[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR 2015
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
________
SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
MICHAEL K. SIMPSON, Idaho, Chairman
RODNEY P. FRELINGHUYSEN, New Jersey MARCY KAPTUR, Ohio
ALAN NUNNELEE, Mississippi PETER J. VISCLOSKY, Indiana
KEN CALVERT, California ED PASTOR, Arizona
CHARLES J. FLEISCHMANN, Tennessee CHAKA FATTAH, Pennsylvania
TOM GRAVES, Georgia
JEFF FORTENBERRY, Nebraska
NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
Rob Blair, Angie Giancarlo, Loraine Heckenberg,
Ben Hammond, and Perry Yates,
Staff Assistants
________
PART 7
DEPARTMENT OF ENERGY
Secretary of Energy
________
Printed for the use of the Committee on Appropriations
ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR 2015
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
________
SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
MICHAEL K. SIMPSON, Idaho, Chairman
RODNEY P. FRELINGHUYSEN, New Jersey MARCY KAPTUR, Ohio
ALAN NUNNELEE, Mississippi PETER J. VISCLOSKY, Indiana
KEN CALVERT, California ED PASTOR, Arizona
CHARLES J. FLEISCHMANN, Tennessee CHAKA FATTAH, Pennsylvania
TOM GRAVES, Georgia
JEFF FORTENBERRY, Nebraska
NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full
Committee, are authorized to sit as Members of all Subcommittees.
Rob Blair, Angie Giancarlo, Loraine Heckenberg,
Ben Hammond, and Perry Yates,
Staff Assistants
________
PART 7
DEPARTMENT OF ENERGY
Secretary of Energy
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
91-277 WASHINGTON : 2014
COMMITTEE ON APPROPRIATIONS
HAROLD ROGERS, Kentucky, Chairman
FRANK R. WOLF, Virginia NITA M. LOWEY, New York
JACK KINGSTON, Georgia MARCY KAPTUR, Ohio
RODNEY P. FRELINGHUYSEN, New Jersey PETER J. VISCLOSKY, Indiana
TOM LATHAM, Iowa JOSE E. SERRANO, New York
ROBERT B. ADERHOLT, Alabama ROSA L. DeLAURO, Connecticut
KAY GRANGER, Texas JAMES P. MORAN, Virginia
MICHAEL K. SIMPSON, Idaho ED PASTOR, Arizona
JOHN ABNEY CULBERSON, Texas DAVID E. PRICE, North Carolina
ANDER CRENSHAW, Florida LUCILLE ROYBAL-ALLARD, California
JOHN R. CARTER, Texas SAM FARR, California
KEN CALVERT, California CHAKA FATTAH, Pennsylvania
TOM COLE, Oklahoma SANFORD D. BISHOP, Jr., Georgia
MARIO DIAZ-BALART, Florida BARBARA LEE, California
CHARLES W. DENT, Pennsylvania ADAM B. SCHIFF, California
TOM GRAVES, Georgia MICHAEL M. HONDA, California
KEVIN YODER, Kansas BETTY McCOLLUM, Minnesota
STEVE WOMACK, Arkansas TIM RYAN, Ohio
ALAN NUNNELEE, Mississippi DEBBIE WASSERMAN SCHULTZ, Florida
JEFF FORTENBERRY, Nebraska HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida CHELLIE PINGREE, Maine
CHARLES J. FLEISCHMANN, Tennessee MIKE QUIGLEY, Illinois
JAIME HERRERA BEUTLER, Washington WILLIAM L. OWENS, New York
DAVID P. JOYCE, Ohio
DAVID G. VALADAO, California
ANDY HARRIS, Maryland
MARTHA ROBY, Alabama
MARK E. AMODEI, Nevada
CHRIS STEWART, Utah
William E. Smith, Clerk and Staff Director
(ii)
ENERGY AND WATER DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
2015
______________________________________________________________________
Wednesday, April 2, 2014.
SECRETARY OF ENERGY
WITNESS
HON. ERNEST MONIZ, SECRETARY, DEPARTMENT OF ENERGY
Mr. Simpson. The hearing will come to order.
Secretary Moniz, it is good to see you again. Welcome to
your first hearing before this subcommittee. You have taken
over the department at a very challenging time. Your
institution is critical for the security of this Nation and it
holds great promise for improving the livelihood and prosperity
of our economy. It helps answer some of the most basic
questions regarding our universe, while it is in charge of
cleaning up the radioactive legacy of keeping our country safe
during the Cold War and beyond. In other words, there is no
doubting the importance of the Department of Energy, yet there
is great doubt that the department is up to the task without
significant improvements.
One of the subcommittee's most pressing concerns is the
department's inability to plan and execute major infrastructure
projects. At this point, nearly every major construction
project underway over the last 5 years, the MOX plant in South
Carolina, the Waste Treatment Plant in Washington state, the
Uranium Processing Facility at Y-12, and I could go on, has
spectacularly broken its cost projections. And when I say
spectacularly, I mean more than doubling, often going billions
higher than the plans Congress had agreed to.
Mr. Secretary, another area of concern is the ability of
the National Nuclear Security Administration to meet the needs
of the Department of Defense. Let me rephrase that. To meet the
needs of the Department of Defense in a way clearly
communicated to and approved by Congress. It does us no good to
have the Department of Energy agree to a work plan with the
Department of Defense which we cannot afford. Your department's
credibility has been sorely damaged by proposing cost plans
which are rapidly exceeded. This is a three-way relationship
that is critical to the security of our country, and it needs
your personal attention.
I mention these issues because the current state of affairs
is not sustainable and this country needs a strong Department
of Energy. This subcommittee has long held your nuclear weapons
mission to be your ultimate responsibility, but the actions of
Russia in the Ukraine remind us that energy supply can also be
an issue of national security. Your department must take that
into account as it develops its research and development plans,
yet it seems to me as if your fiscal year 2015 budget request
misses the mark in that respect.
The two accounts which can help secure the country's energy
security today and in the coming years, nuclear energy and
fossil energy, are cut while renewable energy is increased. I
am not an enemy of renewable energy. Heck, the city of Boise in
my district operates the largest direct use geothermal system
in the country, but coal and nuclear plants are being shut down
across the country. Some of this is because of market forces
like the price of natural gas, but some of these closures are
also due to government policy.
There is a lot of disagreement up here about the proper
role of government, but I think we all agree that the Federal
Government's role is to inject strategic thinking into our
economy, while markets rarely do that. I can't think of a
clearer example of this than our energy supply. If we are going
to ensure that our electrical system remains reliable and our
country prosperous, then your department needs to be doing more
to address our current fleet of power plants, not focus funding
far down the road. Your department should be helping to build a
power sector prepared to quickly adapt to a time when natural
gas prices are no longer cheap and your department should be
proposing budgets to support those objectives.
Mr. Secretary, we have had several meetings, and I have
been encouraged by our discussions. You have been on the job
for, what, 11 months now? Something like that?
Secretary Moniz. Not quite.
Mr. Simpson. Let me give you fair warning for my first
question so that you can prepare. I am going to ask you what
your vision is for the department, and all of the problems that
I have discussed today will have to be fixed as part of
achieving any vision, but only a leader with a clear view of
what he wants this agency to be will be able to rebuild the
department into the strong institution it must be for the
security and prosperity of this country.
As I have told you before, one of my challenges that I have
had serving on this committee for a number of years is while
the Department of Energy does a lot of neat stuff, I have never
had a clear vision of where we want to go with this department
and why we do some of that neat stuff and how it fits into the
overall mission and vision of the Department of Energy.
So as I told you, I think, the last time we had lunch that
I would give you all the time you need so that you could paint
me a picture of your vision of the Department of Energy over
the next 5 years, 10 years, 20 years and where we plan to end
up.
Please ensure that the hearing record, questions for the
record and any supporting information requested by the
subcommittee are delivered in final form to us no later than 4
weeks from the time you receive them.
Members who have additional questions for the record will
have until close of business tomorrow to provide them to the
subcommittee office.
With that, I will turn to my ranking member, Ms. Kaptur,
for her opening statement.
Ms. Kaptur. Thank you, Mr. Chairman.
And, in the interests of time and competing meetings, I
would like to defer, if I could, and turn the gavel--turn the
opportunity over to our very esteemed ranking member.
Mr. Simpson. I know you'd like to turn the gavel over.
Ms. Kaptur. Well, we are working on that.
To Congresswoman Nita Lowey of New York.
Mrs. Lowey. Thank you, Ranking Member Kaptur, and thank
you, Chairman Simpson.
And welcome, Secretary Moniz, to your first budget hearing
before the House Appropriations Committee. And let me apologize
in advance, Chairman Rogers is moving things along very
quickly, and there are about three or four hearings every
morning, so I apologize.
On Monday, the United Nations Intergovernmental Panel on
Climate Change published a new report summarizing the most
recent climate science. The report issued ominous warnings
about the coming consequences of global warming, which threaten
to endanger crop yields, shrink water supplies, flood low lying
coastal communities, and even destabilize global security by
indirectly increasing the risk of violent conflicts.
As someone whose district was directly impacted by
Hurricane Sandy, and who has seen the destruction and cost of
global warming up close, there is no doubt in my mind that the
United States has a responsibility to support investments to
mitigate the domestic impacts of climate change and participate
in international efforts to curb emissions to prevent
irreversible damage to the planet.
Mr. Secretary, I strongly support prioritization of
investments that conform to the President's climate action plan
and I applaud you for the $450 million proposed increase for
energy efficiency and renewable energy programs. With the
damaging effects of climate change clearly visible throughout
the country, additional Federal investments to renewable energy
research are needed to speed the private sector's development
of renewable technologies.
I also share the department's continued commitment to
maintaining our country's robust scientific workforce.
Equipping our citizenry with the knowledge to capitalize on
tomorrow's clean energy economy is one of the best ways to
mitigate the impact of global warming.
With the return on investment of 20 to 67 percent from
publicly-funded research and development, it is imperative that
we continue to invest in innovation at our Nation's colleges,
universities and national labs.
Mr. Secretary, I will read your testimony carefully. I
apologize that I have to move to another hearing, but I want to
do everything I can to ensure that you have adequate resources
when the committee writes its fiscal year 2015 bill.
And thank you again, Mr. Chairman and Madam Ranking Member,
for your indulgence. Thank you.
Mr. Simpson. Thank you. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Let me add my words of welcome to Secretary and Dr. Moniz.
We are just really very grateful for your appearance this
morning, and really, Mr. Secretary, the early reviews of your
tenure as Secretary have been very, very favorable, and I know
how hard you are working. I believe that the hardest challenges
that we all face on the energy front still lie ahead of us, and
you have a very, very important job for our country.
I have long stated that our reliance on foreign energy, is
a grave economic and national security concern for our country.
Just over the last decade, we have spent over $2.3 trillion,
just in the last 10 years, on importing foreign oil. If we go
back to the 1970s, which I remember well, that would be even
greater. We have made rich some of the worst global players at
the expense of our own citizens and we have seen jobs stemmed
in our own country because of the lack of energy independence
here, we have seen economic growth stifled and, frankly, our
national security compromised.
The recent events in the Ukraine, as the chairman has
stated, have highlighted in stark relief the importance of
reliable energy to our world's ability to defend the borders of
sovereign nations. The dependence of Ukraine and much of Europe
on Russian energy imports have complicated the international
response to Russia's annexation and illegal taking of Crimea.
