an industrial 
economy, simply do not capture or reflect this integration of services 
and manufacturing. Knowing the importance and the changed nature of 
manufacturing are critical steps for policymakers, but not the whole 
story. As we stand ready to tackle the challenges of energy security 
and sustainability, we must ensure that America's federal investments 
in research and development and America's premier research capabilities 
are leveraged to provide the strongest possible outcomes. A primary 
example of this is the U.S. Government's high performance computing 
(HPC) capabilities.
---------------------------------------------------------------------------
    \7\ Council on Competitiveness, Thrive: The Skills Imperative, 
Washington, D.C. (2008).
---------------------------------------------------------------------------
     the critical and transformational role of hpc in manufacturing
    The use of high performance computing for modeling, simulation, and 
analysis has already provided a competitive advantage for many of the 
manufacturing Fortune 50. These companies employ in-house advanced 
computing and have access to high performance computing hardware, 
software, and technical resources through partnerships with national 
laboratories. Many of these companies recommend that adoption of 
modeling, simulation, and advanced computing be accelerated throughout 
the U.S. manufacturing sector. For example, Pioneer Hi-Bred, a DuPont 
company, uses HPC to manage and analyze massive amounts of molecular, 
plant, environmental and farm management data, allowing them to make 
product development decisions much faster than by using traditional 
experiments and testing alone. For Pioneer, the result has been faster 
improvement in new seed products, staying ahead of the competition, a 
major jump in innovation and productivity, and the ability to help meet 
some of the world's most pressing demands regarding the availability of 
food, feed, fuel, and materials.\8\
---------------------------------------------------------------------------
    \8\ 9 Interviewed Mark Cooper, Pioneer Hi-Bred International, Inc., 
and Lane Arthur, DuPont, in June 2008.
---------------------------------------------------------------------------
    The Transition to ``Simulation-Based Manufacturing''.--A 
substantial effort toward wider adoption of modeling and simulation 
requires the commitment of intellectual capital, computer hardware and 
software for complex problem solving, and other resources from among 
the diverse advanced computing assets spread across the nation's 
regions, States, and advanced computing centers. This truly successful 
national initiative will leverage these vital resources from a new 
public-private partnership to bolster the U.S. manufacturing sector.
    New Manufacturing ``Call to Action'' on the 21st Century 
Manufacturing Enterprise.--To these ends, the federal government should 
issue a ``call to action'' to U.S. manufacturing sector leaders and 
create a national manufacturing initiative enabled by advanced 
computing. These leaders in advanced computer-enabled design and 
manufacturing should be asked to leverage their expertise in modeling, 
simulation, and analysis and partner with the federal government to 
improve U.S. manufacturing competitiveness. The outcome of this call to 
action will be to accelerate and broaden the use of modeling and 
simulation, to increase penetration of these tools into smaller 
companies (pushing these tools further down into the supply chain), to 
solve the biggest complex problems with the latest techniques, and 
compete through innovation.
    Through the national laboratory system, the federal government 
offers the greatest scientific and engineering resources, computer 
assets, and research software to be deployed for the initiative. 
Importantly, the United States and Japan are the only significant 
manufacturers of HPC machines--an incredible advantage that must be 
utilized for economic growth. To succeed, the initiative should also 
call upon, bring together, and leverage (all of) the nation's most 
advanced computing resources--state to state, region to region, center 
to center.
                      committee draft legislation
    Thank you also for the opportunity to comment of the draft 
legislation on Energy Research and Development. We strongly endorse the 
proposal to double funding for applied energy research and development. 
The Council further urges the committee to act upon the recommendations 
made in Prioritize to triple both basic and applied energy research and 
development.
    The Council applauds the energy workforce development provisions as 
proposed by the committee, as they also are closely aligned with the 
intent of our recommendations in Prioritize. We urge the Committee/
Congress to go further by adopting the Council's recommendations to 
create a $300 million Clean Energy Workforce Readiness Program. This 
program should be specifically designed to foster partnerships between 
the energy industry, universities, community colleges, workforce 
boards, technical schools, labor unions, and the U.S. military, with 
the goal of attracting, training, and retaining the full range of 
skilled workers for America's clean energy industries.
    At the very least, the Department of Labor should be required to 
assess, classify and widely publicize the demand-driven needs for 
energy-related occupations. It should also be required to align federal 
workforce investment programs and state-directed resources to support 
skills training and career path development in energy fields for 
American citizens.
    With regard to the scholarships and fellowships proposed, the 
Council would urge the committee to consider making these portable 
(controlled by the student) to ensure the maximum flexibility for the 
students to follow the most current thinking and technologies in these 
areas.
    Under the section on Grand Challenges Research Initiative, the 
Council would propose that a requirement for small businesses 
representation in the consortia be included.
                               conclusion
    Thank you again for this opportunity to provide testimony on this 
important topic for American competitiveness. The committee's support 
for research and development, including the enactment of the America 
COMPETES Act and recent increases in the stimulus package speaks to the 
forward-looking vision of the Senators sitting on the dais. I would 
only urge that you dedicate the same passion to ensuring the 
infrastructure exists and is utilized to generate value in the form of 
jobs, new businesses and new opportunities from these critical 
investments.

    The Chairman. Thank you very much.
    Professor Corradini.

 STATEMENT OF MICHAEL L. CORRADINI, CHAIR, NUCLEAR ENGINEERING 
 AND ENGINEERING PHYSICS, UNIVERSITY OF WISCONSIN, MADISON, WI

    Mr. Corradini. Thank you, Mr. Chairman and members of the 
committee for inviting me today. I'm currently chair of Nuclear 
Engineering Program at University of Wisconsin, Madison. I am 
from New Mexico originally, so thanks for remembering.
    In 2007 I was a member of the National Academy's review of 
the DOE's Office of Nuclear Energy and recommendations for 
future R and D activities. So today I'd like to address the 
committee on this particular issue. I'll note that Bob Fri was 
the chairman of the committee. So if I do it wrong, he'll tell 
me.
    Growing energy demands, emerging concerns about carbon 
dioxide emissions in a sustained period of successful operation 
of the existing fleet of nuclear power plants really have 
gained a renewal of interest in nuclear power in the United 
States. Clearly I think nuclear energy can be an important 
component in addressing these issues. But we have to ensure 
that our nuclear R and D investments are aligned to the 
technological challenge associated with deploying new plans and 
developing a sustainable nuclear fuel cycle.
    The Office of Nuclear Energy in the United States DOE has 
been the major agent of the government's responsibility for 
advancing nuclear power. Parenthetically if you look back 10 
years ago, it was zero in terms of R and D research. Now we're 
sitting at about 400 million in the current, pending Omnibus 
Appropriations bill.
    In FY2006, the President's budget requested that funds be 
set aside for a study by the National Academy to conduct a 
review of nuclear energy and to recommend priorities among the 
programs given constrained budget levels. The programs to be 
evaluated were NP 2010 or Nuclear Power 2010, the Gen IV 
Reactor Development program, Nuclear Hydrogen Initiative and 
the Advanced Fuel Cycle Initiatives as well as Idaho National 
Labs facilities. I believe its recommendations are still very 
relevant in the prioritization and phasing of nuclear R and D 
investments. I'd like to review some of these and give you some 
personal comments.
    First, NP 2010, the Nuclear Power 2010 program was 
established by the United States DOE in 2002 to support the 
near term deployment of new nuclear power plants. NP 2010 is a 
joint government industry 50-50 cost share with very clear 
objectives. It's actually achieved a very good working 
relationship between DOE and industry.
    The selection of the projects funded is really 
appropriately market driven. There's really a strong focus on 
demonstrating a regulatory process, finalizing and 
standardizing the advance LWR reactor designs and implementing 
the 2005 Energy Policy Act Standby Support Divisions. This has 
lead to a large number of combined license submittals to the 
NRC.
    Our committee concluded that successful completion of the 
NP 2010 program should be the Office of Nuclear Energy's 
highest priority. I'd only emphasize that very strongly. We 
need to continue success in the present to guarantee success in 
the future of nuclear power.
    DOE has also begun to evaluate the need for a reinvigorated 
R and D program to improve the performance of existing and 
advanced light water reactor power plants. The National Academy 
Study supports such an R and D program as a shared cost effort 
separate from NP 2010. For example, the life after fifty focus 
for plant life extension is a good example of a research focus.
    For Gen IV, DOE has engaged in other government wide 
ranging efforts to develop advanced, next generation nuclear 
energy systems, so called generation IV or Gen IV systems. 
During 2002 to 2005 time period, the Gen IV program's primary 
goal was to develop the next generation nuclear plant which 
focused on high temperature process heat, an innovative 
approach as to produce energy products that might benefit the 
transportation and chemical industry. I included a figure.
    I don't have a chart, but you have a figure in the 
testimony that actually identifies in detail the gas cooled, 
graphite moderated reactor concept. Both the reactor at the 
plant and the advanced fuel is being considered. The NGNP 
program has well established goals, decision points and 
technical alternatives.
    The program requires predictable and steady funding. Our 
committee recommended that the nuclear energy sustain a 
balanced R and D portfolio beyond just the NGNP, but for other 
advanced concepts. Again, I included a figure. For example, 
funding and prioritization for grid appropriate reactors, that 
is smaller reactors that could be in various other markets both 
in the United States and abroad.
    Since 2002 the United States has also been conducting a 
program of spent fuel reprocessing R and D in a program called 
the Advanced Fuel Cycle Initiative or AFCI. In 2006, the 
National Academies Committee was established. DOE at the same 
time, about, unveiled GNEP, the Global Nuclear Energy 
Partnership as a broad initiative to facilitate worldwide 
expansion. The AFCI Research Program was absorbed into GNEP 
with an additional component of rapid deployment of commercial 
reprocessing/recycling facilities.
    The overall concept has many positive features especially 
in the international arena at a time when many nations are 
actively considering expanded their nuclear energy portfolio. 
However the committee was not persuaded that the GNEP was worth 
pursuing as presented to the committee at that time. We felt 
the program was premised on an accelerated deployment strategy 
creating large technical and financial risks and premature 
narrowing of technical options. Also we felt there was 
insufficient external input and peer review.
    Nonetheless the committee believes and I continue to 
believe that the program similar to the original AFCI research 
program is very worth pursuing. Such a program should be paced 
by national needs including economics, technological readiness, 
energy security and other factors. The committee recommended a 
more modest, long term program where engineering efforts 
including new research scale experimental capabilities that can 
reveal innovative approaches to nuclear fuels, materials, 
modeling. We had others on the panel even mentioning high 
performance computing, power systems and reprocessing.
    Finally to end off let me talk about the human 
infrastructure. Our success in addressing all of these 
challenges will ultimately be predicated on our ability to 
educate and train the next generation of nuclear scientists, 
engineers and nuclear related technicians. There's good news. 
Undergraduate enrollments continue to increase in several new 
programs.
    In my third figure I gave you essentially a little 
histogram of how we've grown substantially in nuclear 
engineering related fields, both at the undergraduate and 
graduate level and a growth in nuclear engineering departments 
around the country. A good half dozen have started in the last 
few years. However the Federal funding from a Federal funding 
standpoint, the last few years have been a period of 
significant uncertainty.
    DOE, in 2006, completely eliminated the Nuclear University 
Research Programs. Since that time Congress has added back 
funding in the Appropriations process and ultimately shifted a 
significant portion to the Nuclear Regulatory Commission. I 
parenthetically say that's primarily with the support of many 
of the members on this committee, including you Mr. Chairman.
    Last year DOE committed to allocate 20 percent of its R and 
D funding for work to be performed at universities. Most 
recently in the pending Omnibus Appropriations bill, the 
integrated university program structure has been created which 
provides DOE, NNSA and NRC to collaborate in funding both 
mission directed research, jointly coordinated programs that 
support the overall discipline as well as infrastructure such 
as research reactors. This--I really feel that Congress should 
continue this structure and support stable funding portfolio.
    So in closing let me just say that the programmatic 
building blocks already exist for a strong, relevant portfolio 
of research, investment in nuclear R and D. Congress should 
build on these existing programs in a stable, predictable 
manner and hopefully avoiding precipitous changes in funding. 
Ultimately no matter what one's position is on the issue, the 
fact is in my view and it's a strong view that nuclear energy 
will be a prominent fixture of our energy, environmental and 
national security activities for the foreseeable future.
    So I'm open to questions as you see fit.
    [The prepared testimony of Mr. Corradini follows:]

Prepared Statement of Michael L. Corradini, Chair, Nuclear Engineering 
      and Engineering Physics, University of Wisconsin, Madison WI
    Good morning, Mr. Chairman and members of the committee. Thank you 
for inviting me here today. I am currently chair of the Nuclear 
Engineering and Engineering Physics program at the University of 
Wisconsin, Madison. I am also involved in a number of national 
activities in nuclear energy for the National Academies, the Department 
of Energy and the Nuclear Regulatory Commission. In 2007, I was a 
member of the National Academies review of the DOE Office of Nuclear 
Energy and recommendations for future R&D activities in nuclear energy. 
Today, I would like to address the committee on this particular issue 
of nuclear energy R&D as well as human resources related to nuclear 
science & engineering.
    Growing energy demands, emerging concerns about carbon-dioxide 
emissions from fossil fuel combustion, and a sustained period of 
successful operation of the existing fleet of nuclear power plants have 
resulted in a renewal of interest in nuclear power in the United 
States. Clearly, nuclear energy can be an important component in 
addressing these issues. However, we must ensure that our nuclear R&D 
investments are aligned to the technological challenges associated with 
deploying new plants and developing a nuclear fuel cycle that is 
sustainable as well as proliferation-resistant.
    The Office of Nuclear Energy (NE) of the U.S. Department of Energy 
(DOE) has been the major agent of the government's responsibility for 
advancing nuclear power. One consequence of the renewed interest in 
nuclear power has been rapid growth in the NE research budget. NE R&D 
funding has increased from less than $5 million in Fiscal Year 1998 to 
almost $400 million in the pending FY 2009 Omnibus Appropriations Bill.
    In FY 2006 the President's Budget requested that funds be set aside 
for a study by the National Academy of Sciences to conduct a review of 
the Nuclear Energy research programs and budget, and to recommend 
priorities among the programs given the likelihood of constrained 
budget levels in the future. The programs to be evaluated were Nuclear 
Power 2010, the Generation IV reactor development program, the Nuclear 
Hydrogen Initiative, the Advanced Fuel Cycle Initiative (which 
temporarily evolved into the Global Nuclear Energy Partnership--GNEP), 
and the Idaho National Laboratory facilities program. I served as a 
member of this committee and I believe its recommendations are still 
very relevant in the prioritization and phasing of our future nuclear 
R&D investments.
                            np 2010 program
    The Nuclear Power 2010 (NP 2010) program was established by the 
U.S. Department of Energy (DOE) in 2002 to support the near term 
deployment of new nuclear plants. NP 2010 is a joint government--
industry 50/50 cost-shared effort with clear objectives. A good working 
relationship exists between DOE and industry. The selection of the 
projects funded is appropriately market driven and there is strong 
focus on demonstrating the regulatory processes, finalizing and 
standardizing the advanced reactor designs, and implementing the 2005 
EPACT standby support provisions, all of which are essential activities 
and have led to a large number of Combined License submittals to the 
NRC. Our committee concluded that successful completion of the NP 2010 
program should be the Office of Nuclear Energy's highest priority. DOE 
should also immediately initiate a cooperative project with industry to 
identify problems that experience shows can arise in actual 
construction and startup of new plants and define best practices for 
use by the industry.
    Recently, DOE has also begun to evaluate the need for a 
reinvigorated R&D program to improve the performance of existing 
nuclear plants. The NAS study supports such an R&D program in a cost-
shared effort separate from NP 2010.
                         generation iv program
    DOE has engaged other governments, in a wide-ranging effort for the 
development of advanced next generation nuclear energy systems, known 
collectively as ``Generation IV'' (or Gen IV). The goals of Gen IV are 
to widen the applications of nuclear energy; enhance the economics, 
safety and physical protection of new reactors; and improve the fuel 
cycle waste management capability and proliferation resistance in the 
coming decades.
    During the 2002 to 2005 time period, the Gen IV program's primary 
goal was to develop the Next Generation Nuclear Reactor (NGNP) focusing 
on high-temperature process heat and innovative approaches to produce 
energy products that might benefit the transportation and chemical 
industry, such as hydrogen. The current design focuses on a gas-cooled 
and graphite-moderated reactor. (Figure 1)*
---------------------------------------------------------------------------
    * Figures 1-3 have been retained in committee files.
---------------------------------------------------------------------------
    The NGNP program has well-established goals, decision points and 
technical alternatives. The 2005 EPACT identified two key decision NGNP 
points; licensing by the NRC and plant operation no later than 2021. A 
major risk in this program is that the current business plan does not 
match government funding. The program requires predictable and steady 
funding, and its goals and timetable should be in harmony with 
available funding.
    Our committee also recommend that NE sustain a balanced R&D 
portfolio in new Gen IV advanced reactor development concepts; e.g., 
funding and prioritization for grid-appropriate reactors (Fig. 2).
                advanced fuel cycle initiative and gnep
    Since 2002, the United States has been conducting a program of 
spent fuel reprocessing research and development in a program called 
the Advanced Fuel Cycle Initiative (AFCI). In March 2006, after the 
National Academies committee was established, DOE unveiled GNEP, a 
broad initiative intended to facilitate a worldwide expansion of 
nuclear energy while minimizing the risks of proliferation. GNEP would 
require the US to be an active participant in the community of nations 
that recycle fuel in order to meet the fuel and waste disposal needs of 
other ``user'' nations.
    Thus, the AFCI research program was absorbed in GNEP along with 
rapid deployment of commercial reprocessing, recycle facilities and 
fast reactors. The overall concept has many positive features, 
especially in the international arena. At a time when many countries 
are actively expanding their nuclear energy portfolio, there are strong 
energy and national security arguments for continued U.S. leadership in 
the field. However, the committee was not persuaded that the GNEP 
program was worth pursuing, as presented to the committee by DOE. We 
felt the program was premised on an accelerated deployment strategy, 
creating large technical and financial risk, and premature narrowing of 
technical options. Also, there was insufficient external input and 
independent peer review.
    Nonetheless, the committee believes that a program, similar to the 
original AFCI research program, is worth pursuing. Such a program 
should be paced by national needs, including economics, technological 
readiness, national security, energy security, and other factors. It 
should not include construction of large demonstration or commercial 
scale facilities. Rather, the committee recommended a more modest and 
longer term program of applied research and engineering effort 
including new research-scale experimental capabilities that reveal 
innovative approaches for fuels, materials, modeling, power systems and 
reprocessing.
       university nuclear science and engineering infrastructure
    Our success in addressing U.S. nuclear R&D challenges--whether its 
nuclear energy, nonproliferation, or detection-will ultimately be 
predicated on our ability to educate and train the next generation of 
nuclear scientist, engineers.
    There is good news--undergraduate enrollments continue to increase 
and several new programs have been created (Figure 3). However, from a 
federal funding standpoint, the last few years have been a period of 
significant uncertainty. In 2006, DOE proposed the complete elimination 
of nuclear university programs. Since that time, Congress has added 
back funding in the appropriations process (with the support of many 
members of this committee, including you, Mr. Chairman), and ultimately 
shifted a significant portion of the program to NRC. Last year, DOE 
committed to allocate 20 percent of its R&D funding for work to be 
performed at universities. Most recently, in the pending Omnibus 
Appropriations Bill, an Integrated University Program structure has 
been created, which provides DOE, NNSA, and NRC with funding to support 
both mission-directed research, and a jointly coordinated program that 
supports the overall discipline and infrastructure such as research 
reactors. The Omnibus language, combined with DOE's ``20% Solution,'' 
is a strong package of on-going stewardship. Congress should continue 
this structure, with stable funding portfolio.
                               oversight
    As a counterbalance to the short-term nature of the budget process, 
we also recommended that DOE adopt an oversight process for evaluating 
the adequacy of program plans, evaluating progress against these plans, 
and adjusting resource allocations as planned decision points are 
reached. The senior advisory body for NE was the Nuclear Energy 
Advisory Committee, and a modified committee seems the obvious starting 
point for reestablishing proper oversight; to ensure its independence, 
transparency, strategic issues.

