U.S. GOVERNMENT PRINTING OFFICE

64–032CC WASHINGTON : 2000

THE DEPARTMENT OF ENERGY’S PROPOSED

BUDGET FOR FISCAL YEAR 2001

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER

OF THE

COMMITTEE ON COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

MARCH 24, 2000

Serial No. 106–139

Printed for the use of the Committee on Commerce

(

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COMMITTEE ON COMMERCE

TOM BLILEY, Virginia, Chairman

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

MICHAEL G. OXLEY, Ohio

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

Vice Chairman

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

RON KLINK, Pennsylvania

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

JAMES E. DERDERIAN, Chief of Staff

JAMES D. BARNETTE, General Counsel

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

SUBCOMMITTEE ON ENERGY AND POWER

JOE BARTON, Texas, Chairman

MICHAEL BILIRAKIS, Florida

CLIFF STEARNS, Florida

Vice Chairman

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

TOM BLILEY, Virginia,

(Ex Officio)

RICK BOUCHER, Virginia

KAREN MCCARTHY, Missouri

TOM SAWYER, Ohio

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ALBERT R. WYNN, Maryland

TED STRICKLAND, Ohio

PETER DEUTSCH, Florida

RON KLINK, Pennsylvania

JOHN D. DINGELL, Michigan,

(Ex Officio)

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C O N T E N T S

Page

Testimony of:

Glauthier, Hon. T.J., Deputy Secretary of Energy, U.S. Department of

Energy ............................................................................................................ 8

Material submitted for the record by:

Angell, John C., Assistant Secretary, Congressional and Intergovernmental Affairs, Department of Energy, letter dated September 8, 2000,

enclosing response for the record ................................................................ 48

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THE DEPARTMENT OF ENERGY’S PROPOSED

BUDGET FOR FISCAL YEAR 2001

FRIDAY, MARCH 24, 2000

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

The subcommittee met, pursuant to notice, at 10 a.m., in room

2322, Rayburn House Office Building, Hon. Joe Barton (chairman)

presiding.

Members present: Representatives Barton, Burr, Whitfield, Norwood, Markey, and Strickland.

Staff present: Kevin Cook, science advisor; Miriam Swydan

Erickson, majority counsel; Elizabeth Brennan, legislative clerk;

Sue Sheridan, minority counsel; and Rick Kessler, professional

staff member.

Mr. BARTON. The Energy and Power Subcommittee on the hearing of the Department of Energy’s budget, fiscal year 2001 is ready

to begin. I guess this is appropriate since we passed the budget last

night, or in the morning, actually, about 12:15 but we are at least

holding the hearing on the same day.

We have recently held a hearing on the dramatic increase in the

price of crude oil and petroleum products. We did that several

weeks ago. We heard testimony on the multiple causes for the increase, whether the Department of Energy had adequately forecasted the increase and how to help homeowners pay their home

heating oil bills. Today we should remember that the Department

of Energy has responsibility for administering all of the U.S. energy policy. I believe the most important energy issue facing the

United States today is the advancement of electricity restructuring

which this subcommittee has passed legislation on back in October.

I know that bringing full competition to the electric sector is a priority for the committee. It is good for consumers, and that is what

is important to me and to this subcommittee. I hope we can all

work together today and next week in the next month, several

months, to enact a comprehensive electric restructuring program.

Today we are going to examine the Department of Energy’s original mission to promote all energy security. Over the years, the department’s focus has shifted to environmental management and na- tional security. Only 12 percent, or $2.2 billion is spent on energy

resources of the department’s budgets today. I will let everybody

know why I am laughing here in a minute.

This reverses the trend of the last 2 years when the agency’s

budget request was declining. This hearing should provide memVerDate 11-MAY-2000 13:36 Mar 22, 2001 Jkt 067434 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HEARINGS\64032 pfrm09 PsN: 64032
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bers an opportunity to voice any concerns they may have about the

department’s shift in focus in funding. I look forward to hearing

the testimony of the distinguished deputy secretary. And we will

continue with the hearing.

Does Mr. Norwood wish to make an opening statement?

Mr. NORWOOD. Yes, sir.

Mr. BARTON. The Chair would recognize you pending the arrival

of Mr. Strickland.

Mr. NORWOOD. Thank you, Mr. Chairman. I want you to know

that—I will wait until he is listening.

Mr. BARTON. I am listening.

Mr. NORWOOD. I just want to point out to you that in Georgia

this morning the dogwoods are in bloom, the azaleas are wide open,

there is honeysuckle in the air and with that, I would like to thank

you so much for holding this hearing this morning.

Mr. BARTON. Well, now would the gentleman yield?

Mr. NORWOOD. Of course.

Mr. BARTON. The gentleman knows that we were here until 12:15

this morning, so unless the gentleman from Georgia got up at the

crack of dawn and caught the 6 a.m. flight to Atlanta and then

drove for several hours, he wouldn’t be smelling the honeysuckle or

seeing the sunrise over—— Mr. NORWOOD. I would be there right now. But in all seriousness—I am kidding. I am pleased that you are having this hearing

today on the Department of Energy’s budget proposal for the fiscal

year 2001. It gives me an opportunity to make a couple of points.

As you know, my district is contiguous to the Savannah River site,

the most impressive field site in the DOE complex. Roughly, 8,000

of my constituents currently work at this site, which has been a

vital part of our community since World War II. And we consider

them as co warriors.

I spent my first few years in Congress fighting the layoffs that

were inevitable as a result of the end of the cold war. And I now

want to make absolutely sure that our site is not only properly

equipped to clean up after 40 years of serving the country from the

defense buildup, but also is prepared to take on any new missions

that it might be qualified to handle.

I am pleased to see that the DOE’s environmental management

budget for fiscal year 2001 looks good. I would like to reiterate the

concerns, Mr. Secretary, that I have repeatedly and repeatedly expressed about the department’s selection of a commercial plant at

the Tennessee Valley Authority for the proposed tritium production

facility. I have it on good source that the Vice President doesn’t like

all these activities, and he certainly probably really doesn’t want

it in Tennessee. We have always maintained, and I will say it

again here today, the production of tritium for use in nuclear weapons is too sensitive of an issue to risk leaving it in the hands of

a commercial plant. This is not a matter of my protecting my turf

or bringing missions home. This is a matter, in our view, of national security.

Simply stated, the people at the Savannah River site have the

expertise, they have the secure infrastructure to do this. We have

the safety record to ensure that the production of tritium is carried

out in a safe and secure manner. And I would urge you to urge—

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in fact, Vice President Gore and I would urge you to urge the Secretary to rethink his decision in this matter.

My other concerns today involve around the ongoing saga of the

Clinton’s administration unwillingness to accept this responsibility

to deal with our country’s spent fuel problem. I said on the floor

yesterday that I am deeply, deeply concerned that the President is

playing political games with a very dangerous issue. We need to

come, we need to come to some resolution on what we are going

to do with the tons of nuclear waste, much of which is in my back

yard, that is, accumulating at 72 sites around this Nation.

I know that Secretary Richardson has considerable in influence

with the President on this issue. I also know that the Secretary realizes the need for urgency. And I want to urge you to urge Mr.

Richardson to put partisan politics aside on this and do what he

knows in his heart is the right thing to do for this country.

Mr. Chairman, with that, I will button up and yield back the balance of my time.

Mr. BARTON. Well, you just missed one flight to Georgia due to

the length of that opening statement. The Chair has a confession

to make. I rushed in here to start the hearing close to on time and

managed to read the statement of Tom Bliley as my opening statement. So I was about two-thirds of the way through it before the

staff managed to convey to me that it was not my opening statement, it was Chairman’s Bliley’s.

Mr. NORWOOD. Come on, Mr. Chairman, read us yours.

Mr. BARTON. No, I will submit my statement for the record.

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

PREPARED STATEMENT OF HON. JOE BARTON, CHAIRMAN, SUBCOMMITTEE ON ENERGY

AND POWER

We are here today to examine the Department of Energy’s budget request for Fiscal Year 2001. This budget hearing is not just about how much money the Department wants to spend next year, but also about understanding the policies behind

the numbers.

The Department has submitted an ambitious proposal, seeking a total of $18.9 billion for FY2001. This represents an increase of over nine percent from the comparable appropriations for the current fiscal year. The Department needs to justify

to us the reason for this substantial increase. We also need to find out whether DOE

is adhering to our previous guidance and is making progress on a number of energy

issues that are of particular importance to the Members of this Subcommittee.

At this same hearing last year, I said that nuclear waste was at the top of my

priority list. It still is at the top of my list, sharing that spot with electricity restructuring. If anything, my frustration with the Department on the nuclear waste issue

has grown even stronger. Although I disagreed with the Senate bill that came before

the House earlier this week, the final vote shows that a substantial majority of

Members in both chambers support the partial solution to nuclear waste provided

in Senate bill 1287. Members from both sides of the aisle made a sincere attempt

to solve this national problem, and all this Administration would contribute to the

debate was one more irresponsible veto threat.

Secretary Richardson testified to this Subcommittee last year that the permanent

repository program, even without additional features such as interim storage or take

title, faces a serious funding shortfall in the coming fiscal years. The program needs

over $10 billion for the repository between now and 2010, but will be lucky to receive even half of that amount under the current funding scheme. We offered a solution to that problem by using the money that the ratepayers have already paid in

to the Nuclear Waste Fund—and, again, all we heard from the Administration was

another veto threat.

I keep looking for this Administration to offer its own constructive solution to the

funding problem, but the 2001 budget request continues to ignore the situation. It

is time for the Department to be honest with the Congress and the American people

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about this situation—without a major change in how the nuclear waste program is

funded, the permanent repository will not open in 2010.

Meanwhile, spent fuel continues to accumulate at reactor sites around the country, and the financial liability against the Federal government grows larger every

day. And we have before us another DOE budget request that addresses only the

next fiscal year, conveniently ignoring the disaster looming around the corner. I

guess Yogi Berra must have had nuclear waste in mind when he talked about this

being ‘‘deja vu ́ all over again.’’ I have several other serious matters to discuss with the Department, starting

with the Department’s obvious lack of success in forecasting the recent fluctuations

in oil prices. I welcome any comments from the witness concerning improvements

the Department is contemplating to this vital forecasting role.

I was very disappointed that Secretary Richardson discouraged a bipartisan delegation of Commerce Committee Members from going to Vienna for next Monday’s meeting of OPEC countries. I question both the wisdom and intent of asking our

Members, who have many different views on domestic energy policy, to not attend

this important meeting and represent the United States Congress.

As you know by now, this Subcommittee is very concerned about the implementation of the new National Nuclear Security Administration and whether this new organization will really solve the safety and security problems facing the Department.

I also have concerns about the major expansion of research and development work

on climate change. While I am supportive of more R&D on climate change and have

introduced legislation to that end, we all need to make sure that the Department

is not getting out ahead of the Kyoto Protocol. The DOE also requests $450 million to start the Hanford privatization contract, an effort which will take 20 years to complete and require more than $500 million

per year. Unfortunately, DOE has not demonstrated any credible track record with

other privatization projects, such as the failed Pit 9 effort that the Committee revealed in 1997. DOE must get on with the cleanup at Hanford, but the Department

has not demonstrated that the proposed Hanford privatization contract offers the

best value to the US Government.

We can address these matters in more detail during the question-and-answer period. I welcome Mr. Glauthier before the Committee and look forward to your testimony.

Mr. BARTON. I wouldn’t put the Secretary through that. But I do

have a very good opening statement. The Chair would recognize

the distinguished gentleman from Ohio for an opening statement.

Mr. STRICKLAND. Thank you, Mr. Chairman. My opening statement will not be long, and I am anxiously awaiting a time when

we can direct questions to our guest this morning. Mr. Deputy Secretary, I want to thank you for coming and I want to thank you,

and I especially want to thank Secretary Richardson for the obvious concern that he has shown to me and to my constituents. Later

on, I will have questions for you. I have read your testimony. But

I just want to say for the record, I think it is important for me to

say that I have been deeply, deeply disappointed with some of the

actions of the department. In my district we are facing a crisis situation, but I think it is going beyond my district.

I think it involves my colleague from Kentucky’s district, and I

think it involves this Nation’s economic security, and it involves

this Nation’s national security. We privatize this vital industry, the

uranium enrichment industry. Jobs have been lost as a result, 250

jobs at my plant last year, 250 at my colleague’s plant and 825 to

850 jobs will be lost between the two plants in July of this year.

Some of the same Wall Streeters who advocated and pushed for the

privatization of this industry are now advocating for the closure of

one of our two plants. These are very, very serious circumstances.

I think we have a uranium enrichment corporation now that is

worth more dead than alive. And I worry about the potential of this

domestic industry being so decimated that we will find ourselves

without a reliable supply of domestic energy, domestic fuel for our

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nuclear power plants, thereby making us ever increasingly more reliant upon foreign sources for our national energy needs. And so I

welcome you here. I look forward to your testimony. And I look forward to an opportunity to direct some questions to you. Thank you

very much.

Mr. BARTON. Thank you, Congressman Strickland.

Congressman Whitfield, for an opening statement.

Mr. WHITFIELD. Thank you, Mr. Chairman. And once again we

are always impressed with how organized you are.

Mr. BARTON. At least I am honest.

Mr. WHITFIELD. And I just would like to echo Mr. Strickland’s remarks because we do have some common challenges facing us, Mr.

Glauthier, and I am glad you are here today. I would say that

there will obviously be additional hearings on the United States

Enrichment Corporation and its impact on enrichment of uranium

as a guaranteed source for domestic production.

I do have a number of questions which we will get to, but I would

like to thank Secretary Richardson for, I think, responding in an

admirable way to many of the questions raised by The Washington

Post which has been running repeated articles about these gaseous

diffusion plants. I will say that the overall amount of $109 million

in this year’s budget request is nearly double what you proposed

in the past. And that is going to be for cleanup activities, $78 million, $23.9 million for uranium hexafluoride conversion, $4.3 million for environmental health and safety studies and medical monitoring, which is vitally important, and $3 million for worker transition programs. But I know Mr. Strickland and I both have some

other very serious concerns, and so we are delighted you are here

today and look forward to talking to you as we go along.

Mr. BARTON. Thank the gentleman from Kentucky. The gentleman from North Carolina.

Mr. BURR. Thank you, Mr. Chairman. Clearly, I am not as organized as you are, so I would ask unanimous consent to give your

opening statement.

Mr. BARTON. I will hand it down there.

Mr. BURR. In that would be in order. Let me welcome Department of Energy and apologize for my casual clothes, but this is

travel day. And that is probably a good sign for you that I do have

a flight. Let me just say that having an opportunity to read two

different testimonies because of the delay of this hearing, I was

glad to see that there were some things that were added that specifically address the secretary’s negotiations with OPEC and other

items that I think are pertinent to at least our current crisis.

Given that we are looking at an annual budget, I expected to see

more specifics about domestic policy, production policy and initiatives that the department wanted to see implemented in that budget year. I am hopeful that as you answer questions and expound

on your testimony, that, in, fact we will hear some of the specifics

that I didn’t find in the written testimony.

I will say that for many members on this committee, I was delighted to see that we have similar hopes of electricity deregulation

sooner rather than later. And we will look for every opportunity to

explore everything that has happened at the Department of Energy

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to reach some conclusion on deregulation. And with that, I thank

you once again and I yield back, Mr. Chairman.

Mr. BARTON. Thank you. Before we recognize the Secretary for

such time as he may consume, I want to just briefly summarize

what my lengthy opening statement says. We have three concerns.

No. 1, you have got a substantial increase in your budget request

this year. And I think the committee needs to have some justification for a 9 percent increase. Number 2, the nuclear waste policy

of the Department of Energy continues to be a mystery. It is going

to cost $10 billion to build a depository and have it operational by

the year 2010, and the department insists on continuing to funding

requests in the $400 million-per-year range. I think you are up $37

million. It just doesn’t work. You know that I know that. We don’t

need veto threats, we need cooperation between the executive

branch and the legislative branch to find a solution. And then on

the energy, the oil policy problem that we are having, the higher

oil and gasoline prices, the department quite frankly has been

asleep at the switch. Congressman Markey pointed out several

weeks ago that the Energy Information Agency, which is a semiautonomous part of DOE was projecting as early as last June and

officially with retail price projections in October of this past year

what really happened. And the department really did nothing to

even begin to address the problem until December and January. So

we will have some questions on that.

And in trying to cooperate, this subcommittee requested to go to

OPEC this weekend, take a bipartisan congressional delegation.

The State Deputy strongly discouraged it. Secretary Richardson

initially seemed to be open to it in a phone conversation but his

official letter opposed it. When I had to inform the minority of that,

they felt, rightfully so, that if the administration wasn’t participating we shouldn’t participate so we didn’t.