This is not just a challenge to Europe, energy is one of the
defining challenges of our time and will only become a greater
challenge, not a lesser one.
Since the late 1970s and the formation of your department,
progress actually seems glacial. Our own energy crisis is not
just about insecure oil supplies from the middle east, but
about the cost it inflicts on hardworking Americans, the
national security threat it poses to us, and the havoc it
wreaks on our environment.
I appreciate your support of an all-of-the-above energy
strategy, which I also support, but I would appreciate even
more, the Department of Energy setting clearer targets to begin
to close these trade gaps and to focus the American people on a
long-term strategy that is necessary now, not tomorrow or next
week.
While we are developing our approach to energy and its
future and our country, we are all in agreement that we must
focus on commercialization efforts with a strong bias toward
improving American production, American manufacturing, and if
we look at our trade deficit, it tells us something really
important: the two top categories of trade deficit are in the
energy import arena as well as automotive. You link those two,
you solve those, you solve the problem that we face on the
energy front. I cannot emphasize this point enough, and as I
look back after the last 40 years, I say to myself, have we
really been serious since the formation of your department?
Our government can drive the policies and incentives for a
more robust energy mix and smarter energy consumption, however,
as I said before, no matter the policy set forth, if strong
leadership and fundamental management reform are not
forthcoming at the Department of Energy, it will significantly
inhibit the chance of a successful energy policy as well as the
department's credibility, and, frankly, the department has had
a rather foggy image in the minds of the American people in
this regard.
During the questioning period, Mr. Chairman, I will get
into contract and project management issues. I have not been a
member of this subcommittee as long as our chairman has, but
the energy issue is not new to me, and frankly, I have never
seen the cost overruns and schedule slips that I now have
learned have been endemic at the Department of Energy.
So we look forward to your testimony.
Thank you, Mr. Chairman, for the time, and I look forward
to our hearing today.
Mr. Simpson. Thank you.
Secretary Moniz, the time is yours.
Secretary Moniz. Okay. Thank you, Chairman Simpson, Ranking
Member Kaptur, and members of the committee.
I appreciate the opportunity to appear before you today, as
was said, for my first budget presentation before the Congress.
The President has made clear the Department of Energy has
significant responsibilities, as you have acknowledged in your
opening statements, both for advancing the Nation's security,
and I would say especially by maintaining a reliable nuclear
deterrent and by helping to keep nuclear materials out of the
hands of terrorists, and the Nation's prosperity, and
especially by advancing his all-of-the-above approach to clean
energy, and by helping to provide the foundation for the future
manufacturing capabilities that we need.
So as you know, the top line discretionary budget request
for fiscal year 2015, is $27.9 billion, a 2.6 percent increase
above fiscal year 2014. I believe that increase in these
constrained budget times reflects the high priority assigned to
these missions.
So I will just say very briefly a few things about the
budget request so that we can move on to our discussion. I will
organize it around each of the three programmatic areas which
have been set up through our reorganization at the
undersecretary level, focusing on three key areas: science and
energy; nuclear security; and management and performance, and I
believe all three of these have featured in your opening
statements.
On science and energy, first, the all-of-the-above energy
strategy, is driving economic growth and creating jobs while
lowering carbon emissions. We are producing, as you well know,
more natural gas in the United States than ever before, we are
increasing oil production and, in fact, for the first time in 2
decades, we are producing more oil than we import, at the same
time, in that same period, having the lowest CO2
emissions that we have had.
We have seen remarkable progress in clean and renewable
energy. The last 5 years more than doubled electricity from
wind and solar, while still making the investments in coal and
nuclear power that I believe are needed for those sources to be
competitive in a clean energy economy, and efficiency, as was
noted, is a major focus of our fiscal year 2015 budget request.
There is a $9.8 billion request in this area, an increase of 5
percent for science and energy programs to advance these areas.
Just a few examples of EERE, Energy Efficiency and
Renewable Energy. Here we have a substantial proposed increase
to support investments in areas of sustainable transportation,
renewables, efficiency and advanced manufacturing. Those are
highlighted in the budget request. The Office of Electricity
Delivery and Energy Reliability program, more precisely, is our
lead office in driving a focus on grid modernization and
resiliency, again, themes that you have referred to in the
opening statements.
There is a substantial increase proposed to support grid
modernization and resiliency efforts, including smart grids and
micro grids, energy storage, and a strengthened energy response
capability. Ranking Member Lowey mentioned Hurricane Sandy, and
we know the importance of that response. These programs on grid
modernization will be carried out in collaboration with EERE,
Energy Policy and Systems Analysis and other offices at the
department.
ARPA-E, the Advanced Research Projects Agency-Energy, this
program, we believe, is being extremely effective. Actually
there are 24 startup companies already out of the ARPA-E
funding. We request a 16 percent funding increase for ARPA-E to
support four or five new focussed programs, but also to have
our third open funding competition to bring new ideas across
all of the energy space.
The budget request also includes funding for the Office of
Energy Policy and Systems Analysis. I would like to highlight
this was part of our reorganization to provide a focus for,
particularly, analysis that underpins energy policy
development, and they play a central role in the
administration-wide Quadrennial Energy Review.
Turning to the Science programs, as you know, DOE Office of
Science provides critical, scientific and technical
underpinnings for all departmental missions and for the entire
country's physical science and engineering research capacity.
We request $5.1 billion for the Office of Science.
As one example, Science, in conjunction with NNSA, again, a
theme I like to emphasize, we are coordinating across programs,
will focus on developing Exascale computing platforms, and we
believe the road to Exascale will have many, many novel
technology developments, that will continue our traditional and
critical American leadership in high performance computing for
both economic competitiveness and national security.
The budget also supports the Office of Science's unique
role in a whole range of cutting-edge user facilities, a very,
very important service that we support for the American
research community, and that ranges from a set of highly
efficient, highly effective light sources, the Spallation
Neutron Source; a new project, the Facility for Rare Isotope
Beams; and many other projects.
As I already noted, grid modernization and Exascale are two
examples of our focus on cross-cutting initiatives,
coordinating the efforts in multiple offices on important
problems. Another example is subsurface science and
engineering, where we will bring together efforts in about four
offices, because in the past we haven't really put together the
way subsurface science and engineering cuts across multiple
energy programs, from unconventional resources to geothermal,
to waste management and other activities.
Nuclear security. Again, a few words. Just over a week ago,
I was in the Hague with the President, where he reiterated his
commitment to nuclear non-proliferation and security, calling
on the global community to decrease the number of nuclear
weapons, control and eliminate nuclear weapon useable material,
and build a sustainable and secure nuclear energy industry, all
central to our mission.
I might add, we had a specific announcement, which was a
major announcement with Japan, in terms of bringing hundreds of
kilograms of highly enriched uranium and plutonium for safe
handling in the United States. The budget request provides
$11.9 billion for our nuclear security missions, a 4 percent
increase.
Budget caps, as you know, and I might say, Mr.
Frelinghuysen knows well, have put serious constraints on our
national security enterprise broadly. We had a robust
interagency planning process relooking at our stockpile
strategy.
Mr. Chairman, you mentioned the constraints in budgets, we
put forward, we think, a strong request there, with the
commitment to maintain the so-called, three-plus-two deterrence
strategy that was agreed to, but has been challenged since the
Budget Control Act, and we believe we do have now, an
affordable strategy to complete the three-plus-two approach to
a safe and reliable stockpile without testing, while reducing
the numbers and types of weapons in the next two decades.
Defense nuclear non-proliferation, as I already alluded to,
is another obviously very high nuclear security priority, and
we do support a very robust program, but clearly our budget,
because of the constraints, we came in with a substantial
reduction in funding for this program, more than half of that
reduction due to reduced funding for the mixed oxide fuel
fabrication facility, and this was driven by something, again,
you have both referred to. We simply have to get hold of the
costs of these majors projects, and so we have proposed a
standby mode to analyze all available options, including MOX,
to reach an agreed upon way to dispose of this weapons
plutonium.
Naval reactors, again, I would say a strong request to
support the Navy's fleet of aircraft carriers and submarines.
Nuclear propulsion is obviously central to our defense
capabilities, and the interagency working group assigned high
priority to initiatives, such as continuing the work on the
Ohio class submarine replacement and spent fuel handling
recapitalization.
And finally the third area is a new one that we created
through reorganization, that of the undersecretary for
management and performance. The fiscal year 2015 budget request
would provide $6-and-a-half billion for management and
performance programs underneath the undersecretary, but also
with the direct management programs that report to the office
of the secretary.
Importantly, the budget request reflects our move of the
responsibility for environmental management program from the
undersecretary for nuclear security, and I emphasize not NNSA,
but the undersecretary, into a mainline responsibility for the
management and performance undersecretary, to improve
departmental management and execution of several technically
complex cleanup missions.
The budget request continued to support cleanup progress at
16 sites across the complex, and we should remember that many
projects have been successfully completed. What remains are not
surprisingly, the most complex and unique ones that we need to
address.
By the way, and I am pleased to add kind of a news
bulletin, that despite the incident at WIPP, the first shipment
of transuranic waste from Los Alamos to WCS in Texas arrived
early this morning for storage until WIPP re-opens. And the
bigger message here is that while we are continuing to work to
investigate the issues and remediate the issues at WIPP to
reopen it, we are continuing to move forward with movement and
packaging of true waste.
In conclusion, we believe the fiscal year 2015 budget
request will allow us to deliver innovative and transformative
scientific and technological solutions to energy, security,
economic and environmental challenges facing our country in
this century.
I took note of the 4 weeks for response. We will meet that.
And thank you, and I am pleased to answer your questions.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. Thank you, Mr. Secretary.
There are several issues that I want to talk on, which I
will as we have different rounds of questions here, whether it
is what is happening with a variety of the programs that you
propose, what is going to happen with MOX, what is going to
happen with USEC and other proposals and what the department's
plan is for those things.
But first, as a former member of the Blue Ribbon Commission
and now as Secretary of Energy, what is your view on one of the
more controversial issues that has divided the House and the
Senate and the administration, of how we are going to address
our nation's nuclear waste problems, and what does your fiscal
year 2015 budget request do in order to comply with the Nuclear
Waste Policy Act and move forward towards the safe geological
storage of nuclear waste across the country? Because if we
don't solve this problem, nuclear energy is not going to move
forward as it should.
Secretary Moniz. I certainly agree, Mr. Chairman, with the
importance of our moving forward on waste management.
And, perhaps not surprising, as you noted, as a former
member of the Blue Ribbon Commission, and also as an analyst of
these issues in my previous academic life, I strongly support
the approach laid out by the Blue Ribbon Commission and in all
of its key aspects endorsed by the administration.
The key elements, clearly, are a consent-based approach,
and any parallel pursuit of geological isolation and
consolidated storage, starting with and hopefully independent
of some of the discussions that you have referred to with
regard to waste management, hopefully promptly moving towards
something that it seems everyone agrees is critical, and that
would be at least a pilot facility that would accept spent fuel
from shut down reactors. So these are the key ingredients, we
believe. There are many other organizational issues, but those
are the key high level ingredients.
I do want to emphasize that, as you know, we all know there
have been some court rulings, one with the Nuclear Regulatory
Commission in terms of restarting its process. We are providing
the technical information that is required in terms of ground
water, and in fact, we are making very good progress, and I
think it is fair to say that we will certainly be delivering
that to the NRC this quarter for their moving forward.