    The Chairman. Thank you all very much for your excellent 
testimony. I'll ask a few here. I'm sure the others will as 
well.
    Dr. Crabtree, let me start with you. You talk in your 
testimony about this energy research frontier centers as a way 
to bring together industry and universities and national 
laboratories to address fundamental energy research hurdles. 
Could you describe what you think is needed there?
    I mean, we've got work, for example in the area of solid 
state lighting. We've got work going on I know at Sandia 
National Laboratory. I'm sure they're probably going on at 
other national laboratories as well and in universities.
    What more do you see that would be useful for us to do in 
that area or any of the other areas you're focused on here?
    Mr. Crabtree. So that's actually an excellent question and 
an excellent topic, solid state lighting. You may know that the 
incandescent light is 5 percent efficient, fluorescents are 20 
percent efficient and solid state lights can be 50 or even 70 
percent efficient. So the payback in terms of energy efficiency 
is huge.
    The--when you consider that 22 percent of electricity goes 
for lighting, you see that the amount is huge. The impact may 
be very, very large. The road blocks to solid state lighting 
are really to produce white solid state light.
    So we can already produce red solid state lights with 75 
percent efficiency. The trick is to make it white. To make it 
white you have to add three colors together, red, blue and 
green.
    So we have to develop the blue and the green solid state 
lighting. That's mainly a matter of adjusting the composition 
of semiconductors with up to, say, four or even five elements 
present to make the band gaps correct for emitting these red--
the blue and the green light. You have to do this without 
sacrificing the structural perfection and the electron mobility 
which leads to the high efficiency. So that's why it's such a 
difficult problem.
    But there are also engineering problems associated with 
that as well. You have to make a package in which all three of 
these semiconductor elements can be put in the same package and 
extract the light in the right ratios to make white light. Now 
that's a very practical engineering point of problem.
    So it's a challenge that really lends itself to basic 
materials research to understand the structure in band gaps. 
Also to engineering research to make the package that includes 
all three of these semiconductor elements and allows the light 
to come out. There's an industrial side, of course. You have to 
bring it to market.
    So the EFRCs in that example could combine these three 
sectors of research. So the basic research which could come 
from universities and national labs, engineering which could 
come from national labs and industry and industry to do the 
deployment to really solve the problem. It's within reach. The 
progress has been dramatic in the last 10 years. I think with 
continued effort it will certainly yield.
    The Chairman. Very good. Mr. Fri, let me ask you. As you 
point out you're involved in this current study which is being 
done about our energy needs, our energy challenges at the 
National Academy.
    Do you see that study as concluding significant changes in 
policy that we ought to consider adopting here in Congress or 
are these--is this just much more a prioritizing of funding 
areas or what do you see coming out of that study? We're in the 
awkward circumstance of getting ready to write an energy bill. 
In the process of trying to write an energy bill and not 
knowing whether or not it's going to be in sync with what the 
National Academy thinks ought to be happening in this area.
    Mr. Fri. Mr. Chairman, the study has two phases. The first 
phase is the one that is about--is in the final throws of being 
completed and made available. The first phase is what you might 
just call a truth telling phase.
    To look at all of the range of technologies, to understand 
on a comparable basis their cost performance and reasonable 
expectations for deployment over two time periods, a near term 
time period, the next 10 years or so and then a 10 or 15 year 
time period after that. So it provides, I think, a framework of 
reasonable expectations for technology around which a research 
program and a deployment program can be built. The key policy 
issues are meant to be addressed in the second phase of the 
study which so far as I know has not been fully put together 
yet.
    But the kinds of questions that the Congress may have are, 
in part at least, intended to be addressed.
    The Chairman. What is the timing on that second phase? When 
would that be completed?
    Mr. Fri. I don't think it's--I don't know is the answer to 
that question.
    The Chairman. Alright. We have a very impatient President. 
I just thought I'd mention that. I have noticed that, myself.
    Mr. Fri. We've noticed that.
    The Chairman. Yes.
    Mr. Fri. I know that Dr. Blair who is sitting behind me is 
very sensitive to the need for expedition in this regard. On 
the other hand those of us who've done this business for a long 
time also know that if you get some decent facts on the table 
and some careful analysis it will be always valuable. That's 
what the Academies are trying to do.
    The Chairman. I agree with that. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. Dr. Bartis and 
Professor Corradini, this is probably directed toward you. As 
we think about how we encourage young people to go into 
different fields and get them excited.
    It was encouraging to hear Secretary Chu say that there is 
a real level of enthusiasm for the jobs that are being created, 
the new green jobs. I think that the term he used was, you 
know, they're joining the service. That's great. It's 
important. It has to happen.
    But do you have concerns, whether it's in nuclear or 
whether the oil and gas industry that while the excitement to 
join, kind of, the energy of the future, the renewables, the 
greens, is going to leave nuclear behind? It's going to 
jeopardize our ability to get the clean coal technology, the 
carbon sequestration because it will be viewed as those dying 
fields or those areas where you've suggested Professor 
Corradini that university nuclear research programs are cutting 
back in there. If we're not sending the right signals from on 
high from the government that these are areas that we want to 
encourage our best and our brightest.
    We want our engineers to go there. Are we going to lose the 
energy, the enthusiasm in these particular areas? I know that 
when I was out a year or so in California looking at some wind 
turbine operations we were talking about well, is it difficult 
to recruit and retain?
    They said, well basically we're taking all the engineers 
from the petroleum engineers. I'm going up North and the folks 
up there are saying we can't get people to do the engineering 
work that we need here. Are we seeing this shifting and leaving 
behind in certain energy sectors?
    Mr. Corradini. Do you want to go first or do you want me? 
Ok. So, I'll give it a shot.
    I guess my--so a little history. I was actually in front of 
this committee in 2000 I think. I talked about actually the 
human infrastructure there about nuclear engineering.
    At the time all the numbers were about one fifth the size 
that I show you on the graph. In fact I actually went all the 
way back to that time period. So we've seen a tremendous 
growth, a factor of four or five in terms of enrollments in the 
discipline.
    But I think in some sense we're a leading indicator in that 
power engineering, energy engineering in general, has been at a 
very low ebb. We're seeing now growth in all areas. So I think 
that if the--and I'll--so that's observation one.
    Observation two is young people are really smart.
    Senator Murkowski. Yes.
    Mr. Corradini. They don't need me to tell them what to do. 
They ignore me most of the time when I'm in the classroom. So 
there's no point in--so I think that if signals are given and 
they are not thought through carefully, you could get a problem 
exactly as you've characterized.
    I do hope and if they listen a little bit, I try to explain 
to them the underlying fundamentals of physical sciences and 
engineering kind of cross boundaries. As well, if they're well 
trained and educated they can move with it. So that's part of 
the reason when you noted that some people hire here and they 
then shift over here, always occurs.
    But I do think that we have to be careful. That's the 
reason that I emphasize the need to continue without and I'll 
pardon the expression, in a herkey, jerkey, up and down, up and 
down that we continually support at a broad level all areas of 
energy engineering. So that's kind of a quick answer to your 
question.
    Senator Murkowski. I appreciate that. Dr. Bartis.
    Mr. Bartis. I think you have raised a very important point. 
First I'd like to just comment on your geosciences initiative. 
I think that's really a very appropriate direction.
    I've been very concerned over the last couple of decades 
about what's been going on in our mining schools. Safety is 
such an important aspect of mining. You really need people to 
be able to see the whole picture there in mining. So I think 
your geosciences initiative is going very much in the right 
direction. Of course that adds on to the importance of geologic 
sequestration, better petroleum recovery here at home.
    My overall view is that the Department of Energy hasn't 
given adequate funding and the right kind of funding to 
universities. I'm hoping that your committee could rectify 
this. I think the university funding levels have not been as 
high as they should be, especially from the technology 
development programs.
    They need to be investing in university research to make 
sure that they have that level of wisdom that they can call on. 
That level of expertise that they can call on because these 
programs generally do have problems. Other than that I think a 
good scientific education, a good engineering education does 
allow all of our students to have that flexibility to move 
during their careers to other fields of endeavor.
    I mean we can't predict the future. So it's that solid 
engineering and science background that's essential here. But 
again it takes Federal support.
    Senator Murkowski. Thank you.
    The Chairman. Senator Udall.
    Senator Udall. Thank you, Mr. Chairman. I do think the 
Senator from Alaska makes a very good point. It relates to the 
overall energy policy that I think the Chairman has proposed 
and advocated for as has the Senator from Alaska which is, we 
have to throw the kitchen sink at this.
    We need a comprehensive energy proposal. Somebody quipped 
to me, Mr. Chairman, that there's no silver bullet. Maybe 
there's a lot of silver buckshot and it includes renewables, 
includes efficiency, includes the traditional fossil fuel 
technologies. We have to do it all including nuclear as well.
    Dr. Crabtree if I might turn to you. You talked about some 
of the overarching challenges with next generation sustainable 
fuels. Many of these technologies work in the labs, but they're 
not economical on a larger scale.
    Beyond increasing the funding for such programs what are 
other policy actions that the Congress could take to encourage, 
not just the development, but the deployment of these 
technologies?
    Mr. Crabtree. So that's a very broad question because you 
have, certainly have to have before you're ready to deploy, you 
have to have a workable, sort of demonstrated and viable 
technology. I think the reason that a lot of the technologies 
haven't hit the target and been deployable is simply that they 
don't look economically attractive. That's a performance 
question.
    That performance question is--the solution to that 
performance question lies really in the materials and the 
chemistries of these sustainable energy technologies. So we've 
talked a lot actually about solar. It was mentioned earlier in 
this hearing that when Secretary Chu was here, that we need to 
get the cost down by a factor of 5.
    That's the thing that I think will induce the commercial 
side to invest and to deploy solar. Getting the cost down, but 
getting that cost down is really a scientific issue. We have to 
understand why semiconductors do what they do and what's 
limiting the efficiency.
    I just returned earlier this week from Japan, a meeting on 
innovative solar energy, photovoltaics. They're looking at 
efficiency as 50 percent or more, nothing less. That's the 
intended goal of their program. It's a 5-year program.
    That's the kind of innovation that is going to get the 
price down, cost of electricity down, solar electricity and 
make it deployable. So in my view the issues really are 
fundamental at the materials and chemistry level. We need to 
understand that and do those things better. The rest will come.
    It will be a sort of tipping point when it finally becomes 
competitive with let's say coal to electricity, it will happen. 
I'm not sure that it's wise to force it to happen before that 
time. We really should concentrate on the fundamentals.
    Senator Udall. Any other members of the panel care to 
comment. Particularly on sustainable fuels, alternative liquid 
fuels and what more we might do to encourage the development 
and deployment of these technologies. I've read increasingly 
that many scientists think this is where you may see 
developments that we can't even predict today, with all due 
respect to the exciting potential news about PV technology.
    But in the alternative liquid fuels arena we don't 
necessarily know what feed stocks might work. There's a lot 
going on. There are those who think this really could see 
developments that we can't forecast here today.
    Anybody else care to comment?
    Ms. Wince-Smith.
    Ms. Wince-Smith. I'll just add to the comments also on the 
deployment issues. You know in addition to refining and 
understanding some of the underlying science we really have to 
look at the whole risk/reward continuum of the investment both 
on the debt and equity side. The built in infrastructure that 
often acts as a barrier for the deployment of these new systems 
and the replacement cost.
    In the case of the liquid fuels area you know one of the 
other partners for collaboration was the Department of Energy. 
I think the new Secretary and the new Administration is going 
to really look at these activities in a systemic way is the 
Department of Defense. They're already working very 
aggressively to try and develop, you know, alternative liquid 
fuels for of course, military applications.
    The extent of which we can really mirror both the 
industrial as well as the defense as we've done in other very 
important game changing technologies that changed the world. 
That's another very, very critical path on deployment.
    Senator Udall. Others?
    Mr. Fri.
    Mr. Fri. The short answer is put a price on carbon. Not 
just because of the usual reasons. But the innovation process 
in this country is a messy, recursive process. It's not some 
sort of linear, start here and get there.
    So the way it works best is to get a lot of people working 
on it. The way you get a lot of people working on it is put a 
price out there that incents them to go work on it. I know 
that's a very difficult thing to do. But at the end of the day 
that's the thing that will really stimulate the innovation 
process.
    Senator Udall. Dr. Bartis.
    Mr. Bartis. I want to--I certainly agree with that, putting 
a price on carbon. Unfortunately the Department of Energy in 
its program has tried to narrow prematurely. I think you talked 
about the problem of narrowing prematurely its choices on 
biofuels.
    This is a program that should be--have a very broad scope. 
It needs to be looking at lots of different opportunities out 
there. The focus on cellulosic alcohol, it may be ready for 
some scale up, but it should not be done at the expense of all 
these other opportunities, these longer term, much higher pay 
off potentially, opportunities.
    The place to do that research is in the national labs and 
the universities. It's fairly basic stuff that has to be 
investigated.
    Senator Udall. Mr. Chairman, thank you. I think we may be 
coming to the end of the hearing. But if I might I'd like to 
direct some additional questions to the panel for the record on 
coal to liquid technology, on oil shale which Dr. Bartis you've 
written at great length. I think in a compelling and thoughtful 
and rational way.
    So thank you Mr. Chairman, for this important hearing.
    The Chairman. Alright. Thank you very much. I think Senator 
Murkowski had another question.
    Senator Murkowski. Just very quickly Ms. Wince-Smith. You 
mentioned just the investment and recognizing that the current 
investment markets are in pretty tough shape. I guess the 
question that I would have of you.
    Are we seeing the government become the main source of long 
term technology investment? Is this a good thing, a bad thing? 
Is it healthy? Is it sustainable? Does it hinder us in any way 
as we move forward on R and D?
    Ms. Wince-Smith. I certainly think that the government's 
primary role in supporting the underlying, basic research, the 
frontier research, through the applied continuum is very 
important. You know we've all worked so hard to get the 
American Competes Act that's just at the heart of that. But 
having said that, you know, as we move to really, for instance, 
be the place in the world that solves and commercializes some 
of these battery storage challenges that R and D barriers.
    We have to involve industry right there in the process. We 
have to have financing mechanisms that are sustainable and long 
term. Quite frankly a lot of people think that the venture 
capital world, you know, will be the place that will finance 
the startups that who knows where they will go.
    But the scale is so big that there has to be a way to pool 
these different investment sources together. One of the 
initiatives that the Council on Competitiveness pushed very 
early, it's in our Prioritize. We're very pleased it's being 
addressed by this committee and the Congress is the Clean 
Energy Bank.
    I mean, XM is still financing and accessing capital markets 
for United States products, innovative products, to be sold 
overseas. What about having those capabilities and resources 
and guarantees to deploy and develop them here in the United 
States as well? So I think the financing area with loan 
guarantees, debt networks, is a very, very critical area that 
will supplement and add to what the government's core role is 
in the basic applied and some of the demonstration products.
    You have to have both of those together.
    Senator Murkowski. I agree. Appreciate that statement.
    The Chairman. thank you all very much. I think it's been 
useful testimony. We appreciate it. That will conclude our 
hearing.
    [Whereupon, at 11:39 a.m. the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