So as far as I know, there is going to be no U.S. present at OPEC

at all this weekend and early next week. Given the sensitivity of

their decisions it would have seemed appropriate to me to take a

bipartisan delegation and observe the discussions and perhaps encourage them to make some decisions that I know the Republicans

and Democrats in the Congress and in the executive branch support. So those would have been my statements elaborated if he had

given a lengthy statement. I will put that into the record.

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. TOM BLILEY, CHAIRMAN, COMMITTEE ON COMMERCE

This morning, the Subcommittee on Energy and Power will examine the Department of Energy’s budget request for Fiscal Year 2001.

Recently we held a hearing on the dramatic increase in the price of crude oil and

petroleum products. We heard testimony on the multiple causes for the increase,

whether DOE adequately forecasted the increase, and how to help homeowners pay

their home heating oil bills.

Today, we should remember that DOE has responsibility for administering U.S.

energy policies. I believe the most important energy issue facing the U.S. today is

the advancement of electric restructuring legislation. I know bringing competition

to the electric sector is a priority for this Committee. It is good for consumers and

that is what is important to me. I hope that we can all work together to enact comprehensive legislation in the 106th Congress that will benefit all consumers.

Today we examine DOE’s original mission—to promote energy security. Over the

years, DOE’s focus has shifted to environmental management and national security.

That is why only 12 percent, or $2.2 billion is spent on energy resources. But more

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importantly, this year DOE requested a 9 percent increase of almost $1.6 billion.

This reverses the trend of the last two years when the agency’s budget request was

declining. This hearing provides Members of this committee with an opportunity to

voice any concerns they may have about DOE’s shift in focus and in funding.

I look forward to the Department’s testimony, and thank Mr. Barton for this hearing.

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

CONGRESS FROM THE STATE OF MASSACHUSETTS

Thank you, Mr. Chairman. I want to begin by commending you for calling today’s

hearing.

As I consider the energy agenda reflected in the Administration’s Budget Request,

I am struck by the transformation that has taken place since the early years after

I first arrived in Washington. Back then, we had price controls on oil and natural

gas—controls which had been in place since the Nixon Administration and which

established at least 32 different prices for natural gas and 7 tiers of oil prices. Oil

prices were beginning to spike upward from $13 towards a peak of over $37 a barrel. Consumers were about to resume facing gas lines at the pump. We were supposedly running out of natural gas and therefore had to pass a Fuel Use Act barring

it from being used for electricity generation. President Carter was calling for a massive multi-billion dollar government investment in synfuels, which he claimed, was

essential to meeting our future energy needs. Energy Secretary James Schlesinger

was telling us that if we didn’t build 1000 nuclear powerplants we would be facing

blackouts and brownouts across the country. We were going to strip oil from shale

in a corner of Colorado that would, in light of the relevant impact upon the environment, be designated a ‘‘National Sacrifice Zone.’’ New cars consumed an average of

12 miles per gallon, and Detroit was telling us they just couldn’t make them any

more energy efficient than the Model A Ford my Dad bought back during the Depression.

Today so much has changed. The concept of oil and gas price controls now seems

as distant and dated as polyester leisure suits and avocado green refrigerators. The

Carter-era synfuels program that was supposed to lead us out of the world of ever

higher oil prices actually had nothing to do with today’s lower prices. In fact, the

program is long dead, buried, and largely forgotten. Colorado survived. Moreover,

today, we are awash in cheap natural gas—with pipelines coming down from off the

coast of Nova Scotia that will transform our energy marketplace in New England.

We haven’t ordered a single new nuclear powerplant since 1973, but we have met

our electricity needs with alternative fuels and by becoming more energy efficient.

Today, new cars consume an average of 27 miles per gallon (although Detroit is still

telling us they just can’t make them any more energy efficient)!

But, we are again facing an upward spike in oil prices. And while many observers

believe that the current high prices are likely to be shorter in duration and severity

that the huge oil shocks we experienced back in the Seventies, these increased

prices have put increased focus on the importance the Department’s activities play

in crafting a national energy policy. The Administration’s DOE budget request seeks

to put our nation in a position where the American people are protected from energy

price shocks while having access to the energy and fuel they need. And the budget

request does this not by hurting the environment, but by increasing our energy efficiency and diversing our fuel supply base. For example, the President and the Vice

President have proposed a budget that includes over $1 billion next year to accelerate the research, development, and deployment of alternative and more efficient

energy technologies, as well as $4.0 billion in tax incentives over five years to benefit our energy-reliant consumers and businesses.

These are the kinds of tax cuts that would make a real difference in our energy

future, and will save consumers more money in the long run than a small break

on the gas tax. Unfortunately, the House yesterday passed a Republican budget resolution that failed to make any mention of these common sense tax credits. In addition, the Administration’s budget request includes a proposed $275 million in R&D

efforts next year to make offices, homes, and appliances 50% more energy efficient

within a decade. People understand what that means for their home heating bill.

Overall, meeting this goal would save consumers $11 billion a year in energy costs.

Here, the House Republican budget resolution proposed to slash overall Energy Research funding by $200 million below last year’s funding level.

The Administration has also proposed to expand DOE’s Weatherization Assistance

Program that helps low-income households make their homes more energy efficient.

These are the Americans that most need to reduce monthly energy costs. This proVerDate 11-MAY-2000 13:36 Mar 22, 2001 Jkt 067434 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 E:\HEARINGS\64032 pfrm09 PsN: 64032
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gram has already weatherized almost 5 million low-income homes and is saving 3.0

million barrels of oil each year. With funding from DOE and the states, our nation

could add more than 150,000 homes to the list in the next year—which will save

more than an additional 91,000 barrels of oil per year. The Administration’s budget

request seeks $154 million for FY 2001 and an additional $19 million for the current

year in the FY 2000 supplemental spending bill. Here again, the House Republican

Budget resolution is silent. And in past years, Democrats have had to fight hard

to prevent cuts in this important program.

Earlier this week, the House considered a bill that the House Republican Leadership dubbed the ‘‘Oil Price Reduction Act’’—a case of misleading advertising if I ever

saw one. Rejecting Democratic efforts to reauthorize the President’s authority to deploy the Strategic Petroleum Reserve (which expires at the end of next week), create

a regional home heating oil reserve (as the President proposed last week), or to

adopt the Administration’s package of energy production, renewables, and efficiency

tax credits, the Republicans instead passed a meaningless do-nothing bill. All it says

is that we should take into account oil-price fixing by OPEC member nations in our

overall political, economic and military relations with these nations—as if we didn’t

already do so today! The bill calls for a report by the President on any OPEC price

fixing, and on the nature of existing military assistance or arms sales from the U.S.

to these nations. However, the Rules Committee dropped the only meaningful provision from the bill—an authorization for the President to cut off arms sales or military assistance to OPEC nations that engage in oil price fixing.

And so, I can only hope that this do-nothing bill is not the final chapter in this

years’ legislative activities on energy. We need to reauthorize the Energy Policy and

Conservation Act—EPCA—that gives the President authority to deploy the Strategic

Petroleum Reserve. It is unconscionable that this Congress would let EPCA lapse

just as OPEC’s oil ministers are about to meet in Vienna. In addition, we should

amend the Markey-Lent-Moorhead amendment to EPCA to grant a specific authorization to the President to create a regional refined product reserve in the Northeast. Finally, we should approve the Administration’s budget request for the Department of Energy—which offers a package of medium and long-term solutions to our

dependence on imported oil.

Thank you again, Mr. Chairman, for calling today’s hearing. I look forward to

hearing the testimony.

Mr. BARTON. We are glad to have you, Mr. Deputy Secretary.

You have been before this committee and subcommittee several

times. We are going to recognize you for such time as you may consume then we will have some questions for you. Mr. Secretary.

STATEMENT OF HON. T.J. GLAUTHIER, DEPUTY SECRETARY

OF ENERGY, U.S. DEPARTMENT OF ENERGY

Mr. GLAUTHIER. Thank you, Mr. Chairman, and members. I will

summarize my statement because you do have copies of it. I want

to thank you for the opportunity to be here to discuss the budget.

Before I start on specifics of the budget, I want to comment on

some of the management reforms that we have been working on at

the department. These are areas which Secretary Richardson and

I both feel deserve top priority. And we have put a lot of attention

into them. And I would like to just highlight a couple of them.

First and most important, we have really changed the way the

headquarters and field operations of the department interrelate.

We have simplified the reporting lines and we have clarified the relationship of line and staff offices within the department. We have

tried to put in place a clear chain of command from the program

officers at headquarters to the field offices, to the actual sites, the

laboratories or production plants or other facilities in the field so

that there is a clear responsibility and authority for actions and for

programs and policies and an accountability that has been lacking

all too long.

9

We have also done some other things. We established and staffed

an office of engineering and construction management within our

Office of Chief Financial Officer to make fundamental changes in

the way the project management is carried on at the department.

So much of our work does include very large expenditures on big

projects. We need to have the best discipline and the best practices

in that area. We have staffed it with people who bring experience

from other departments and other programs to give us that expertise.

In this last year, we have also initiated several immediate actions concerning security and counterintelligence. As you know,

those have gotten a lot of attention in the last year. We feel we

have made substantial progress on an extensive program there,

and have done things such as creating the Office of Security and

Emergency Operations, which consolidates the security functions

throughout the department. We have instituted a bottom up internal security review and we have created the Office of Independent

Oversight and Performance Assurance, which independently oversees security, cyber security and emergency management programs

and reports directly to the Secretary.

Also last year, we launched a ‘‘Work Force for the 21st Century

Initiative’’ to build a talented and diverse work force which will

strengthen our technical and management capabilities and address

new challenges, including addressing the long-standing underrepresentation of women and minorities in senior management management and technical positions.

On another front under the direction of Under Secretary Ernest

Moniz, we also established a clearly defined and well articulated

departmental R&D portfolio. This will ensure our R&D programs

are properly structured and take advantage of interrelationships

with all of the relevant program areas.

And last in this management area, the department’s defense mission is being restructured into the National Nuclear Security Administration. We established the NNSA as required on March 1st.

We transferred 2000 Federal employees and over 37,000 contractor

employees into this new organization. The President has indicated

he will nominate General John Gordon to head this organization,

and he has nominated Madelyn Creedon to be the Deputy Administrator for defense programs. We are committed to making the

NNSA a viable effective organization. The fiscal year 2001 budget

for this NNSA will total $6.2 billion, an increase of over $400 million above this year’s level.

We have made progress in many areas, but we are far from finished. We’ll continue to improve the department’s internal management capabilities to realize the full potential which our work force

and facilities hold for America. This budget will help us go further.

It is a forward looking request, emphasizing investments for the future.

I would like to mention a couple of successes this year before

moving on to the requests for the next year. In our four mission

areas, first, in the science area the department’s funded researchers have received 43 of the 100 awards given last year by the R&D

magazine for outstanding technology developments with commerVerDate 11-MAY-2000 13:36 Mar 22, 2001 Jkt 067434 PO 00000 Frm 00013 Fmt 6633 Sfmt 6602 E:\HEARINGS\64032 pfrm09 PsN: 64032
10

cial potential. This is the largest number ever won by any public

or private entity in the history of the awards.

In the national security area, the Departments of Energy and

Defense have certified for the third consecutive year the safety, security and reliability of our Nation’s nuclear weapons stockpile

without nuclear testing. And we are meeting critical mission objectives, including new production environments for the W76, W80

and W88 warheads, for refurbishment of the W-87 Peacekeeper

warheads and successful accomplishment of subcritical experiments, including initiation of production of tritium reservoirs at the

Kansas City Plant and reestablishment of pit production capability

at Los Alamos.

In the energy resources area we have proposed legislation, as

noted earlier, to restructure the electric utility industry, give consumer choices, save them $20 billion a year on their power bills.

And we hope that we will be able to continue to work with you in

the Congress to get this legislation passed this year.

We promoted new technologies for clean and renewable energy.

We have worked with the utilities and the oil and gas industry to

make all of our systems Y2K compliant. And on January 1, the

lights stayed on. We are responding to the current oil supply problems through a range of measures from the Secretary’s diplomatic

initiatives with major oil producing countries, both within and outside OPEC, to the reestablishment of an energy emergency office

within the department, extensive consultation and coordination

with energy suppliers and State and local government officials, renegotiation of the Strategic Petroleum Reserve royalty in kind deliveries to keep more oil in the market. And last Saturday, the

President announced the administration’s intention to create a

northeast heating oil reserve. The department is working to expedite this decision.

We would ask you to help us get reauthorization of the Strategic

Petroleum Reserve, which legislation expires at the end of this

month.

In the environment area after years of delay and excuses, we did

finally open the waste isolation pilot plant in New Mexico, the Nation’s first nuclear waste repository. We have successfully completed 44 shipments to WIPP to date, and on March 10th, resumed

shipments from the Rocky Flats site in Colorado after successfully

completing additional waste certification requirements.

We formed partnerships with Governors to clean up and close

former nuclear weapons productionsites and have set aside over

300,000 areas—acres as wildlife preserves in Washington, Colorado, Tennessee, South Carolina, Idaho and New Mexico.

For the 2001 budget, we have given the budget the theme

‘‘strength through science.’’ Science is the focus because scientific

research, both basic and applied, is integral to achieving our programmatic objectives in each of our mission areas. This department

is among the top Federal research and development funding agencies, regardless of the criteria used. We are first in scientific facilities and rank third in basic research funding after the National Institutes of Health and the National Science Foundation. The Department of Energy is, at its heart, a science agency. In fact, 40

percent of our fiscal 2001 budget qualifies as R&D expenditures.

11

We will spend a total of $7.1 billion on R&D in fiscal 2000 and plan

to spend $7.7 billion in 2001, an increase of 8 percent.

The department’s 2001 budget request total is $18.9 billion. That is $1.6 billion over this year’s appropriation, a 9 percent increase

as you indicated in your opening comments. Our budget is organized into four business areas. Let me mention each one of them

briefly. First, energy resources, which is the request of $2.2 billion,

an increase of $175 million over this year’s level or 8 percent, to

provide energy options for a stronger America. These investments

will enhance U.S. energy security by providing more economical

and environmentally desirable ways to use and produce energy.

DOE continues to support a balanced portfolio of energy for America’s future and research and development to enable a cleaner energy future.

The request features several cross-cutting initiatives involving

energy technology research offices. The climate change technology

initiative and the international clean energy initiative will identify

and develop precommercial energy technologies and potential markets for their use. The electric grid reliability initiative will develop

policies and technologies to enhance the security of our electricity

supplies. The enhanced ultra clean transportation fuels initiative

targets government and industry resources to develop a portfolio of

advanced petroleum-based highway transportation fuels and fuels

utilization technologies that are responsive to near and midterm

environmental regulatory and technical challenges.

Finally, the bioenergy, bioproducts initiative will fund research

to help make biomass a viable competitor as an energy source or

chemical feedstock.

The fossil energy research and development program level of $385 million includes funding for the upgraded National Energy

Technology Laboratory for Fossil Fuels Research. This budget continues investments in advanced technological concepts and development of highly efficient power generation and fuel producing technologies that together do could reduce, or perhaps nearly eliminate

carbon emissions from fossil fuel facilities, the centerpieces of this

research including the Vision 21 energy plant of the future and carbon sequestration.

The proposed deferral of $221 million in clean coal technology

program reflects scheduled delays from the rescheduling of certain

projects. The department believes the clean coal program is important and we anticipate successfully completing all of the ongoing

projects. Funding for the Office of Energy Efficiency and Renewable

Energy includes support for the research to assist in the development of more efficient homes and buildings, wind energy, geothermal, photovoltaics, and bioenergy and biopowered projects. Research will also continue in the ongoing partnership for new generation of vehicles which is developing the prototype advanced

technology vehicle in conjunction with the auto industry. The we

are asking $1.3 billion for these programs in fiscal 2001, an increase of 18 percent.

It includes the weatherization assistance program, which helps

to reduce heating and cooling bills for low income residents which

itself has an increased budget request for 2001 to weatherize approximately 77,000 homes.

12

The budget for the Office of Nuclear Energy Science and Tech- nology has an increase of $21 million to support such important activities as nuclear energy research and development including the

expanded nuclear energy research initiative and managing the inventory of depleted uranium hexafluoride. This office also conducts

a program to produce and distribute isotopes necessary for medical,

industrial and research purposes, including the advanced nuclear

medicine initiative.

The power marketing administrations sell electricity primarily

generated by hydropower projects located at Federal dams. First

preference for the sale of power is given to public bodies and cooperatives. This budget assumes that in fiscal 2001, the power

marketing administrations will use offsetting collections from the

sale of electricity to finance purchased power and wheeling expenses that were previously funded by direct appropriations.