So in the budget request, the key issue is that we are
proposing activities, all certainly authorized under the
Nuclear Waste Policy Act, to advance on issues like
transportation and storage that we believe are absolutely
essential for pursuing any waste strategy, certainly the
consent-based strategy.
Mr. Simpson. One other question, and I don't know quite how
to answer this--or to ask this question and make it so that you
can answer it.
As I said in my opening statement, one of my concerns about
the Department of Energy has been the stop-and-start strategy
we have had ever since I have been on this committee. We start
a new program, we end a new program, we start another program,
we end that program, we start another program with every
changing secretary, with every changing president, whatever.
And while you allow and have to allow an administration the
flexibility to institute the things that they ran on, these are
long-term projects and it seems like we oftentimes don't get
anything done because we keep this stop-and-start sort of
strategy.
Where do you see the Department of Energy? I will be
upfront. I am a little concerned about SMR's, which is the road
we are headed down now, with the recent B&W announcement, and I
don't know how that is going to affect the SMR program or give
us pause to think about the SMR program.
Where do you see the department 5 years from now, 10 years
from now, 20 years from now? What is your vision for this
department?
Secretary Moniz. Well, if I start at the high level of the
vision----
Mr. Simpson. Yeah.
Secretary Moniz [continuing]. And then we can narrow down
to some particular issues.
First of all, I think there are two big kind of pillars
that I see in terms of how we address our missions.
One is that ultimately the major strength of the Department
of Energy across all of its missions is, I would go so far as
to say it is a science and technology powerhouse, and it is the
application, the development and application of science and
technology to these critical areas, with our national lab
system being an important part of that, not exclusively, but a
very important part of that at its core.
Then the other thing I would say is I think we have, and I
hope this will have 5- and 10-year life, through our
reorganization, emphasized the three big things we must commit
to the American people: the energy-science agenda, as we have
described and then we can go into that in more detail in terms
of what it means, in terms of energy security, in terms of
transformative clean energy, how we accelerate that, et cetera;
nuclear security, an absolute responsibility for the safety and
reliability of the stockpile, without testing, as certified
annually to the present and keeping nuclear materials safe; and
third, the management and performance.
I completely agree with the statements that you have made
in the opening that we should not underestimate the substantial
number of successes in programs and projects, and there are
many, but there are too many that have suffered this issue of
major cost overruns, with a common theme, well, an almost
common theme, at least, with these projects that are baselined,
so-called baselined before the projects are well understood at
all, and I can go through on specific projects what that means.
So my view is that on the energy and science first of all,
number one, we must maintain for the long-term, I think our
very successful support for the physical sciences and
engineering in this country. That is a base for just about
everything.
On the energy side, I personally, there is no question, I
am very committed to all of the above. I do believe, as the
President has stated, we have to move on fossil, nuclear,
renewables and efficiency, all with a view towards the future
clean energy economy, and we can go back to the IPCC report
later on that was mentioned by Ranking Member Lowey.
So I think it is very important that we maintain that broad
portfolio. Your statement that administrations may have
different emphasis in different areas, but I think it is
important that we sustain that for the long-term.
On the nuclear security, we must meet our commitments to
the Department of Defense, and this budget does, and as you
know, it is not without controversy, it does commit to the W-
76, to the B-61, to the W-88, projects on schedule, that
supports the triad.
We had to stretch out some other things to do that, but we
must do that, but we must remember that this is not only a job
for this decade, it is a job for 5, 10, 25 years, which means
we have to pay equal attention to maintaining the science and
engineering base in our nuclear laboratories for supporting
that critical mission.
And management and performance, as I have said, I think we
need to bring discipline. We have some active discussions going
on around various projects, whether it is in South Carolina,
Washington state, we can name others, like Oak Ridge, but we
are trying to bring a discipline of recognizing the facts and
responding to them and putting together reliable baselines when
we have the information to do so.
I think we are taking some creative approaches. I will
mention, for example, in Washington state with the big WTP
project, probably the biggest and most complex of all of our
environmental cleanup projects, we have proposed to the state a
new framework that we believe reflects the physical realities
and yet moves quickly.
Clearly the state said they have some different views, but
I want to emphasize the commonality. We both agreed that we can
move forward with the low activity waste, we both agreed, that
there are technical problems that must be resolved. So I think
we will just have to have a discussion now over the next few
months about how to do that.
UPF at Oak Ridge, I will just mention a second example. I
am sorry I am going on so long, but it was an open-ended
question.
Mr. Simpson. Yes. It was.
Secretary Moniz. There, I think again, we are trying to
bring a new kind of discipline, where in this case, the key
issue is, as was done for the plutonium facility at Los Alamos,
getting, frankly, laboratory leadership, in looking at new ways
to accomplish the mission at a lower cost.
So we are committed to that project, we are committed to a
budget cap, we are committed to a date, and right now we have
an outstanding red team led by Tom Mason, the director of Oak
Ridge, looking at that. We expect a report from him within
weeks on that.
So this is the kind of discipline we are trying to bring to
this, and I think, and I agree, we need this to support the
vision and our ability to execute the critical missions that we
have assigned to us.
Mr. Simpson. Thank you.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
I would like to ask the Secretary if he thinks America is
winning or losing the battle on becoming energy independent
here at home?
This is a chart from the Energy Information Administration
showing from after World War II all the way until the great
recession of 2008, continuing increase in imports and then, of
course, with the deep recession, we had a reduction, and we
have been doing better at home because of the Obama
administration's policies, for an all-of-the-above strategy,
but looking forward, Mr. Secretary, could you tell the American
people what are the goalposts for going back to a growing
economy, a robustly growing economy here at home, one where we
are producing energy-related jobs in this country at a level
commensurate with our population size?
What are the goalposts that the Department of Energy sets
so that the American people know whether we are winning or
losing? Can you comment on that?
And then secondly, can you tell us some of the inventions
that the Department of Energy has sponsored that have made
winning possible again for our country?
You might start with natural gas, for example. The people
listening might not be aware of what the investments of the
Department of Energy have done to help our country dig
ourselves out of this incredible hole.
Secretary Moniz. Thank you for the question, Ranking Member
Kaptur.
First of all, it is clear that we are making dramatic
progress towards relieving our dependence on foreign energy
sources, particularly non-North American sources, and I want to
emphasize that the work involves both the supply side and the
demand side for having that balance.
So if we take oil, for example, which historically has
always been the issue associated with energy and security,
since we have never been major natural gas importers, for
example, then we are on a trajectory largely driven by the
unconventional production of oil as well as gas, but oil. We
are probably going to get at least pretty close to 10 million
barrels a day of production within a few years. It is a
significant increase from where we were in that graph that you
showed, and I think that will continue, and that is helping our
balance of payments, which you referred to in your opening
remarks as well as, you know, the energy security equation.
But what I want to emphasize, and this is very important
for the independence idea, is that we are also focusing at the
same time on three major directions to lessen our oil
dependence. One is efficient vehicles both through the CAFE
standards, but also through our technology developments, our
manufacturing initiatives, to continue on this pathway.
This is already having an impact, oil usage for
transportation has not gone up. We are getting carbon
emissions, contributions, carbon lowering, carbon emission
lowering from that.
Second path, we continue to work hard on alternative fuels
for our transportation sector. The President in his State of
the Union gave a strong emphasis to natural gas coming into the
transportation system more robustly, but, you know, on somewhat
longer time frame maybe by the end of the decade. We are
pushing and making real progress on the whole range of advanced
biofuels, including our work together with the Department of
Defense and the Department of Agriculture. And then----
Ms. Kaptur. I want to compliment you on that, Mr.
Secretary.
Secretary Moniz. Thank you.
The third is the continuing focus on electrification of
vehicles. Battery costs have come down by about a factor of two
in the last 4 to 5 years, we need another factor of two to
three for the large scale commercial market, but we should not
lose sight of the fact that, you know, last year almost 100,000
electric vehicles were sold in the United States, so we are
making real progress. So it is both on the supply and demand
side.
Gas, we will continue to be--our EIA projects continued
increases in our gas production, and, of course, we have
provided so far conditional approvals, one final and five are
at FERC right now, conditional approvals for the export of
about 9.3 billion cubic feet per day. That is within the range
of studies that say this should not have major domestic price
increases, but yet I think sometimes we don't put this in
perspective. 9.3 billion cubic feet per day is almost within a
whisker equal to the amount of LNG exported by Qatar, currently
by far the world's largest LNG exporter. And that goes back to
the issues also of the economy and jobs and all kinds of
issues.
LNG, I mean, natural gas has, of course, given a big boost
to our manufacturing sector. Probably $125 to $150 billion have
been invested in new manufacturing capacity directly associated
with natural gas.
Then in addition, of course, nuclear, renewables and
efficiency all contribute to the energy security equation quite
clearly.
In terms of the second part of your question, some of the
department's contributions in these areas. Well, first of all,
if we talk about the unconventional oil and gas, the department
in its very first years, in the late 1970s and to 1980 started
the first characterization of these unconventional reservoirs,
and then less well known, but for the next really 20 years, a
combination of the administration through FERC and the Congress
through a time-limited tax incentive took that information and
had technology transfer working with the independent companies
to develop the technologies that are now being used to produce
all this oil and gas. That was a very interesting program,
which I could describe in more detail. So those are examples in
those areas.
With respect to coal, the department really brought in the
first technologies for scrubbers in the 1980s, critical, and of
course now we are looking at scrubbers for carbon dioxide,
carbon capture for coal plants into the future.
With renewables, I think it is pretty clear that the
department has been critical in stimulating the deployment of
renewables and the advancement of renewables. A good example is
from the loan program where the first five utility scale
floatable tank plants were given loans, loan guarantees, and
now ten more are going forward with private sector funding.
So I could go on, but I think I have taken too much time,
but I think it is a very good picture in terms of, where we are
and where we are going in terms of energy security.
Ms. Kaptur. You know, Mr. Secretary, I have been very
impressed with your systemic approach to many issues, for
example, on the grid, looking at modernization of the grid, and
also your work on the departmental management structure itself.
I just wanted to take a second to say that if one
approaches the systemic needs of manufacturing America, where a
third of jobs have been lost in this country, over the last
quarter century, I would encourage you to take as you are
sending out requests for proposals, taking a look at
manufacturing corridors, and I know you are, but the Duluth to
Buffalo corridor, which has suffered disproportionately in this
country, and it is a corridor that has over the years been
involved in coal.
Coal-fired utilities, I don't have to tell you this, I say
this for others, coal shipments by sea, by rail, the largest
number of coal-fired utilities have been shut down in this
region, and we have this entire Great Lakes, St. Lawrence
seaway corridor that really needs additional attention, and so
I would urge you to think in the way that you are functioning
in the department to look at adjustment policies that would
allow these communities to recover more quickly.
So, for example, if one is evaluating the shipment of
natural gas, let's say, I don't know how that is all going to
turn out, but the Great Lakes is the shortest distance between
the United States and the ports of northern Europe, for
example. If this region is not being considered as new staging
areas are developed, well, what does that mean for the future?
I think if you were to overlay where the pain is greatest in
terms of manufacturing and a transition from our traditional
power sources to something else, a systemic approach in
advanced manufacturing and transition might be incorporated
somehow in the proposals that you are seeking, because it is a
corridor-wide challenge.