      Response of Robert M. Fri to Question From Senator Bingaman
    Question 1a. Given that any new energy technologies that are 
developed must be accepted and adopted by an already well-established 
energy industry, what role should these industries play in public-
private R&D partnerships?
    Answer. The most efficient role for industry in public-private R&D 
partnerships depends on a variety of factors, such as the relative 
maturity of the technology on its path to widespread commercial 
viability, the unit scale of its likely ultimate deployment, or the 
accompanying maturity of so-called ``balance of system'' features 
necessary to demonstrate the technology at commercial scale. For 
example, it is less important for industry to be leading early stage 
investigations of fundamentally new areas of inquiry, e.g., novel solar 
cell concepts, such as high-efficiency organic and polymer solar cells 
or nano-particle devices (distributed junction solar cells) that use 
different nanostructures for solar conversion. But for technologies 
closer to commercial scale development, industry leadership is 
essential, such as in demonstrating at commercial scale carbon capture 
and sequestration or next generation nuclear power generation.
    Question 1b. For example, ARPA-E: Should these research teams be 
industry led? ''University led with significant industry input?
    Answer. If ARPA-E is to be true to its model-the ``old'' DARPA-the 
the leadership should be guided by the problem and the necessary 
expertise, which could be either industry or academic teams depending 
on the project. In introducing the idea in 2006 following the release 
of the Academy report, Rising Above the Gathering Storm, Steven Chu, 
who served on the Academy Committee that prepared the report, expressed 
the committee's view as ``ARPA-E could fund research at universities 
start-ups, established firms and national laboratories for similar 
focused goals. ARPA-E may be especially useful in funding projects 
whose success will require coordinated efforts from several fields of 
science. It would also meet the nation's need for transformational, 
high-risk, high payoff R&D that would be a challenge for today's 
electric utilities, petroleum companies, and large energy equipment 
manufacturers to address and which are not very attractive to the 
entrepreneurial world . . . Anyone could compete for funding from ARPA-
E including universities, industry, businesses, and national 
laboratories or ideally, a consortia of these organizations. Those 
managing the process would need to be very independent and not favor 
one group over another.''
    Question 1c. Within these partnerships, how do we balance 
industry's inherent need for short-term results with the longer 
timeframe often required to achieve scientific breakthroughs?
    Answer. ARPA-E is but one component in the portfolio of R&D 
mechanisms. ARPA-E is designed to focus on ``for transformational, 
high-risk, high payoff R&D'' that has been underserved by other 
government funding mechanisms. Yet results from ARPA-E could serve 
either short-or long-term R&D objectives.
     Responses of Robert M. Fri to Questions From Senator Murkowski
    Question 1. Congress tends to authorize a large number of programs, 
but we are not as successful in deauthorizing programs that are no 
longer needed, or are ineffective.
    As we are looking at doubling the authorization level for energy 
research and development programs, are there some programs that could 
be deauthorized?
    Answer. As technologies are commercially demonstrated the need for 
a government role becomes less and less important, but it is sometimes 
difficult to make the determination that government support is no 
longer needed. The clear signals are in the measurement of scale and 
scope of R&D progress and as demonstrated benefits become marginal and 
incremental it is time to move on. We have not assessed the current 
portfolio, but, as an example, one of the Academy reports I referred to 
in my testimony, Energy Research at DOE: Was It Worth It?, concluded 
that magnetohydrodynamic electricity production, a technology that was 
identified as a potentially efficient method for generating electricity 
from domestic coal, continued to be funded long after the technology 
was found to be too costly and complex for widespread use. A systematic 
review of the portfolio today along the lines of that report's analysis 
would likely yield similar examples.
    Question 2. As we work to grow our future energy workforce needs, I 
am reminded that multinational companies are global shoppers of talent-
there is no such thing as a monopoly on good ideas.
    What energy education and workforce development programs are there 
overseas that we might be able to emulate?
    Answer. Higher education in the United States, especially the 
graduate schools, remains generally the envy of the world. U.S. 
Technical training in trade schools and, of course, at K-12 level 
science and mathematics is not so envied and indeed lags other nations 
by a considerable margin. We have not analyzed the energy education and 
workforce programs in the U.S. and overseas per se, but there may be 
applicable lessons from more general analyses. I refer you to Academy 
studies such as Science Professionals:
    Master's Education for a Competitive World (2008), Policy 
Implications of International Graduate Students and Postdoctoral 
Scholars in the United States (2005), Enhancing the Community College 
Pathway to Engineering Careers (2005), or Preparing Chemists and 
Chemical Engineers for a Globally Oriented Workforce - A Workshop 
Report to the Chemical Sciences Roundtable (2004).
    Question 3. Yesterday, the National Association for Colleges and 
Employers reported that 66% of companies surveyed are either hiring 
fewer new college graduates in the Spring, or not hiring at all. The 
report also shows a 37% decline in hiring of professional services, 
which includes engineering. At the same time, large segments of the 
energy industry workforce are nearing retirement and will need to be 
replaced.
    What role should Congress and the Department of Energy play in 
highlighting energy workforce needs for college students?
    Answer. Many universities and colleges are reporting renewed 
student interest in energy-related disciplines by students. If the 
stimulus package reflected in the American Recovery and Reinvestment 
Act of 2009 is implemented successfully and expanded investments in 
energy technology research, development and deployment, as reflected in 
the FY09 appropriations bill just passed, take shape quickly, demand 
for skills in energy related fields will gain momentum relatively 
quickly as well. However, we are in the midst of a deep and likely 
prolonged recession and industry may be conservative in making 
decisions to build the skill base to implement those activities. As 
examples, Congress and the Department of Energy could play at least two 
roles in overcoming industry reluctance: (1) support for university 
programs that are tuned to the needs of industry, i.e., ``impedance 
matching'' the skills needed with the skills delivered by universities 
and (2) expansion of support for ``work study'' programs that build 
student relationships with industry as early as possible.
    Question 4. In the health care field, many medical students turn to 
a specialty practice rather than general healthcare, where there is a 
huge need, because overwhelming student loans require the higher pay 
found in specialty care.
    As we look to grow the energy workforce, does the burden of student 
loans move students toward one particular field over another?
    Answer. If you mean within energy fields, I'm not sure student 
loans alone would explain major shifts among fields, since other 
considerations would likely dominate, such as perceived job market 
considerations. Perhaps they have an effect on the margin. Nonetheless, 
in the current economic conditions the burden of student loans or, 
perhaps the lack thereof or of alternative sources of support, will 
likely contribute to the trends observed recently in student decisions 
among institutions, such as decisions less expensive public rather than 
private colleges and universities, which regionally could have an 
equivalent effect of selecting among fields. In graduate education, 
research assistantship support (perhaps sometimes combined with loans) 
is crucial for maintaining a healthy pipeline and if such support is 
plentiful in one field over another and job market conditions are 
similar, the market will, of course, favor the funded field.
    Question 5. We tend to live in society that expects and demands 
instantaneous results and action--from instant messaging and the 
internet, to being reachable electronically around the globe 24-hours a 
day, seven days a week. Yet most research and development takes years 
to achieve results and even then it may not be a marketable product.
    In today's economy, what are the challenges to demonstrating the 
long-term applicability and economic viability of energy research and 
development programs?
    Answer. I think the answer can be illustrated with the historical 
experience of the energy R&D portfolio. For example, I referred in my 
testimony to the Academy report, Energy Research at DOE: Was It Worth 
It?, which, in looking back as far as 1978, examined 17 DOE R&D 
programs in energy efficiency and 22 programs in fossil energy and 
found that those programs yielded economic returns of an estimated $40 
billion from an investment of $13 billion. Perhaps more importantly, 
however, the study found that a few key programs delivered benefits 
many times over the total amount invested, but that it was essentially 
impossible to predict a priori which part of the portfolio would yield 
the most important benefits. To demonstrate economic viability the 
portfolio must be held accountable for producing results. However, the 
challenge is striking the right balance between high risk and 
potentially high benefit options and options with lower risk but more 
likely more incremental benefit.
                                 ______
                                 
     Response of James T. Bartis to Question From Senator Bingaman
    Question 1. Given that any new energy technologies that are 
developed must be accepted and adopted by an already well-established 
energy industry, what role should these industries play in public-
private R&D partnerships?
    For example, ARPA-E: Should these research teams be industry led? 
University led with significant industry input?
    Within these partnerships, how do we balance industry's inherent 
need for short-term results with the longer timeframe often required to 
achieve scientific breakthroughs?
    Answer. If the objective of the effort is short term and directed 
at the development of a new product, such as a lower-cost PV panel, the 
effort should be industry led and include significant cost-sharing by 
industry. If the objective of the effort is to advance technical 
progress more broadly, combined teams involving universities, national 
laboratories, and industry are appropriate. In this case, it may be 
highly appropriate that the overall effort, or significant components 
of the effort, be university led.
    More generally, I recommend that all major energy research programs 
should be implemented through a process that involves broader 
participation of the public, the scientific and technical community, 
and industry. By this means, universities, national laboratories, non-
governmental organizations, and industry can collectively contribute to 
the formulation of research plans.
    The greater the level of industry cost-sharing, the greater will be 
industry's need for short term results. To promote industry 
participation in programs that involve longer-term efforts, I suggest 
that Congress reduce the requirements for industry cost-sharing.
    Responses of James T. Bartis to Questions From Senator Murkowski
    Question 1. Congress tends to authorize a large number of programs, 
but we are not as successful in deauthorizing programs that are no 
longer needed, or are ineffective.As we are looking at doubling the 
authorization level for energy research and development programs, are 
there some programs that could be deauthorized?
    Answer. This is an excellent question, and one that is too 
infrequently asked. I assume that the question concerns technology 
development efforts, as opposed to basic research. With that 
assumption, I suggest focusing on technologies that are well-
established in the private sector and where government efforts to 
introduce improved systems might weaken private initiative. For 
example, technology for enhanced petroleum recovery is well-established 
within the private sector. Unless the main purpose is carbon dioxide 
sequestration, I suggest low priority for technology development (but 
not basic/fundamental research) on this topic. Likewise, the private 
sector has extremely strong financial motivations to develop advanced 
batteries and is investing in this area. Portable computers and hybrid 
vehicles are two applications that clearly indicate the value of 
successful product development. Again, government-sponsored R&D should 
be limited to fundamental and basic studies; otherwise, the government 
will simply be de-motivating private investment. A third example might 
be wind energy systems. Considering the number of firms active in wind 
power development, sponsoring the development of an advanced wind 
system is likely to be counterproductive. More relevant would be 
research on advanced materials and fabrication systems.
    Question 2. As we work to grow our future energy workforce needs, I 
am reminded that multinational companies are global shoppers of 
talent--there is no such thing as a monopoly on good ideas.
    What energy education and workforce development programs are there 
overseas that we might be able to emulate?
    Answer. I am not familiar with this topic and regretfully am unable 
to provide you with an informed judgment on this question.
    Question 3. Yesterday, the National Association for Colleges and 
Employers reported that 66% of companies surveyed are either hiring 
fewer new college graduates in the Spring, or not hiring at all. The 
report also shows a 37% decline in hiring of professional services, 
which includes engineering. At the same time, large segments of the 
energy industry workforce are nearing retirement and will need to be 
replaced.
    What role should Congress and the Department of Energy play in 
highlighting energy workforce needs for college students?
    Answer. In my judgment, an important goal of a college education is 
to provide students with the flexibility to respond to future 
employment opportunities. The marketplace already provides clear 
signals--through hiring and compensation--as to where those 
opportunities are. Government efforts to promote college graduates to 
enter the energy workforce independent of these marketplace signals 
could lead to an oversupply and lower salaries, which would simply 
negate the intended benefits.
    That being said, there is a role for continued improvements in K-12 
education and, in particular, science and technology (S&T) education. 
Any efforts to improve S&T education should increase the potential 
labor pool for college-trained persons capable of entering the energy 
workforce.
    Question 4. In the health care field, many medical students turn to 
a specialty practice rather than general healthcare, where there is a 
huge need, because overwhelming student loans require the higher pay 
found in specialty care.
    As we look to grow the energy workforce, does the burden of student 
loans move students toward one particular field over another?
    Answer. This issue is outside my area of expertise. I have no basis 
by which I can provide you with an informed answer to the question.
    Question 5. You mentioned in your testimony that retrofitting 
existing plants with carbon capture technology represents a parasitic 
load on those plants. To replace that lost energy we will need to build 
more plants or burn more fuel. Certainly carbon capture technologies 
would not be deployed if there were a net increase in emissions but it 
does bring up the impact of plant efficiency.
    Could you comment on the relative benefits of research and 
development directed at improving plant efficiency overall and how that 
would compare to the expenditures needed for carbon capture and 
sequestration to have an equivalent impact?
    Answer. In my spoken remarks before the committee, I suggested that 
at least $2 billion per year over the next 10 years is required so that 
we can use fossil fuels for power generation at greatly reduced 
greenhouse gas emissions. While my highest priority is multiple early 
demonstrations of carbon dioxide sequestration in the United States, 
the funding for such demonstrations should represent well below half of 
the $20 billion minimum funding level that I suggested.
    In my judgment, the majority of these funds should be directed at 
developing advanced power-generation technology that enables both 
carbon dioxide capture and highly efficient power generation from new 
plants. Significant funding is also required to develop technology that 
might allow carbon dioxide capture from existing generating units.
    A number of older power plants operate at energy efficiencies in 
the 30 percent range. Technology is available to upgrade these plants. 
For example, if these plants are upgraded (or replaced) with plants 
operating at the current state of the art (about 40 percent for coal), 
fuel use and greenhouse gas emissions would decline by 25 percent.
    For three reasons, however, I do not recommend government support 
of research that would raise generating plant efficiency but not allow 
carbon capture. First, technology is already available for upgrading 
the efficiency of power plants. This upgrade technology is not being 
applied in the United States because the current economic benefits--
lower coal costs--of improving efficiency do not support the required 
investment costs. If Congress passes legislation that places a price on 
emitting carbon, power plant operators may opt for efficiency 
improvements. Second, a collateral consequence of progress in 
developing advanced power generation cycles for new plants will likely 
be efficiency-enhancing technology that might be retrofitted onto 
existing plants. Third, considering the magnitude of the reduction in 
greenhouse gas emissions that appears to be needed over the next 40 to 
50 years, a 25 percent reduction from power plants is not sufficient.
      Responses of James T. Bartis to Questions From Senator Udall
    Question 1. Two years ago you testified before this committee on 
the topic of oil shale development. In your statement, you said at the 
time, ``In my judgment, establishing a broad-based commercial leasing 
program within the next five years is not necessary and, in fact, may 
be detrimental to oil shale development.'' You also made the following 
recommendation:

          Rescind the requirement to establish final regulations for a 
        commercial leasing program within six months of completing the 
        programmatic EIS. As discussed above, within the next few 
        years, it is unlikely that adequate technical, economic, and 
        environmental information will be available to formulate fair 
        and equitable leasing regulations.

    Late last year the Bush Administration finalized a commercial 
leasing program, which has been criticized by many, including myself, 
for having a host of deficiencies.
    Has anything changed in the intervening two years to change your 
views as expressed in your statement of April, 2007?