In the science and technology mission area, we are asking for a total of $3.2 billion, an increase of $337 million or 12 percent. This

should provide the knowledge base for future innovation thereby

improving America’s long-term position in an increasingly competitive world economy. We continue to promote a strong national scientific infrastructure, provide the technical foundations for our applied missions. The fiscal 2001 budget includes initiatives to advance ongoing work at the frontiers of nanoscience, scientific computing, microbial genomics, robotics, bioengineering and will allow

us to increase the use of our scientific facilities.

This budget continues to strongly support the department’s

unique scientific user facilities. Each year over 15,000 university

industry and government sponsored scientists conduct cutting edge

experiments at these particle accelerators, high-flux neutron

sources, synchotron radiation light sources and other specialized facilities.

In the environmental quality mission area, we are asking for a total of $6.8 million, an increase of $511 million, or 8 percent, to

protect the environment and our workers. These amounts are required to ensure that each cleanup site meets safety and legal requirements, supports accelerated cleanup and site closure and

maintains other critical environmental priorities.

Our 2001 request continues an aggressive approach to address

immediate and long-term environmental and health risks of the

weapon complex. Let me cite a couple of examples. I mentioned

earlier that we have opened the WIPP facility in New Mexico and

completed 44 shipments there. We are accelerating the schedule of

shipments this year and next year in next year’s budget in order

to continue to support the movement of waste from our other sites.

One of those sites is Rocky Flats, where a budget request of $665

million in the fiscal 2000 budget will support closure by December

of 2006. This is based on new cost-plus incentive fee contract that

took effect February 1 this year. The Rocky Flats site is the largest

site challenge to accelerate cleanup and achieve closure in 2006.

And to date, significant progress has been made toward making

this goal a reality.

Another of our efforts is to protect the Columbia River by beginning the removal of spent nuclear fuel from the K-Basins at Hanford, which will begin later this year, November of 2000. This

13

project will carry out a first of a kind technical solution to move

2,100 metric tons of corroding spent nuclear fuel from at risk wet

storage conditions in the K-East and K-West basins adjacent to the

Columbia River into safe dry storage in a new facility away from

the river.

We have also requested increased funding for a privatization

project in the environmental management area to provide more

progress in cleaning up and reducing risks from the environmental

legacy of the Nation’s nuclear weapons program. In 2001, the privatization request includes $450 million in budget authority to develop treatment facilities that will vitrify at least

10 percent by volume of the 54 million gallons of high level waste

now stored at underground tanks at the Hanford sight in Washington. The department is using a privatization approach that

shifts many of the technical and performance risks to the contractor. This request, a $327 million increase anticipates a decision

in 2000 authorizing the contractor to proceed to the construction

phase of the project.

The request also features new initiatives to accelerate and clean

up and protect health and safety at the gaseous diffusion plants in

Portsmouth, Ohio and Paducah, Kentucky. Last summer, after reports of alleged health and environmental problems surfaced at Paducah, the Secretary announced a strategy to investigate, identify

and remedy at past or remaining health safety and environmental

problems at these plants. The supplemental budget request in the

2001 budget will significantly increase funding for these two sites.

The environment safety and health budget provides an increase of $38 million up to a total of $166 million to make health and

safety programs across the department a key priority. This also includes $17 million for the energy employee compensation initiative

that is pending now before the Congress. It is legislation to establish an occupational illness compensation program for our workers

at our nuclear facilities.

The President has also directed that the National Economic

Council conduct a review of other workplace exposures and illnesses at DOE sites. At the end of this process to be completed this

spring, the President will receive an interagency study on health

of our workers which may lead to additional measures beyond

those which we have initially proposed.

The civilian radioactive waste management program is funded at

$437 million in our budget request to support determination of the

suitability of the Yucca Mountain site as a permanent repository

for nuclear waste. An increase of $77 million for the design and engineering work at this site allows DOE to maintain the schedule

included in the viability assessment. In fiscal 2001 an investment

of approximately $4 billion and almost 18 years of site investigations will culminate in a series of statutory decisions on whether

the repository should be sited at Yucca Mountain. If the site is determined to be suitable a site recommendation report will be prepared and submitted to the President in fiscal 2001. Our schedule,

as you know, Mr. Chairman is to complete the science at the end

of this calendar year so that that will be on schedule.

The national security area, the fourth of our mission areas to be

summarized this morning, we are asking for $6.6 billion in total.

14

It is an increase of $500 million or 8 percent. And it is focused on

promoting peace and addressing the next generation of national security threats. One of the defendant’s most important responsibility

to the American people, the President and to you, the Congress, is

to ensure the safety security and reliability of the Nation’s nuclear

stockpile.

Last fall the Secretary tasked Under Secretary Moniz to conduct

a comprehensive internal review of the stockpile stewardship program. We have termed it the 30-day review. The principal finding

of the review is that the stockpile stewardship program is working

both in terms of scientific—of specific science of surveillance and

production accomplishments and in terms of developing a program

management structure that integrates the span of program activities. However, the program also faces significant people and infrastructure challenges, including attracting and retaining the best

and brightest people at both the laboratories and production plants

and maintaining and capitalizing an infrastructure in many, many

instances is over 50 years old.

These challenges, along with the numerous requirements that

have been added to the program since its in inception, are being

addressed by Secretary Richardson through his action plan.

We have made considerable progress on these issues in the last

3 months and continue to work very closely with the Department

of Defense through the Nuclear Weapons Council to ensure that

the U.S. nuclear deterrent remains viable into the future.

That concludes my summary of the statement. The full statement has been submitted to you for the record. I look forward to

answering questions.

[The prepared statement of Hon. T.J. Glauthier follows:]

PREPARED STATEMENT OF T.J. GLAUTHIER, DEPUTY SECRETARY OF ENERGY

Mr. Chairman, I want to thank you for the opportunity to appear before the Subcommittee on the Department of Energy’s Fiscal Year 2001 budget.

Management Reforms

Before I discuss the details of our FY 2001 budget request, I would like to address

a major issue of concern to the Administration and the Congress—management systems of the Department. In the past year, a top priority has been to improve the

way DOE manages its people, its resources, and its programs. The Secretary and

I have given management efficiencies our closest attention.

First, we changed the way headquarters and the field interrelate. We instituted

a Field Management Council to bring coherence to decision-making and weigh competing demands for requirements on the field, and assigned Lead Principal Secretarial Officers (LPSOs), responsibility for specific sites within the complex. We hired

new managers at almost all our sites throughout the complex.

Second, we increased the accountability of our top managers. We are depending

more upon ‘‘line management,’’ have empowered LPSOs, and are holding them accountable for their specific areas of responsibility.

Third, working with the Congress, we regained control of assigning M&O contract

employees to the Washington area. We restructured assignment procedures for

these employees in Washington, required specifically defined tasks from them, and

ordered closure of most M&O Washington offices reimbursed by DOE.

Fourth, working with the Congress, we are applying sound business principles to

management of our construction and environmental remediation projects. We established and staffed the Office of Engineering and Construction Management within

the Office of the Chief Financial Officer to make major fundamental changes in our

project management procedures, principles, and practices.

Fifth, we initiated several immediate actions correcting security and counterintelligence problems within the Department which have existed for years, but had not

15

received the appropriate level of attention. We have made substantial progress on

an extensive program of security and counterintelligence improvements, including:

• Creating the Office of Security and Emergency Operations, consolidating the security functions throughout the Department; • Instituting a bottom-up internal security review; and, • Creating the Office of Independent Oversight and Performance Assurance, which

independently oversees security, cyber security, and emergency management

within the Department and reports directly to the Secretary.

Sixth, last year, we launched the ‘‘Workforce for the 21st Century’’ Initiative to

build a talented and diverse workforce which will strengthen our technical and management capabilities and address new challenges. Increasingly, the Department is

competing with private industry to recruit and retain the highly skilled personnel

required to deliver our missions. This growing skills gap has been recognized by the

General Accounting Office, the Office of Inspector General, and this Committee. To

address part of the scientific skills gap, we are proposing a Scientific Recruitment

and Retention Initiative in this budget which totals $10.0 million. Under our Workforce 21, for the first time in four years the Department has been able to target hiring of key technical personnel and strengthen recruitment and internship programs

to create a pipeline of employees ready to enter the DOE workforce at the entry and

mid-level jobs.

The Department also has an opportunity and responsibility to address the longstanding under-representation of women and minorities in senior management and

technical positions. We have initiated an extensive review of workforce management

practices to identify barriers that hinder the promotion of a more representative

workforce. The review resulted in a Department-wide strategic plan called ‘‘Achieving and Promoting a Workforce that Looks Like America: A Companion to Workforce

21.’’ This plan, now in place, will help build a representative workforce and instill

management systems that foster equal opportunity in hiring, promotion, and training practices. We have also established a task force against racial profiling and emphasized the need to promote more partnerships with minority educational institutions.

Seventh, under the direction of the Under Secretary Ernie Moniz, we also established a clearly defined and well articulated Departmental R&D portfolio. This will

ensure our R&D programs are properly structured and take advantage of interrelationships with all relevant program areas.

Lastly, the Department’s defense mission is being restructured into the National

Nuclear Security Administration (NNSA). We established the NNSA, as required, on

March 1. This included the successful consolidation of the Defense Programs, Nonproliferation and National Security, Fissile Materials Disposition, and Naval Reactors offices into the NNSA and involved the transfer of some 2,000 federal employees and 37,000 contractor employees to this new organization. As we discussed, the

President has announced that he intends to nominate General John A. Gordon to

head this organization. He also nominated Madelyn Creedon to be the Deputy Administrator for Defense Programs. We are committed to making the NNSA a viable,

effective organization. The FY 2001 budget for the NNSA will total $6.2 billion, an

increase of $432 million over this year’s level.

We’ve made progress in many areas, but we are far from finished. We will continue to improve the Department’s internal management capabilities to realize the

full potential which our workforce and facilities hold for America. This budget will

help us go farther. It is a forward-looking request emphasizing investments for the

future.

Mission Accomplishments

Notwithstanding our efforts to address our management problems, the Department has continued successfully to carry out its critical missions. For example, in

Science, Department-funded researchers received 43 of the 100 awards given in

1999 by R&D Magazine for outstanding technology developments with commercial

potential. This is the largest number ever won by any public or private entity in

the history of the awards.

In national security, the Departments of Energy and Defense certified for the

third consecutive year that the safety, security and reliability of our nation’s nuclear

weapons stockpile could be assured without nuclear testing. And we are well on our

way to our fourth certification. We also completed important agreements with Russia to promote non-proliferation. And we are meeting critical mission objectives including new production requirements for the W76, W80, and W88 warheads, refurbishment of W-87 Peacekeeper warheads, successful accomplishment of subcritical

experiments, initiation of production of tritium reservoirs at the Kansas City Plant,

and re-establishment of pit production capability at Los Alamos.

16

In energy resources, we proposed legislation to restructure the electricity industry,

to give consumers choices, and save them $20 billion a year on their power bills.

We hope Congress will act on it this year. We promoted new technologies for clean

and renewable energy. We worked with utilities and the oil and gas industry to

make systems Y2K compliant, and on January 1, the lights stayed on. We are responding to current oil supply problems through a range of measures: from the Secretary’s diplomatic initiatives with major oil producing countries, both within and

outside of OPEC, to the reestablishment of an Energy Emergency Office within the

Department, to extensive consultation and coordination with energy suppliers and

state and local government officials, to renegotiation of Strategic Petroleum Reserve

royalty-in-kind deliveries to keep more oil in the market. On Saturday, the President announced the Administration’s intention to create a Northeast heating oil reserve and the Department is working to expedite this decision.

For the environment, after years of delays and excuses, we opened the Waste Isolation Pilot Plant in New Mexico, the nation’s first nuclear waste repository. We’ve

successfully completed 44 shipments to WIPP to date and on March 10 resumed

shipments from Rocky Flats after successfully completing additional waste certification requirements. We formed partnerships with governors to clean up and close

former nuclear weapons production sites, and set aside over three hundred thousand

acres as wildlife preserves in Washington, Colorado, Tennessee, South Carolina,

Idaho, and New Mexico.

Strength Through Science

We’ve given this budget the theme Strength Through Science. Science is the focus

because scientific research, both basic and applied, is integral to achieving our programmatic objectives in each of our mission areas. This is as true for our national

security mission—which ensures that the nation’s nuclear weapons stockpile remains safe, secure, and reliable, and counters the spread of weapons of mass

destructio-as it is for our energy mission--to achieve continued reductions in the economic and environmental costs of producing and using energy resources. It is also

true for our environmental mission to clean up the nuclear and toxic waste that is

the legacy of the Cold War.

Many of the technologies that are fueling today’s economy, such as the Internet,

build upon government investments in the 1960’s and 1970’s—including the Office

of Science’s ‘‘Esnet.’’ The Department of Energy and its predecessor agencies have

been the sponsor of science-driven growth through the combined efforts of the national laboratories, 70 Nobel Laureates associated with the Department, and thousands of outstanding university- and industry-based researchers nationwide.

This Department is among the top federal research and development funding

agencies, regardless of the criterion used. We are first in scientific facilities and

rank third in basic research after the National Institutes of Health and the National

Science Foundation. The Department of Energy is, at its heart, a science agency;

in fact, 40 percent of our FY 2001 budget qualifies as R&D expenditures. We will

spend a total of $7.1 billion on R&D in FY 2000 and plan to spend $7.7 billion in

FY 2001, an increase of 8 percent.

Department of Energy FY 2001 Budget Request

The Department of Energy’s FY 2001 budget request is $18.9 billion. This is $1.6

billion over this year’s appropriation, a nine percent increase. Our budget is organized into four business lines; some highlights of each of these are described briefly

below.

Energy Resources: $2.2 billion (an increase of $175 million, or 8 percent) to provide energy options for a stronger America. These investments will enhance U.S. energy security by providing more economical and environmentally desirable ways to

use and produce energy. DOE continues to support a balanced portfolio of energy

for America’s future, and research and development (R&D) to enable a cleaner energy future. This request emphasizes energy infrastructure reliability, scientific carbon management and R&D, international energy R&D partnerships, and bio-energy/

bio-power technologies.

The request features several cross-cutting initiatives involving the energy technology research offices (Fossil, Nuclear, Energy Efficiency and Renewable Energy,

Science) that will ensure energy security through new economically and environmentally desirable means of using and producing energy. The Climate Change Technology Initiative and the International Clean Energy Initiative will identify and develop pre-commercial energy technologies and potential markets for their use. The

latter effort builds on the conclusions of a recent report by the President’s Committee of Advisors on Science and Technology (PCAST) that identifies the need to

bridge the gap between development and deployment of new technologies.

17

The Electric Grid Reliability Initiative will develop policies and technologies to enhance the security of our electricity supplies. The Carbon Sequestration Initiative

follows a technology roadmap to accelerate R&D to mitigate the impacts of carbon

emissions.

The Enhanced Ultra Clean Transportation Fuels Initiative targets government

and industry resources to develop a portfolio of advanced petroleum-based highway

transportation fuels and fuels utilization technologies that are responsive to nearand mid-term environmental, regulatory and technical challenges.

Finally, the Bioenergy/Bioproducts Initiative will fund research to help make biomass a viable competitor as an energy source or chemical feedstock.

The Fossil Energy Research and Development program level of $385 million includes funding for the up-graded National Energy Technology Laboratory for fossil

fuels research. This budget continues investments in advanced technological concepts and development of highly efficient power generation and fuel producing technologies that together could reduce, or perhaps nearly eliminate, carbon emissions

from fossil fuel facilities. The centerpieces of this research include the Vision 21 energy plant of the future and carbon sequestration. The proposed deferral of $221 million in the Clean Coal Technology program reflects schedule delays from the rescheduling of certain projects. The Department believes the Clean Coal Program is important and we anticipate to successfully complete all of the ongoing projects.

Funding for the Office of Energy Efficiency and Renewable Energy includes support for research to assist in the development of more efficient homes and buildings,

wind energy, geothermal, photovoltaics, and bioenergy and biopower projects. Research will also continue in the on-going Partnership for a New Generation of Vehicles (PNGV), which is developing the prototype advanced technology vehicle in conjunction with the automotive industry. We are requesting $1.26 billion for these programs in FY 2001—an increase of 18%.

The Weatherization Assistance Program , which helps to reduce heating and cooling bills for low-income residents, has an increased budget request for FY 2001 to

weatherize approximately 77,000 homes. In addition, the Administration is requesting $19 million for this program in the FY 2000 Supplemental Appropriations package to cover 9500 more homes.