And it isn't just one company; it is a network of
companies, it is a network of systems that are just having to
adjust to this change, and there isn't really a coherent
umbrella as exists, for example, in the west with the Bureau of
Reclamation or in the south with TVA, for example. Those aren't
perfect, but we don't have anything like that in our region, so
the Great Lakes suffer more.
Some people say, hey, Marcy, you are a merchant economy,
you know, love every minute of it. Well, you know, some of the
minutes have been pretty rough.
So I am just saying as you look at energy transition,
please take a look at this corridor, and I know you are, but I
am just encouraging you on in those efforts.
I don't really have a question there. That was just a
comment, but do I have time for one other question, Mr.
Chairman, which can be answered very quickly?
Mr. Simpson. Very quickly.
Ms. Kaptur. Okay. In your biofuels research at the
department, and I am very close to that issue, because Tom
Harkin and I drafted the first title to an agriculture bill
dealing with biofuels. It appears you have devoted significant
research dollars to cellulosic and alcohol-based fuels, but oil
crops, I have a question about, can you clarify DOE's biofuels
research priorities and the funds dedicated both on the sugar
side and on the oil side? Is there a difference?
Secretary Moniz. Well, I think first of all, if one looks
at scalability, then the cellulosic and energy crops have the
largest scale potential, however, with the oils, I will mention
two examples, or maybe three.
The first, in the DOD, DOE, USDA program, with the Defense
Production Act authority that we were given in fiscal year
2014, we will be having our resources from the three agencies
support, I believe it is, four projects, two of which are based
upon oils and fats, so two of those four, I believe.
Secondly, within our own program, there is the program
around algae, which is an example of oils production.
And third, and this one I know less about, but I can get
more information for you later, is some work on genomics to
looking for greater oil production from some energy crops.
Ms. Kaptur. Thank you. We will look for additional
information to be placed in the record on that question.
Secretary Moniz. Okay. Great.
Ms. Kaptur. Thank you, Mr. Chairman.
Mr. Simpson. Thank you.
Mr. Frelinghuysen.
Mr. Frelinghuysen. Thank you, Mr. Chairman. I was just
struck by how remarkably quiet it is in here. It must be your
firm leadership that has worked to make everybody so
acquiescent here, but----
Mr. Simpson. We all miss you here, but glad we could be----
Mr. Frelinghuysen. Well, I am not here to stir things up,
but, no, I haven't been on this committee for 20 years, so this
is the quietest group that I have ever witnessed, and if----
Secretary Moniz. Boring witness.
Mr. Frelinghuysen. No, no. No. If it was based on
likability, may I say, I have heard quite a few secretaries, we
welcome your presence at the Department of Energy, and----
Secretary Moniz. Thank you.
Mr. Frelinghuysen [continuing]. And anything you can do, if
you will pardon the expression, to shake it up and get more
performance and better management practices, God speed to you.
It is difficult.
Secretary Moniz. Thank you.
Mr. Frelinghuysen. Let me just say for the record, I am
disappointed with the numbers for fusion, both domestic and 18
percent reduction, I am going to leave that aside, but there
may be some reasons for it. I don't want us leading from behind
in that area. There we, too, work with our allies.
I would like to focus on one of the concerns raised by
Chairman Simpson, the ability of the National Nuclear Security
Administration to meet the needs of the Department of Defense,
and I quote from the chairman's remarks: ``Let me rephrase that
to meet the needs of the Department of Defense in a way clearly
communicated to and approved by Congress. It does us no good to
have the Department of Energy agree to a work plan with the
Department of Defense which we cannot afford, and your
department's credibility has been sorely damaged by proposing
cost plans which are rapidly exceeded.'' It goes on, ``this is
a three-way relationship that is critical to security of this
country, our country and needs your personal attention.''
I know you have commented on it. I want you to make some
more personal observation. Mr. Visclosky and I have sort of
shifted. We are both on this committee, but we have shifted to
roles on the defense appropriations committee. We would like to
know where we are going in this area. I know there are issues
of affordability, but you wouldn't have a department unless we
had passed the Atomic Energy Act. I mean, whatever you have
here, the sciences you have, the pyramid was built on the
nuclear deterrent, and I would like to have some more personal
reassurance from you that you are working closely with the
Department of Defense.
Secretary Moniz. Thank you.
Frankly, I think we have reenergized the relationship with
the Department of Defense, but I want to emphasize as well, it
is not only with the Department of Defense, it is also with the
National Security Council and OMB in what I think has been
coming up to the fiscal year 2015 budget a very robust process,
putting on the table the----
Mr. Frelinghuysen. With all due respect to the OMB, we know
they have an inordinate amount of power and influence over the
process, but indeed you have certain responsibilities, which
you have mentioned, which is the whole issue of certification,
and we have these vast----
Secretary Moniz. Right.
Mr. Frelinghuysen [continuing]. Complexes where remarkable
work is done to give you that assurance, but you still have to
tell the story the way you need to tell the story but adhere
here to OMB directives.
Secretary Moniz. No. I will continue in that, sir, but I
just wanted to emphasize, because I do believe that the proviso
added in the chairman's statement about the affordability part
is important, which is why on the policy side, clearly I think
DOE, DOD and National Security Council are there, but again, we
have to make it affordable and so I think OMB was a very
important part of a four-way discussion.
Secondly, as you know very well, last week Mr. Augustine
and Admiral Mies testified on the initial findings of the
congressional panel and they pointed out a number of the
systemic issues that must be addressed, I agreed personally
with all of those.
And by the way, I think we are addressing them. We have a
lot more work to do. We can talk about that. But I also want to
note that in their testimony, they twice referenced bluntly the
importance of an engaged secretary in these issues. And I can
assure you that you have and will have as long as I am there an
engaged Secretary in these issues. I think the process that led
to the fiscal year 2015 budget request----
Mr. Frelinghuysen. You are engaged in them and I say
engaging.
Secretary Moniz. That is not a universally shared view, but
with those who are engaged.
So I think a very important result, frankly, which I
alluded to earlier is in this process, there came at the
highest level a kind of a renewed look at and a renewed
commitment to the fundamental strategy laid out in the nuclear
posture review for how we are going to have a reliable triad,
sustained over time, aligned with what one sees as the
strategic challenges we face in this dimension, and those who
have perhaps gotten a little more notice in the last month,
shall we say.
To do so, that is where the affordability came in. We had
to put on the table, insist, what is it really going to cost,
to do this. We had to stretch some things out in the plan. You
will see, for example, the cruise missile had to be pushed out.
But then to make it work goes back to the other question, that,
well, to say we can afford it means we are going to have to
meet the budget targets for, for example, the re-modernization
of the complex.
So that is where, again, like this UPF story comes in, we
are absolutely committed to a $6-and-a-half billion dollar
budget, we are absolutely committed to getting out of Building
9212 by 2025 at the latest, and we are having to look
creatively with our red team led by Tom Mason in terms of, how
do we restructure the project to have the core capabilities
absolutely preserved but make sure we come in on that budget.
So I think it all has to fit together, and I feel we are making
progress.
Mr. Frelinghuysen. Well, I am glad you are making progress.
And, of course, the nuclear posture is linked to the defense
posture, and God only knows in recent months the defense
posture seems to have been shifting all over the damn place.
We have learned things about the Ukraine and Budapest
agreement, and the Iranians are not slowing down what they are
doing, the North Koreans are doing what they are doing. There
are nuclear powers out there that some very strange and
apparently, you know, some critical things can happen at any
time, but I think this puts a huge burden on you working very
closely with the Department of Defense, even given the budget
limitations, to come up with a plan that gives us more----
Secretary Moniz. Right. We would love to have a chance to
come and talk more about the strategic directions maybe in a
different environment.
Mr. Frelinghuysen. Yeah.
Secretary Moniz. And I think that would be extremely
useful, because, in fact, another thing that I think Norm
Augustine in particular emphasized is that for a little while,
there has been maybe less focus in the national security
discussions on the nuclear deterrent issues, and I think we----
Mr. Frelinghuysen. It could be somebody whose opinion we--
you know, we respect and----
Secretary Moniz. Absolutely.
Mr. Frelinghuysen. And a credible asset.
Secretary Moniz. And I completely agree with that statement
that he made, and so that is where, frankly, if we could get
more interaction on this and strategic thinking three-way, as
you mentioned earlier, I think that would be enormously helpful
in and of itself.
Mr. Frelinghuysen. Okay. Well, I know Mr. Visclosky is here
for himself, and I just appreciate the opportunity to work with
him and the chairman and the ranking on this critical issue.
Thank you very much.
Secretary Moniz. Thank you.
Mr. Frelinghuysen. Thank you, Mr. Chairman.
Mr. Simpson. Thank you, Mr. Chairman. We can certainly
arrange some of those meetings between all of us and so we can
get together and knock heads and find out where we are.
Mr. Moniz. That would be great.
Mr. Simpson. Mr. Fleischmann.
Mr. Fleischmann. Thank you, Mr. Chairman.
Mr. Chairman, before I begin with my questions, I want to
welcome Secretary Moniz.
Mr. Secretary, I want to personally thank you and your
undersecretary. So this whole subcommittee will know, the
Secretary has taken his time to meet with me personally on more
than one occasion, has come to Oak Ridge, and we have had the
hard conversations on so many complex issues. I am privileged
to represent Oak Ridge, once known as the secret city. This is
a great city, and I have said in my short tenure in Congress, I
want to make sure it is the not-so-secret city. We have got a
lot of everything that is great there. This was the birth place
of the Manhattan Project, this is where we won the Cold War,
and this is where we continue to lead the Nation.
We have got, in my view, the premier, the premier lab at
ORNL, we are doing super computing, advanced manufacturing, we
have got the Y-12 plant, and, Mr. Secretary, I want to thank
you for your commitment to building the UPF. I know it has had
problems. I have a strong commitment to see the UPF built. The
nation needs it. We have had some miscues, but we need to
continue to move forward. I want to commend you for choosing
Tom Mason to lead the red panel. I know they are doing good
work, and we look forward to their report, but the men and
women who work there deserve a safe facility. I know you have
been to 9212, you have seen the facilities there. The working
conditions are deplorable. We have got to fix that, not only
for them, but for the nation.
So let me say thank you for all you have done, and I have
enjoyed working with you and your assistant secretaries who
have come into the district, not only in Oak Ridge, but also to
Chattanooga, and I appreciate that.
Another issue that is less glamorous, but critically,
critically important to our community in Oak Ridge, is land
transfers. Mr. Secretary, this issue had been stalled for years
where we clean up formerly dirty sites, legacy sites from the
cold war and before, and we get that back to the community. You
personally got the ball rolling on that again, and I thank you.
We need to get these properties back on the tax rolls and away
from the payment lieu of taxes. This revenue is critically
important to Oak Ridge, so I thank you for those.
I am going to ask a couple questions because I appreciate
the fact that you have, I think, very thoroughly stated your
commitment to UPF. And thank you. We will move forward with
that.
I want to talk about American Centrifuge, though. The
American Centrifuge Project benefits our national security,
preserves our unique manufacturing capabilities, and supports
an American nuclear industry. The 2015 budget request did not
fund ACP.
Can you please tell the committee your plans on the status
of the American Centrifuge Project. And what are your plans for
the future?