    Answer. No. To the contrary, the actions by Department of the 
Interior over the past two years to establish a commercial leasing 
program have strengthened my conviction that insufficient information 
is available to formulate fair and equitable leasing regulations. In 
particular, the ``programmatic'' EIS published in September of 2008 
clearly illustrates how little information is available on the 
environmental performance of prospective technologies for commercial 
development of oil shale. Likewise, lack of information on the 
economics of prospective oil shale technologies resulted in rules for 
royalty rates and diligence requirements that do not take into account 
the public stake in the prudent development of oil shale resources.
    Rather than a ``commercial'' leasing program, I suggest 
consideration of an oil shale leasing program that is specifically 
designed to encourage private investment in advanced oil shale 
technology development and demonstration. I refer to this alternative 
as a ``pioneer'' oil shale leasing program, since it is directed at the 
small number of firms that are pioneering new and better (economically 
and environmentally) oil shale technology. The low-cost leasing of 
small parcels for RD& D can be viewed as one component of such a 
pioneer leasing program. But firms will not make the $100 million plus 
investments required for oil shale technology development and 
demonstration unless they are confident that success will reap rewards 
commensurate with the size and risks of investing in RD&D. Basically, 
they need to know that if they pass environmental muster, they will be 
able to build a pioneer commercial facility on public lands and pay 
fairly low royalty rates for the initial operating period of that 
commercial facility.
    Given the richness of the oil shale resources that are of greatest 
commercial interest, access to a fairly small amount of public land for 
a commercial operation may be more than adequate to incentivize private 
investment. Considering the risks of building pioneer production 
facilities and the vicissitudes of the world oil market, it may be 
appropriate for the Department of the Interior to be highly flexible 
regarding royalties, including the option of foregoing royalties for 
the first 10 or 15 operating years of a pioneer oil shale operation.
    These special considerations would be limited to the few pioneer 
facilities that might be candidates for commercial production over the 
next 10 to 15 years. The design and operating experience from these 
pioneer facilities would form the basis of formulating a broader-scale 
commercial leasing program that could be put in place in the 2020 to 
2025 timeframe.
    Question 2. Secretary Salazar last week announced that he was 
halting the Bush Administration's solicitation for a new round of oil 
shale research, development and demonstration (RD&D) leases. He also 
stated that he planned to offer a new round of solicitations after he 
had heard from the public and had an opportunity to review the program.
    In your statement two years ago, you suggested that, ``the federal 
government direct its efforts at a list of ``early actions'' listed in 
the RAND oil shale report, viewing those actions as priority measures 
for developing oil shale as a strategic resource for the United 
States.'' Your recommendations included additional research on the 
impact of oil shale development on climate change and our environment, 
as well as development of technology.
    Would you make the same suggestions to the Interior Department for 
its next round of RD&D leases, and would you add any issue areas that 
you think need to be explored before we venture off into a commercial 
development program?
    Answer. In my written testimony submitted on March 5, I repeated my 
recommendation that the government support research required to 
understand and mitigate or prevent the adverse impacts of oil shale 
development. I also highlighted the importance of research directed at 
establishing the information base required to prepare a federal leasing 
strategy. Since publication of the RAND report on oil shale development 
in 2005, it is my understanding that negligible, if any, federal R&D 
funding has been directed at these issues. While industry may be 
conducting important work in certain environmental areas, the public 
interest requires that non-interested researchers also be involved. 
Moreover, environmental issues that are critically important to a 
sustainable oil shale industry, as opposed to a single facility, are 
not being addressed. These include infrastructure requirements, water 
requirements and availability, potential air quality impacts, and 
disposition of greenhouse gases.
    A forthcoming round of RD&D leases provides the government with an 
opportunity to rectify the inadequate federal funding directed at 
protecting the public interest in oil shale development. Moreover, if 
demonstration facilities are built, they will provide an important 
opportunity for independent researchers to gather important 
environmental information such as how the subsurface environment 
responds to chemical and physical changes induced during in-situ 
retorting. To allow this research, the RD&D lease provisions should 
allow for the government to secure limited site access by independent 
researchers, along with provisions to protect company proprietary 
information.
    If a federally-sponsored oil shale research program is to be 
established, I recommend that the implementing agency take steps to 
assure broader participation in the formulation of research priorities 
and in the overall oversight of the program. Since the results of this 
research will weigh on future decisions regarding the governance of oil 
shale development, it is important that interested parties, especially 
the state of Colorado, local governments in the vicinity of the 
Piceance Basin, non-governmental organizations, and industry, be 
consulted.
    Question 3. I know you authored a RAND report on coal-to-liquid 
fuels last year. What are your thoughts on the water needs for CTL 
refineries and the limitations that might put on wide scale development 
of this technology?
    Answer. Water is an important issue for CTL development in the 
Mountain States, particularly Wyoming, Montana, Colorado, and New 
Mexico. For CTL production facilities built in locations with abundant 
water supplies, between 200 and 400 gallons of water will likely be 
consumed for each barrel of transportation fuel produced. CTL plants 
can be designed to use much less water, possibly as low as 65 gallons 
per barrel of fuel produced. Moreover, CTL plants might be able to use 
water sources that are unsuitable for other purposes, such as 
agriculture. But given the CTL design information that is publicly 
available, the cost implications of such low-water designs is highly 
uncertain.
    Overall, I anticipate that water limitations will not seriously 
impede CTL development in the Midwest and Appalachian regions. The 
extent that water limitations will impede CTL development in the 
Mountain States remains an open issue. Early commercial operating 
experience in CTL plants built in the Mountain States should provide 
important insights into this problem.
                                 ______
                                 