This Office also funds the Federal Energy Management Program, which helps federal agencies identify, finance and implement energy efficiency improvements for

their facilities. The Federal Government spends $8 billion each year on energy for

its own facilities and operations, and this program saves money for taxpayers by reducing that spending. Our FY 2001 request for this program is $29.5 million—a 23%

increase.

The budget for the Office of Nuclear Energy, Science and Technology has an increase of $21 million to support such important activities as nuclear energy research

and development (including the expanded Nuclear Energy Research Initiative) and

managing the inventory of depleted uranium hexafluoride. The Department is also

proceeding with the project to design and build facilities to convert this inventory

to a more stable form, and in a manner that fully protects workers and the environment. This office also conducts a program to produce and distribute isotopes necessary for medical, industrial and research purposes, including the Advanced Nuclear Medicine Initiative.

The Power Marketing Administrations (PMAs) sell electricity primarily generated

by hydropower projects located at federal dams. First preference for the sale of

power is given to public bodies and cooperatives. Revenues from selling the power

and transmission services of the three PMAs are used to repay the U.S. Treasury

for annual operation and maintenance costs, repay the capital investments with interest, and assist capital repayment of other features of certain projects. However

the PMAs also buy and sell, as a simple pass through, purchase power and wheeling. This budget assumes that in FY 2001 the PMAs will use offsetting collections

from the sale of electricity to finance purchase power and wheeling expenses previously funded by direct appropriations. Purchase power and wheeling activities financed through this method will be phased out in annual decrements by the end

of FY 2004.

Science and Technology: $3.2 billion (an increase of $337 million, or 12 percent) to strengthen our science programs and provide the knowledge base for future

innovation, thereby improving America’s long-term position in an increasingly competitive world economy. We continue to promote a strong national scientific infrastructure and provide the technical foundations for our applied missions. The FY

2001 budget includes initiatives to advance ongoing work at the frontiers of

nanoscience, scientific computing, microbial genomics, robotics, bioengineering, and

it will allow us to increase the use of our scientific facilities.

18

The budget calls for $182 million for Advanced Scientific Computing Research

(ASCR) to increase computer modeling and simulation research and development.

Microbial genomics, an outgrowth of the Department’s pioneering work in the

Human Genome Program, is expanding efforts in microbial cell research. This research, which involves the study of organisms that have survived and thrived in an

extreme and inhospitable environment, could hold the key to advance energy production and use, environmental cleanup, medicine, and agricultural and industrial

processing.

Nanotechnology, or research and development into extreme miniaturized tech- nologies, is funded at $91 million, of which $83 million is in the Science budget and

$7 million is in Defense Programs. This work gives researchers the ability to manipulate matter at the atomic level and could spark further development of supercomputers that fit in the palm of the hand, or tiny devices to fight disease or heal injuries from inside our bodies. Also included in this science budget is $281 million for

the Spallation Neutron Source and $247 million for fusion.

The FY2001 budget continues to strongly support the Department’s unique scientific user facilities. Each year over 15,000 university, industry and governmentsponsored scientists conduct cutting edge experiments at these particle accelerators,

high-flux neutron sources, synchrotron radiation light sources and other specialized

facilities.

Environmental Quality: $6.8 billion (an increase of $511 million, or 8 percent)

to protect the environment and our workers. These amounts are required to ensure

that each cleanup site meets safety and legal requirements, supports accelerated

cleanup and site closure, and maintains others critical environmental priorities.

The Environmental Management budget of $6.3 billion supports proposals to continue our efforts to meet cleanup obligations to communities throughout the country:

• $1,082 million for Defense Facilities Closure Projects; • $4,552 million for Defense Environmental Restoration and Waste Management; • $515 million for Defense Environmental Management Privatization; • $286 million for Non-Defense Environmental Management; and • $303 million for the Uranium Enrichment D&D Fund.

These funds will allow the Department to continue to implement the agreement

the Secretary reached last year with the Governors of Colorado, South Carolina,

Tennessee, and Washington on a Statement of Principles laying the foundation for

a cooperative working relationship between DOE and the states with DOE cleanup

sites. Our FY 2001 request continues an aggressive approach to address immediate

and long-term environmental and health risks of the weapons complex. In March

1999, we made great progress when we opened the Waste Isolation Pilot Plant in

New Mexico as a safe, permanent disposal location for transuranic nuclear wastes.

The FY 2001 request represents an increase of approximately $440 million over the

FY 2000 current appropriation to continue making progress in completing cleanup

and closing sites. A budget request of $664.7 million supports closure of Rocky Flats by December

15, 2006, the closure date targeted in the new cost-plus-incentive-fee contract that

took effect February 1, 2000. The Rocky Flats Site is the largest site challenge to

accelerate cleanup and achieve closure in 2006, and to date significant progress has

been made toward making this goal a reality.

The FY 2001 request furthers our efforts to protect the Columbia River by beginning the removal of spent nuclear fuel from the K-Basins at Hanford in November

2000. This project will carry out a first-of-a-kind technical solution to move 2,100

metric tons of corroding spent nuclear fuel from at-risk wet storage conditions in

the K-East and K-West basins adjacent to the Columbia River into safe, dry storage

in a new facility away from the river.

The increased request for EM Privatization will provide for more progress in

cleaning up and reducing risks from the environmental legacy of the nation’s nu- clear weapons program. The FY 2001 privatization request includes $450 million in

budget authority to develop treatment facilities that will vitrify at least 10 percent

by volume of the 54 million gallons of high level waste now stored in underground

tanks at the Hanford Site in Washington. The Department is using a privatization

approach that shifts many of the technical and performance risks to the contractor.

The request, a $327 million increase, anticipates a decision in FY 2000 authorizing

the contractor to proceed to the construction phase of the project. The amount requested will keep the project on schedule to begin hot operations in 2007.

The request features new initiatives to accelerate cleanup and protect health and

safety at Gaseous Diffusion Plants (GDPs) in Portsmouth, Ohio, and Paducah, Kentucky. Last summer, after reports of alleged health and environmental problems

surfaced at Paducah, the Secretary announced a strategy to investigate, identify and

remedy any past or remaining health, safety and environmental problems at these

19

plants. The Secretary appointed an investigation team that made recommendations

which resulted in a request for funding to achieve health surveillance, safety assessments, and environmental remediation goals within a rapid timeframe. The Administration also has submitted a $26 million FY 2000 Supplemental Budget Request

to Congress to address additional concerns—$10 million for ES&H activities and

$16 million for environmental restoration. This supplemental request and the FY

2001 budget will significantly increase funding for the two GDP sites.

The FY 2001 budget request also provides funding, subject to new legislative authority, to initiate cleanup of uranium mill tailings in Moab, Utah, to restore lands

at the gateways of some of our most spectacular national parks.

The Environment, Safety and Health budget provides an increase of $38 million, to $166 million, to make health and safety programs a key priority of the entire department. ($40 million is included in the Energy Supply account for non-defense

ES&H activities.) This also includes $17 million for the Energy Employee Compensation Initiative. Pending now before Congress is legislation to establish an occupational illness compensation program for the Department of Energy’s workers at

its nuclear facilities. The bill has three parts, each addressing a specific group of

workers eligible for compensation benefits:

• The Energy Employee’s Beryllium Compensation Act, addressing current and

former DOE federal and contractor workers with beryllium disease. Eligible

workers would receive reimbursement for prospective medical costs associated

with the illness and a portion of lost wages, or have the option of receiving a

single, lump sum benefit of $100,000; • The Paducah Employees’ Exposure Compensation Act, addressing Paducah, Kentucky employees exposed to radioactive materials; and • A specific group of Oak Ridge, Tennessee employees determined by an independent panel of occupational physicians to have illnesses due to workplace exposure.

The President has also directed that the National Economic Council (NEC) conduct a review of other workplace exposures and illness at DOE sites. At the end

of this process, the President will receive an interagency study on the health of our

workers which may lead to additional measures beyond those we initially proposed.

In response to worker health concerns, the Department has also established the

Chronic Beryllium Disease (CBD) Prevention Program. Contractors at DOE sites

with the potential for worker exposure to beryllium, a metal used in many nuclear

applications, are required to submit a detailed plan to meet prevention program requirements. This is intended to minimize the number of future cases of disease from

current workers. The program also calls for monitoring the health of ‘‘beryllium-associated’’ workers to promote early detection of CBD.

The Civilian Radioactive Waste Management program is funded at $437 million

to support determination of the suitability of Yucca Mountain as a permanent repository for nuclear waste. An increase of $77 million for Yucca Mountain design and

engineering works allows DOE to maintain the schedule of work included in the Viability Assessment. In FY 2001, an investment of approximately $ 4 billion and almost 18 years of site investigations will culminate in a series of statutory decisions

on whether the repository should be sited at Yucca Mountain. If the site is determined to be suitable, a Site Recommendation Report will be prepared and submitted

to the President in FY 2001.

National Security: $6.6 billion (an increase of $502 million, or 8 percent) to promote peace and address the next generation of national security threats. One of the

Department’s most important responsibilities to the American people, the President,

and to you, the Congress, is to ensure the safety, security and reliability of the nation’s nuclear stockpile. A dependable nuclear deterrent remains at the root of the

United States’ national security policy. Once again, without underground testing,

our Stockpile Stewardship Program is working today to confirm its continued safety

and reliability. It draws upon the best scientific resources in our complex, allowing

the Secretary of Energy and the Secretary of Defense to annually certify to the

President that the nuclear deterrent does not require underground testing at this

time. Three annual certifications—and a soon-to-be-completed fourth—are proof of

its enduring success.

Last October, the Secretary tasked Under Secretary Moniz to conduct a comprehensive internal review of the Stockpile Stewardship Program (30-Day Review).

The principal finding of the review is that stockpile stewardship is working, both

in terms of specific science, surveillance, and production accomplishments, and in

terms of developing a program management structure that integrates the span of

program activities. However, the program does face significant people and

infrastucture challenges, including attracting and retaining the best and the brightest people at both the laboratories and the production plants, and maintaining and

20

recapitalizing an infrastructure that—in many instances—is over fifty years old.

These challenges, along with numerous requirements that have been added to the

program since its inception, are being addressed by Secretary Richardson through

his 15-point Action Plan. We have made considerable progress on these issues in

the last three months and continue to work very closely with the Department of Defense, through the Nuclear Weapons Council, to ensure that U.S. nuclear deterrence

remains viable into the future.

In addition, our supplemental budget request for FY2000 of $55 million will allow

us to address infrastructure issues. It will specifically apply to the workforce, production readiness, required infrastructure, and safety challenges at the three production plants:

• Y-12 Plant in Tennessee; • Kansas City Plant in Missouri; and the • Pantex Plant in Texas.

The National Defense Authorization Act for FY 2000 created a semi-autonomous

agency within the Department, the National Nuclear Security Administration

(NNSA). These national security program increases are necesssary to ensure the

safety, security, and reliability of America’s nuclear weapons stockpile, reduce nuclear proliferation threats world-wide, and protect against the threat of weapons of

mass destruction. A total of $6.2 billion—up $432 million from the funding level for

these programs in FY 2000—is requested for departmental programs that are consolidated into the NNSA (Defense Programs, Nonproliferation and National Security, Fissile Materials Disposition, and Naval Reactors). The Albuquerque and Nevada Field Operations offices also are under the jurisdiction of the NNSA.

The remaining national security budget request includes department-wide offices

of the Secretary of Energy that are not part of the NNSA—the Offices of Intelligence, Counterintelligence, Security & Emergency Operations, Independent Oversight & Performance Assurance, and Worker Transition. The most significant increase is for the Office of Security and Emergency Operations, with a program level

of $340 million. The increase of $48 million, assuming favorable Congressional action on our supplemental request, is mainly for additional cyber-security activities

and personnel.

Conclusion

Our FY 2001 budget is a strong statement reflecting this Administration’s com- mitments to the American people. It is a request that emphasizes our strength in

science and enables us to effectively deliver our missions. I look forward to working

with you, Mr. Chairman and other members of the Subcommittee, to meet our responsibilities to the American people.

Mr. BARTON. Thank you, sir.

The Chair is going to recognize himself for 7 minutes. We are

going to recognize each member then for 7 minutes. Then if we

need additional questions, we will do that. I have a flight at 12:27,

so we are trying to wrap this up by 11:45 if possible. I want to say

at the outset, Mr. Secretary, that I understand that the Department of Energy is misnamed. You really—most of your resources

and most of your responsibilities are more in weapons management, weapons development, waste cleanup. So it is no negative on

the Clinton administration. But the $18 billion proposed budget, I

went through last night and then just glanced through your testimony again, I don’t see too much money being spent on energy, energy research especially. What is the total, and I don’t need an

exact number, but what would you estimate of your $18 billion request is actually going to try to increase domestic energy supply?

Mr. GLAUTHIER. Well, the energy resources area, one of our four mission areas is a total of $2.2 billion.

Mr. BARTON. But most of that is not energy research to actually

increase energy supply. It is environmental management, and I

think you used the euphemism ‘‘carbon dispersion’’ or something.

Mr. GLAUTHIER. Sequestration.

Mr. BARTON. That is hardly adding to our energy supply. I am

talking about Mr. Strickland, who might want to spend a little

21

more in clean coal technology so we could use more of a coal resources or myself who might want to spend more in natural gas research or oil research so you get a little more out of our domestic

oil wells or find more markets for natural gas, I am talking about

actual things that would minimize our growing dependence on foreign sources of energy.

Mr. GLAUTHIER. Well, Mr. Chairman I think the majority of the funds, the vast majority of those funds in the $2.2 billion dollars

do speak to that, either directly or indirectly. Directly in research

and areas like fossil energy research or clean coal programs but indirectly also in the energy efficiency programs, which reduce the

amounts of energy we need to consume, so that every advancement

we can make in appliances or automobiles or industrial motors that

require less energy also benefit.

Mr. BARTON. I will grant you that if you can increase conservation, you use less energy, and we would agree on that. But last

year did the United States of America increase its energy production or decrease its energy production? From all sources?

Mr. GLAUTHIER. From all sources.

Mr. BARTON. That we actually produce in this Nation, not import?

Mr. GLAUTHIER. We decreased oil production, but I suspect increased electricity production, for example.

Mr. BARTON. Well—— Mr. GLAUTHIER. So on balance, I am not sure.

Mr. BARTON. You are saying that we added some gas-fired turbine plants, and probably on a net basis that offset the decline in

domestic oil production.

Mr. GLAUTHIER. I am not sure it offset completely, but the

economy—— Mr. BARTON. Well, I am not either. You are not under oath. I am

not trying to trick you. I am just pointing out a basic fact is that

we are not significantly increasing domestic energy production.

Now, because the electricity markets are changing, we are building

more gas-fired turbine plants, and some of them have double capacity and that, on a net basis, is probably slightly increasing our

overall capability. But our oil production is declining. Our coal production is flat and may be slightly increasing. Our natural gas production is—could increase significantly, but stymied by transportation bottlenecks primarily in the northeast.

So I would encourage you to look a little bit more in trying to

actually do more to increase domestic energy production.

I want to switch gears just a little bit. Do we have the clock? We

do have the clock on? I don’t want to take up too much more than

my time than I am supposed to. On the floor 2 days ago, we had

a bill out of the Foreign Relations Committee that directed the Secretary of Energy to give a report to the President and the Congress

about the OPEC nations if they are price fixing. In my opinion, it

is one of the silliest pieces of legislation we have had before the

Congress in the 15 years I have been in Congress. I was one of only

38 members that thought that through, the other 300 and some

odd voted for it.

But in the middle of that debate, in the middle of that debate,

several northeast congressmen got up and talked about the need

22

for a refined fuel oil reserve in the northeast. That that somehow

would have been a salvation for the heating oil problem that was

legitimately faced in the northeast this winter.

Now, I pointed out that section 157 of the Energy Policy Conservation Act, the Strategic Petroleum Reserve authorizes such a

reserve. It is the current law. So I was a little bit struck when earlier this week or late last week, the President came forward, and

with great fanfare announced the creation of such a reserve. So I

want to just try to find out what the thinking is here of the administration. Because last March, March 15th, 1999, Secretary Richardson submitted a letter to the Speaker of the House, Danny

Hastert, and said we ought to repeal that. He said subsection F

would amend section 152 of EPCA, by deleting the definition of

early storage reserve industrial petroleum reserve and regional petroleum reserve. There is no need to establish an early storage reserve now that the SPR reserve is operational. And an industrial

petroleum reserve has never been established because of policy consideration. And EPCA provisions referring to it should be struck.

In the course of several reviews conducted since the passage of

EPCA, DOE has consistently determined the government owned

and controlled crude oil reserve located in the Gulf Coast region is

the most cost effective way to ensure continued oil product supplies

to the Nation. Therefore, the regional petroleum reserves are not

necessary.