Secretary Moniz. Thank you, Mr. Fleischmann.
And I also have enjoyed our opportunity to work together,
especially in the areas that we agree on.
Mr. Fleischmann. Yes. Thank you.
Secretary Moniz. The ACP is an issue that we are working
very hard on. Number one is there is no question that we
continue to have a need to preserve an American technology for
enrichment for defense purposes. Obviously, the ACP right now
is the technology. It has successfully gone through meeting its
technical milestones in the RD&D project that we have now
finished funding.
We have clearly a situation that right now is, perhaps
unfortunately, very fluid for a couple of reasons. One is that
the fiscal year 2014 appropriations funded the ACP facility and
the associated work, which, for example, Oak Ridge is part of,
as you well know--funded that facility through April 15 and
provided the authority for reprogramming up to $57 million, I
believe it is, out of other NNSA funds to get us through the
rest of the year. We have to get through the rest of the year.
So, actually, Acting Administrator Held I think is here
somewhere--there he is--and is very actively seeing which left
pocket will go to the right pocket to keep this going. Well, we
have to keep it going this year. So that is our immediate
issue, is to get that funding. And, frankly, it would be very,
very desirable to make sure we can keep the 120 machines
spinning there.
Now, in our management approach, having accomplished the
RD&D program and having this transition in the funding, then we
are looking to manage the program going forward, actually,
through Oak Ridge, in fact, which, of course, is the origin of
the technology. So we have to preserve the technology, we have
to preserve the IP, and we have to think about how we are going
to go ahead to meet our national security obligations, which
most immediately--it is not immediate, but the nearest term
issue will be for tritium production for the stockpile.
Mr. Fleischmann. Thank you, Mr. Secretary.
Mr. Chairman, do I have some more time or----
Mr. Simpson. Let's move on, and we will come back for a
second round, if you would.
Mr. Fleischmann. Thank you, sir.
Mr. Simpson. Mr. Graves.
Mr. Graves. Thank you, Mr. Chairman.
Mr. Secretary, good to see you. And, first, let me thank
you for the department's support of Nuclear Power Plant Vogtle.
I think you have demonstrated the importance of that project
not only for the State of Georgia, but for the entire
southeast, and I want to thank you for that.
And in a somewhat related matter, the chairman referenced
some issues within the department in managing various projects
and mentioned MOX, which, as you know, is in South Carolina on
its border with Georgia. And I want to touch on that project
just a minute and see if you could help us understand what is
going on there.
Your statement, in essence, says it is being mothballed and
that, ``It will be significantly more expensive than
anticipated.'' Maybe you could go into that a little bit.
Could you share with the Committee--is that a result of the
project itself or is it a result of what the department has
requested in change orders?
Because it is our understanding that there have been many
change orders requested sometimes once a week, if not more than
that, in some cases costing hundreds of millions of dollars.
My first question would be: Is putting this project on cold
standby more a result of the original scope of the project or a
result of the department's requested changes?
Secretary Moniz. Well, I thank you for the question, Mr.
Graves.
And, by the way, it was a pleasure to be in Georgia for the
Vogtle announcement, and I will be back in Georgia in a few
weeks, in fact.
Mr. Graves. That's great to hear.
Secretary Moniz. With regards to the MOX Facility, I think
it is a pretty, first of all, uniform understanding that we are
talking now about a 30-billion-plus life cycle cost, which is
quite a bit beyond what was originally bargained for.
I think the origins of that are several. One is that--and
the capital project itself is nearly a factor of three beyond
original projections, certainly two and a half, at least.
The first one of the problems was this baselining before
the project was really understood. Secondly, there were a
number--at least now, with hindsight, looking back--from what I
understand, there were a number of assumptions made by the
contractors in terms of how the experience of building a
similar plant in France would transfer here, and it turned out
there were a lot of incorrect assumptions both in how the plant
would be physically constructed, but, also, in terms of
interactions on safety standards, things of this type.
We, of course, have NRC regulation of the plant, and I
think there were a number of unanticipated issues there which
substantially escalated the cost. Partly, it is performance.
And, you know, we put together last June a really, I think,
extraordinarily strong project team headed by one of my senior
advisers that I recruited from the private sector--a lot of
project experience--found a lot of holes, frankly, and there
were some management changes that were needed and implemented.
And, fourth, of course, there was a general escalation due
to lack of funding profile being met and stretch-out and, as
you know, that just continues to add money. So it is a lot of
things that came together, and now the issue is--so this is a
very important dialogue that we need to have with the Congress
because, frankly, the issue is, ``Okay. Is $30 billion lifetime
something that can be supported for the disposal of the 34
tons''--by the way, there is a parallel 34 tons in Russia that
would be disposed of by them, of course--''or not?''
So that is why we are saying, ``Look, let's not do anything
irreversible. But to protect the taxpayer money with the
uncertainty of what is an affordable option going forward,
let's have a look--a hard look at various options.''
You know, in the 1990s, the National Academy of Sciences
put forward something like 31 options for our plutonium
disposal. We have narrowed that down to four or five to look at
in more detail. So that is the proposal. And, look, this is a
discussion that I think we are going to have to have with the
Congress now over these next months.
Mr. Graves. All right. And I hope you do, and I hope it is
an open dialogue.
I am listening to your response, and I didn't really hear
any blame being put on the community or the contractor. More of
it seemed to be related to the government or governmental
changes or slowness in funding, but I would hope that they are
still----
Secretary Moniz. Well, if I may interject there, I am not
leaving the contractor out of that equation. In fact, as I
mentioned, I think there were some incorrect assumptions made
in terms of transferability of the French.
So I think there is--you know, if we want to do blame,
there is plenty to go around. I am interested in solving
problems. So I just want to move forward and see what we can
do.
Mr. Graves. Great.
Secretary Moniz. We are committed to disposing of the 34
tons of plutonium.
Mr. Graves. Could you maybe share--what is the cost of cold
standby? Is there a projected cost or a study----
Secretary Moniz. So we are----
Mr. Graves. Because we are talking about a facility that
may be 60 percent complete at this point.
Secretary Moniz. Yes. It depends how one counts. But, yes,
that is fine.
So we believe--I think it is--215 or $220 million for
fiscal year 2015 would allow us to do a controlled transition
to this State with no irreversible harm.
Because MOX, by the way, is one of the options that is
still on the table to be looked at. The problem is--and I
understand it, and there is no way around it, and it is a
challenge--it would be a real challenge--the workforce.
Mr. Graves. Right.
Secretary Moniz. You have a workforce that has--by the way,
the safety record up to now has been exemplary in building it.
So there is not anything about the workers.
Mr. Graves. Okay.
Secretary Moniz. So we have to manage this, and I think the
best way to manage it is by trying to sit down and keep looking
at it.
Mr. Graves. Well, it is good to hear that MOX is still one
of the options being considered. And you referenced the
responsibility for taxpayer dollars, and that is certainly of
interest to this committee.
And I would be interested to know what the other
alternatives are. Has that been determined yet or is that part
of the study?
Secretary Moniz. Well, there are both reactor alternatives
and nonreactor alternatives. And there is another issue, that
the reactor alternatives satisfy the agreement that we have
with Russia at this time.
The others would require a reopened dialogue. Dialogue
right now is not so simple. So, anyway, yeah, we will spell out
those--we are looking at four alternatives--four options
specifically.
Mr. Graves. Right. Okay. Thank you, Mr. Secretary.
Secretary Moniz. And I will say preliminary view is that
two of the other ones, frankly, are not less expensive than
MOX.
Mr. Graves. Okay.
Secretary Moniz. But we are still working it.
Mr. Graves. Thank you.
Thank you, Mr. Chairman.
Mr. Simpson. Mr. Visclosky.
Mr. Visclosky. Thank you, Mr. Chairman.
Mr. Secretary, it is good to see you back.
Secretary Moniz. It has been a long time.
Mr. Visclosky. And I am very happy to see you in your
position. I think you bring not only intellect, but energy,
thoughtfulness, and some strong management to the position. And
I do encourage you as you proceed in your responsibilities to
consider everything possible to strengthen management at the
Department of Energy.
I have served on this subcommittee for a long period of
time and have grown very tired, not from you, but others coming
in and saying, ``Well, this was a unique project, one of a
kind, and that is why we have management problems.'' That is
why we have good managers. So I would encourage you in that.
I also do want to thank the chair and follow up on Chairman
Frelinghuysen's comments as well. In his opening statement, the
chairman said it does us no good to have the Department of
Energy agree to a work plan with the Department of Defense
which we cannot afford, talking about the NNSA department. This
is a three-way relationship that is critical to the security of
this country, and it needs your personal attention.
I would certainly associate myself with the chairman's
observation as well as Mr. Frelinghuysen. Fortunately--and I
say this very sincerely--I am very pleased that there is four
people on this subcommittee who also serve on the Defense
Subcommittee, given the interrelationship. I remain concerned,
however, that we are going through modernization drills with
some munitions that I have a question as to the delivery
systems of potential existence into the future.
I continue, despite the answers we receive in the
Department of Defense hearings that, ``No. Everything is fine
and our requirements are being met''--that, if those cost items
that we are very concerned about on this subcommittee aren't on
DOD's budget, that they can have all the requirements in the
world and would trust that, at some point, if the
communications aren't going well, if somebody hasn't thought
out those requirements vis--vis the investments we need to have
at NNSA--I would hope that there is some pushback and some
positive tension, if you would, and that the subcommittee be
made aware.
Because, again, I think it is very good that there is four
people on both of these subcommittees, and we would want to
make sure you are part of those negotiations as opposed to NNSA
being told what to do and would encourage you very, very
strongly in that. And, again, associate myself with the
chairman's opening remarks and Mr. Frelinghuysen's line of
questioning.
The one question I would have is--apparently, there is a
proposal for a HydroNEXT Program that over a 5-year period of
time would have a $100 million proposal relative to hydropower.
Understand that there have been criticisms of their
proposal--nothing new in our line of work--that the major
constraints are capital cost, that the modular technologies of
small dams require too much up-front investment, and that
diverting water for electricity generation, particularly in the
west, isn't practical.
Would you just have some comments, if you would, as to the
criticisms that were raised.
And the second question I have: Is this in any way
diminishing the department's attention to research on how we
can best use tidal power and, also, rediverting resources from
tidal power research to the new initiative?
Secretary Moniz. Thank you, Mr. Visclosky.
And it is good to renew our dialogue after many, many
years.
Mr. Visclosky. You have held up a lot better than I have.
That is all I have got to say.
Secretary Moniz. No. No.
If I may just comment on your first statement before
getting to your question. As we discussed earlier, I think
then--the chairman, I think, took interest in maybe getting
exactly the kind of dialogue that you described set up, if we
could talk about--at a more strategic level about the issues
going forward with the stockpile.
And I agree with you that those ultimately need to be
discussed as well in the context of the delivery systems and
the way one is postured. That is very directly relevant to the
part of the program that was shifted downstream a little bit in
terms of the cruise missile.
Mr. Visclosky. Uh-huh.
Secretary Moniz. With regard to hydro, first, let me say
straightforwardly that, in the budget proposal, within the
constraints, we increased the amount for the water program, but
we did shift funds more to the HydroNEXT side than the
Hydrokinetic. Again, I am happy in all of these issues to have
a dialogue about that.