    Response of George W. Crabtree to Question From Senator Bingaman
    Chairman Bingaman, Ranking Member Murkowski, Senator Stabenow and 
members of the committee: thank you for the opportunity to respond to 
these questions concerning my testimony before the Senate Energy and 
Natural Resources Committee. Please find my responses below. I will be 
happy to supply more information on these or other questions at your 
convenience. I would appreciate your inserting your questions and my 
responses into the formal record.
    Question 1. Dr. Crabtree, in your testimony you support the 
formation of Energy Frontier Research Centers (EFRC's) that are focused 
towards making fundamental scientific breakthroughs to enable the 
development of competitive and sustainable energy technologies. We have 
seen several other proposals for `innovative' R&D models to enable the 
development of breakthrough technologies: ARPA-E, the Brookings 
proposal of Energy Discovery-Innovation Institutes, and, as I have just 
put forth--a Grand Challenges Research Initiative.
    What are your thoughts on the ability of each of these models to 
achieve the technological breakthroughs that we need? Do we need more 
than one of these models? How would you envision these models 
complementing one another?
    Answer. These are important questions and I will answer at some 
length. The energy, environmental and economic challenges we face can 
be captured by a few simple objectives: we must reduce our dependence 
on imported oil and other fossil fuels, reduce our carbon dioxide 
emissions to slow climate change, and create and export next generation 
sustainable energy technologies to grow our way out of the recession. 
The routes to achieving these objectives, however, are considerably 
richer and more diverse than the simple statement of the challenges 
suggests. The solutions include, for example, sequestering carbon 
dioxide in geologic formations, generating electricity in coal and 
nuclear power plants at twice their current efficiencies, producing 
power from renewable solar, wind and geothermal sources, replacing oil 
and gasoline with biofuels and solar chemical fuels, electrifying 
transportation through increased use of plug-in hybrids and battery 
electric vehicles, and replacing fossil fuels with hydrogen produced by 
splitting water renewably. Many of these more sustainable energy 
technologies require a 21st century electricity grid with the capacity, 
reliability and efficiency to move energy long distances, and efficient 
methods to store electrical energy to accommodate the intermittent 
production of wind and solar electricity.
    The roadblocks to these sustainable energy technologies are severe, 
otherwise they would have been solved by the significant resources 
already devoted to the applied energy sector. They cannot be overcome 
by incremental improvements of present energy technologies. 
Transformational change is needed if we are to reduce our dependence on 
imported oil and other fossil fuels and lower our carbon dioxide 
emissions sufficiently to slow climate change.
    Basic and Applied Science Challenges.--To achieve viability of 
sustainable energy technologies, transformational breakthroughs are 
needed at many points along the research and development chain. 
Serendipitous discovery of new phenomena has always played a key role 
in generating new technologies, by creating qualitatively new 
opportunities where none previously existed. The record-shattering 
discovery in 1986 of superconductivity at temperatures ten times higher 
than ever observed before is in this serendipitous category, allowing 
transformational change of the capacity, reliability, and efficiency of 
the electricity grid that have now been demonstrated and are beginning 
to be exploited.
    Equally important as serendipitous discovery is use-inspired basic 
research to understand and control known but unexplained phenomena, 
such as how plants use sunlight to transform water and carbon dioxide 
into fuel, or how catalysts increase the rates of targeted chemical 
reactions by factors of one million or more. Understanding these 
mysteries of nature requires the steady development of theoretical 
insights and observational tools, often at ultra small length and 
ultrafast time scales that are beyond the reach of the human eye and 
beyond our present capability. Once understood and controlled, these 
phenomena can be applied to create new energy technologies such as 
recycling waste carbon dioxide to produce fuel using sunlight, or 
transforming the high density energy of chemical bonds to useful 
electricity by electrochemical conversion without combustion.
    Understanding known phenomena like photosynthesis and catalysis for 
energy are challenges that respond to strategic scientific research. 
These two challenges, for example, have been examined by Basic Research 
Needs workshops convened by DOE's Office of Basic Energy Science 
(http://www.sc.doe.gov/bes/reports/list.html). The workshop reports on 
Solar Energy Utilization and on Catalysis for Energy outline the 
current status of each field, the scientific roadblocks to sustainable 
energy applications, and the promising research directions for 
overcoming the roadblocks. Understanding and controlling these 
phenomena are basic science challenges that will produce the necessary 
transformational energy technologies. Like other basic science 
challenges, they will be solved by creative, out-of-the-box thinking, 
bottom-up idea generation, and by following promising research 
directions wherever they lead.
    Beyond basic science challenges, there are a host of applied 
science and technology development challenges that also require 
transformational change to overcome. Unlike basic science challenges, 
these applied science challenges exploit phenomena that are largely 
understood, connecting them together to produce a complete energy 
chain, such as plug-in hybrid cars or wind farms to produce 
electricity. These are primarily engineering challenges, with the same 
richness, creativity and transformational potential as basic science. 
Unlike basic science challenges, however, applied science and 
technology development challenges respond to top-down management, a 
focus on performance, and on meeting pre-set milestones needed to make 
the technology viable.Energy Frontier Research Centers.--Because the 
transformational challenges needed for next generation energy 
technologies lie along the entire research and development spectrum, 
more than one kind of program is needed to meet them. Energy Frontier 
Research Centers (EFRCs) meet the basic science transformational 
challenges, overcoming roadblocks in understanding and controlling the 
basic phenomena of sustainable energy. EFRCs will operate as basic 
science research consortia at the $5M level, creating dream teams of 
the best scientists from multiple institutions to work in 
interdisciplinary collaboration using the most advanced tools and 
focused on the most critical and basic obstacles. EFRCs are designed to 
solve the scientific challenges in understanding and controlling the 
phenomena of sustainable energy. Despite the high impact of EFRCs in 
solving major scientific roadblocks to sustainable energy development, 
their cost is relatively small compared to the cost of applied energy 
programs.
    EFRCs offer an approach to basic science energy research that is 
tuned to the level of the challenge--bigger and broader than individual 
investigators but small enough to be scientifically nimble and 
responsive to new opportunities created by scientific discovery. Many 
of the challenges outlined by the twelve Basic Research Needs workshops 
and reports issued by the Office of Basic Energy Sciences require this 
level of effort. EFRCs provide interdisciplinary coordination among top 
scientists using resources from different institutions but do not add 
the layers of administration and management that technology development 
requires. Many of the most serious roadblocks to sustainable energy are 
knowledge based--we need to understand and control the fundamental 
phenomena of sustainable energy production, storage and use. EFRCs are 
designed to build the required knowledge base quickly.
    ARPA-E presents another model, locking onto specific high-risk 
high-payoff ideas that, if successful, will enable specific 
transformative changes in energy technologies. The concept of DARPA, on 
which ARPA-E is modeled, is to act quickly, usually within 18 months or 
3 years, to decide if a particular high risk idea is close enough to 
fruition to pay off in the near term. If not, the idea is dropped and 
attention is diverted to the next idea. The ARPA-E concept works well 
for ideas that face near term technical roadblocks that can be overcome 
in less than three years and that are not being considered seriously by 
industry because the risk is too high. ARPA-E would assume the risk 
and, if possible, bring these projects within industry's development 
horizon. The rapid development of specific transformational changes for 
sustainable energy through ARPA-E would build on the basic science 
foundation produced by EFRCs. The two programs are highly 
complementary.
    Energy Discovery Innovation Institutes.--The Brookings 
Institution's Energy Discovery Innovation Institutes offer a much 
grander vision (http://www.brookings.edu/reports/2009/
0209_energy_innovation_muro.aspx). The Brookings report takes the bold 
step of looking at the entire energy enterprise, not just within DOE 
but also across the national landscape, including all agencies of the 
government, research universities and industry. Many of their 
observations are on target: the problems of energy and climate are 
severe, long term, and require transformational change in our national 
way of doing business; solutions will be interdisciplinary across 
research fields and require coordination of science and engineering 
internal and external to DOE; an interagency approach is needed to 
coordinate energy research across the federal government; and the 
magnitude of the total investment in energy research from government 
and industry must increase significantly, by as much as a factor of 
four or five.
    While the Brookings analysis of the energy landscape frames many of 
the issues at an appropriately large scale, its plan for Energy 
Discovery Innovation Institutes requires much further study before it 
can be accepted for action. The largest institutes would be led by 
universities or national labs, but on strictly separate tracks--a 
feature that discourages, rather than encourages, close cooperation 
among these two pillars of energy research. The size of the largest 
Energy Discovery Innovation Institutes is recommended to be $200M/year, 
much larger than many other energy research organizations. Although a 
commitment of this size can be justified (as the Brookings report does 
well), the structure, management style, and scope of these institutes 
are much less well examined. A bottom up approach is needed for basic 
science, a top down approach for applied science and technology 
development. Experience shows that it is challenging--there may be no 
successful examples at this scale--to combine management, scientists 
and engineers embodying both world-class basic science and world-class 
applied science and technology development in one organization. We need 
to gain experience at managing basic and applied research in a single 
structure, such as with the Helios program at Berkeley, before 
launching much larger initiatives on all fronts.
    The Brookings study recommends NSF as the lead agency for the 
Energy Discovery Innovation Institutes, yet NSF has little experience 
at managing large projects and no intellectual foundation in energy 
research. DOE has the required management and oversight experience 
through its strategic network of scientific user facilities such as the 
Spallation Neutron Source, the four light sources, the Electron Beam 
Characterization Centers and the five Nanoscale Science Research 
Centers--over $800M/year in operations management--and it has a strong 
and unique intellectual foundation in energy through its series of 
twelve Basic Research Needs workshops and related reports issued since 
2002.
    At the scale envisioned in the Brookings report the Energy 
Discovery Innovation Institutes would be the dominant energy research 
organizations in the country. They would consume much more than all of 
the projected growth in federal spending on energy. To create a new 
structure of unprecedented size and scope to manage such a large 
investment that duplicates or supersedes much of the energy structure 
and intellectual momentum already in place is very likely to be unwise. 
We need to build on what we have, perhaps refining it to better meet 
the monumental challenges of energy, environment and economy that we 
now recognize; we should not duplicate, or worse, relegate to the side 
lines the present energy structure. Given the depth of the financial 
crisis, we need to make the best use of the resources we have, not 
create new ones that bring parallel and possibly competing strategic, 
administrative and funding structures into existence.
    Grand Challenges Research Initiative.--The Grand Challenges 
Research Initiative proposed in the draft legislation of the Senate 
Energy and Natural Resources Committee has many admirable features that 
could address the twin challenges of energy and environment. The draft 
legislation captures key elements needed for a successful program, 
including consortia addressing the grand scientific and energy 
challenges described in the twelve Basic Research Needs workshop and 
related reports issued by the Office of Basic Energy Sciences or in the 
Grand Challenges for Engineering report issued by the National Academy 
of Engineering, coordinating basic and applied science, and 
contributing to scientific understanding. There are, however, a few 
features of concern in the proposed initiative that are briefly 
mentioned below.
    Page 44, line 22 of the draft legislation refers to `` . . . the 
Challenges described in the Grand Challenges report of the Basic Energy 
Sciences Advisory Committee of the Department of Energy . . . ''. The 
Grand Challenges report is just one of twelve reports describing the 
basic science energy challenges. The text should be revised to 
specifically include ``the Basic Research Needs and Grand Challenges 
reports issued by the Office of Basic Energy Sciences.''
    Page 46, line 22 of the draft legislation refers to `` . . .  
assisting industry in overcoming the Grand Challenges described in 
subsection (c).'' Industry is an important component in developing new 
technologies, but the strong focus on industry leadership is too 
restrictive. Industry is generally too risk-averse to aggressively 
pursue solutions to grand energy challenges. Because most industry 
decisions are driven by obtaining financial gain in the short-term and 
capturing the exclusive use of the intellectual knowledge base they 
produce, they would not likely be interested in working on the big 
picture grand challenges. Most of the grand challenges blocking 
sustainable energy are so high risk, so generic and require such a 
long-term commitment that their payoffs are beyond industry's planning 
horizon. In many (even most) cases, the initiative and the leadership 
of tackling grand challenges should reside with the basic science 
partner, namely national laboratories and universities. Industrial 
participation may be a crucial element for eventual success, but 
requiring industrial leadership in all instances is likely to leave 
many of the grand challenges on the table and unaddressed by this 
program.
    Industry will lead when a solution to a grand challenge emerges as 
promising. Before reaching that point, the risk is too high and the 
guaranteed payoff too low for industry to take a leading role. The 
grand challenges described in the twelve BES Basic Research Needs 
workshop reports and many of those called out in the Committee's Grand 
Challenges Research Initiative are in the realm of basic science, and 
require dream teams of the most creative and energetic scientific 
talent to succeed. The leadership of these grand challenges should 
reside in basic research organizations including universities and 
national laboratories.
    Page 48, line 8 of the draft legislation states that ``The amount 
of an award provided to a consortium selected by the Secretary under 
this subtitle shall be not less than $50,000,000 for each fiscal 
year.'' A consortium funded at this level must have considerable 
administrative structure, diluting the research funds available to 
actually solve the grand challenges. This size is larger than most 
national laboratory divisions and university departments, and it would 
require the overhead costs and structures appropriate to a large 
organization, typically as much as 50% of the total funding. To be 
effective, such an organization would ordinarily require a building, an 
issue not addressed in the legislation. The legislation should address 
how the funding will be spent, whether it would create a stand-alone 
organization with administrative and physical structures, or whether it 
would leverage the administrative and physical structures of existing 
research organizations.
    At the proposed level of funding, $50,000,000 or more per 
consortia, the Grand Challenges Research Initiative would require 
adding several hundred million dollars to energy spending for promoting 
applications and technology deployment. The cost of this program, 
however, could diminish the basic science resources needed to solve the 
fundamental problems blocking sustainable energy development. 
Investments in the basic science of sustainable energy, through EFRCs 
and other mechanisms, must be enhanced if we are to produce a more 
sustainable energy landscape. The cost of the proposed legislation 
should not come at the expense of reducing the doubling of basic 
physical sciences funding laid out in the America COMPETES Act. For 
example, funding only six centers of the Grand Challenges Research 
Initiative at the minimum $50 million a year would require an 
additional $300 million a year--more than the proposed increase in the 
Office of Science budget and 7% of the Office of Science's total 
funding in FY08.
    Page 50, line 5 of the draft legislation seems to allow non-
competitive awards of $50M or more to consortia. If a non-competitive 
approach is intended, this approach is fraught with problems. It would 
not be in keeping with the transparency of the scientific enterprise, 
and experience shows that non-competitively awarded consortia typically 
perform well below the level of competitively awarded consortia. The 
non-competitive aspects of the legislation should be re-examined and 
excluded.
    Page 50, line 20 of the draft legislation seems to allow 
information produced under this funding to be embargoed from 
publication for five years. Such a restriction will severely limit the 
participation of academic and national laboratory scientists whose 
careers depend on publication of their research results in peer 
reviewed journals. This provision should be eliminated or severely 
revised to include specific protections of the right to publish in 
those consortia that are solving pre-competitive scientific grand 
challenges. Most of the grand challenges outlined in the twelve Basic 
Research Needs workshop reports fall in this category. The American 
public benefits when research discoveries are openly disseminated. This 
not only furthers a basic principle of the scientific enterprise of 
sharing information, but also greatly increases the likelihood that the 
research will be developed and commercialized.
  Responses of George W. Crabtree to Questions From Senator Murkowski
    Question 1. Congress tends to authorize a large number of programs, 
but we are not as successful in deauthorizing programs that are no 
longer needed, or are ineffective.
    As we are looking at doubling the authorization level for energy 
research and development programs, are there some programs that could 
be deauthorized?
    Answer. Peer review, the lifeblood of science, maintains the 
quality of the scientific enterprise. The scientific community 
rigorously reviews the scientific papers published in its journals. The 
more prestigious journals that carry highly cited papers and are the 
most important for career advancement impose the most severe reviewing 
requirements. This is evident in their rejection rates: Physical Review 
Letters, the pre-eminent physics journal, rejects 65% of the papers it 
receives, Nature and Science, interdisciplinary science journals, 
reject over 90% of the papers they receive.
    The standards of scientific peer review apply equally to research 
grants: rejection rates for Office of Science and NSF new proposals 
approach or exceed 90%. Initial grants in the $100 K range are 
scrutinized by up to eight reviewers, collaborative grants of $2-5M 
receive mail reviews and in-person site visits by teams of six to 
twelve reviewers. The full review process is repeated every three 
years, so that high performance must be maintained continuously or 
funding will be cut. Phasing out research grants is common, it is the 
primary mechanism by which new talent is brought into the scientific 
community. The scientific funding agencies are themselves regularly 
reviewed by ``Committees of Visitors'' whose task is to evaluate their 
performance in funding the highest quality proposals and phasing out 
those whose quality no longer meets the standard.
    Using the above procedures, the scientific community takes a pro-
active role in phasing out scientific programs that no longer meet the 
quality mark. Additional funding allocated to science and administered 
through competitive grants will normally maintain its quality and its 
usefulness indefinitely. Individual projects and principle 
investigators will change frequently to keep the funding focused on the 
frontier of research and to insure that only the highest quality 
projects are active.
    Question 2. As we work to grow our future energy workforce needs, I 
am reminded that multinational companies are global shoppers of 
talent--there is no such thing as a monopoly on good ideas.
    What energy education and workforce development programs are there 
overseas that we might be able to emulate?
    Answer. Other countries are not standing still. Europe and Asia 
have dramatically increased the quality and effectiveness of their 
science enterprises in the last two decades, to the point that the U.S. 
can no longer assume with confidence that it is the pre-eminent 
scientific leader in the world. Germany reorganized its national 
laboratory system under the new name Helmholtz Association in 2001, 
with national strategic planning and coordinated funding across all 
laboratories replacing the former fragmented and laboratory-centric 
system. In energy research, this has been a sweeping change, bringing 
coordination among basic and applied components and across formerly 
independent research laboratories, and review at the highest strategic 
levels by foreign scientists. The impact of the reorganization in 
preparing Germany to solve its energy challenges and market next 
generation energy technologies to the rest of the world (one of their 
stated strategic goals) has been significant. In implementing this 
reorganization, training of graduate students in national laboratory 
settings is a major new component.
    Japan is looking well beyond incremental advances in energy 
research to, for example, efficiencies greater than 50% in innovative 
multi-junction solar cells. Their program, launched in 2008 and called 
Solar Quest, coordinates four teams of scientists from three 
institutions with international collaborators to design and create the 
complex semiconductor materials and architectures that will deliver 
high efficiency solar electricity at competitive cost. This program is 
advanced basic science, well beyond the risk limit of industry but well 
within the reach of sophisticated materials science. This consortium 
will build on the new world record for solar cell efficiency 
established in January 2009 by the German Fraunhofer Institute of Solar 
Energy Systems, 41.1%.
    Workforce issues are critical to the future US competitiveness in 
science and technology, and especially in energy. Training the next 
generation of innovators in energy is key to our future national 
health. The response to the question below elaborates this theme.
    Question 3. Yesterday, the National Association for Colleges and 
Employers reported that 66% of companies surveyed are either hiring 
fewer new college graduates in the Spring, or not hiring at all. The 
report also shows a 37% decline in hiring of professional services, 
which includes engineering. At the same time, large segments of the 
energy industry workforce are nearing retirement and will need to be 
replaced.
    What role should Congress and the Department of Energy play in 
highlighting energy workforce needs for college students?
    Answer. The energy and environmental challenges have captured the 
imagination of students and early career scientists across many 
disciplines. For the last two years, the American Physical Society has 
held a one-day Energy Research Workshop on the Sunday before its March 
meeting, limited to 65 participants and presented by leading basic 
energy researchers. The response has been overwhelming--in each of the 
two years, the Workshop has been oversubscribed by a factor of two. The 
``energy'' at the workshop was palpable-lively and creative questions 
from the participants, intense informal exchanges among students and 
lecturers during breaks and at lunch and a buffet dinner. The same 
interest is seen at other major energy events, such as the MRS Energy 
Forum, a one-day event before the annual Spring meeting of the 
Materials Research Society in 2008. Over 300 participants filled a room 
designed for 150, mostly students and early career scientists, sitting 
on the floor in the aisles and along the walls.
    There is an overwhelming interest among students and early careers 
scientists in energy, an unusual situation that we as a nation can use 
to our strong advantage. Young scientists are eager to attack the 
energy and climate challenges, driven in part by the desire to use 
their scientific talents to solve societal problems. The best and the 
brightest of the students know that energy is the place to be, 
expecting career-building opportunities like those of information 
technology in the last two decades and nanoscience in the last ten 
years.
    We are not equipped to accept, guide and mentor this eager flood of 
budding energy research scientists. We need major new graduate 
fellowship programs, five year early career energy research awards, an 
organized program of regional and national symposia on energy to 
promote networking across traditional disciplinary boundaries for early 
career energy scientists, and a set of senior mentors to advise 
technically and professionally the coming generation of energy 
scientists. Their careers will be unlike any others, because energy 
requires much more interdisciplinary research than any other field. 
There is no ``department of energy'' in universities; instead energy is 
diffused over physics, chemistry, biology, materials, engineering, 
economics and sociology. We need to give the next generation of energy 
scientists a much broader base and much wider vision than we were 
given; we are not currently prepared to do this.
    The resources of the national labs, working collaboratively with 
university partners, offer a scale and dimension to energy workforce 
training that anticipates conditions in the larger community. These 
experiences for students, postdocs and early career scientists can be 
major components in their training.
    Consistent, sustained and balanced funding for research is critical 
for workforce development. Students who see faculty continuously 
stressed over funding will not be encouraged to proceed with energy 
research careers. Funding should support scientific research generally, 
rather than try to pick winners and losers. Funding bubbles that 
encourage a temporary overproduction of workers in a particular area 
are not helpful to the long-term needs of science, engineering or the 
economy.
    Question 4. In the health care field, many medical students turn to 
a specialty practice rather than general healthcare, where there is a 
huge need, because overwhelming student loans require the higher pay 
found in specialty care.
    As we look to grow the energy workforce, does the burden of student 
loans move students toward one particular field over another?
    Answer. Unlike in health care, graduate education in the physical 
sciences, biology and engineering is supported by fellowships that make 
it possible to earn a graduate degree without going heavily into debt. 
This removes some of the incentive to steer energy research careers to 
the highest paying areas. We should strive to maintain this positive 
feature of energy education.
    Question 5. I am struck by your note that the cost of imported oil 
at last summer's prices would be $700 billion/year. That's pretty close 
to what the President and Congress just spent on an economic stimulus 
plan. At a time when we are racking up record levels of debt that will 
be passed on to future generations, concern about spending fatigue 
needs to be kept in mind.
    The proposal before us would double energy research and development 
funding. Is this justifiable?
    Answer. Federal spending on energy research and development is far 
smaller than the stimulus bill or the cost of imported oil. In FY2007, 
the federal expenditure for energy research and development was 
approximately $2B\1\, 0.25% of the $787B spent on the stimulus bill in 
2009.
---------------------------------------------------------------------------
    \1\ Federal R&D Funding by Budget Function: 2007-09, NSF, http://
www.nsf.gov/statistics/nsf08315/
---------------------------------------------------------------------------
    Today's federal spending on energy R&D is one fifth of the 
expenditure on energy R&D of the early 1980s (in constant dollars). 
Including approximately $2.4B spent by industry on energy R&D, the 
total energy R&D spending is $4.4B, approximately 0.35% of the $1300B 
gross output of the energy sector in the U.S. By contrast, the health 
sector spends 2% of its gross output on health R&D, and agriculture 
spends 2.3% of its gross output on agricultural R&D. Across all 
sectors, R&D spending is 2.7% of GDP.
    Given the magnitude of the energy and environmental challenges and 
the transformational change needed to meet them, many experts in and 
out of government conclude that the U.S. is significantly underfunding 
energy R&D.\2\ Even a doubling would not bring energy R&D spending to 
near the average intensity of R&D spending for other sectors.
---------------------------------------------------------------------------
    \2\ International Energy Agency, ``Energy Technology Perspectives 
2008;'' President's Council of Advisors on Science and Technology 
(PCAST), ``The Energy Imperative: Technology and the Role of Emerging 
Companies'' (Washington: Executive Office of the President, 2006); 
National Academy of Engineering, Engineering Research and America's 
Future; National Academies, ``America's Energy Future: Technology 
Opportunities, Risks and Tradeoffs'' (Washington: National Academies 
Press, 2008).
---------------------------------------------------------------------------
    There is an important return on energy R&D expenditures that must 
be considered when we calculate the cost: the outcome of some of this 
spending is a reduction in the cost of imported oil. If energy R&D 
spending produces a 10% gain in the efficiency of automobiles (a goal 
that everyone, even auto manufacturers, agrees is within reach) we cut 
the cost of imported oil by $20B/year--$70B/year. The payback to the 
U.S. economy in one year is much more than the total cost of the R&D to 
achieve it.
    Innovation is what drives our economy. The only way to recovery 
from the economic downturn we currently face is to grow and innovate 
our way out of it. That requires investment in basic science, and now 
is the critical time to increase those investments. Other nations are 
investing in the development of energy technologies. If the US does not 
keep pace we will become the consumers of these foreign-developed and 
produced energy technologies instead of the sellers.
    Question 6. You describe in your testimony the magnitude of the 
energy R&D challenge before our country in terms of the Manhattan 
project or the Saturn program. I am glad to see that you also refer to 
an important barrier to adoption of new developments--economics. 
Economic competitiveness is a challenge that neither of these earlier 
programs faced.
    While we focus on the need for basic energy R&D what do we need to 
do to foster the engineering development needed to promote the 
commercial adoption of promising new discoveries? This wouldn't be a 
role of the DOE's energy frontier research centers would it?
    Answer. A primary strength of the U.S. economic system is its 
entrepreneurial nature. When new opportunities arise, entrepreneurs are 
quick to take the opportunity to market. The market for sustainable 
energy in the U.S. and the world is obvious, and the profit motive is 
as robust as ever. The bottleneck for entrepreneurial commercialization 
of sustainable energy is the fundamental science roadblocks to 
competitive performance. These roadblocks are not new, they have been 
known for years or, in some cases, decades. The fact that they have not 
been solved despite the resources and efforts of the entrepreneurial 
community shows that they require breakthroughs in understanding and 
control of complex materials and chemical phenomena that can only come 
from basic science. The required breakthroughs, and the promising basic 
science research directions to achieve them, have been outlined in the 
twelve Basic Research Needs workshops and reports organized by DOE's 
Office of Basic Energy Science. Once basic science provides the 
understanding and control of these phenomena, often using nanoscale 
techniques, entrepreneurs can translate the opportunities to the 
marketplace as competitive next generation energy technologies.
    This system worked well for Bill Gates and Steve Jobs, two towering 
entrepreneurial figures who capitalized on new ideas and opportunities 
enabled by faster, smaller, cheaper semiconductor electronics. Similar 
opportunities await on the sustainable energy frontier, as basic 
science develops the understanding and control of sustainable energy 
materials and chemical phenomena. Entrepreneurs need a new opportunity, 
the basic science of sustainable energy materials and chemistry 
provides the opportunity.
    Although Energy Frontier Research Centers are primarily oriented 
toward the basic science of sustainable energy, the proposals submitted 
include industrial participation, and in some cases leadership by 
industrial firms. This close connection of basic research and 
industrial development is key to rapid progress in sustainable energy 
technology. Industrial partners who participate in the basic research 
of materials and chemistry of sustainable energy will be in the best 
position to appreciate and exploit new opportunities before they become 
widely known. This bridging feature of EFRCs is a key link between 
basic and applied research for sustainable energy and an opportunity to 
pursue basic to applied translational research.
   Responses of George W. Crabtree to Questions From Senator Stabenow
    Question 1. Federal Collaboration.--The energy challenges facing my 
state of Michigan and others require everyone on deck--not just 
engineers and scientists but public policy experts, business leaders 
and economists. What steps would you recommend to link public policy 
and science at the federal government level? What initiatives could be 
shared among agencies--DOE, EPA, Department of Transportation, etc.--to 
best address the multiple energy challenges facing our country?
    Answer. Energy is a highly interdisciplinary enterprise, spanning 
not only science and technology, but also business, economics, 
sociology and public policy. An interagency approach is very 
appropriate, such as the existing interagency initiatives in 
nanoscience, high performance computing, and climate change. Such an 
approach will bring many of the major players together and get the most 
value from federal resources. It is important to engage the policy 
makers in the discussion as well, such as the Secretary of Energy, the 
White House coordinator for Energy and Climate Change, the President's 
Science Advisor, and the chairs of the President's Council of Advisors 
on Science and Technology.
    Question 2. Congressional Role.--Besides additional federal 
dollars, what is the single greatest action that Congress can take to 
stimulate additional energy R&D? What would be most effective in 
assisting regions, such as the Midwest, to transition to new industries 
built on alternative energy technology?
    Answer. Energy and carbon dioxide are monumental, long-term 
challenges that need participation from every sector of society-
government at all levels, industry, the science community, and 
citizens. The ``reaction time'' of the energy and climate systems is 
long, giving time for market forces to play a significant role if they 
can be properly motivated. The single biggest factor determining the 
course of energy and climate research and development is economics. One 
of the reasons we face such monumental problems today is that fossil 
fuels have always been relatively cheap and plentiful--there was no 
business or economic imperative to develop alternatives or to consider 
the cost of cleaning up their environmental and climatic impact.
    The same economic factors that created the present energy and 
environmental challenges can be turned to our advantage to help meet 
the challenges. Consumers of imported oil and other fossil fuels can be 
asked to pay the true cost of their use, reflecting not only the price 
set by supply and demand, but also the cost of developing sustainable 
alternatives, reducing their greenhouse gas emissions, and cleaning up 
the pollutants they release into the environment. The effect of raising 
the price of fossil fuels has been demonstrated twice, in the oil 
crises of 1980 and 2008. In each case, dramatically rising prices 
motivated us to use less and to seek lower cost alternatives. This 
dynamic operated effectively at all economic levels-businesses and 
consumers became creative proponents of finding alternative energy. 
Because the price of oil dropped following both crises, the financial 
incentives to develop alternatives disappeared, and we resumed business 
as usual with fossil fuels.
    Congress, however, can change the economic equation going forward. 
Finding a way to charge commercial and private consumers the true cost 
of fossil fuels gives us financial incentives to find sustainable 
alternatives. There are many ways to fold the true cost of fossil fuel 
use into their price, through taxes or a system of carbon cap and 
trade, for example. Finding the most societally acceptable way of 
charging the full cost of fossil fuel consumption is a complicated 
political and sociological task that is best achieved by Congressional 
negotiation.
                                 ______
                                 