Then it goes further, next page said that the subsection 157 the

regional petition reserve should also be struck. It says the department is determined in its report issued on May the 13th, 1998, that

a government owned and controlled crude oil reserve located the

Gulf Coast region is the most cost-effective way to ensure continued oil product supplies to the Nation. Accordingly, product supplies are not required to ensure prompt and effective responses to

supply interruptions because domestic refining capacity is adequate

to supply petroleum products during a supply emergency.

So that is May—I mean, March 15 of last year. Mr. Gee, who I

think is sitting right behind you looking very intelligent as he is

and being glad that he is not up here at the desk I am sure, September the 16th, 1999, he says the same thing when he testified

before this subcommittee. ‘‘the need for a regional petition reserve

is not foreseeable and funding for such a program is not justifiable,

because based on its expected benefits, the administration bill deletes both this requirement and references to regional and refined

product storage.’’

So all the official documentation until about a week ago says we

don’t need this. I have got the report here in June 1998 and the

summary. It is to design and construct a large reserve and then

adopt an inexpensive field strategy and an unresponsive employment policy would produce a reserve whose cost would greatly outweigh its benefits.

Now, I understand that Mr. Markey and Mr. Gejdenson and

some of my Republican friends too, it has not just been the Democrats, have been demanding that the existing law be obeyed and

that this is something that’s necessary. But all your policy documents that you have submitted indicate that while it may look

good on paper, it just doesn’t make any sense. So is all this inforVerDate 11-MAY-2000 13:36 Mar 22, 2001 Jkt 067434 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 E:\HEARINGS\64032 pfrm09 PsN: 64032
23

mation wrong or have you all found some new documents and some

new models that showed that you were incorrect in the past and

now you have seen the light?

Mr. GLAUTHIER. Well, Mr. Chairman, we do want to acknowledge

that the these situations are dynamic and we continue to reassess

the situation. What we found in the last year is that the distribution system was not, in fact, as flexible as we had thought. In particular, we saw the industry reducing its own inventories at a faster rate than we would have expected. Our proposal now is to have

a reserve all right, but not the same one that is in the statute because the way the provision is already authorized in law, does not

provide us the flexibility to use a reserve of that sort when there

is a regional problem, a regional spike in prices or a regional disruption in supply. The trigger that is required to be able to release

oil from that reserve in the current legislation is, or the current

law is a national emergency. Now, we need to have that modified

we need to have it done if a way that really would reflect a regional

problems and then——

Mr. BARTON. You want a different trigger mechanism.

Mr. GLAUTHIER. That is the primary change that is going to be

needed.

Mr. BARTON. Do you want to amend your budget that you submitted to fund this reserve, and if so, how much? I didn’t see any

money in the budget for this newly found fervor for the reserve. So

how much money do you think we ought to put into it?

Mr. GLAUTHIER. Well, there are two types of funding that might

be required. One is for structuring, leasing a facility and operating,

and the other one is the purchase of the oil itself. The purchase of

the oil is by far the greater amount of money, and we do not propose to actually seek appropriations for that. The idea would be

that we essentially effect a transfer of oil that is in the Strategic

Petroleum Reserve now so that about 2 million of that is actually

located in a reserve in the Northeast.

Mr. BARTON. So you are not going to have a refined fuel oil reserve that is available in the Northeast?

Mr. GLAUTHIER. Well, this would be a Home Heating Oil Reserve, and when I said effectively transfer, we don’t mean physically to take oil from the Strategic Petroleum Reserve and pipe it

up there, but rather to exchange oil that is in the reserve for products that would be stored up in the Northeast, so that——

Mr. BARTON. I guess I am just ignorant, but it would seem to me

if you wanted to—it does make some sense to me to have fuel oil

available for distribution where the people need it. Oil that is in

the Strategic Petroleum Reserve down on the Gulf Coast takes

time to get it out, it takes time to refine it, it takes time to transport it and then it takes time to distribute it. So obviously if we

had a problem next winter like we had this winter and that was

our refined product reserve, it would probably take 2 months to get

it there and that wouldn’t help anybody, but I don’t hear you saying that you want to actually physically locate fuel oil in Boston,

in New York, in Connecticut, wherever, having it available so that

if you have a severe winter, it is there.

You are not saying that?

24

Mr. GLAUTHIER. No. I am sorry, Mr. Chairman, that is what I

intended to say. I haven’t said it clearly.

The proposal would be to have a reserve for home heating oil in

the Northeast, somewhere located in the Northeast.

Mr. BARTON. Real fuel oil?

Mr. GLAUTHIER. Yes.

Mr. BARTON. It would be in real tanks?

Mr. GLAUTHIER. That’s right.

Mr. BARTON. Okay. Not just on paper somewhere.

Mr. GLAUTHIER. That is correct.

Mr. BARTON. You are not requesting we fund that; you just want

the political benefit of saying, we ought to do it and let the next

administration pay for it?

Mr. GLAUTHIER. We will be requesting some funding for it. We

will send a budget amendment forward for the 2001 budget, for

only the cost associated with leasing of tanks and of some of the

operations, which—— Mr. BARTON. So you are not going to add new capacity? The same

capacity that was inadequate this winter, you are just going to

lease it so it will be inadequate next winter?

Mr. GLAUTHIER. On a national scale, we have about 580 million

barrels of oil in the Strategic Petroleum Reserve.

Mr. BARTON. It is crude oil. It is not refined.

Mr. GLAUTHIER. That is correct. We propose to essentially trade

a couple million barrels of that oil for the refined products that we

want to store in the Northeast, so we don’t have to ask for appropriations to purchase those products; and that will—— Mr. BARTON. So you are going to go to the private oil companies

and say, we will give you 2 million barrels of crude oil in the SPR

if you give us 2 million barrels of fuel oil and store it in the Northeast.

Mr. GLAUTHIER. Whatever the right numbers work out to be. We

haven’t done all the analysis to work it out.

Mr. BARTON. But there is a principle——

Mr. GLAUTHIER. That is exactly the principle, and of course, we

are continuing to replenish the oil in the Strategic Petroleum Reserve from our royalty-in-kind program, so even though this would

temporarily be a slight reduction in the Gulf Coast, we would make

that up. And, in fact, the reserve is still part of the national reserve. We would have that portion in refined products in the

Northeast.

Mr. BARTON. My time has expired, but isn’t it true that all the

analysis that was done a year or two ago really—I mean, I have

no reason to oppose a Northeast refined or regional refined product

reserve if it really made sense. It makes great political sense, because it shows we are doing something; but in a practical way, it

doesn’t make sense. It is very costly, it is very inefficient. It is not

adding the capacity if you are not going to build new storage tanks.

Mr. BURR. Mr. Chairman, could I—— Mr. BARTON. It would seem to me—it would seem to be a lot

more productive to talk about things that really help, like let us

try find a way to build more natural gas pipelines or refined petroleum pipelines. Then if we need to create some sort of an emergency distribution system where we allocate fuel oil to the homeVerDate 11-MAY-2000 13:36 Mar 22, 2001 Jkt 067434 PO 00000 Frm 00028 Fmt 6633 Sfmt 6602 E:\HEARINGS\64032 pfrm09 PsN: 64032
25

owners that need it and have contracts for industrial customers,

that might actually help a little bit.

It might take a while to do. It is not easy getting the right of

way to build these pipelines and things we need to do, things to

increase the actual supply that can be distributed, as opposed to

this idea that didn’t make a lot of sense. And when the weather

was a little bit better, you were honest enough to say that.

Mr. BURR. Mr. Chairman, could I ask you to yield time, that you

don’t have, just for a clarification; and I would ask for Mr.

Strickland’s patience.

It hasn’t been that long since I left business, and the scenario

that you just painted for me, I was in the wholesale distributing

business where we relied on retailers to stock a certain amount of

goods. And we were in seasonal products; if at any point we made

a decision to have a greater stock because we anticipated a change

in Mother Nature which might require more heating equipment or

lawn equipment, we automatically saw a reduction in the stock of

our retailers, and they became 100 percent reliant on our increase

in inventory versus an insecure filing on their part that they

wouldn’t have the products.

My fear under the scenario that you just conveyed to me is that

the Federal Government would guarantee some number of additional gallons of fuel oil, at which time the oil companies would

say, therefore, we don’t need even what we had stocked last year

in our inventories; and in fact, if we have a winter that wipes us

out, we have got the reserve that we go to and we are protected.

I would only caution all of us that I think that that scenario

forces an economic decision that will not have the end result that

all of us would hope we achieve.

And I thank the chairman for yielding.

Mr. BARTON. I want to say one thing before I recognize Mr.

Strickland.

One thing you said actually makes sense, if we are going to keep

the strategic regional reserve on the books, and I don’t have any

opposition to that if that is what the administration wants to do.

Changing the trigger mechanism does make sense; we should make

it possible on a regional basis, if you have got a supply interruption

like we had, whatever you have got on the books, if you have got

a fuel source there that can be used, if—give the Secretary or the

President the right to use it. I am all for that.

But I am not convinced that the underlying idea makes any

sense except in a political ‘‘after the horse is out of the barn’’ sense,

well, we want to do this next time.

Mr. GLAUTHIER. May I comment, Mr. Chairman?

Mr. BARTON. Sure.

Mr. GLAUTHIER. I appreciate your comments and your support

for that proposal. The proposal we have made is only one element

on a whole range of things that need to be done. We would agree

that this, by itself, would not be sufficient to take care of the problem; and so we have a lot of long-term actions that are needed to

increase natural gas use in the East, do things that will help increase domestic production of oil and gas throughout the country,

and we need to work together on a whole range of things.

26

Mr. BARTON. The next 2 to 3 months, when I am not trying to

help put together an electricity bill, which the administration

wants to do, we are going to do some hearings on long-term solutions or at least possible solutions.

We have not had a debate in this country for a substantial

amount of time on increasing domestic energy supply because we

have had low energy prices. We have taken it for granted, and if

there is a silver lining, what has happened in the last 3 to 4

months, it is that the country’s attention has been refocused on

how vulnerable we are to foreign sources of energy imports; and it

is not bad that we are focused on that.

The gentleman from Ohio is recognized.

Mr. STRICKLAND. Thank you, sir.

Mr. Deputy Secretary, I would like to direct your attention to

page 15 of your testimony. You are talking about Worker’s Compensation, and you say the bill has three parts, each addressing a

specific group of workers eligible for compensation benefits.

You mention on the first bullet the Beryllium Compensation Act;

you say that eligible workers would receive reimbursement for perspective medical costs associated with illness and a portion of lost

wages or have the option of receiving a single lump-sum benefit of

$100,000.

The second bullet lists the Paducah Employee’s Exposure Compensation Act, addressing the Paducah, Kentucky, employees exposed to radioactive materials.

The third bullet, a specific group of Oak Ridge, Tennessee, employees determined by an independent panel of occupational physicians to have illnesses due to a workplace exposure.

Mr. Deputy Secretary, looking at that testimony, can you identify

an obvious missing piece of that compensation plan?

Mr. GLAUTHIER. Well, I am not sure which piece you are referring to. The portion that comes to my attention is, of course, all the

other facilities in our complex.

Mr. STRICKLAND. Mr. Deputy Secretary, what about the workers

at the Piketon facility, a sister facility to the Paducah plant, a

plant where my employees, my constituents, were exposed to the

very same radioactive materials, plutonium and other materials, as

were those employees at the Paducah, Kentucky, plant?

Can you tell me, sir, any rational reason why this administration

would choose to compensate the employees at Paducah and exclude

the employees at Piketon, Ohio.

Mr. GLAUTHIER. That is the subject of the next paragraph of the

testimony, which is the ongoing study under the direction of the

National Economic Council at the White House, and which is making good progress.

Mr. STRICKLAND. Can you explain to me, though, because my

plant is a sister plant to the Paducah plant and the very same materials were handled by these employees, why this administration

would choose to provide a compensation package to the Paducah,

Kentucky, employees and not to Piketon, Ohio, employees?

Mr. GLAUTHIER. Only because we did not want to delay the proposal for the Paducah workers at the time. We did not have the

data at that time to be able to identify the extent of the exposure.

27

Mr. STRICKLAND. Can you tell me today that once the medical investigation is completed at the Piketon site, at the conclusion of

that investigation are that my workers who were exposed to the

materials, as were the workers at the Paducah plant, can you guarantee me today on behalf of this administration that my workers

then will be included in this same compensation package?

Mr. GLAUTHIER. I think the commitment I can make to you today

is that the administration is very actively engaged in exactly that

question, that we hope to have a decision soon, and—— Mr. STRICKLAND. In all due respect, sir, what I am asking you

to answer is if the conditions are identical to the conditions that

existed at Paducah, if the materials that were handled were identical to the materials that were handled at Paducah, if that conclusion is reached by this investigation team that is currently carrying

out an investigation, can you give me an assurance that if those

conditions are identical, that this administration will ask for the

same compensation package for my constituents?

Mr. GLAUTHIER. That is the logic, the rationale that the working

group is working toward at the administration, and that premise

is the working premise of the group.

I can’t give you a firmer guarantee, because, of course, a decision

has to be made by the President and hasn’t been made yet; but I

think it will be made.

Mr. STRICKLAND. So it is the President’s fault that this has not

been done?

Mr. GLAUTHIER. He was not supplied or provided the options or

the data on which to do it.

Mr. STRICKLAND. Well, I think the President should be provided

with the options, because this is a serious matter; and I have been

told that forces within the administration—the Department of Defense, the Department of Justice, OMB—are determined not to include my employees because they don’t want to open up the possibility of litigation. DOD is concerned that employees at their sites

may require the same kind of compensation package.

And, you know, I understand those concerns, but I cannot justify

to my constituents why they are being left out of a compensation

package; and I want to tell you, I am glad the Paducah, Kentucky,

employees are in fact being compensated. They deserve to be compensated. But the workers at the Piketon site deserve equal compensation. It is unacceptable that this kind of discrimination would

occur.

Mr. GLAUTHIER. One of things I can tell you is that, earlier this

week, I was in a meeting with representatives of the same agencies, the Defense Department and others you cited, and those agencies have dropped their opposition of the type you talked about, so

that I think they are prepared now to acknowledge and to support

some program that will go forward this way.

Mr. STRICKLAND. Can you give me some idea as to when the data

may get to the President, so that he can fully participate in this

decision?

Mr. GLAUTHIER. It will be in the next few weeks. The timing, as

you know, from last fall was, this would be completed in the spring.

We are now in the spring. I do expect this will be completed this

spring. I cannot give you anything more precise than that.

28

Mr. STRICKLAND. Mr. Deputy Secretary, there was a hearing in

the Senate this week; I am sure you are aware of that hearing.

Two employees from my plant testified about serious injuries.

Are you aware of that hearing?

Mr. GLAUTHIER. Yes.

Mr. STRICKLAND. I just wanted to draw your attention to page

259, volume 2, Paducah Employee’s Exposure Compensation Act,

and this is what it says. ‘‘In recognition of the fact that Federal and contract workers at

DOE’s gaseous diffusion facility in Paducah, Kentucky, were exposed to plutonium and other highly radioactive materials, without

their knowledge, as a result of the policy of reusing uranium in the

production of plutonium.’’ It is no secret that the workers at the Piketon, Ohio, enrichment

facility managed the same type of material and were exposed to

plutonium and other highly radioactive materials without their

knowledge and without adequate protection; and some of these employees now have serious health consequences. I visited one of

those individuals weekend before last.

It is beyond belief that this administration would come forth with

a compensation package that would include employees at Oak

Ridge, Tennessee, and in Paducah, Kentucky, and leave out the

employees in Piketon, Ohio; it is just beyond belief.

You know, I have asked—I don’t hold you personally responsible

for this; but I have asked over and over and over for an explanation, and what I get is double-talk. It is totally unacceptable, and

I want you to carry this back to whoever you need to carry it back

to, if it has to be the President that hears this or anyone else.

This is unacceptable, and I cannot believe that my colleagues on

both sides of the aisle will stand for this kind of injustice, and so

I have expressed myself, I guess, as strongly as I can.

Mr. GLAUTHIER. Mr. Congressman, may I comment?

Mr. STRICKLAND. Yes.

Mr. GLAUTHIER. I do appreciate your comments. I will take those

back and want to make it as clear as possible that the decision that

was made last fall was not a policy decision that somehow workers

at your site did not deserve to be compensated, but rather strictly

on the basis of the available data, the available information.

We had basis—we felt we could make a proposal, we could support legislation at the Paducah site. We did not have the same

amount of data, we did not have the factual basis to go forward yet.

So the question is, should we delay and do both later; or should

we do one then and tell you, we were going to work on the other,

which we are now trying to complete?