But right now what we saw was a very, very strong push
coming out of the private sector in terms of an enormous
potential for small hydro. They are talking about 70 gigawatts
potential, and this is something, obviously, we have
discussions with others. The Army Corps of Engineers for
example is obviously critical in many of those discussions.
So that is what the budget proposal is at the moment,
looking at what might be a relatively near-term, major
additional low-carbon source with microhydro. A lot of people
have come forward in the private sector with the idea that this
could be a relatively short-term positive.
But to be honest, within the fixed budget--well, not fixed
budget--we went up, but it did lead to a proposal for 20, I
think, or 25 percent reduction in Hydrokinetic.
Mr. Visclosky. Okay. Secretary, thank you.
Thank you, Mr. Chairman, very much.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Secretary, welcome. We have never had the pleasure of
visiting before. I am Jeff Fortenberry from Lincoln, Nebraska.
I want to tell you a quick story. I ran into an old friend
recently. Danny Kluthe is a hog farmer. Have you ever spent
time on a hog farm?
Secretary Moniz. I cannot say that I have. No.
Mr. Fortenberry. There is a lot of energy there, let me
just tell you.
And so Danny is an entrepreneur and very creative and a
number of years back decided to capture, basically, the manure
in a pit, and the methane that was generated off of there was
used to produce electricity.
Secretary Moniz. Uh-huh.
Mr. Fortenberry. Danny basically reconfigured his system so
that now he is moving that methane into his truck, blending it
in some sort of proprietary fashion, as I understand, with
diesel and getting 70 miles to the gallon in his truck.
You are welcome to come see it. I think you would enjoy it.
Secretary Moniz. Could we drive it here? That is
interesting, obviously.
Mr. Fortenberry. The important policy point is this: The
energy entrepreneurs who are out there who are working on
distributed systems of energy generation and renewables are, I
think, on the cusp of a lot of new innovative approaches here.
And I appreciate what your disposition is on attempting to
leverage the public resources department to unleash that
potential. It is important.
But there are innovators out there like this who you might
overlook in the sense--because they are so small, but,
nonetheless, they are doing very, very important leading-edge
things and helping solve some of the most critical problems
regarding our own energy independence as well as environmental
sensitivity.
The broader point I wanted to make is I want to emphasize
something that Congressman Frelinghuysen said. To gather us,
perhaps, in another appropriate setting with DOD officials and
National Security Council officials to review and talk about
the interactions regarding nuclear security strategy is of
utmost importance.
And I would like--Mr. Chairman, I hope that we can
accomplish this quickly rather than sitting out there--this is
a goal that we need to do. This is an urgent task in a matter
of weeks, not even months.
You had commented that there has never been, from your
perspective, better interaction, dialogue, and, again,
strategic thinking. We need to be a part of that. Perhaps one
of the most important things that you and I can do in our time
of public service is to ensure that we decrease the probability
of the use of a nuclear device to as close to zero as possible.
Now, nuclear deterrence has an important role in achieving
that, but so do other essential nonproliferation initiatives.
In the Congress, I have helped form a nuclear security working
group in order to try to help Congress--it is a bipartisan
initiative--to get our arms around this spectrum of nuclear
security issues, which is complicated and cross-jurisdictional.
Now, in that regard, I wanted to talk to you about the
reduction of the defense nuclear nonproliferation budget. You
suggest that their $400 million reduction is somewhat due to
the MOX Facility issue.
But does it impact other nonproliferation initiatives that
you are undertaking, such as the global threat reduction?
Secretary Moniz. Thank you for the comment and question and
certainly on the first part.
Again, I think this idea of us having a little caucus,
maybe a sustained caucus, would be really very, very helpful,
and I could not welcome that more.
Mr. Fortenberry. Mr. Chairman, what is the pathway to
getting that done shortly? Sorry to be presumptuous and----
Mr. Simpson. We will talk later.
Mr. Fortenberry. Okay. That is a good answer. I will
obviously be raising it. It puts an accent on its importance.
Secretary Moniz. And the second point you made which I
would like to align with is that we should be thinking about
the nuclear weapons program and the nonproliferation program as
really part of the same objective in terms of nuclear security,
because sometimes they are viewed as kind of like alien
programs.
Mr. Fortenberry. Right.
Secretary Moniz. They are actually--it is the same
objective, ultimately.
Now, in terms of the budget, there is no question that, for
example, the GTRI program does have a reduction in this budget.
I have said publicly that, you know, I am disappointed that we
could not do a little bit better with that budget.
Mr. Fortenberry. Well, let's fix that. Why don't we fix
that?
Secretary Moniz. Well, it is the question of--well, with
the 050 constraints, and balancing these priorities--we felt we
just had to get the weapons program on track for--again, an
affordable deterrent within the Nuclear Posture Review
approach.
Now, in the GTRI, I do want--or the rest of the
nonproliferation program, I mean, I do want to emphasize that
we believe this is a strong program. Over the last few years,
we have had a real kind of surge in that program in terms of--
--
Mr. Fortenberry. Appropriately so.
Secretary Moniz [continuing]. In terms of the materials.
But with this budget, we will still continue to have strong
nuclear materials repatriation programs.
As I mentioned last--I think it was just last week in The
Hague--made the announcement with Japan, which was a very
important announcement, in terms of hundreds of kilograms of
plutonium and HEU--weapons-grade HEU. We will continue reactor
conversions. So I think, you know, it is an issue of how much
we can do, obviously, but I do want to--we will have a strong
program at this level.
Mr. Fortenberry. In terms of, again, prioritization--and we
all have to make hard choices--we cannot react to a nuclear
incident. We can't react. It is too severe. We have to prevent.
And the problem is the technology has spread. We are not in
a post-World War II period anymore where you just had a very
few actors with access to this technology and capacity to use
it, if they chose to do so.
Plus, the issue of transnational groups and the problem of
loose material, again, trying to get our arms around the
spectrum of potential threats in this regard, is complicated.
So I think it ties into what we all seem to be in agreement
on of getting in another setting to talking about the
interdependency of what you are doing, as well as the Defense,
as well as the White House, but also ensuring that we are not
somehow just considering these budgetary requests alongside
other important things, but in terms of outcomes aren't quite
as essential.
So that is my emphasis to you. And I hope that, as we move
forward--you are talking about these programs being strong. In
terms of a priority, it is absolutely essential. We cannot let
something happen here.
Now, I have noticed that you have undertaken a management
restructuring and created a new undersecretary for nuclear
security.
Do I have that understanding correct?
Secretary Moniz. No. Actually, that undersecretary was
preexisting. It is equal to the administrator of NNSA.
Mr. Fortenberry. Is that what the change is?
Secretary Moniz. No. No.
So the change really was in combining the undersecretaries
of energy and of science into an undersecretary for energy and
science, creating then a new undersecretary for management and
performance and moving the environmental management program
from the undersecretary for nuclear security under the
management and performance organization.
Mr. Fortenberry. Okay. I am sorry. I misunderstood that.
Secretary Moniz. No. No.
Mr. Fortenberry. I thought that was, again, an attempt to
do what I am suggesting, to, again, heighten the intensity of
need in this particular policy area.
Secretary Moniz. But if I may add a bit more, because it is
an area that I am very, very committed to.
Number one, the office, DNN, has been working on a kind of
over-the-horizon piece of work. Today let's look at the threats
going out and make sure we have got our program focused on the
right threats.
But that is feeding into something that I charged the
Secretary of Energy Advisory Board to look at, NN, and the
directions, the threat space, et cetera. That is chaired by Al
Carnasale, who you may know, is very highly respected in these
areas.
And the task force will report at the end of the calendar
year, although they will probably informally be able to provide
some observations in the summertime, and be happy to get you--
--
Mr. Fortenberry. That would be helpful.
Secretary Moniz [continuing]. Informed about that SEAB
process.
Mr. Fortenberry. That would be very helpful.
Mr. Chairman, one other question right quick regarding the
EDR project. We had an extensive hearing on this last week or
so.
It seems to me, by our proposed reductions in terms of our
contribution, it is an admission that the chaotic management of
that international effort is a very significant problem. And
what I don't want to see is us 2, 3 years from now having spent
even more money on this saying that it is going to go into cold
storage.
It is unclear to me whether or not the proposed trajectory
of some actual physical product is real. And, again, if we are
going to end up wasting money in 2 to 3 years, is it necessary
to decelerate this now?
Secretary Moniz. Sir, I am recused from discussions about
the whole fusion program. But the Acting Director of the Office
of Science is here and could answer your question, if you
would--the chairman permits.
Mr. Simpson. That is fine with me.
Mr. Fortenberry. Okay.
Secretary Moniz. This is Pat Dehmer.
Ms. Dehmer. We talked about this last week when I was here.
Mr. Fortenberry. It is always fun to reemphasize things.
Ms. Dehmer. Isn't it? Yeah.
And my answer is going to be the same, obviously. We are
waiting for the International Organization to derive a baseline
for the project. That won't happen until a year from this
coming summer, June, July 2015. And we are going to reassess a
year at a time now.
The $150 million for this year we believe is the correct
amount. We believe that maintaining our commitment to the joint
implementing agreement is the right thing to do. So taking
everything into consideration, the $150 million for this year
is the correct amount. And we are going to watch very carefully
what happens in the future.
Mr. Fortenberry. One idea that I thought of after your
testimony last week: Instead of having some sort of annual
review, what if we broke that up into even more micro tranches
and looked at it quarterly to see if there is reasonable
management initiative that brings about the reorganization that
gives us some higher level of certainty that we are going to
produce a product here that is worth the investment of taxpayer
dollars?
Ms. Dehmer. Well, we certainly do watch what the
International Organization, the IO, is doing on a more frequent
than an annual basis.
So right now they have the management assessment in front
of them. They have committed to look at all the
recommendations.
What I am looking for is that they accept all the
recommendations, they make a corrective action plan, and they
implement it. And we will be watching that much more frequently
than annually.
Mr. Fortenberry. Back to the question of priorities that we
just talked about with the Secretary, if we are looking at the
creation of a star and we are not exactly sure whether or not
we can do that and we are pouring lots and lots of money into
it versus trying to prevent the explosion of a nuclear weapon
in an American city, there is a difference in priorities there.
Ms. Dehmer. I understand.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Simpson. Thank you. I thought I heard that question--or
that answer last week.
Let me ask you again--get back into the subject that a few
people have mentioned and you have responded to to some degree.
First, you get criticized for not being careful that you
don't jump into a project that we are going to put in cold
storage down the road. Then you get criticized for putting a
project in cold storage when it is down the road.
It is one of the frustrations I have, I guess, here. You
know, I look at, what, $14, $15 billion we spent drilling a
hole in the ground in Nevada that is, I guess, a good place to
store their records, in a hole in the ground. $3.2 billion we
have spent so far on MOX.
We had a debate in Congress on whether MOX was the right
thing to do, and there were Members of Congress opposed to it
and Members of Congress supportive of it.
Chairman Hobson was very critical of MOX. He tried to kill
it several times while he was chairman of this committee. But,
nevertheless, Congress went ahead with it.
Yeah, it has had cost overruns. You could say that is true
of the waste treatment plant in Hanford, also. We did MOX for a
purpose, and we had an agreement with Russia. And now we are
putting it in, what, cold standby status or whatever?
Secretary Moniz. Uh-huh.