 Responses of Deborah L. Wince-Smith to Questions From Senator Bingaman
    Question 1. Given that any new energy technologies that are 
developed must be accepted and adopted by an already well-established 
energy industry, what role should these industries play in public-
private R&D partnerships? For example, ARPA-E: Should these research 
teams be industry led? University led with significant industry input? 
Within these partnerships, how do we balance industry's inherent need 
for short-term results with the longer timeframe often required to 
achieve scientific breakthroughs?
    Answer. The Federal government must maintain its traditional role 
as the funder of long term basic research but the importance of public/
private sector partnerships is critical if the United States is to meet 
the twin challenges of energy security and sustainability. The 
Council's Energy Security, Innovation and Sustainability (ESIS) 
Initiative is grounded in the belief that the demand-side of the 
equation must be adequately addressed since government cannot and 
should not mandate new technology adoption. Industry is as a key 
reality check and commercializer of new ideas and needs to be at the 
table early in the process. But, industry can be a longer term thinker 
as demonstrated by the Department of Energy's INCITE program that 
grants industry access--on a peer reviewed basis--to the nation's 
greatest high performance computing capability in order to tackle some 
very fundamental scientific challenges.
    Question 2. Could you discuss what you see as the main reasons that 
the U.S. often invents but fails to capture the production of 
technologies like flat panel displays, photovoltaics, and advanced 
batteries?
    Answer. As I discussed in my testimony, the United States must be 
poised to deploy the new ideas and innovations that arise from our 
research enterprise. To do otherwise is to fail to capture value in the 
form of new jobs and new industries from the billions of tax dollars we 
spend each year on research. The oft-discussed valley of death--where 
funding dries up between basic research and commercialization--remains 
a significant challenge; as does the perception that we don't ``make 
anything'' in America anymore. Overcoming both these challenges means 
investing in our advanced manufacturing capacity as well as basic and 
applied research. The manufacturing processes of the 21st century--such 
as desktop and nano fabrication--are just as cutting edge as the 
research they seek to commercialize, but no less complicated or in need 
of study.
    The other point I would make is that the technology transfer 
process in our nations universities and labs remains spotty at best 
often suffering from too narrow a focus on licensing fees and/or 
patents. The technology transfer process must be viewed appropriately 
in its larger regional innovation context where success is measured by 
new companies, jobs increases to the tax base and overall regional 
economic growth.
    Question 3. Throughout your testimony you state that new public-
private partnerships are needed to translate our advances in energy R&D 
into a competitive manufacturing and economic advantage for the United 
States. Can you comment further on how these public-private 
partnerships might be structured? Should we establish and make 
available Manufacturing Science Centers at each of our National Labs 
that manufacturers could partner with to develop and test new processes 
and technologies?
    Answer. I am hesitant to suggest that a new research bureaucracy is 
necessary to overlay the current federal research enterprise. Rather, 
consistent with the recommendations included in the Council's 100-Day 
Energy Action Plan, Prioritize, I would urge the committee to explore 
better leveraging the federal research assets that currently exist by 
creating regionally-based R&D test-beds and large-scale commercial 
pilots for new energy technologies.
    Question 4. Could you comment on the role that both regulatory and 
tax policy can play in driving the establishment of new domestic 
manufacturing? For example, both Spain and Germany have become leaders 
in solar and wind technology production, respectively--a result that 
many believe stems from these countries' aggressive renewable energy 
production incentives.
    Answer. The Council put forward two recommendations in this area in 
its competitiveness agenda released last fall. The first argued that it 
is critical to put all energy sources on equal footing with respect to 
federal subsidies and regulatory treatment. Secondly, the Council 
proposed a series of tax changes to encourage corporate investment in 
the United States. These include: a reduction is the corporate tax 
rate; a short term allowance for repatriation of foreign earnings; and 
making the R&D tax credit permanent.
    Question 5. The Federal Government currently has several programs 
through NIST, DOE and SBA that aim to increase the competitiveness of 
U.S. manufacturers. How can we better leverage and integrate these 
programs to reach more manufacturers and enable them to develop high-
value manufacturing?
    Answer. The Council first addressed this issue in its Innovate 
America report in 2004 when we called for NIST to refocus its 
manufacturing work on 21st century advanced manufacturing opportunities 
rather than trying to perpetuate the jobs and industries that were not 
coming back. I would also reiterate my earlier point regarding better 
use of the federal government's HPC capabilities by a broader cross 
section of America's industries. Advanced being made in modeling and 
simulation will literally transform the way, and at what cost, 
innovations are brought to market.
    Question 6. In your testimony you make the point that our 
classification of what constitutes a manufacturing job is outdated. If 
we instead use your classification system, how do the manufacturing 
employment trends of the past 10 years change?
    Answer. As American firms restructured optimize for efficiency, 
manufacturing firms often outsourced (not off-shored) certain functions 
to specialty firms: contract research, design or engineering, logistics 
and distribution or marketing and branding. Once these jobs were 
performed outside the company, the jobs would typically be reclassified 
as service jobs--even though they support competitiveness in the 
manufacturing sector. Indeed, the fastest growing source of 
manufacturing revenues is in associated services that are tied to the 
product. Our position is that the current classification misses this 
synergy between production and services which is now at the heart of 
high-value manufacturing.
 Responses of Deborah L.Wince-Smith to Questions From Senator Murkowski
    Question 1. Congress tends to authorize a large number of programs, 
but we are not as successful in deauthorizing programs that are no 
longer needed, or are ineffective. As we are looking at doubling the 
authorization level for energy research and development programs, are 
there some programs that could be deauthorized?
    Answer. The Council has not proposed the specific elimination of 
any programs, though as discussed in my testimony, the federal 
government must do a better job of leveraging the research assets it 
has.
    Question 2. As we work to grow our future energy workforce needs, I 
am reminded that multinational companies are global shoppers of 
talent--there is no such thing as a monopoly on good ideas. What energy 
education and workforce development programs are there overseas that we 
might be able to emulate?
    Answer. I am not personally aware of any such programs.
    Question 3. Yesterday, the National Association for Colleges and 
Employers reported that 66% of companies surveyed are either hiring 
fewer new college graduates in the Spring, or not hiring at all. The 
report also shows a 37% decline in hiring of professional services, 
which includes engineering. At the same time, large segments of the 
energy industry workforce are nearing retirement and will need to be 
replaced. What role should Congress and the Department of Energy play 
in highlighting energy workforce needs for college students?
    Answer. The Council's 100 Day Energy Action Plan calls for:

   The Secretary of Labor to create a $300 million ``Clean 
        Energy Workforce Readiness Program,'' augmented by state and 
        private sector funding, to foster partnerships between the 
        energy industry, universities, community colleges, workforce 
        boards, technical schools, labor unions and the U.S. military 
        to attract, train and retain the full range of skilled workers 
        for America's clean energy industries.
   All federal agencies to commit 1 percent of their R&D 
        budgets to competitive, portable undergraduate and graduate 
        fellowships in energy-related disciplines for American 
        students.
   The Secretary of Labor to assess, classify and widely 
        publicize the demand-driven needs for energy-related 
        occupations and align federal workforce investment programs and 
        state-directed resources to support skills training and career 
        path development in energy fields for American citizens.

    Question 4. In the health care field, many medical students turn to 
a specialty practice rather than general healthcare, where there is a 
huge need, because overwhelming student loans require the higher pay 
found in specialty care. As we look to grow the energy workforce, does 
the burden of student loans move students toward one particular field 
over another?
    Answer. The Council's research confirms both the tremendous need 
and opportunity in the energy field for skilled, technically trained 
workers. Importantly, many of these high paying jobs do not require a 
4-year college degree, so the debt burden could be significantly less. 
What is critical is for States, regions, businesses, academic 
institutions and labor unions to be better coordinated in matching the 
workforce needs of a region to the available education and training.
 Responses of Deborah L. Wince-Smith to Questions From Senator Stabenow
    Question 1. Federal Collaboration.--The energy challenges facing my 
state of Michigan and others require everyone on deck--not just 
engineers and scientists but public policy experts, business leaders 
and economists. What steps would you recommend to link public policy 
and science at the federal government level? What initiatives could be 
shared among agencies--DOE, EPA, Department of Transportation, etc.--to 
best address the multiple energy challenges facing our country?
    Answer. As stated in my testimony, the one federal research asset 
that is currently underutilized as a drive of economic growth, cuts 
across departments and agencies and is almost the sole purview of the 
United States is our high performance computing capacity. If we are 
going to address some of the great scientific challenges facing the 
public and private sectors in the energy and climate change arenas, HPC 
must be brought to bear and diffused further into our economy.
    Question 2. Congressional Role.--Besides additional federal 
dollars, what is the single greatest action that Congress can take to 
stimulate additional energy R&D? What would be most effective in 
assisting regions, such as the Midwest, to transition to new industries 
built on alternative energy technology?
    Answer. The single greatest action beyond additional investment in 
research and development is to recognize that this is not enough by 
itself. The Council's 100-Day Energy Action plan includes several 
recommendations to achieve energy security and sustainability through 
the creation of new industries, new innovations and new jobs. Rather 
than repeat them here, I would note that the full report was included 
in the hearing record and can be found at www.compete.org.
                                 ______
                                 
   Response of Michael L. Corradini to Question From Senator Bingaman
    Question 1a. Given that any new energy technologies that are 
developed must be accepted and adopted by an already well-established 
energy industry, what role should these industries play in public-
private R&D partnerships?
    Answer. A team approach in any new energy technology development is 
crucial. New technologies are being developed by innovative 
individuals, whether at universities or companies, all the time. From 
my perspective, the technologies that are successful in taking a new 
science/engineering concept and being able to translate them into a new 
product and/or process is always a team-effort. I would expect 
established industries to be part of a team but not necessarily lead a 
team. I am not sure that I have answered your question adequately, but 
let me give you some examples (case studies) that show success and 
failure of new science/technologies for energy and environmental 
issues:

   Molten Metal Technology (early 1990's)--waste remediation
   Virent (early 2000's)--bioenergy
   NuScale (2007)--modular nuclear power plants

    Question 1b. For example, ARPA-E: Should these research teams be 
industry led? University led with significant industry input?
    Answer. Consistent with my comments above, I would allow either 
industry or universities to lead a team and let the team of top-notch, 
smart and motivated individuals develop the proposals. These motivated, 
energetic folks would form themselves in a small business startup and 
they would take the risks. I would encourage ARPA-E to be a modified 
version of a public Venture Capital company investing in new energy 
technologies based on their ability to deliver a new product or process 
in a time-scale that is longer (5+yrs compared to 2-3yrs) than private 
venture capital companies (like Kosla Ventures or Vulcan Corp or 
Vinrock Inc). But I would not change the historically successful model 
where individuals form a team based on their own skills and ideas and 
the team then makes the proposals to the ARPA-E model. I am not an 
expert in these sort of business arrangements, but I would be quite 
willing to get you in touch with those that are at VC firms and or 
successful small companies.
    Question 1c. Within these partnerships, how do we balance 
industry's inherent need for short-term results with the longer 
timeframe often required to achieve scientific breakthroughs?
    Answer. I completely agree with your vision, that timescale is the 
important determinant. I firmly believe that ARPA-E should be focused 
on shorter-term goals (?5yrs). The normal R&D funding from the DOE 
Office of Science would handle the longer term research with scientific 
discoveries. Given the Bayh-Dole act of 1980, the discoveries from such 
research has a natural avenue to create new businesses.
                                 ______
                                 
 Responses of Michael L. Corradini to Questions From Senator Murkowski
    Question 1. Congress tends to authorize a large number of programs, 
but we are not as successful in deauthorizing programs that are no 
longer needed, or are ineffective.
    As we are looking at doubling the authorization level for energy 
research and development programs, are there some programs that could 
be deauthorized?
    Answer. I cannot argue with the idea that certain programs should 
have a sunset clause or be ``deauthorized''. However, Energy R&D has 
been so severely underfunded for the last two decades, I would have a 
hard time giving you immediate examples. This lack of investment has 
caused the energy infrastructure to deteriorate and we are suffering 
for it now and will for many years. Nuclear Energy R&D is a good 
example of this point, and only in recent years has this changed. With 
this disclaimer, let me point out that the reorientation of the GNEP 
program, back to what it was in 2005, to a more stable and steady R&D 
effort is a useful effort.
    Question 2. As we work to grow our future energy workforce needs, I 
am reminded that multinational companies are global shoppers of 
talent--there is no such thing as a monopoly on good ideas.
    What energy education and workforce development programs are there 
overseas that we might be able to emulate?
    Answer. Let me address this question with nuclear science and 
engineering as the theme. The Japanese have been very aggressive in 
reviewing and reorienting their nuclear science and engineering 
programs. The name of the effort is GoNERI and Prof. Y. Oka has been a 
real force in reorganizing their educational efforts. That is one good 
example. Another example can be found in France, where the CEA is 
sponsoring masters programs to bring young people back into the field 
from other disciplines.
    Question 3. Yesterday, the National Association for Colleges and 
Employers reported that 66% of companies surveyed are either hiring 
fewer new college graduates in the Spring, or not hiring at all. The 
report also shows a 37% decline in hiring of professional services, 
which includes engineering. At the same time, large segments of the 
energy industry workforce are nearing retirement and will need to be 
replaced.
    What role should Congress and the Department of Energy play in 
highlighting energy workforce needs for college students?
    Answer. I have just completed testimony at the Nuclear Regulatory 
Commission (NRC) about this particular topic and would be happy to send 
you my presentation. The short answer is that the NRC inherited the 
former DOE program and their approach to developing the human 
infrastructure for nuclear is excellent. John Gutteridge, formerly at 
DOE, has developed this program. Because of this success, the DOE is 
now working with the NRC and the NNSA to develop a comprehensive 
effort. This would be a good model for other energy fields.
    Question 4. In the health care field, many medical students turn to 
a specialty practice rather than general healthcare, where there is a 
huge need, because overwhelming student loans require the higher pay 
found in specialty care.
    As we look to grow the energy workforce, does the burden of student 
loans move students toward one particular field over another?
    Answer. No, I have not seen this to be the case.
    Question 5. I am glad to hear that you believe pursuing advanced 
fuel cycle research is worth pursuing, particularly since the 
administration has already announced its intention to abandon our 
current spent fuel management strategy. I am concerned though that 
spent fuel recycling is often described in terms of long term R&D. In 
the past we have seen R&D funding for nuclear technology dwindle to 
nothing, as it did during the Clinton administration.
    What is the best way to ensure a consistent level of fuel cycle R&D 
over what may be several administrations so that we don't find 
ourselves without alternatives twenty years from now?
    Answer. This is a very difficult question and is more policy than 
technology. Continuing fuel-cycle R&D is an easier part of this issue, 
in the sense that the more we can learn from R&D the more technology 
options we can provide to policy-makers in the future. I think the 
harder question is what institutional structure can be created that 
would provide stable stewardship of fuel-cycle R&D, spent fuel storage, 
recycle, and eventual disposal of some part of the material (something 
will have to be geologically disposed of). In my view there is nothing 
wrong with Yucca Mountain as a disposal site for high-level waste, but 
there is also no rush. This Institutional structure should be the focus 
of a ``Blue-Ribbon Panel''.
                                 ______
                                 