Mr. STRICKLAND. And I understand that, and I told members of

this administration and representatives from OMB that if they

would simply make a guarantee to me that if the investigation determined that my workers were exposed to these materials unknowingly, without adequate protection, that they would in fact be

given the very same compensation package; and that guarantee

has not been forthcoming, and I really, with all due respect, I don’t

think it has been forthcoming from you today.

Maybe you can’t make that decision sitting here, but someone in

this administration needs to say to me that there will be no disVerDate 11-MAY-2000 13:36 Mar 22, 2001 Jkt 067434 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 E:\HEARINGS\64032 pfrm09 PsN: 64032
29

crimination. I don’t want my workers to get anything they don’t

need or deserve or aren’t eligible for, but neither do I want them

to be discriminated against for reasons that are—I don’t know—irrational in my mind.

Mr. GLAUTHIER. Well, if I could go one step further, our goal is

to try to be sure there is fair and equitable treatment to workers

throughout our complex at all of the sites, because there may be

health problems at other sites as well.

Mr. STRICKLAND. I understand. But my plant is a sister plant to

the Paducah plant. They handle the same materials, the very same

materials, and why you can’t just say, they are going to be treated

in an equitable fashion, is beyond me. It is just beyond me.

Mr. GLAUTHIER. It is our goal; I can’t give you the guarantee, because I don’t have that authority, but I can give you that statement

of a goal. That is where we are trying to be.

Mr. STRICKLAND. Well, somebody in this administration ought to

give that guarantee, and until they do, this issue is not going to

go away.

I have used up my time. Thank you.

Mr. NORWOOD [presiding]. Thank you very much, Mr. Strickland.

It is pretty clear to all of us that you have sensitized all of us to

this issue, and I think you will find friends on both sides of the

aisle.

This chairman’s chair feels pretty good, but I am actually going

to be next because I was next here. Well, whatever, I am going

next.

Mr. Secretary, I have two or three little fast questions. How long

have you been at DOE?

Mr. GLAUTHIER. Just completed 1 year of service in this position.

Mr. NORWOOD. How many employees over there now? How many

worldwide employees at DOE?

Mr. GLAUTHIER. The Federal workforce of DOE is about 15,000,

which includes the Federal Energy Regulatory Commission and the

Power Marketing Administrations. When you deduce that the DOE

itself, which is really running the programs, is just under 11,000

Federal employees, and about 110,000 contractor employees, other

contractor employees, and then there are additional subcontractors.

Mr. NORWOOD. How many in town here?

Mr. GLAUTHIER. I am not sure. About 5,000 of the Federal employees.

Mr. NORWOOD. Did you drive to work this morning?

Mr. GLAUTHIER. Yes, sir.

Mr. NORWOOD. Do you come in our own car or company car?

Mr. GLAUTHIER. I did.

Mr. NORWOOD. Can I ask you what kind of car you have got?

Mr. GLAUTHIER. It is a U.S. car. It is a Buick made by the Auto

Workers.

Mr. NORWOOD. We are darn proud it is a U.S. car, I can tell you

that.

Did you drive over here to this meeting?

Mr. GLAUTHIER. No, I did not. I was driven in a Department car

here.

Mr. NORWOOD. That is what I mean, you came by automobile?

Mr. GLAUTHIER. Yes.

30

Mr. NORWOOD. What kind of car was that.

Mr. GLAUTHIER. It is also a General Motors car. It is a Cadillac,

actually.

Mr. NORWOOD. Oh, my word. How nice.

Mr. GLAUTHIER. It was there before I got there.

Mr. NORWOOD. Actually, in my other life I used to drive Cadillacs, too, before I got up here in this business. Those suckers use

a little gas, but they are nice.

My question really is, do you agree with Mark over here, he was

here the other day—Mazur, is it not, Director of Office Policy.

Mark agrees with the President, and I am just curious if you do;

are you all right with $2 a gallon gas? The President thinks it is

pretty good.

Mr. GLAUTHIER. I think the President is trying to do what he can

to bring that price down.

Mr. NORWOOD. It is confusing, because he said he thought it was

pretty good. It is good for conservation; people can’t afford it, so

they won’t drive.

I want to know how you feel about that, just a personal question,

particularly with that Cadillac. I am worried about that gas mileage.

Mr. GLAUTHIER. We did car pool. There were five of us in the car.

Mr. NORWOOD. Very good. We can divide it up between five; that

will help.

Mr. GLAUTHIER. The President’s announcement last Saturday

was a very specific set of activities to help bring prices down. He

is very concerned about consumers and the public.

Mr. NORWOOD. Well, what has me so concerned, he says—I am

only quoting the man; I am not trying to put words in his mouth—

so he says he is concerned about the fact that if this gas can cost

a lot and none of us can afford it, think how great that is for the

environment. That is what he says now. I know, what you say he

is saying now, of course, after the truckers were in town and all

that.

Do you agree with the statement that he made 3 or 4 weeks ago,

that ‘‘Isn’t this great, it is going to get to $2 a gallon?’’ and I will

give you the exact quote if you are offended by how I am paraphrasing it.

Mr. GLAUTHIER. Well, I think it is the characterization. There is

one effect of high prices; that will be increased incentive for conservation. That is certainly true.

Mr. NORWOOD. Secretary, I love you. Yes or no, do you agree

with the President?

Mr. GLAUTHIER. I agree with the President.

Mr. NORWOOD. You are okay with $2 a gallon of gas?

Mr. GLAUTHIER. I agree with whatever the President said.

Mr. NORWOOD. Give me that exact quote so we can get it in the

record, so I am sure I don’t mistreat you in any way.

[The information referred to follows:]

Now, on the other hand, Americans should not want them to drop to $12 or $10

a barrel again, because that puts you in this roller coaster environment which is

very destabilizing to the producing countries and not particularly good for our economy, and takes our mind off our business, which should be alternative fuels, energy

conservation, reducing the impact of all this on global warming.

31

Mr. NORWOOD. I want to now get to the rest of my questions. By

the way, Volkswagen is low on gas mileage.

I would like to direct the bulk of my questions, what time I have

left today, toward the disposition of nuclear waste, and I assume

you are familiar with the bill that came out of the House, the one

my good friend from Michigan called a ‘‘turkey,’’ which really he

was bragging on it when he said that, because he knows how great

that bird is. But my question to you, and this is for your opinion,

will the President sign that bill?

Mr. GLAUTHIER. I think the indications are that the President is

probably not going to sign that.

Mr. NORWOOD. Could you tell us what is the problem now?

Mr. GLAUTHIER. Well, I think the most specific concern is the authorities that are taken away from EPA in establishing the right

protective standards for groundwater.

Mr. NORWOOD. How come we didn’t work that out 3 years ago,

when Mr. Dingell was helping us and many Democrats were helping us try to find a solution to the problem.

Mr. GLAUTHIER. Well, there has been an ongoing series of discussions over the years, and 3 years ago there were a lot of other

issues on the table as well. We are now at the point where we are

going to complete the science on this facility this year, this calendar year, and we are going to be in a position to actually see a

recommendation finally go forward on the suitability of the site

next June, June of 2001, to the President. We are finally at the

stage after 1 year of being on the threshold of seeing a decision

made on a permanent site.

Mr. NORWOOD. Well, we don’t want to rush into this, that is true.

Would you mind just submitting in writing at some point in time,

like in the next couple of weeks, exactly the reasons the administration can’t sign that bill?

Mr. GLAUTHIER. Be happy to do that.

[The following was received for the record:]

The Administration has consistently and clearly stated its position on S. 1287, the

Nuclear Waste Policy Amendments Act of 2000, and similar legislation. The Administration opposes this bill because it would infringe upon and restrict the Environmental Protection Agency’s existing authority to establish standards to protect public health and safety and the environment from radioactive releases. Therefore, it

is unacceptable to the Administration. The bill passed by the Senate would be a step

backwards because it would limit the Environmental Protection Agency’s ability to

exercise its existing authority until June 2001. The Agency’s current intent is to

issue a final standard during the summer of 2000 so that it will be in place well

in advance of the Department of Energy’s decision in 2001 on the suitability of the

Yucca Mountain Site. As stated before, the Administration would oppose S. 1287 for

these reasons and, if presented to the President, it would certainly invite a veto.

Mr. NORWOOD. Why it is that the Department of Energy objects

so to Yucca Mountain as an arms storage site?

Mr. GLAUTHIER. We would like to focus on this site as a potential

permanent repository site and do not want to see anything that is

going to deflect from our ability to complete that successfully. That

has been one of the concerns in the past, if we preempt the decisions by forcing or making a premature decision on interim storage.

Let us focus on the permanent decision first; let us make that, and

then let us come back and explore what else might be done once

that decision is in place.

32

Mr. NORWOOD. You could hardly call any decision we are making

premature, we have talked about this an awful long time. What

precisely is the problem? I mean, isn’t that a perfectly good place

for interim storage?

Do you know something the rest of us don’t, that it wouldn’t

make a good place for interim storage?

Mr. GLAUTHIER. We have been concerned about interim storage

anyplace. We are concerned about the funds being focused on completing the work for the permanent repository, the amount of

money we have. We have not gotten the full budget requests that

we have made the last couple of years. The amount of money we

have is just enough to keep us on schedule for this decision to go

to the President next June.

We are concerned about the requirements to move on into licensing. Anything that we do that will move us onto another path, even

to divert a portion of those funds, is going to have an impact on

the ability to get this permanent repository finished.

Mr. NORWOOD. What did you mean, that you are concerned about

interim storage anyplace? What does that mean?

Mr. GLAUTHIER. Well, you mentioned Nevada. Our feeling is that

if we were to construct an interim storage facility, a new facility

anyplace, that would, I think, have the same concerns that I cite

about diverting funds, of having an impact on the ability to complete the permanent repository on schedule.

Mr. NORWOOD. Do we have pretty good science indicating Yucca

Mountain is a good place?

Mr. GLAUTHIER. We have no show-stoppers at this point. This is

all on track.

Mr. NORWOOD. How is your science regarding interim storage in

Aiken County, South Carolina; Burke County, Georgia? How are

we going there? What does the science indicate about the interim

storage that we do have going on.

I think there are 70 other places around where there is interim

storage going on. What is the science telling us about that?

Mr. GLAUTHIER. My comment a moment ago was with respect to

a centralized interim storage facility. We do have materials stored

at numerous sites throughout the country. We are concerned about

that, and as you know, we have a proposal that we have offered

to the utilities for the Federal Government to take responsibility

for the fuel of those sites.

Mr. NORWOOD. We made that proposal years ago didn’t we when

we started taxing Georgia ratepayers we made that deal a long

time ago. In fact, we have spent a half a billion dollars, sent it up

here to you for you to take responsibility.

So we thank you making the offer to take care of our interim

storage, but you know, you are supposed to do that now. I have forgotten how much, 7 billion in all has been sent over there to you

to take care of that interim storage; and when you make a decision

to play politics with Yucca Mountain, what you are doing is saying,

in effect—at least a common-sense reading of it—it is perfectly fine

to have interim storage in Aiken County, South Carolina—no

sweat, no danger, we have got the science, but we have got to study

Yucca Mountain one more time.

33

Now, that is what you are saying when you are playing games

with this Yucca Mountain thing that Democrats and Republicans,

both sides of the aisle in both bodies in Congress, want you to get

moving on. I want exact, detailed lists as to why, one more time,

you have moved the goal post on Yucca Mountain.

Will you do that for me, sir?

Mr. GLAUTHIER. We will be happy to submit the response. The

schedule will run, it is the same schedule we have been on for the

last 5 years at least, getting this suitability assessment done, based

on the science.

[The following was received for the record:]

Since 1993, this Administration has been unwavering in its commitment to complete the rigorous world-class scientific and technical program necessary to evaluate

the suitability of the Yucca Mountain site for a repository in a timely manner. We

are nearing a decision, expected next year, on whether the site is suitable and

should be recommended for development. The Administration’s Fiscal Year 2001 request for the Program is critical to reaching these decisions and, if appropriate, proceeding forward to begin emplacement operations at Yucca Mountain in 2010. This

has been the Department’s published schedule since 1989.

Mr. NORWOOD. We catch onto what you have been doing. I promise you, we catch onto how long you have been taking, and how

much this is going on, and how we can never quite get there under

this administration because when we come to an agreement—and

I mean, between my pal, John Dingell, and this administration, we

have got, well, we just can’t quite sign that bill, we have got to do

one more little thing here.

And you know what, January will be here before you know it. It

will get here quick, and I am telling you guys, you have an opportunity to do the right thing.

Now, I know you can’t make the man sign anything, but you

darn sure ought to be making a legitimate argument as to why the

interim storage in Burke County, Georgia, is not safe. And I have

crawled through that hole in Yucca Mountain that we have spent

I have forgotten how many billions on, and I don’t blame them for

not wanting it in Nevada. I wouldn’t want it either. But that is

where it needs to be, and you guys need to help get it moved.

I see my time is up, Mr. Burr. I know you are just squirreling

over there, big time. So with that, I will refer to you so you can

catch a flight.

Mr. BURR. I was just mesmerized by the gentleman’s line of

questions.

Mr. NORWOOD. You get another 2 minutes.

Mr. BURR. Clearly, you are only going to have the Chair for another 30.

Mr. NORWOOD. I see that. Well, the chairman will back me up.

Mr. BURR. Again, welcome, Mr. Secretary.

One of the things we as Members of Congress try to do as we

try to find solutions to others’ problems—I would suggest to Mr.

Strickland that the fastest way to address this problem in Ohio is

to go to your local paper and tell them to hire the reporter from

the Paducah paper, who put the pressure—public pressure on the

Congress and on the Department of Energy to look at a horrendous

problem in Kentucky, and ultimately, the Department of Energy

responded to a number of different pressures.

34

I hate to make it that simplistic, but it is not just coincidental

that that one reporter who broke that story has led to a tremendous amount of work by this subcommittee and a reaction from the

Department of Energy.

Mr. STRICKLAND. Can I respond to you?

Mr. BURR. Please do.

Mr. STRICKLAND. If I hadn’t run out of time, one of the questions

I was going to direct toward the Deputy Secretary was, would the

response have been different if the Washington Post had decided

to run a series of stories on Piketon, Ohio, instead of Paducah,

Kentucky, and I just did haven’t time to direct that question.

Thank you so much.

Mr. BURR. We think a lot alike.

Mr. Secretary, let me talk to you just very briefly about the deregulation and, specifically, the stakeholders group, because I think

it is unclear as to exactly what the participation of the Department

of Energy was and the organization and coordination of the group.

So, if you will, tell me, was the Department of Energy the nucleus

behind the creation of this stakeholder group to look at electricity

deregulation?

Mr. GLAUTHIER. The Department has helped to facilitate the

meetings of that stakeholder group. I don’t believe that we actually

created this stakeholder group.

Mr. BURR. Did the DOE invite the attendees?

Mr. GLAUTHIER. We did to at least a couple of the meetings, yes.

Mr. BURR. And what criteria did the Department use to determine who the invitees would be?

Mr. GLAUTHIER. It was based largely on an earlier meeting that

the Secretary had had with a group of people who were interested

in restructuring.

Mr. BURR. So the Secretary picked them?

Mr. GLAUTHIER. It kind of grew out of that meeting.

Mr. BURR. Did this stakeholders group ever meet at the Department of Energy or a Department of Energy facility?

Mr. GLAUTHIER. Yes, yes, they did.

Mr. BURR. And was there any need for something like that? I

show my ignorance. Is there any need for any type of public notification of that?

Mr. GLAUTHIER. No.

Mr. BURR. Is there any reason that you are aware of as to why

somebody from this committee—Republican, Democrat chairman,

ranking member, wasn’t included in the stakeholders group?

Mr. GLAUTHIER. I believe that it was a systematic attempt to try

to form a group that would represent all points of view and make

sure that everybody was represented.

Mr. BURR. So it was just to get one point of view and consensus

in one direction on deregulation?

Mr. GLAUTHIER. I think the idea was to try to get ideas formulated to get a more——

Mr. BURR. Well, we tried that too and we got together, Republican and Democrat members, and Rich was kind enough to come.

And it is through those meetings—our door was open; it was a

pretty public process that we went through. We invited people from

outside that we perceived to be experts to come in and educate us

35

on what they thought the direction is that we should head, what

the effects of certain things were.

We worked through that process and were able to pass a subcommittee bill. It didn’t have unanimous consent; it did have bipartisan support and was a very important first step to the process.

Now, as we are going through that process, the Department of

Energy has a parallel effort at the creation of a stakeholders group,

that meets at the Department of Energy facilities, that was picked

by the Secretary to try to determine the direction of electricity deregulation; and Congress wasn’t invited to participate.

Is there a problem with that as it relates to how you look at it?

Mr. GLAUTHIER. My understanding is that the staff of the committee were briefed on those meetings.