Mr. Simpson. It is not just that we are going to put this
in--I mean, everybody is going to stop working there for a
while because there is no money to continue the construction.
There are facilities all around the country, contractors
that work to provide the services for the MOX project. All of
those go on standby, if you will.
There is a cost of maintaining this in a standby status,
and then there is a cost if it is one of the choices that you
choose to go ahead with MOX in restarting it.
Secretary Moniz. Uh-huh.
Mr. Simpson. And there is the potential loss of those
contractors who no longer want to deal with the Federal
Government or have lost employees.
I am thinking of a couple of companies that I am well aware
of that are providing facilities that have to have welders that
are certified to work on nuclear processes. They are going to
go because they don't have any more work anymore. So there is a
cost of restarting it.
Is it wise to put it in cold standby and incur those costs
while you are deciding what you want to do or should we go
ahead with it while you decide what you want to do? There are
costs both ways.
Secretary Moniz. Uh-huh. Yes. And, obviously, we have made
the choice of going to the standby, recognizing the issues that
you have said.
In doing that, we will be looking at how we can, in some
sense, soften the blow in terms of some of the skills, because
putting it into standby is not itself a simple action. It
requires highly technical people, but, obviously, a reduced
number to go there.
So, you know, it is a judgment on optionality in terms of--
you know, if in a year or a year and a half one decides that
MOX is not the way to go, then there would be the issue of
having spent another hundreds of millions of dollars on a
project, but there are the downsides the other way. You know, I
think those are facts.
The other constraint, of course, was the 050 cap. And so,
you know, I have to say that was part of reaching the decision
on that balance of issues----
Mr. Simpson. Sure.
Secretary Moniz [continuing]. Because there is a difference
there of, you know, maybe $300 million.
So this is not an easy--not an easy decision. It is not
something that, you know, was a lot of fun. But we drilled down
and we said, during Mr. Graves'--I mean, the life cycle cost,
the question is: Is the country prepared to spend, you know, a
better part of a billion dollars a year for decades?
Mr. Simpson. Where did the life cycle cost of $30 billion
come from? Because I have heard substantially different
numbers.
Secretary Moniz. Well, what I would say is the--first of
all, that is part of our internal team, as I mentioned, under
the leadership of one of the people I recruited who had
substantial private-sector management in project and investment
history.
The GAO came out with a report recently that talked about
24 or 25 billion, but said it is almost certainly light. In
fact, they had not incorporated certain issues. So I would say
they are in the same place.
And the Army Corps of Engineers we also brought in to look
at the capital facility and they, if anything, are probably a
little bit higher than we are on it. So I just think right now
all the information points to that being probably pretty much
correct.
The other thing is that the team that we put together
starting last June has worked intensively with the contractors,
looking for ways to reduce costs and, frankly, other ways of
sharing risk, maybe a different contract structure for part of
the project.
And those have been very, very professional discussions
that went on for a long time. We came out of the discussions,
however, not seeing any reason to think that the cost estimate
was in any way incorrect.
Mr. Simpson. Well, you said you are looking at four
different options, a couple of them probably as expensive as
MOX, a couple of them, I assume, less expensive than MOX.
Will those meet the Russian agreement?
Secretary Moniz. Not presently.
Mr. Simpson. So you are going to have to renegotiate with
Russia?
Secretary Moniz. That would have to be a discussion with
the Russians. Correct.
Mr. Simpson. That will be interesting.
Secretary Moniz. I did have a couple of discussions with
them earlier on. Of course, this was before decisions were
made. But those were not in the recent months, shall we say.
Mr. Simpson. Let's talk for just a minute----
Secretary Moniz. Well, actually, for the record, I want to
make sure that I don't provide any misinformation.
I have not had any discussions with them in recent times
about, you know, the decision and the need to maybe--the
possible need to rediscuss this.
But just for the record, I want to make sure that I--I did
as a courtesy inform just prior to the budget being public--
inform the ambassador that this was going forward and that,
when a dialogue is possible, we may need a dialogue.
Mr. Simpson. Okay.
Secretary Moniz. Yeah.
Mr. Simpson. SMRs. Did the B&W announcement concern you?
And what does it do to the future of SMRs? And the reason we
build, do the research in building SMRs, or anything else,
actually, is because there is a private-sector interest and a
potential commercial interest in doing those things.
If B&W is having trouble finding that private-sector
interest, does that concern you about the future of SMRs, in
general?
Secretary Moniz. To a certain extent.
But the other side of the coin is--and this was prior to
the most recent B&W statement--and I should say we are--not
surprisingly, we are in an intensive dialogue with them right
now in terms of the path forward, as well as, by the way, going
along very well is the discussion with the second awardee, Nv
Scale.
But the other side of the coin is last month, for example,
I had discussions with some major utility CEOs who historically
have had interest in nuclear, and I asked them flat out, you
know, ``Look, is this a technology that is of any interest to
you?'' And the answer was uniformly, ``Yes.''
And the timing is critical. What they said is that, you
know, ``In the 2025 time period is when we have to make
decisions about this.'' And this is certainly a player in those
discussions, which is why that is--the critical thing is in the
program as we had put forward. It was to get the kind of
generic design application to NRC within years and to have a
first plant of each design built prior to 2025.
So the timing looks to be just about right to hit that
market point, and that is why, frankly, an announcement for any
substantial deferral does trouble me because I didn't want to
miss the market. So----
Mr. Simpson. Just one other subject is USEC and what is
going to happen there. As you know, in last year's conference
report, we included $62 million to keep it operating in the
research and development agreement through April of this year.
Secretary Moniz. Uh-huh.
Mr. Simpson. Plus another $56.6 million of transfer
authority available after we approve a path forward for
domestic enrichment technologies for national security needs.
Do you still believe there is a national security need for
domestic enrichment?
Secretary Moniz. I do.
Mr. Simpson. Mid-April is approaching relatively rapidly.
Have you made a decision yet on what you are going to do in
operating--what you said earlier. It would be nice to keep
the--what is the name?--spinning----
Secretary Moniz. The machines.
Mr. Simpson. The machines spinning. Yeah. Right.
Have you had discussions with USEC on what they will do,
because, if they are, in fact, as you know, in mid-April going
to be running out of money, they are going to have to send out
layoff notices to their employees.
Have you had those discussions with them so that they know
what is going on so that their employees will know what is
going on or are we looking at transferring $10 million to them
to get them through that month of April--or that period?
Secretary Moniz. So we are executing the program as it was
laid out. And, again, just to repeat, that the technical
milestones were all met in terms of the performance of the
centrifuges.
Mr. Simpson. Right.
Secretary Moniz. We are, number one, as I said earlier,
looking at the reprogramming to get that $56 or $57 million to
continue with the facility. We are committed to continuing that
technology development, but we cannot be, you know, committed
to a specific manager.
And so our current plan--and this is understood--is that
the responsibility for managing it will novate to Oak Ridge,
which is where the technology originated.
But, you know, I think it is quite reasonable to speculate
that, of course, the skilled workforce working on those
machines will then have to be kept on one way or another,
probably--if I had to guess--and this is strictly a guess--
through like a subcontract, for example, to USEC through them.
Mr. Simpson. Uh-huh.
Secretary Moniz. Now, that is separate from the rest of the
company's challenges. We all know they are in Chapter 11 at the
moment.
And, you know, the whole uranium enrichment business is
quite different. In fact, to be honest, you know, the ACP was
being developed by USEC because it has a commercial
opportunity.
Well, I think nobody believes right now that there is any
room in that market for a new commercial opportunity. So we
have to put our focus now on the national security obligations
as opposed to the commercial world.
But, of course, if we keep the technology going for
national security purposes and the uranium markets are quite
different, nuclear comes back on, you know, the Japanese
restart some reactors and other builds come on, well, then,
maybe in the future that could then be commercially viable.
Mr. Simpson. Do you expect it to be run cheaper by the
national lab than you do by the company?
Secretary Moniz. I think that, for this particular task, it
is really about maintaining the technology and the IP, which is
what we are focusing on right now.
And then, if the commitment is made to go to a full
national security train, then that would require manufacturing
more. And there is a supply chain out there which, of course,
USEC was drawing upon.
Mr. Simpson. Okay. Ms. Kaptur.
Ms. Kaptur. Thank you.
I want to associate myself with your remarks, Mr. Chairman,
and, also, point out, again, each of us exist in a different
universe sometimes.
But in terms of USEC and Ohio, the highest unemployment
counties are those counties in which it has its major
operation. So I just wanted to put that on the table.
I think, Mr. Secretary, you are so important and your
department is so important in America's future. I always like
to cast my remarks in the broadest frame.
And I began earlier today with some statistics about how
significant our energy deficit has been for a number of years
and linking that to our vehicular deficit using the figure of
$2.3 trillion in the red since--in the last decade.
If I were to go back and say how far are we in the red in
terms of our energy dependence, our imports, back to 1973, it
would be $5.1 trillion, $5.1 trillion more imports than
exports, no balance. And if we were to add to that our
vehicular imbalance, it would more than double. We would we
would be well over $10 trillion.
We look at our budget deficit and we all have views of why
we have a budget deficit. But, honestly, when you are
hemorrhaging on the trade accounts a half a trillion dollars a
year, led by energy and vehicle imports, it becomes pretty
clear what has happened to the diminishment of economic growth
in our country.
Right now, we have over 10.5 million Americans still
unemployed, many working full-time for poverty wages and people
who literally have dropped out. They have just dropped out. And
they are in those counties where USEC functions right now, and
they are in hundreds of other places around this country.
So the broad frame we operate in as a country is: How are
we all going to work together to pull this team forward using
energy and its infinite capacity to lead us forward to help
heal this wound so that we don't throttle economic growth
anymore in this country and that we are able to unleash the
power of this economy again? And we are seriously challenged in
that regard.
Now, I wanted to say one of the sectors that has not been
hemorrhaging is agriculture, and there is a whole substructure
in our economy that makes their success possible. So we have
success stories amid the red ink. And we need to think about:
Why does that happen? What is that structure?
And I wanted to say to you, Mr. Secretary, you have the
vision to work with other departments, Department of Defense,
Department of Agriculture. And so my next question will relate
to some of these relationships that you have built, important
ones, and particularly focused with the Department of
Agriculture.
With the pressures of climate change, which are real in
every part of this country, our growing western water
shortages, which one Senator from California has described to
me as California becoming a desert, with the increasing cost of
transporting food across this country, how can the Department
of Energy, through your incredible research facilities,
contribute to the redesign of new energy and water-efficient,
climate-controlled, canopy-under-canopy production and develop
food platforms targeted to regions that have abundant fresh
water, where the agricultural base has the capacity to innovate
and adapt this new technology for four-season production?
I think we are at the beginning of a revolution in
agriculture in this country because of climate change. And for
those regions that have the capacity to produce undercover, I
find these structures completely 19th century. Now, their
sellers will say, ``Oh, Congresswoman, that is an
overstatement.''
But I have greenhouse producers I represent using 1946
boilers. We don't have solar technologies integrated in our
canopies. And, frankly, we don't have cost-effective canopy-
under-canopy production. We do not have systems that ration
water, use it most efficiently and are able to integrate the
energy and water demands of modern food production.