    Responses of Hon. Steven Chu to Questions From Senator Bingaman
    Question 1. Given that any new energy technologies that are 
developed must be accepted and adopted by an already well-established 
energy industry, what role should these industries play in public-
private R&D partnerships?
    For example, ARPA-E: Should these research teams be industry led? 
University led with significant industry input?
    Within these partnerships, how do we balance industry's inherent 
need for short-term results with the longer timeframe often required to 
achieve scientific breakthroughs?
    Answer. Public-private R&D partnerships are critical tools to 
increase industry engagement in activities that spur energy technology 
innovation and the development of entire new industries. The Department 
engages with industrial partners through a variety of programs that 
focus on different points in the life cycle of technology development, 
recognizing that different industrial partners have different needs and 
varying tolerances for the risk associated with scientific research.
    One example of public-private R&D partnerships occurs through the 
Office of Science's Bioenergy Research Centers (BRCs), which provide a 
variety of mechanisms for industrial entities to advise and collaborate 
in the Centers' research projects. Two of the three BRCs are led by DOE 
national laboratories. All of the BRCs have industry representatives on 
their advisory boards; all are cultivating close relations with 
industry; and two of the three have industrial partners that actually 
collaborate in the fundamental research.
    Another example occurs through the Office of Energy Efficiency and 
Renewable Energy's Photovoltaic Technology Incubator program, which has 
awarded funding to a range of small-to-medium sized firms to promote 
the development of a diverse set of laboratory-proven photovoltaic 
technologies that target a variety of markets, including residential, 
commercial, and utility power generation.
    Finally, the Office of Fossil Energy's Plains CO2 
Reduction (PCOR) Partnership, one of seven regional technology 
demonstration partnerships under the Regional Carbon Sequestration 
Partnership Program, has brought together more than 80 eighty state, 
federal, industrial, and non-profit entities to perform test injections 
of carbon dioxide in lignite coal seams in North Dakota. Numerous other 
Fossil Energy programs have successfully partnered with industry and 
academia on public-private R&D, such as the Advanced Turbine Systems 
program, which developed advanced, higher efficiency combustion 
turbines, and the Solid State Energy Conversion Alliance (SECA) 
program. This focuses industry teams and core technology program 
participants on developing low-cost solid state fuel cells.
    These examples illustrate a variety of mechanisms to promote 
public-private R&D partnerships in energy-relevant technologies and 
highlight some of the key roles our national laboratories continue to 
play in these types of programs. Our laboratories also play a 
significant role in private-public R&D partnerships through their 
technology transfer activities with industry, such as cooperative 
research and development agreements, reimbursable work for the private 
sector, and licensing of laboratory developed technology. The 
laboratories can also offer to the public-private partnership model 
their knowledge and experience in conducting longer-term research 
programs focused on providing scientific breakthroughs.
    The Department recognizes that industry is also critical to the 
success of ARPA-E. At this early stage in its development, ARPA-E can 
be expected to establish teams led by any of the important R&D 
sectors--academia, industry, federally funded entities, and other not-
for-profit entities. The Department is not imposing rigid structures on 
ARPA-E partnerships, preferring instead to allow flexibility in the 
formation of the partnerships and then follow the progress of varying 
models closely.
    Question 2. How do you intend to execute the contracts that will be 
required to be put in place, or modified, to implement the American 
Recovery and Reinvestment Act? How will you plan on obtaining the 
necessary staffing to implement these increased funds?
    Answer. The Recovery Act requires agencies to follow government-
wide procurement laws and regulations for awarding contracts under 
which Recovery Act funding will be obligated unless otherwise 
authorized by statute. Accordingly, the Department will follow all 
applicable legal, regulatory and policy requirements governing the 
award and administration of contracts and modifications of contracts 
that will be funded with Recovery Act appropriations. Additionally, the 
Recovery Act prescribes new requirements that necessitate the inclusion 
of special terms and conditions in contracts to ensure added 
transparency, reporting, administrative controls and oversight. Pending 
the issuance of final government-wide guidance and rulemakings, 
including new or amending Federal Acquisition Regulations provisions, 
the Department has developed and issued interim terms and conditions 
for use in contracts to ensure proper implementation of Recovery Act 
requirements. In addition, each Departmental program has developed 
contract-specific execution strategies to ensure the expeditious and 
proper obligation of funds consistent with the requirements and 
objectives of the Recovery Act.
    With respect to ensuring that appropriate and qualified staff are 
in place to properly obligate and administer Recovery Act funds, the 
Department is pursuing both short-term and long-term strategies. 
Consistent with the objectives of the Recovery Act to expedite the 
obligation of funds, the Department is utilizing its existing 
acquisition workforce, including leveraging contracting and program 
personnel that support programs that are not directly impacted by the 
Act, as well as existing information technology systems that will speed 
the solicitation, evaluation, and award of contracts. As necessary and 
appropriate, the Department also intends to supplement its existing 
acquisition workforce with temporary contractor support. To ensure that 
appropriate Federal personnel are in place to manage and oversee the 
expenditure of Recovery Act funding, the Department has identified 
essential staffing needs, in both acquisition and program. The 
Department is pursuing filling those needs through expedited hiring 
strategies and approaches, including direct-hire authority, the 
Department of Veterans Affairs' Veterans and Disability Program, and 
the Reemployed Annuitant program.
    Responses of Hon. Steven Chu to Questions From Senator Murkowski
    Question 1. Congress tends to authorize a large number of programs, 
but we are not as successful in deauthorizing programs that are no 
longer needed, or are ineffective.
    As we are looking at doubling the authorization level for energy 
research and development programs, are there some programs that could 
be deauthorized?
    Answer. The Department of Energy implements and oversees a wide 
range of programs in every stage of energy research and development 
(R&D) as well as in energy technology deployment, demonstration, and 
technology transfer phases. While the current priority is the 
expeditious and responsible disbursement of funds made available by the 
American Recovery and Reinvestment Act, the Department will continue to 
review existing programs to determine both their effectiveness in 
achieving desired objectives and their efficient use of taxpayer money.
    Question 2. As we work to grow our future energy workforce needs, I 
am reminded that multinational companies are global shoppers of 
talent--there is no such thing as a monopoly on good ideas.
    What energy education and workforce development programs are there 
overseas that we might be able to emulate?
    Answer. We certainly must be open to learning from the world's best 
practices in developing our future workforce. Working closely with the 
National Science Foundation and others, the Department's Office of 
Science's Workforce Development for Teachers and Scientists (WDTS) 
program is responsible for providing a continuum of opportunities to 
our students and teachers of science, technology, engineering and 
mathematics. As part of their work, they monitor and interact with 
programs around the world including participation in the international 
Lindau Nobel Laureates meeting, which annually attracts 600 of the best 
graduate students and 30 Nobel Laureates to a week long meeting in 
Germany. This year will focus on climate change and renewable energy. 
WDTS also works with other DOE offices, including EERE, to monitor 
international programs and model exemplary programs from overseas.
    Question 3. Yesterday the National Association of Colleges and 
Employers reported that 66% of companies surveyed are either hiring 
fewer new college graduates in the Spring, or not hiring at all. The 
report also shows a 37% decline in hiring of professional services, 
which includes engineering. At the same time, large segments of energy 
industry workforce are nearing retirement and will need to be replaced.
    What role should Congress and the Department of Energy play in 
highlighting energy workforce needs for college students?
    Answer. The Department of Energy (DOE) is committed to meeting its 
workforce needs in energy careers for college students through 
recruitment programs tailored at the entry-levels. The Student Career 
Experience Program (SCEP), Student Temporary Employment Program (STEP) 
and the Federal Career Intern Programs (FCIP) are some of our programs 
offering students exposure and hands-on experience in science and 
technology.
    While some of these students will clearly move on to energy 
careers, the main missions of the Department of Energy are focused on 
energy and science research and development activities, nuclear 
security and environmental cleanup. Inasmuch as the research awards 
assist colleges and universities in the education and training of our 
next generation of energy workers, the Department of Energy stays 
within its mission and contributes to this workforce growth.
    In the health care field, many medical students turn to a specialty 
practice rather than general healthcare, where there is a huge need, 
because overwhelming student loans, require the higher pay found in 
specialty care.
    Question 4. As we look to grow the energy workforce, does the 
burden of student loans move students toward one particular field over 
another?
    Answer. The Department is not expert in education related matters, 
but has not observed any such trend in energy-related fields. That 
said, the Department does use recruitment incentives and student loan 
repayment flexibilities when appropriate to attract candidates by 
helping to minimize their financial burdens. For example, while 
engineers, physicists, computer scientists, and mathematicians made up 
18 percent of DOE's Federal employee hires last year, this group 
accounted for nearly 30 percent of the Department's recruitment 
incentives. As the Federal workforce continues to age, we expect to 
continue the use of human capital flexibilities like recruitment and 
retention incentives and student loan repayment to attract and retain 
America's best and brightest scientific professionals.
    Question 5. Shortly following the release of the FY2010 Budget Blue 
Print, your DOE press office put out a statement which said ``the new 
administration is starting the process of finding a better solution for 
management of our nuclear waste''. I am happy to hear this since the 
administration has been unambiguous in its oppositions to the current 
solution in the form of Yucca Mountain.
    Since the language we are considering today includes increased 
authorizations for nuclear energy R&D, which includes the Advanced Fuel 
Cycle Initiative, do you agree that there is a need to increase fuel 
cycle R&D to support this process?
    For the record, can you provide a more detailed description of the 
process the administration plans to follow? What other agencies may be 
involved and what is the timeline?
    Answer. The President has highlighted the need to address the key 
issues of security of nuclear fuel and waste, waste storage, and 
proliferation. To this end, the Department will continue to work with 
the Department of State, the National Security Council, the 
Environmental Protection Agency, and Congress to resolve technical and 
policy issues associated with proliferation-resistant technologies.
    Question 6. The legislation we are considering today provides top 
level authorizations for broad ranges of R&D programs in nuclear, 
fossil, and renewable energy and fundamental science. In your testimony 
you also list a number of clean energy technology examples in need of 
transformational research.
    Can you be more specific regarding what transformational research 
would be needed in these different areas and how increased R&D funding 
would be used?
    Answer. The Department needs transformational research to bring a 
range of clean energy technologies to the point where the private 
sector can pick them up. Some examples include:

   Automobile batteries with two times the energy density of 
        today's Lithium-ion batteries, that can be recharged in 
        minutes, that can survive 15 years of deep discharges, and that 
        cost one-third as much as current devices;
   Transportation fuels generated in a biorefinery from biomass 
        feedstock like forest wastes, crop wastes, municipal solid 
        wastes, algae, and non-food energy crops. In addition, 
        transformational technologies are needed to reduce the cost of 
        higher-value bioproducts that can replace petrochemicals in the 
        chemicals and materials markets;
   Photovoltaic solar power that has installed costs of one-
        third as much as today's technology;
   Advanced materials for building shells (walls, windows, 
        roofs) and advanced equipment for lighting and heating and 
        cooling, together with computer-controlled design and 
        operations tools for commercial and residential buildings to 
        enable reductions in energy consumption of up to 80 percent and 
        lower costs of ownership; such technologies, together with 
        onsite power generation using renewable energy sources like 
        photovoltaics, will truly provide net-zero energy buildings;
    Large scale energy storage systems that will allow 
        utilities to accept high levels of variable renewable energy 
        sources such as wind and solar power, with an incremental cost 
        of just $0.01/kWh to $0.02/kWh

    This is not a definitive list, or a hard set of technology goals, 
but it gives a sense of the types of technologies and benchmarks for 
which DOE should be aiming. The Department will need transformational 
research to attain these breakthrough goals. DOE must re-energize its 
national laboratories as centers of great science and innovation and at 
the same time must reach out to universities, our Federal partners, and 
other research entities for collaboration and innovation wherever it 
may be.
    Transformational research will also be needed to make carbon 
capture and sequestration safe, cost-effective, and secure for hundreds 
of years. One area of immediate importance is research into potential 
technology breakthroughs for carbon capture from the existing fleet of 
power plants which will be critical in meeting any greenhouse gas 
stabilization scenario.
    Question 7. As you know, Congress expanded the Renewable Fuel 
Standard to 36 billion gallons in 2007. A submandate of 16 billion 
gallons was put in place for cellulosic biofuels, starting with 100 
million gallons in Calendar Year 2010. To encourage the development of 
these fuels, we've appropriated funds for a wide range of research and 
development programs, including the Bioenergy Research Centers you 
mentioned in your testimony. But even with those commitments, most 
agree there is almost no chance that the submandate for cellulosic 
biofuels will be met when it kicks in next year.
    Do you believe the biofuels R&D programs we have in place are 
adequate, given the volume of biofuels Congress mandated in 2007? In 
terms of both supply and demand, are the targets set by Congress 
achievable and realistic? Are there any further actions that you would 
recommend to facilitate the transition from corn-based ethanol to next 
generation biofuels?
    Answer. Cellulosic biofuels technologies involve the creation of an 
entirely new industry that will produce liquid transportation fuels. As 
you know, cellulosic processes must be competitive in a high volume and 
highly volatile fuel market. Several factors have led to unanticipated 
reductions in the near-term pace of growth of the cellulosic ethanol 
industry, including the economic recession, severe oil price drops, and 
the reduction of credit available to investors who wish to invest in 
these technologies. The Department believes that meeting the 2010 
cellulosic biofuel target set by the 2007 Energy Independence and 
Security Act (EISA) will be challenging. However, EISA does provide 
Environmental Protection Agency (EPA) authority to adjust the 
cellulosic targets.
    The Department shares your concern that the U.S. needs to 
transition from corn-based ethanol to next-generation biofuels. That is 
why the DOE Office of Science's Bioenergy Research Centers are 
performing fundamental research on next-generation bioenergy crops to 
provide the transformational breakthroughs that can contribute towards 
more efficient cellulosic biofuel production and development of other 
advanced cellulosic biofuels. Moreover, DOE deployment projects focus 
mostly on cellulosic or other non-food feedstocks to produce advanced 
biofuels. The DOE Biomass Program has developed public-private 
partnerships to share the risk of deploying first-of-a-kind cellulosic 
biorefineries to produce biofuels. Cellulosic biofuels facilities are 
also eligible to apply for loan guarantees under DOE's Title XVII 
program.
    Question 8. During your confirmation you expressed your support for 
nuclear energy and the administration has stated that nuclear energy 
will be ``part of the mix''. Yet, in the list of clean energy 
technologies you describe in your testimony there is no example of 
nuclear energy. Also, in the 2010 budget there is little mention of 
nuclear energy outside the reduction in Yucca Mountain funding.
    What assurance can you or the administration provide that nuclear 
energy will actually receive equitable benefit from increased R&D 
funding relative to other clean energy technologies?
    Answer. Nuclear power currently supplies nearly 20 percent of the 
Nation's electricity and approximately 70 percent of its greenhouse 
gas-free electricity. It is unlikely that the U.S. can meet its 
aggressive climate goals if nuclear power is eliminated as an option, 
but as industry moves forward with expansion, the federal government 
must continue to address the key issues of security of nuclear fuel and 
waste, waste storage, and proliferation. These priorities are supported 
in the administration's FY 2010 budget overview, released February 26, 
and will be described further in the forthcoming detailed Congressional 
budget request.
    Question 9. You mentioned in your statement that you have spent 
much of your career in research labs--and I particularly noted you 
mentioned your time as a student.
    In your opinion, throughout your career in the energy arena--from 
student to Secretary of Energy, has the government kept up in helping 
to attract students to the energy sector? What could we be doing 
better?
    Answer. Attracting bright students and inspiring them to devote a 
career to tackling our most challenging energy and climate needs are 
matters of great importance to me. Energy security and climate 
sustainability are priorities not only for the United States but indeed 
for the entire global community. For the United States to meet these 
challenges and achieve the transformational breakthroughs needed, a 
large, highly focused, highly trained technical workforce must be 
developed.
    Government has achieved some successes in attracting talented 
students to the energy sector. DOE programs support undergraduate 
researchers, graduate students working toward doctoral degrees, and 
post-doctoral researchers. The R&D workforce developed by DOE and its 
national laboratories provides scientific talent in areas of 
fundamental and applied research and also provides talent for a wide 
variety of private technical and industrial sectors. In addition, the 
DOE scientific user facilities provide outstanding hands-on research 
experience to many young scientists. Thousands of students and post-
doctoral investigators conduct experiments at DOE-supported facilities 
each year.
    And, building on our achievements, we see this as a time of 
increased opportunity. DOE programs complement the changing demands of 
the energy workforce through their support of career-intern programs, 
research and development opportunities, scholarships, and support for 
post-doctoral associates to continue to help them develop advanced 
research and management skills. The Department utilizes a variety of 
intern programs to attract students to professional and scientific 
careers in government. The Federal Career Intern Program, Presidential 
Management Fellows Program, Student Career Experience Program, Student 
Temporary Employment Program, Student Partnership Program, and DOE 
Scholars program all provide professional development to students while 
allowing us to build our workforce pipeline. Workforce pipeline 
development and talent acquisition strategies are effective when 
government has the right people with the right tools to facilitate that 
pipeline.
    Energy is not an area of fleeting relevance. It will continue to be 
essential to our economy, our national security, and our environment 
for decades to come. There is huge growth potential in clean, 
renewable, sustainable energy as our Nation seeks to overcome 
dependence on foreign oil and reduce carbon emissions by improved 
conservation measures and the commercial expansion of renewable 
technologies. We cannot afford for this potential to be limited by a 
labor shortage; however, experience has shown that students are well 
aware of the areas where their greatest employment potential lies and 
gravitate to those fields. Having an ample workforce with diverse 
technical skills is critical to an effective transition in the energy 
sector, and the ongoing leadership of the Administration can help 
signal that these areas are high potential for new graduates.
    Question 10. I applaud the Administration's support for graduate 
fellowship programs that will train students in energy-related fields 
in the FY2010 budget request. But in order to have successful graduate 
programs, there needs to be a pipeline of students interested in 
energy-related fields starting in high school and on through 
undergraduate programs.
    What support will there be for these programs in the FY2010 budget?
    Answer. Every year the Department of Energy engages in a variety of 
capacity building programs in an effort to maintain the strength and 
vitality of the Department's workforce pipeline beginning at the high 
school level. In FY 2010, the Department will continue its efforts to 
attract both high school and undergraduate participation. DOE has 
supported the development and expansion of high school outreach and 
pipeline programs for many years. Approximately 91 percent of the 
participants in our science, technology, engineering and mathematics 
(STEM) related outreach and education programs belong to the K-12 
demographic. One of the Department's leading STEM programs is the 
National Science Bowl, which DOE has sponsored since 1991. This program 
is designed to encourage high school students to excel in science and 
math, and was expanded in 2002 to include a separate national 
competition for middle school students.
    Recognizing the growing diversity of our Nation coupled with the 
underutilization of some key segments of the population, DOE has 
designed programs to ensure that under-represented high school students 
have access to DOE facilities and information. For example, DOE 
partnered with non-profit organizations to sponsor a series of seven 
Hispanic Youth Symposia across the country. While encouraging students 
to pursue higher levels of education, these symposia showcase the 
importance of STEM education, research, and careers with DOE while 
supporting the Executive Order on Education Excellence for the 
Advancement of Hispanic Americans.
    At the collegiate level, DOE supports the National Solar Decathlon 
and will continue to work in programs that enhance the President's 
vision on clean energy and reduced dependence on foreign oil. DOE is 
committed to providing opportunities for college students and recent 
graduates to experience R&D firsthand through fellowships, internships 
and entry-level hiring programs. DOE currently has 38 Presidential 
Management Fellows, 166 Federal Career Intern Program interns, and 141 
Student Career Experience Program interns hired at the entry-level, 
which provide opportunities for conversion to permanent career 
positions. DOE also has 277 Student Temporary Employment Program 
interns currently on board and is funding 70 DOE Scholars. These are in 
addition to the regular cadre of student summer interns which DOE 
sponsors annually. This short-term summer intern program provides 
participants both a salary to help them stay in school and real hands-
on experience with careers in the Federal Government.
    The Department's FY 2010 budget supports graduate fellowship 
programs that will train students in energy-related fields. In the 
energy sector, recruitment needs to increase three to fourfold in the 
years ahead, both to meet increasing demand and also to replace an 
aging current workforce. The FY 2010 budget support transformational 
research to re-energize our national laboratories as centers of great 
science and innovation.
    Responses of Hon. Steven Chu to Questions From Senator Stabenow
                              r&d spending
    Question 1. The Recovery Bill in February included $2.5 billion for 
Energy Efficiency and Renewable Energy R&D. What are the 
Administration's priorities for rolling out grant applications and new 
program regulations to fulfill the vision of our Recovery bill R&D 
priorities? We are enthusiastic about the opportunities--Michigan we 
will be among those first in line to receive such grants, given our 
strong research and manufacturing capacity, and our commitment work to 
connect researchers, entrepreneurs and industry to bring about a 
strong, green economy.
    Answer. The Department of Energy's Office of Energy Efficiency and 
Renewable Energy (EERE) is working to develop projects as directed by 
the Recovery Act. These projects are being closely reviewed to ensure 
that they meet the priorities of the Act, the energy priorities of the 
Administration, as well as requirements for integrity and transparency.
    The Department understands the need to issue Recovery Act funds 
quickly and will be making announcements on R&D funding opportunities 
that span the energy efficiency and renewable energy industries.
      expedited deployment of advanced manufacturing technologies
    Question 2. Large turbine component manufacturing is done on the 
same tooling machinery that was in use in the 1960's. What can DOE do 
to help insure that advanced manufacturing technologies that will speed 
production and lower cost are deployed as soon as possible in the U.S.? 
For large competitive solicitations that are forthcoming from the DOE, 
such as the grants that will be available for battery manufacturing, 
how has the DOE prepared (in terms of staffing and operational support) 
to respond to the solicitations, and what is the expected turnaround 
time for agreements to be announced? Also, under the new processes DOE 
has developed, how quickly will contracts to be finalized once 
agreements are announced?
    Answer. The Department of Energy (DOE) is partnering with the 
Department of Commerce to ensure that resources and capabilities 
available to both agencies are best targeted to support rapid expansion 
of the U.S. wind energy technology supply chain, including support for 
development and deployment of advanced manufacturing technologies. 
While this partnership is just beginning, DOE is currently supporting 
an advanced manufacturing project for wind blades in collaboration with 
the state of Iowa. DOE has also received a number of applications for 
industry projects in wind technology manufacturing advances through a 
solicitation that closed on March 5 and expects to announce selections 
in early May. DOE will continue to provide technical expertise and 
resources as available to contribute to expanding and speeding 
production, retooling for needed industrial capabilities, and lowering 
the cost of U.S. wind energy technology manufacturing to keep pace with 
the rapidly growing markets for renewable energy.
    DOE is assessing staffing and operational support needs. Additional 
Federal staff and appropriate support personnel will be acquired to 
enable the department to solicit, evaluate, and award agreements for 
battery manufacturing. The department has and will continue to issue 
vacancy announcements to acquire necessary Federal staff, reassign 
existing federal staff from lower priority activities on a limited 
basis where possible, and hire support personnel through existing 
support contracts. For instance, the Advanced Battery Manufacturing 
solicitation was released March 19, 2009 and will be open for 60 days. 
The Department expects contracts to be awarded (finalized) by September 
30, 2009.
    Question 3. Efforts of States. As a general matter, how does the 
Department view states' efforts to collaborate with potential 
applicants, and will the use of state dollars as non-federal match 
provide any preference as the Department awards funding under the 
Recovery Act?
    Answer. Cost share requirements vary based on particular 
solicitations, and applicants' leveraging of Federal funds is highly 
encouraged. Direct funding for States is primarily through formula 
grants. DOE provides guidance to States that focuses on the principles 
that should guide their project planning, including encouraging States 
to support programs and projects that will provide substantial, 
sustainable and measurable energy savings and that will have job 
creation and economic stimulus effects and to give priority to programs 
and projects that leverage Federal funds with other public and private 
resources.
     Response of Hon. Steven Chu to Question From Senator Barrasso
    Question 1. What is the Department of Energy's long-term plan to 
extend the operation and production of the Rocky Mountain Oilfield 
Testing Center and ensure its continued success as a research and 
education resource?
    Answer. DOE expects production to continue to naturally decline 
because NPR-3 is largely comprised of stripper wells--wells whose 
production has slowed to 10 barrels a day or less. The President must 
authorize continued production every three years, and production is 
currently authorized until April 2012. For FY2010, production 
activities will continue at NPR-3, while testing activities proceed at 
the Rocky Mountain Oilfield Testing Center (RMOTC). DOE is studying 
options concerning RMOTC once NPR-3 production operations are no longer 
economically feasible, including options for becoming a self-sustaining 
user facility.
     Responses of Hon. Steven Chu to Questions From Senator Shaheen
               recovery act weatherization implementation
    Question 1. Continuing with my question from the hearing regarding 
the Weatherization program and the funding included in the economic 
recovery bill, can you tell me what steps the DOE is taking to ensure 
states make best use of these weatherization monies? We have twin goals 
of getting this money into our economy quickly while at the same time 
achievable the important goal of weatherizing homes and reducing energy 
costs for consumers. What guidance are you or will you be giving states 
to help guide them through this process? Would the DOE be willing to 
hold workshops in various regions, like the Northeast, to bring 
together stakeholders to trouble shoot, problem solve and talk through 
these issues?
    Answer. The Department of Energy (DOE) has made it a priority to 
make the funds under the Recovery Act available to the weatherization 
grantees as quickly as possible, while making the use of funds 
transparent and accountable. DOE published the Funding Opportunity 
Announcement (FOA) which contains program guidance regarding the use of 
these funds and its programmatic goals to all grantees. This FOA and 
Guidance can be read in its entirety at http://apps1.eere.energy.gov/
wip/pdfs/wap_recovery_act_foa.pdf
    DOE is taking a number of actions to ensure effective use of the 
funds. First, DOE is increasing the level and scope of the evaluation 
of state plans submitted as part of the application for funds. Plans 
must demonstrate that states and local weatherization agencies have 
identified and have satisfactorily planned to meet the need to increase 
the number of workers, equipment, auditors, trainers and supervisors. 
Second, DOE intends to obligate the Recovery Act funds based on a stage 
gate system with progress reviews as follows:

   10% of total allocation at time of initial award
   40% of total allocation upon DOE approval of a State Plan 
        (due within 60 days after FOA issuance)
   Balance of total allocation (20% to 30% at a time) based on 
        DOE review of progress of the states in obligating the funds, 
        complying with all reporting requirements, and creating jobs. 
        If progress reviews reveal deficiencies, such as funds not 
        disbursed, jobs not created, insufficient technical monitoring, 
        or failure to meet reporting requirements, DOE reserves the 
        right to place a hold on current balances and withhold further 
        funding until deficiencies are corrected.

    Third, DOE will increase the frequency of monitoring and oversight 
of the states and local weatherization agencies, including announced 
and unannounced visits. The DOE/Energy Efficiency and Renewable Energy 
Project Management Center offices in Morgantown, West Virginia and 
Golden, Colorado field staff are assigned to conduct oversight 
monitoring of state operations. These offices will bring on additional 
support to ensure that monitoring will be conducted on a timely and 
thorough basis.
    DOE headquarters and field management staff conduct weekly 
conference calls to address ramp up, obstacles to achieving goals, 
funding, and accountability. The 2009 National Training Conference, 
scheduled for July 21-23, will work to ensure that the weatherization 
network is trained to meet the programmatic goals established under the 
Recovery Act. DOE is considering holding regional workshops or using 
any other mechanisms to spot and solve problems and discuss issues as 
they arise.
                recovery act weatherization funding cap
    Question 2a. We raised the statutory cap in the Recovery bill from 
a maximum of $2,500 worth of weatherization improvements on a single 
home to $6,500. Can you please clarify for me, does the cap apply to an 
average of homes or a single home?
    Answer. The cap applies across all homes weatherized in the state, 
not to individual homes.
    Question 2b. In my conversations with the New Hampshire Community 
Action Association, which actually implements New Hampshire's 
weatherization money, they are concerned that $6,500 may not be enough 
and are advocating for a $10,000 cap on each home. The thinking goes, 
rather than making relatively modest weatherization improvements to 
many homes, with a $10,000 cap, they could actually fully weatherize a 
lot of homes. Do you have any thoughts on changing the cap to a higher 
level?
    Answer. The Recovery Act, by statute, changed the program's maximum 
average cost per unit from $2,500 to $6,500. Any subsequent changes 
would have to be made through statute. Investments in homes are made on 
the basis of a cost effectiveness assessment under which the most cost 
effective measures are performed first. Each incremental measure is 
less cost effective than those that precede it.
    Question 2c. In addition, is the DOE considering giving some 
flexibility to state agencies, like the New Hampshire Community Action 
Association, in administering these dollars and what is prioritized 
when improving these homes? More flexibility may help expedite the 
expenditure of these funds and help get the money into our economy more 
quickly, a key goal of the Recovery bill.
    Answer. DOE encourages innovation in program implementation within 
the statutory and regulatory framework. Proposed new approaches should 
be fully described in the plan that the State submits to allow DOE to 
make a thorough and considered review to assess the impact on quality 
control, cost effectiveness and other critical program requirements.
    Question 3. Of the six Gen IV nuclear power technologies proposed 
by the US in 2000, DOE Idaho National Labs have been pursuing two--(1) 
high temperature gas-cooled reactors for hydrogen production, and (2) 
sodium-cooled fast reactors for waste burning. Separately, liquid-
fluoride thorium reactor research is ongoing at UC Berkeley, MIT, 
Redstone Arsenal, and in other countries including France, Japan, and 
Canada.
    As the Department analyzes advanced reactor designs, can you tell 
me if the liquid-fluoride thorium reactors are under consideration? 
What are the benefits of liquid-fluoride thorium reactors? What are the 
drawbacks or downsides of liquid-fluoride thorium reactors? How does 
power generated from liquid-fluoride thorium reactors compare, on a 
price per kilowatt hour, with power generated from the current coal 
generation fleet in the United States? As we confront our nation's 
energy and climate challenges, what role might these types of reactors 
play?
    Answer. The ``liquid-fluoride thorium reactor,'' otherwise known as 
a molten salt reactor (MSR), where molten salts containing fissile 
material circulate through the reactor core, is not part of the Office 
of Nuclear Energy's research program at this time. Some potential 
features of a MSR include smaller reactor size relative to light water 
reactors due to the higher heat removal capabilities of the molten 
salts and the ability to simplify the fuel manufacturing process, since 
the fuel would be dissolved in the molten salt. One significant 
drawback of the MSR technology is the corrosive effect of the molten 
salts on the structural materials used in the reactor vessel and heat 
exchangers; this issue results in the need to develop advanced 
corrosion-resistant structural materials and enhanced reactor coolant 
chemistry control systems. In addition, operational practices would 
have to address the fact that the liquid salts solidify between 
temperatures of 300 C to 500 C, thereby requiring the use of special 
heating systems when the reactor is not operating. From a non-
proliferation standpoint, thorium-fueled reactors present a unique set 
of challenges because they convert thorium-232 into uranium-233 which 
is nearly as efficient as plutonium-239 as a weapons material. A cost 
per kilowatt hour estimate has not been developed.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

  Statement of John R. Deal, Chief Executive Officer, Hyperion Power 
                            Generation, Inc.
    Hyperion Power Generation is the spin-out and commercialization 
vehicle for a small (70 MWt) transportable reactor invented by Dr. Otis 
(Pete) Peterson while he was on staff at Los Alamos National 
Laboratory.
    The Hyperion Power Module has several key attributes that make it a 
compelling solution to providing remote, independent, secure power 
generation in a variety of applications (see below)*.
---------------------------------------------------------------------------
    * HPM Report has been retained in committee files.
---------------------------------------------------------------------------
    A small business, based in Los Alamos New Mexico, Hyperion is 
funded entirely by venture capital, and mentored by Technology Ventures 
Corporation, a non-profit business assistance and economic development 
company. Hyperion is the only privately-owned company commercializing 
reactor technology from the U.S. Department of Energy.
    Hyperion is exactly the kind of innovative firm doing the ``crazy 
stuff'' that American industry and government (according to DOE 
Secretary Chu at the hearing on March 5) need to pursue to help provide 
cleaner, cheaper, more secure power generation for the nation and the 
world at large.
    The Hyperion Team has successfully commercialized technologies 
invented at DOE facilities for over 15 years. Several on our team 
served as Los Alamos staff. Since taking on the commercialization of 
the Hyperion reactor technology over two years ago, Hyperion management 
and staff have become immersed in U.S. public policy as it relates to 
new energy technology, and more specifically, U.S. policy on nuclear 
power generation.
    We believe the committee can support the expansion of safe, clean, 
and secure nuclear energy by enacting a few initiatives. All of these 
are consistent with President Obama's commitment to a new energy 
economy built on innovation, and also to the committee's charter and 
legislative agenda.

          1. The U.S. must close its civilian nuclear fuel cycle. This 
        is a political dilemma, not a technical problem. Although 
        various attempts have been made, it is critical Congress 
        provide funding to create definitive methods for recycling 
        uranium, and securing other fission products and waste in long 
        term storage. France recycles nuclear fuel. Is the U.S. 
        incapable of doing something the French take for granted? As 
        you know, over 90% of so-called ``nuclear waste'' can be 
        recycled. This valuable fuel can generate massive amounts of 
        electricity for generations to come. While we support the 
        overall goals of the Global Nuclear Energy Partnership (GNEP), 
        we think Congress should focus funding on the recycling and 
        waste treatment aspects of the U.S. GNEP program instead of on 
        creating new commercial reactor designs. If a company as small 
        as Hyperion, and firms as large as Westinghouse, can invent and 
        manufacture new reactor designs, the U.S. government does not 
        need to spend taxpayer dollars doing so.
          2. If President Obama is sincere about not funding further 
        development of Yucca Mountain, Congress must enact new 
        legislation to shut down that project and to put taxpayer 
        dollars toward finding a new long term storage site. Although 
        the Yucca Mountain project has been built on solid science, it 
        has been plagued by bad PR and been mismanaged from a public 
        policy perspective. To continue the project now, in the face of 
        Congressional, Administrative, and local opposition, will just 
        waste additional taxpayer funds. We implore Congress look to a 
        more remote location, and suggest the U.S. commonwealth of the 
        Northern Marianna Islands; Tinian comes to mind. The local work 
        force is accepting of nuclear energy, and the region 
        desperately needs additional industry. They would welcome such 
        as project. Transportation to CNMI would be completely safe 
        since such a repository would be for civilian (non-weapons 
        grade) waste only.
          3. We need a Department of Energy focused on energy. The U.S. 
        weapons complex has enormous responsibilities. Their focus, 
        rightly, is on the maintenance and safety of the weapons 
        stockpile. A smaller, separate, and more efficient weapons 
        complex would eliminate the conflicts inherent at the DOE labs 
        and allow the vast majority of personnel to focus on energy 
        innovations and infrastructure. A Department of Energy focused 
        on civilian energy innovation is necessary in order to meet our 
        national challenges.
          4. Congress must be pragmatic and intellectually honest and 
        include nuclear power generation in all so-called ``clean,'' 
        ``green,'' and ``renewable'' energy categories. All energy 
        generation is really energy conversion, and each has a waste 
        stream. The critical issue is the impact each waste stream has 
        on the planet. Nuclear energy is the only part of the energy 
        industries that can truthfully assert it has contained 100% of 
        its waste stream. The waste streams from all other energy 
        generation methods are simply diluted into the atmosphere. This 
        not only poisons the entire planet, but gives citizenry a false 
        sense of security. It has led many in the U.S. to believe that 
        solar or wind generation can solve our baseload energy 
        requirements (they can't) and that a veritable ``free lunch'' 
        exists (it doesn't).
          5. Lastly, the committee should see that Congress continues 
        its support for small businesses, especially those companies 
        contributing to national energy security, physical homeland 
        security, and alternative energy technologies. The Small 
        Business Innovation Research (SBIR) grants should be 
        streamlined to minimize the time between proposal and funding, 
        and new methods of technology maturation--outside the 
        inefficient Laboratory complex-- should be established to get 
        innovations ``off the bench'' and into the hands of industry as 
        fast as possible.

    I appreciate the committee's interest in our national energy 
security and in its commitment to increasing U.S. economic security 
through technical innovation and small business development.
                                 ______
                                 
   Statement of George Crabtree, Senior Scientist and Distinguished 
Fellow, Materials Science Division, Argonne National LaboratoryArgonne, 
                                   IL
         New Science for a Secure and Sustainable Energy Future
summary of a report of the doe basic energy sciences advisory committee
The Energy Challenge
    For a secure and sustainable energy future, the United States must 
reduce its dependence on imported oil, reduce its emissions of carbon 
dioxide and other greenhouse gases, and replace the economic drain 
ofimported oil with economic growth based on exporting a new generation 
of clean energy technologies.
    The cost and uncertainty of imported oil ($700B/yr at the peak, 
about $200B/yr currently) are major threats to the U.S. economy. 
Developing new competitive renewable energy resources will help solve 
our energy problems at home and create economic opportunity to market 
our solutions to the world.
The Science and Technology Solution
    Changing our decades-long dependence on imported oil and unfettered 
emission of carbon dioxide requires fundamental changes in the ways we 
produce, store and use energy. This report identifies three strategic 
goals required to meet these challenges: (1) making fuels from 
sunlight, (2) generating electricitywithout carbon dioxide emissions, 
and (3) revolutionizing energy efficiency and use.
    To meet these strategic challenges, the U.S. will have to create 
fundamentally new technologies with performance levels far beyond what 
is now possible. Such technologies, for example, may be able toconvert 
sunlight to electricity with triple today's efficiency, store 
electricity in batteries or supercapacitors at ten times today's 
capacity, and produce electricity from coal and nuclear plants at twice 
today's efficiency while capturing and sequestering the carbon dioxide 
emissions and hazardous radioactive wastes.
    Development of these advances will require scientific breakthroughs 
that come only with fundamental understanding of new materials and 
chemical processes that govern the transfer of energy between light, 
electricity, and chemical fuels. Such breakthroughs will require a 
major national mobilization of basic energy research. A working 
transistor was not developed until the theory of electronic behavior on 
semiconductor surfaces was formulated. Lasers could not be developed 
until the quantum theory of light emission by materials was understood. 
Similar breakthroughs can be achieved for sustainable energy, but only 
if we invest in basic research now.
    Basic science stands at the dawn of an age in which matter and 
energy can be controlled at the electronic, atomic, and molecular 
levels. Materials can now be built with atom-by-atom precision, and 
advanced theory and computational models can predict the behavior of 
materials before they are made--opening new horizons for creating 
materials that do not occur in nature and are designed to accomplish 
specific tasks. These capabilities, unthinkable only 20 years ago, 
create unprecedented opportunities to revolutionize the future of 
sustainable energy. Transformational solutions to reducing imported oil 
dependency and carbon dioxide emission-from solar fuels, renewable 
electricity and carbon sequestration to batteries, solid-state lighting 
and fuel cells-require breakthroughs in the fundamental understanding 
and control of materials and chemical change.
Recommendations
    To achieve these essential breakthroughs we need to fund a bold new 
initiative focused on solving the critical scientific roadblocks in 
next-generation carbon-free energy technologies. The solutions are 
within reach, using advanced materials and chemical phenomena that 
control matter and energy at the electronic, atomic and molecular 
level. To develop these solutions, we must recruit the best talent 
through workforce development and early career programs. We must 
establish ``dream teams'' of the best researchers and provide them the 
resources to tackle the most challenging problems.
                                 ______
                                 

                                    

      

```