Mr. BURR. Were they invited?

Mr. GLAUTHIER. No, I don’t think they were.

Mr. BURR. I mean, we invited Rich. I don’t think——

Mr. BARTON. Would the gentleman yield?

Mr. BURR. Be happy to.

Mr. BARTON. The subcommittee chairman wasn’t briefed on these

meetings; in fact, the subcommittee chairman found out about it

through the rumor mill, so if you are briefing somebody up here,

it is not on the majority side.

Congressman Boucher and Hall are not here. Perhaps they were

briefed, but I think if they had been briefed, they would have told

me because we have got a very positive relationship. I don’t mean

to take the gentleman’s time.

Mr. BURR. I appreciate the chairman’s clarification.

This member was not briefed, as well, but this member felt like

he knew everything that was going on at the stakeholders meeting,

because it was reported in the press pretty aggressively—not necessarily that there was an open process going on, but that a group

had gotten together to aspire to a certain direction for electricity

deregulation.

It is not that there is anything wrong with that, but I guess my

question is, when Congress can have an open process, is it right for

the Department of Energy to have such a closed and secretive process to try to achieve a policy decision?

I mean, the last time I remember, this had happened on health

care and America was not real happy about it; and I think if America knew about this, they wouldn’t be real happy about it.

Are you happy?

Mr. GLAUTHIER. If I might, Congressman, this effort that we

have undertaken has been only to try to help provide more ideas,

more dialog, going into the debate that was going to occur here in

the Congress.

Mr. BURR. The debate was taking place, Mr. Secretary. If you

had wanted it to be in addition to the debate we were having, we

would have been included. We have had over 30 public hearings,

both sides of the aisle, in this Congress on electricity deregulation—not counting the open meetings that Rich sat in. And I think

Rich—correct me if I’m wrong—we had White House representatives in those meetings. Just because they didn’t agree with some

of the points we talked about, we didn’t ask them to leave, and we

36

never locked the door, and we never excluded anybody who asked

to come and testify.

Now, granted, I never asked to come to the stakeholders meeting,

but that was primarily because nobody asked me if I wanted to. Do

you think that is wrong? Is it wrong what the Department of Energy did as it related to the stakeholder group?

Mr. GLAUTHIER. I think that the impression that has grown out

of this is much stronger than what was intended at the time. The

intention was to get ideas on the table that would go into a process

that—we are not even expecting that this group of ideas will be the

Department of Energy’s position. It is, rather, other ideas that will

go on in the discussion. We look forward to working with the subcommittee and the full committee now to continue the discussion

and move legislation forward.

Mr. BURR. I talked earlier about my business background. The

way that you prepare to work with people is not to exclude them

from your own internal processes; it is actually to reach out and

include them, and I thought that was what the chairman was doing

when Gingrich and others from the White House sat in the room

and brought their ideas, had the opportunity to participate in the

discussion, and the minority to bring people in as well, that might

talk about what they were doing.

Let me move on because my time is up. I just want to ask one

last question.

Mr. BARTON. This will have to be the last question.

Mr. BURR. Yes or no answer, do the current level of gas prices

lessen the economic impact if we were to adopt the Kyoto protocol?

Mr. GLAUTHIER. I am not sure that I can give you a simple yes

or no.

Mr. BURR. Let me refresh your memory. One of the issues raised

in the Senate was—when Kyoto was first proposed, and we agreed,

and it came back to the Senate, and they began to have debates,

we were at 88, 90 cents a gallon; and one of the specific points that

was made was that if you adopted the Kyoto Protocol, the gas

would go to $1.50.

Now that gas is at $1.65, it is easier for people not to look at the

gallon of gas as a reason and, in fact, the economic impact is less

if gas is at $1.60 and Kyoto would only force it to $1.50.

Mr. GLAUTHIER. I am not sure, and I don’t believe that the cost

impact, economic impact of complying with the Kyoto Treaty would

change. What it does is, it provides incentives for people to move

to other strategies.

Our cost estimates have been that complying with the Kyoto

Treaty will be modest overall, that if it is done in a way that provides flexibility, emissions trading, things of that sort, that there

will not be significant economic dislocation.

The projection of the gas prices you referred to are not a part of

the policy positions, but rather some people’s projections of what

might happen.

Mr. BURR. Potential economic impacts of feeling. I thank you,

Mr. Secretary.

And I thank the chairman and Mr. Strickland for their patience,

and I would yield back.

37

Mr. BARTON. Mr. Whitfield. And before you start Mr. Whitfield,

do you have a plane to catch today?

Mr. WHITFIELD. No, I yielded to Mr. Burr because he said he had

a plane to catch.

Mr. BARTON. Well, Mr. Strickland has some additional questions,

so I am going to stay here till about 12 to 12, and then I am going

the turn the Chair over to you for such time as you may consume

to ask questions, so that Deputy Secretary—you are recognized for

7 minutes now for questions.

Mr. WHITFIELD. Mr. Chairman, thank you very much. And Mr.

Strickland raised an interesting issue earlier, and obviously, I am

delighted there is legislation affecting the Paducah plant. There is

going to be more legislation prepared and there has been some prepared. But let me ask you this question.

Considering the fact that we had Department of Energy sites all

over the country manufacturing various weapons systems and material for bombs and so forth; and that employees throughout the

country who, in many instances—were unaware of the types of material that they were dealing with and many of them have suffered

and incurred serious illnesses as a result of that, don’t you think

that the U.S. Government should have a policy of adopting a program to compensate these employees for verified illnesses that they

incurred while working at these plants?

Mr. GLAUTHIER. Yes, Congressman, we do and that really is the

underlying position under the various proposals, the proposal we

did offer in the fall and the ongoing work now to try to get a basis

to act in some way that is equitable and fair to all the workers.

Mr. WHITFIELD. And obviously, I think one reason it has taken

a long time to even get to this point is because we are talking

about World War II on and even prior to that. So for many, many

years we have had all these people out there who have incurred

various illnesses without any compensation whatsoever for this,

unless there was some State Worker’s Comp program. I know that

one of the reasons, obviously, we don’t have a Federal program has

just been the cost.

But I think as this administration and others step up to the

plate to settle discrimination lawsuits, just like the $538 million for

discriminating against women at the United States Information

Agency, the government is going to have to step up to the plate and

say, at whatever the cost, we are responsible for this; you did not

know what you were dealing with, and therefore we are going to

have to make you whole.

I think that we have an obligation to do that, and we are going

to have to do it. Do you agree with that?

Mr. GLAUTHIER. Yes. And Secretary Richardson has tried to be

very forceful in making that proposal. The legislation that we did

propose for Paducah is premised exactly on that, and that is what

we hope to continue to do as we move to Piketon and the other facilities.

Mr. WHITFIELD. And we are in the process of preparing legislation that will affect a lot of sites around the country and people

who have experienced these same things. So we look forward to

working with you all on that as we go along.

38

Now, Senator McConnell and I, as well as Congressman Strickland, passed legislation in the Congress that a conversion facility

would be built at the Paducah and Portsmouth sites to take care

of this uranium hexafluoride, and I noticed in this year’s fiscal year

2000 budget there is $22.9 million requested, and of that, I guess

about half of it goes to maintain the cylinders in which this is

stored and the other half is going to entice companies to give their

proposals on bidding a facility.

Now, it is my understanding that within the Department there

are many people who are opposed to these conversion plants. Am

I accurate in saying that, or could you tell me exactly what is happening over there as far as the policy of developing these conversion plants?

Mr. GLAUTHIER. Yes, thank you. I would be happy to do that.

I think the confusion, perhaps, about these plants has been the

question of what schedule they are on; and there was discussion

last year, the middle of the year, about an accelerated schedule,

and the proposal had even been RFP’d, had been drafted and circulated, which would have put things on a very fast track. And

then, in reviewing it in the fall, we decided—and I led the process—to make the decision that that schedule was not going to be

successful, that we were getting ahead of ourselves in a way that

unfortunately has been too traditional in DOE projects. As a result,

what we have done is to focus on characterizing the wastes, to be

able actually to do samples of the materials in those containers, to

be able to do environmental sampling of the sites as well, so we

will have a solid basis, a technical basis for proceeding; to get the

design process laid out in way that we will be able to then proceed,

have the proposals go out, the request for proposals be issued by

October 1 of this year, have those proposals come back in and be

able to build these successfully, so we will have the technical basis,

the design basis to be able to proceed to full design construction

and operation that will be successful and will be able to be followed

up.

Our earlier path, I am afraid, was not going to have resulted in

the success of the project.

Mr. WHITFIELD. So there is no question that the technology is

there to do this; is that correct?

Mr. GLAUTHIER. That is correct, although we do need to know exactly what constituents are in those tanks so—we found in some

of the sampling recently, at least one case where there was something in one of the cylinders that was not expected, and it would

require a slight change in the treatment technology that is used.

So that is the kind of reasoning that has led us to this.

Mr. WHITFIELD. Now, let us say that you do this sampling which

is ongoing and you discover that there is contamination there,

there are transuranics, whatever, that is pretty widespread.

Is that going to change your opinion on whether or not you

should proceed with conversion plants?

Mr. GLAUTHIER. No we don’t expect that. We want to be sure

that the treatment technologies and the sizing is done exactly

right, so it will accommodate the range of actual technical levels

of contamination levels that we will find. That is the focus.

39

Mr. WHITFIELD. And when do you anticipate the sampling will be

completed?

Mr. GLAUTHIER. Most of it, I think, will be completed by September. We have sampling going on right now. In some cases, it

takes several months for the final results to be available.

Mr. WHITFIELD. Now, and you said October 1 you would hope to

have an RFP. Now, do you believe that 12 million is enough to entice a company to come forth and reply to an RFP or submit a proposal?

Mr. GLAUTHIER. I think it is the appropriate level to show that

the Congress is supporting these projects on the track that is necessary, and that if Congress does appropriate those funds and supports this effort, that firms will come forward, yes.

Mr. WHITFIELD. So if we added additional money to that, you

would not be opposed to that?

Mr. GLAUTHIER. It depends on where it comes from, Congressman. Our concern is, of course, that we keep our other priorities

in place, too.

Mr. WHITFIELD. Okay.

Now let me ask you, on your supplemental—— Mr. BARTON. Let this be the last question in this round. We have

Congressman Markey here. I want to introduce him to the committee properly, and then I have to leave and go to the airport; but

go ahead and ask this question.

Mr. WHITFIELD. In your supplemental, there was $26 million— so much for environmental cleanup, so much for medical monitoring which was approved. Now, it is my understanding that you

had made another effort at some timeframe to obtain another $11.2

million for the Office of Worker and Community Transition Assistance, which was not granted by either the staff or whatever. Why

did you not make that request within the $26 million; that $11 million, why did you not add that on at the original time?

Mr. GLAUTHIER. I am not sure that I follow all the individual

pieces that you have got. We do have another $12 million that will

be going to the program from funds that were in the memorandum

of agreement that was executed at the time of the privatization of

USEC.

Mr. WHITFIELD. Well, it is my understanding that in the supple- mental there is a $26 million supplemental for this cleanup and

worker transition, and that people went to the Committee on Energy and Water and wanted another $11 million on top of that, and

that that didn’t make it through; and I was wondering why it was

submitted in separate pieces.

Mr. GLAUTHIER. I believe the additional piece you are talking

about is worker transition funding?

Mr. WHITFIELD. Right.

Mr. GLAUTHIER. And what we have been trying to do there is to

continue to look at what we can do to try to deal with the expected

layoffs that will occur this summer. We have, as you know, additional money in the cleanup portions of the budgets in our environmental management budget. We have been trying to husband those

resources so that that money can be used this summer to help

bring about increased hiring at the same time that the other layoffs may occur. We expect probably on the order of 400 or more

40

workers to be able to be hired this summer, and then if our request

is funded, the 2001 request, by October, we would have an additional amount of hiring that could be done.

Mr. WHITFIELD. Thank you, Mr. Chairman.

Mr. BARTON. Thank you. Mr. Whitfield, if you will begin to move

this way to take the chair, I am going to have to run to the airport.

The Chair would ask unanimous consent that all members not

present have the requisite number of days to put their opening

statements in the record if they so desire. Is there objection to

that?

Hearing none—— Before I leave, Mr. Secretary, I want to point out that when we

did this hearing last year the staffs on both sides sent written

questions as follow-up and we had to close the official record without ever receiving replies to those written questions, and we kept

the record open for 6 months. So we are going to be a little bit

more pushy this year.

We are going to send you the written questions within the next

2 weeks, and we would hope that you would get us written responses within the next 2 weeks after that. Do you think that—— Mr. GLAUTHIER. We will work to be as responsive as we can. We

will do it quickly, and it is certainly not our intention to have

things drag out. So we will work to try to do it that quickly.

Mr. BARTON. We won’t send you questions with multiple choice

answers. You will have to do some thinking to answer them, but

hopefully they can be answered in the timeframe.

And the other question I am going to ask that you really think

about for the record: Mr. Norwood asked a number of questions on

the nuclear waste fund. I am not going to repeat that, but we simply have to have a responsible solution from the administration on

the funding profile. You know and I know we can’t build the thing if we fund it around $400 million a year when, within the next 3

years, it is going to cost over a billion dollars a year for construction.

I mean, you have got to—we will work with you on a bipartisan

basis if the administration, Department of Energy, will present us

with realistic funding requests for the depository. I mean, we just

got—you know, it is beating a dead horse, but the House bill did

that. The Senate bill doesn’t do that.

Having said that, we simply have to move forward on that.

Mr. GLAUTHIER. We do need to work together. Thank you.

Mr. BARTON. The Chair is going to recognize the distinguished

gentleman from Massachusetts, who has joined Mr. Burr in observing a tieless subcommittee hearing. And I have already informed

the distinguished gentleman from Massachusetts that I was less

than enthusiastic about his idea of the refined product reserve in

the Northeast, but I am sure, since he is going to get the last word,

he will reinforce the need for that with our distinguished Deputy

Secretary. Mr. Markey is recognized for 7 minutes; then we are

going to have second round of questions that Mr. Strickland and

perhaps Mr. Whitfield will want to continue.

Thank you for being here.

Mr. MARKEY. We kind of have this disagreement over what is a

national emergency. The Sandinistas are coming up the Rio Grande

41

toward Texas; that is a national emergency. If there is a hurricane

in Texas and 20,000 people lose their homes and there is $200 billion worth of damage, that is a national emergency—not a regional

emergency; the President declares it a national emergency.

But if 67 nations get together at the prime minister or sheik

level and decide to cutoff home heating oil supplies for the northeastern part of the United States, that is a regional emergency, not

a national emergency.

Now, the fact of the matter, that the rest of the Nation doesn’t

use home heating oil, is really not relevant. In fact, using that kind

of an argument, if the lower 48 States were all cutoff, but Alaska

had plenty of oil, you wouldn’t have a national emergency by definition, because you hadn’t hit every State. So, you know, some people look at this definition of ‘‘national emergency,’’ and somehow or

other you have to hit every single State or it is not a national

emergency.

Now, that, of course, would be a very narrow-minded view of defining what constituted a national emergency. That would actually

be a pretty stupid way of dealing with it. So we think that the administration has the ability to deploy a regional petroleum reserve,

using the existing language.

Do you agree?

Mr. GLAUTHIER. Yes. The President in his announcement last

Saturday asked the Congress to move forward and authorize a reserve, but also reserved the right to do it under existing authorities

if the Congress doesn’t act.

Mr. MARKEY. Do you agree, as well, that the President has the

ability to deploy the Strategic Petroleum Reserve? If 3 million barrels of oil is removed from our energy supply, is that a national

emergency? How many barrels would it take?

Mr. GLAUTHIER. That is a good question. I am not sure we have

a specific number threshold.

Mr. MARKEY. If I am paying $1.70 for gasoline and I should be paying only $1.20, have we reached a national emergency yet? Or

is it $2 or $2.20? Is it 5 million barrels that they have withdrawn?

When do you reach a point where it is a national emergency, or

does the President always reserve the right to make that decision,

notwithstanding what other parts of America might say? What is

the testing mechanism?

Mr. GLAUTHIER. The only basis of the law currently, for acting

to withdraw oil from the Strategic Petroleum Reserve is a supply

interruption.

Mr. MARKEY. Right. Do you consider, when four or five governments get together, who control the oil supply to our Nation, and

at the government level, they decide to interrupt our supply in the

normal course of, you know, international commerce, a supply

interruption—and cutoff 3 million barrels?

Mr. GLAUTHIER. It is different from the kind of supply interruptions I think were anticipated originally. The question that would

have to be addressed is, how long is the interruption going to last,

and what are the steps that are possible to be taken?

Mr. MARKEY. What were the original supply interruptions that

we anticipated? I was here on the committee throughout the 1970’s,

and what we were talking about was four or five governments

42

going into a room and saying we are going to cutoff X amount of

supply. There wasn’t a war, in other words; it was strictly an economic decision. Is that what you are talking—aren’t we in the

exact same circumstance we were in in the 1970’s?

Mr. GLAUTHIER. We are in a similar circumstance. The question

is, how long will this last, will there be changes made? And of

course, Secretary Richardson is doing everything he can to bring

about an increase.

We expect to revisit the question about the Strategic Petroleum

Reserve after hearing next week’s decision of OPEC and we understand in the context of that decision what kind of an interruption

may be continuing.

Mr. MARKEY. I guess the question that I am asking is that if the

existing conditions continued is that, in and of itself, sufficient to

justify an emergency being declared, if there were no changes of

circumstances whatsoever?

Mr. GLAUTHIER. That has been discussed. There has not been a

firm decision made within the administration on whether or

not——

Mr. MARKEY. How many barrels would it take? What is the

range? Can you give us a range? Is 3 million not enough? How

many would it have to be?

Mr. GLAUTHIER. We do not have any quantified criteria established.

Mr. MARKEY. You can’t define it, but you will know it when you

see it? Well, that is good. I will tell you why that is good, because

that means it is a no-standard standard; and that means that, you

know, whatever the President decides becomes the standard in

terms of what an emergency is and is, as a result, unchallengeable,

since it is in the eye of the beholder if you don’t have an absolute

standard.

Now—so would the President need us to authorize specific language in order to construct a regional reserve or can he do it without?

Mr. GLAUTHIER. Well, he has asked to have it authorized specifically, because I think that would be preferable to do this the right

way. If the Congress does not act—— Mr. MARKEY. If we don’t act in the next couple of months, is he

going to—does the administration plan on authorizing a process to

be put in place so that the residents of the Northeast know for this

coming winter that something will be in place?

Mr. GLAUTHIER. My expectation certainly is that we will act

under existing authorities if the Congress does not proceed.

Mr. MARKEY. Is it your intention to have something in place for

this coming winter?

Mr. GLAUTHIER. Yes, it certainly is.

Mr. MARKEY. Okay. How important is it to the administration

that the Strategic Petroleum Reserve be authorized under EPCA?

Mr. GLAUTHIER. We are asking the Congress to act. As you know,

the authorization expires at the end of the month. We would like

to get a simple extension of a year, so we can work together on the

broader questions about the reserve.

Mr. MARKEY. What would be the consequences of a failure to reauthorize EPCA?

43

Mr. GLAUTHIER. It makes some of our other authorities—potentially, it will be challenged.

Mr. MARKEY. Do you think we should authorize the regional petroleum reserve in spite of EPCA?

Mr. GLAUTHIER. As part of?

Mr. MARKEY. As part of reauthorization.

Mr. GLAUTHIER. What we are asking for right now is the simple

extension.

Mr. MARKEY. I am talking about the regional petroleum reserve

now.

Mr. GLAUTHIER. I think we need to work together on language

that will constitute the regional reserve.

Mr. MARKEY. Would you like us to do that in EPCA?

Mr. GLAUTHIER. Yes, that would be the logical place to do it.

Mr. MARKEY. Okay. Now, in his radio address on Saturday, the

President said he did not want a regional petition reserve to have

adverse environmental impacts. Could you detail for us what those

potential environmental adverse impacts might be?

Mr. GLAUTHIER. Well, I think all the impacts that could be associated with the storage of products, heating oil products, our expectation is in order to do this quickly, we would use existing storage

facilities so we would not be trying to site new facilities or construct new ones.

Mr. MARKEY. What would be the issues surrounding the use of

existing facilities?

Mr. GLAUTHIER. I think the transportation of the fuels, the storage and all, we want to be sure whatever facilities we use will meet

all the appropriate standards and——

Mr. WHITFIELD [presiding]. Your time has expired. If you would

like to ask one more question and if the Secretary has time, we are

going to do one more round.

Mr. MARKEY. I have one final question. Then I thank you, Mr.

Chairman. In your testimony and in Chairman’s Barton’s remarks,

you endorsed the concept of new triggering language that would

allow oil to be released from the regional reserve in response to a

regional emergency or a price hike. Has the administration developed legislative language on this matter?

Mr. GLAUTHIER. We are working on it. We don’t have the language actually developed now. But we are working on it and would

like to get it done quickly.

Mr. MARKEY. Could we get it—what is your time line for getting

us language?

Mr. GLAUTHIER. We would like to work over the next couple of

weeks to do this.

Mr. MARKEY. We are moving to the EPCA reauthorization next

week. Could you do it over the weekend like it was an emergency

that had to be dealt with for the northeastern region of the country? Is there someone who could work over the weekend?

Mr. GLAUTHIER. Let’s see if we could work with your staff to

come up with the language next week.

Mr. MARKEY. Just coming up with one sentence or two. We

should be able how to do that before the markup.

44

Mr. WHITFIELD. We appreciate your time this morning. If you

have about 12, 14 more minutes, we would like to go around one

more time.

Mr. GLAUTHIER. For you and Congressman Strickland, of course.

Mr. WHITFIELD. Thank you so much.

Mr. MARKEY. Any port in a storm.

Mr. GLAUTHIER. If it was the Congressman from Massachusetts.

Mr. WHITFIELD. Mr. Strickland, why don’t you proceed for 7 minutes.

Mr. STRICKLAND. Thank you, sir. Mr. Deputy secretary, I stated

in my opening remarks that I was having some questions this

morning that may pertain to the privatization of the enrichment industry. And at this point I would like to ask if you know when the

administration will be releasing its report to Congress addressing

the effect of the Russian HEU agreement on domestic uranium

mining, conversion, and enrichment industries, and the operation

of the gaseous diffusion plants. This report is required under the

1996 Privatization Act and should be reported to Congress not later

than December 31 of each year. I have yet to see such a report and

I would expect the Department of Energy would contribute significantly to such a report. Can you tell me if such a report exists and

when it is likely to be available?

Mr. GLAUTHIER. Well, I can report that the report you are talking about is in draft form. It is in review within the administration.

I do not have a specific date when it will be out. But there is an

active effort going on to try to complete that and get it to you soon.

Mr. STRICKLAND. Would you please do everything that you can

under your influence and power to make sure that that report is

available to us as expeditiously as possible. Since apparently it was

due on December 31.

I want to preface my question with some observations. We

privatized our enrichment industry, and I believe the government

received something approximating $1.9 billion out of that transaction. Shortly thereafter we were required to appropriate some

$325 million as a direct result of privatization. And I am sure you

understand what was involved in that dealing with the Russians

and the natural uranium.

In the meantime, either jobs have been lost or renounced totaling

somewhere in the vicinity of 1,500 jobs at the two sites. The company, the privatized company, is now estimated to be worth somewhere in the range of $400 million. My understanding is they are

carrying about a $500 million debt.

I had a meeting with the national, or the Nuclear Regulatory

Commission a couple of weeks ago. They told me that they are in

the process of doing an analysis which they hope to have done by

perhaps June in which they will try to determine if this private

company is capable of doing what it must be do statutorily, and

that is maintain a reliable and economic domestic source of enrichment services. They use the phrase Catch 22 when they were talking about their obligations to make this determination in order to

continue to license this company to continue to operate this industry.

Many people think that this industry is facing bankruptcy. I received a call this week from Dr. Thomas Neff, who purported to be

45

the father of the arrangement with Russia to purchase materials

from their nuclear arsenal. And I asked him point-blank if he

thought the best thing for the security of this Nation, both in terms

of our national security and in terms of our economic security, was

to think about the possibility of this government once again taking

control of this industry, purchasing it back, however that could be

done. To me that, in his considered opinion, that was what would

likely be the best scenario.

And I say that leading up to this question. Obviously this industry is in difficult straits. My office and other offices have been getting calls from individuals who are representative of the debt holders, there are questions about the, management of this industry,

what its long-term strategies are. Given the importance of this industry to the energy needs of this Nation, and as I said a little earlier, some people think this industry would be worth more dead

than alive, in other words, to actually cease the production of the

enrichment facilities, sell off the contracts and God only knows,

what would happen as a result, but what I want to ask you is what

is the department doing to address the energy security needs of

this Nation in terms of our enrichment capacity considering NRC’s

concerns? And I can tell you, I talked with Treasury within the last

several days and much of what they said to me was their statutory

responsibilities and obligations are pretty much over once privatization occurred. So I guess that leaves the responsibility in the

hands of the Department of Energy. And what is the Department

doing in terms of the vulnerability of this industry and trying to

make sure that our security needs are attended to?

Mr. GLAUTHIER. Congressman, we do feel that we need a domestic source of enrichment capacity in this country. We need that for

both commercial power plants, and of course for our national security needs in case we need to enrich material again for our weapons stockpile and for our naval reactors.

The question on our mind in this regard is the long-term question for U.S. enrichment corporation. They have the facilities in

your districts now, but those facilities are old, they are very energy

intensive. The electricity contracts that they are operating under

are going to expire here in a couple more years.

So we have been concerned about what their long-term plan is

going to be. Ever since they decided not to go forward with the

Atlas technology, our technical staff and our nuclear energy program, our R&D program at the Department has been working with

the U.S. enrichment program over the last few months to share

with them the technical information from our work on different enrichment technologies. And the USEC people have been looking at

whether or not they might use one of those technologies as a basis

to go ahead and build a new production facility to help become

more competitive in the long term. We want to support that. We

hope that it will be possible for them to do something that maintains a competitive position in the marketplace, maintains a strong

domestic capability, and uses the best technologies.

Mr. STRICKLAND. Mr. Whitfield, can I ask one quick follow up

question?

Mr. WHITFIELD. Sure.

46

Mr. STRICKLAND. And this is an effort to get your personal opinion. Given the history of privatization, given the fact that I was

told and I think others were told that the reason the IPO privatization process was the most desirable because that was the most— that was the way to have the greatest guarantee that Atlas would

be pursued as the next technology, given the fact that they are now

coming back to the Department of Energy apparently to get DOE

expertise in order to make this industry viable in the future, was

privatization—has privatization benefited our Nation? Your judgment?

Mr. GLAUTHIER. Well, I think the operations of running an enrichment facility did not have to be necessarily governmental. It is

not inherently governmental. The question now is can the operation, in fact, formulate a long-term strategy that will really be a

solid business basis to proceed in the future. It has several things

going on in it right now. It has still a good book of business. It has

the inventory that it has available. It has a financial position on

which it can move forward if it can make decisions on a technology

basis and formulate a plan and really move ahead. I think the jury

is out.

We have go to watch and see where this will all actually go. We

want to be as supportive as we can, and our technologies would be

available to them or to any company here who would be interested

in it.

Mr. STRICKLAND. One final follow-up. When we privatized the

Avlos technology was valued at zero, my understanding is, in that

transaction. They terminated the Avlos research and I may be

wrong, but I have been informed that then they had a yard sale

and sold off the lasers and other equipment, I guess, to their profit

from an investment that had been valued at zero, but an investment that had consumed hundreds of millions of perhaps billions

of tax dollars. It is—it is all so puzzling to me how these things

have occurred. But I want to thank you for answering my questions

and I thank you for being here.

Mr. WHITFIELD. Thank you, Mr. Strickland. As you know, Mr.

Glauthier, the Oversight and Investigations Subcommittee of Commerce will be having a hearing around April 13 on the financial

condition of USEC, because all of us, I think, are committed to

maintaining a domestic production source for enriched uranium for

national security reasons. And I think that that will be at a time

when we can look into this in more detail as well. And I am delighted that Mr. Strickland raised that issue at this hearing.

I have just a couple of questions to close up here. As you know,

both the Paducah and Portsmouth plants are scheduled to lose a

total of 850 jobs, and we know that negotiations and discussions

are going on with Bechtel Jacobs to move some of those over for

environmental cleanup to minimize the loss of jobs. Those that will

not have jobs through the transition will have a termination benefits package available for them. Have you, at this point, been able

to determine how many employees you believe will not find a job

at Bechtel Jacobs and will have to be terminated?

Mr. GLAUTHIER. I don’t believe we have the exact numbers yet.

We are still working actively with the organizations. We, as I said

earlier, are hopeful that we will be able to increase our hiring in

47

the environmental cleanup program by 400 perhaps as many as

500 workers this summer. We are doing everything we can to maximize that and to try to make sure we can use what capacities we

have to try to help mitigate their situation.

Mr. WHITFIELD. And do you have a date in which you think that

decision will be made by?

Mr. GLAUTHIER. In terms of the numbers that you mean a better

precision of numbers? I know the work is going on every week. It

is a continuous effort. I am not sure if there is a target where we

actually know. We will share the information with you as we proceed.

Mr. WHITFIELD. In your testimony, you talked about the proposed deferral of $221 million in clean coal technology programs.

Would you expand on that just a little bit.

Mr. GLAUTHIER. Yes. Because of the schedule, some of these

plants or projects have not been able to proceed as rapidly as expected. This has been true for several years. A few years ago there

were proposals to actually rescind funding that had been previously

made available because the projects were behind schedule. What

we have done instead is to propose deferring the funds so that they

will still be available to complete the work, but they will be available in the years in which they are actually going to be needed.

Mr. WHITFIELD. But the department is still committed to researching and pursuing clean coal technology.

Mr. GLAUTHIER. That is correct. And we are supporting the

projects that are still underway. I believe there are five that are

under construction now and two more that will still need funding.

Mr. WHITFIELD. Okay. And would you provide us a list of those

five. I mean I am not aware of where those five sites are and I

would like to know.

[The following was received for the record:]

The Department of Energy’s Clean Coal Technology Demonstration Program currently has five projects that have recently initiated construction or are preparing for

the initiation of construction activities. These five projects and their locations are

summarized below:

Project Location

JEA Large-Scale CFB Combustion Demonstration Project ..................................................................... Jacksonville, Florida

Kentucky Pioneer Energy IGCC Demonstration Project .......................................................................... Trapp, Kentucky

McIntosh Unit 4A PCFB Demonstration Project ..................................................................................... Lakeland, Florida

McIntosh Unit 4B Topped PCFB Demonstration Project ........................................................................ Lakeland, Florida

Clean Power From Integrated Coal/Ore Reduction (CPICOR) ................................................................ Vineyard, Utah

Of these five projects, only the Kentucky Pioneer Energy and CPICOR projects

have remaining funding requirements.

Mr. GLAUTHIER. One of the two, of course, is in Kentucky.

Mr. WHITFIELD. That makes it even better.

You have testified that DOE intends to meet its schedule for the

Yucca Mountain repository. In making that statement and in the

fiscal year 2001 budget submission, which radiation standard are

you assuming will apply to the repository, the standard proposed

by the NRC or the standard proposed by EPA?

Mr. GLAUTHIER. Well, of course that effort is continuing on to

come to a final standard. We are evaluating the impacts of both the

48

standards and assuming that we could accommodate, whichever of

those ends up being the final standard.

Mr. WHITFIELD. Now EPA is to issue their final standard later

this year, and the Senate bill delays issuance of that final rule

until June of 2001. In your opinion, what is the impact of that

delay on your schedule?

Mr. GLAUTHIER. We will still proceed ahead with our analysis to

complete the scientific assessments in December of this year so

that we will have the report which will be the basis for the hearings that will take place then in the first half of next year in order

to make a recommendation to the President in June.

Mr. WHITFIELD. Okay. Well, Mr. Secretary, I would thank you so

much for your time this morning and for your staff. We genuinely

appreciate you being here. I think this was a useful hearing which

provided some important information. I know that all of us look

forward to working with you in the future. Thank you very much.

This hearing is concluded.

[Whereupon, at 12:20 p.m., the subcommittee was adjourned.]

[Additional material submitted for the record follows:]

DEPARTMENT OF ENERGY

September 8, 2000

The Honorable JOE BARTON

Chairman

Subcommittee on Energy and Power

Committee on Commerce

U.S. House of Representatives

Washington, DC 20515

DEAR MR. CHAIRMAN: On March 24, 2000, T.J. Glauthier, Deputy Secretary of Energy, testified regarding the Department’s Fiscal Year 2001 Budget. On July 25,

2000, we sent you the answers to 32 questions.

Enclosed are the remaining answers to the questions submitted by you and Representatives Ehrlich and Wilson.

Also enclosed is the remaining insert submitted by Representative Whitfield to

complete the hearing record.

If we can be of further assistance, please have your staff contact our Congressional Hearing Coordinator, Barbara Barnes at (202) 586-6341.

Sincerely,

JOHN C. ANGELL

Assistant Secretary, Congressional and Intergovernmental Affairs

Enclosure

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