Can you give us some insight in the kinds of relationships
you have with the Department of Agriculture? And could the two
of you together, these two massive departments, one of which
produces trade surpluses and the other one which produces trade
deficits, put your mind together to help America heal this
major wound that we are facing with these trade deficits?
Secretary Moniz. I would only quibble with our causing
trade deficits. We are trying to reduce the trade deficits.
Ms. Kaptur. That is good to hear. But it is so slow, Mr.
Secretary. 40 years. How long has your department been around?
1979, was it?
Secretary Moniz. 1977.
Ms. Kaptur. 1977. So think about this.
Secretary Moniz. Right. So--well, it is interesting. First
of all, let me say a few things that would touch on some of the
areas that you mentioned individually and then maybe come back
to more the system view.
Certainly, in terms of the water issues, we have ramped up
an energy water nexus activity because we do think this is an
increasing problem and, with warming, it will just keep getting
worse.
And, in fact, part of the issue is the pattern, as long
expected, which we seem to be seeing in front of us, is,
roughly speaking, you know, dry places getting dryer and wet
places getting wetter and neither is good----
Ms. Kaptur. Yes. Correct.
Secretary Moniz [continuing]. Because there are runoff
problems with some of these intense storms, et cetera, et
cetera. So that is one thing that we--and probably next year
will be more visible in terms of what we want to do in terms of
energy and water.
Cost of transporting food you mentioned. And I am sorry.
This will be slow as well. But, for example, programs like the
SuperTruck program that we have, just a few weeks ago, I
stepped into the cab of the first--I wasn't allowed to drive
it, but I stepped into the cab of the first product.
It was a combination of Cummins and Peterbilt in terms of a
class 8--you know, class 8 vehicle, which had energy efficiency
between 60 and 70 percent better than the standard class 8
vehicle.
All those technologies are not yet ready for commercial
deployment, but I think over the next 10 years you will see
them go out there. So big impact on that. And class 8 vehicles
do use a lot of the transportation fuel in this country.
In terms of water-efficient food platforms, there, I think,
you know, the--and I don't know--and, actually, Pat Dehmer
could probably say more.
But in a general sense, things like the work of our Joint
Genome Institute, part of that is looking for more, you know,
water--or less water-tolerant plants, et cetera, for various
applications. So those all are relevant.
But for the specific problem you mentioned, I am not aware
of any kind of system approach that we have. That is something
that I could talk with Secretary Vilsack about, potentially, in
terms of a joint program.
Ms. Kaptur. I thank you, Mr. Secretary, for hearing me. You
always hear us. You are not able to change that flagship
department that you run always so quickly, but I think just to
have the insight of what is at stake here----
Secretary Moniz. Uh-huh.
Ms. Kaptur. And when I talked about the parts of the
country that are enduring such difficult economic
circumstances, the proper technology and training can lead to
new industry in places that it doesn't currently exist, and I
think your department, in cooperation with the Department of
Agriculture, can really do some extraordinary development.
If I take a county like Cuyahoga County in Ohio, which has
lost enormous capacity--they used to be the leading greenhouse-
producing county in Ohio because it sits next to a great fresh
water lake. With new technology, they could restore some of
that production. The same is true next door in Lorain County,
where U.S. Steel and Republic Steel function.
But that isn't all they can do. They have incredible
landscape industries, the third--second largest growing sector
in Ohio now in the agriculture front. But we haven't put the
science together.
And for you to talk to the Department of Agriculture is a
Washington miracle, that we would actually have two of these
stovepipes talking to one another and thinking about creating
the future, whether it is biofuels or, in this case, food-
production platforms, which could also be, by the way, fish-
production platforms, and thinking about ways of helping our
greenhouse growers, for example, to produce woody plants much
more efficiently than they are currently doing.
I haven't seen a single canopy platform that has solar
embedded in the canopy itself. I am thinking: What is holding
this industry up? Why are we functioning like the 19th century
here? Why are we doing this?
Secretary Moniz. I think the Dutch are quite advanced in
these areas.
Ms. Kaptur. The Dutch are very advanced, and the Belgians
are very advanced. The problem is they have a cap-and-trade
system in Europe that gives tremendous energy subsidies to
their producers.
And I am very worried about this country and our inability
to meet the water and energy challenge of their subsidy system
versus ours in a sector, agriculture, in particular, that has
provided a net positive to us in terms of our trade balance.
And I think the energy-water nexus--you mentioned genomics
as well. I was at an Israeli seed facility. Unbelievable
tomatoes they are producing there with limited water.
Unbelievable.
We need to be as agile. And, unfortunately, I can tell you
we are not. Even though the people out there are working very
hard, they are working with old technology.
So I thank you very much for allowing me to place that on
the record.
And could you, finally, Mr. Secretary, tell us a little bit
more. As you look to the future for your advanced manufacturing
initiative, lead us through the next year. What is the
department looking for? What are you hoping for?
You have got cooperative agreements with the Department of
Defense, with the Department of Agriculture. You have ideas
about new technologies that you want to advance. Tell America
what you hope to achieve in the next year in this critical
field.
Secretary Moniz. Well, once again, you know, the outcomes
will be over several years, but what we want to get moving and
have moved are--so far, we have done 2.4 of these manufacturing
centers.
The .4 is in Ohio, where the Department of Defense is the
larger investor to us. And then we have one in North Carolina
right now and one that is open right now for competition.
But I think, first of all, the important thing is the theme
here is to focus on the kind of cross-cutting, kind of enabling
manufacturing technologies that will give broad advantage in
the United States.
So the first one that we were involved in is on 3D printing
and advancing the manufacturing technologies there. And I see
Mr. Fleischmann is back. And I will mention, at Oak Ridge,
there is also a focus on 3D printing, basically.
Secondly, a second one is wideband gap semiconductors. That
is mainly for power electronics, which is--again, it is an
enabling technology. It cuts across many energy sectors and
other sectors.
The third that is now open for competition is on the whole
subject of composite materials for lightness and strength. And
I might add the Department of Defense has two others. One is on
lightweight steels, metals, and the other on digital
manufacturing.
So you can see the pattern is--these are not, you know,
kind of pigeonhole things. They are key core capabilities that
can go across our manufacturing sector and, hopefully, gain us
advantage
Ms. Kaptur. And for the sake of the public, either yourself
or your director of science, could you state for the public
which technologies, such as nanomaterials--what are your
priorities? You have about six or seven.
Secretary Moniz. For specific applications of these
technologies? Is that what you mean?
Ms. Kaptur. Well, the sectors, nanomaterials----
Secretary Moniz. Oh.
Ms. Kaptur. You have about six or seven major----
Secretary Moniz. Yes. So the kinds of things that I already
mentioned in terms of lightweight materials, composite
materials, the lightweight metals, the manufacturing processes
like 3D, et cetera.
So those are the priority areas now, and we will be
expanding the list in consultation with a bunch of
stakeholders.
But then the applications, if I just look at the energy
space, you know, they range from efficient vehicles to wind
turbine blades and power electronics, renewables to grid
management.
So the applications of this is going to be very broad
across the energy sector and other parts of our industrial
sector, because, again, we are focusing on these key
foundational technologies that will apply to many
manufacturers.
Ms. Kaptur. Thank you.
Thank you, Mr. Chairman.
Mr. Simpson. Mr. Nunnelee.
Mr. Nunnelee. Thank you, Mr. Chairman.
Thank you for being here, Mr. Secretary.
Last year the President's budget request called for a
strategic review of the Tennessee Valley Authority, which, to
my knowledge and from testimony from the director of OMB in the
budget committee on which I serve that the review is yet to be
completed.
The President's fiscal year 2015 budget request states
that, ``The administration stands ready to work with Congress
and TVA stakeholders to explore options to end Federal ties to
TVA, including alternatives such as the transfer of ownership
to state or local stakeholders.''
So considering the very active partnership between TVA and
NNSA--I am curious--what conversations have taken place between
OMB and the Department of Energy and NNSA, specifically as it
relates to tritium production?
Secretary Moniz. As I understand, frankly, prior to my
tenure, I believe that those discussions were held in terms of
making sure that the national security equities would be part
of any discussion that went forward.
Mr. Nunnelee. So what are your thoughts on transferring
tritium production to the private sector or to state or local
stakeholders?
Secretary Moniz. Well, we clearly need to continue our
tritium production and--you know, and I would say, with TVA
being a government entity, it is probably a little bit simpler.
But I think, technically, of course, we could do it with a
commercial reactor as well.
Mr. Nunnelee. We will be----
Secretary Moniz. I mean, commercial--it is a commercial
reactor, but I mean a non-government entity.
Mr. Nunnelee. Sure. We will be submitting questions as to
what it would involve to make that transition, should it become
necessary.
Secretary Moniz. Okay.
Mr. Nunnelee. Have I got time for another one, Mr.
Chairman?
Mr. Simpson. You bet.
Mr. Nunnelee. Thank you.
I do support your work in advanced research concepts. This
subcommittee last year added $12 million to this program for
2014 to fund an industry-only competition for advanced reactor
concepts.
I know the President's budget has not requested more
funding for this. I do hope that Congress will be able to
continue this in 2015 along with our support of the national
lab efforts. We have to find ways to stimulate industry efforts
to develop new reactors that will be safe and economically
competitive.
Developing generic technologies like DOE did with this very
small amount of 2013 funding will take a long time for us to
get to where we need to go of competitively priced electricity.
But given the larger amount that we gave you in 2014, I
hope that you will move forward in funding three or four
reactor concepts that might eventually produce economically
competitive electricity, not simply generic technologies that
may end up not working well together.
So I would appreciate it if you would just look into this
and get back with us on the subject.
Secretary Moniz. I will, indeed.
Mr. Nunnelee. All right.
Thank you, Mr. Chairman.
Secretary Moniz. Thank you.
Mr. Simpson. Mr. Visclosky.
Mr. Visclosky. Mr. Chairman, I would simply want to
emphasize that I join with Mr. Hobson in his concerns about MOX
originally. Thank you very much.
Mr. Simpson. I was going to mention you, but I wasn't
certain that that is where you were.
Mr. Visclosky. I appreciate the chairman not taking my name
in vain. I appreciate that very much.
Mr. Simpson. Mr. Fleischmann.
Mr. Fleischmann. Thank you, Mr. Chairman.
And, Mr. Secretary, I wanted to discuss high-speed
computing because I think this is so critically important to
our nation. And, as you know, when you visited ORNL with me, we
had an opportunity to visit there and discuss that.
We are competing with the rest of the world in developing
and maintaining our supercomputing capabilities, sir.
Can you talk a little bit about the importance of
computing, both in speed and performance, and how you see the
U.S. comparing with other countries.
Secretary Moniz. Yes. Thank you for the question.
First of all, you can be assured that I am very, very
committed to maintaining and extending DOE's--I mean, DOE and
its predecessor agency's really historic role in helping push
advanced computing for this country.
It was--when I was in my first go-round at DOE, the program
was really pushed by our weapons program, which historically
had been how these supercomputers were advanced over many
decades.
At the end--towards the end of the Clinton Administration
at the department, we started the application of these tools
more broadly to key science and energy challenges.
And I have to say, coming back, I am really pleased to see
how that has burgeoned, really, which reinforces your point
about how high-performance computing, you know, is--kind of
goes across so much of what we do, often without even realizing
it, frankly, including the spread to industry that we all know,
airline manufacturing, for example, being based on this.
And I will come to a broader statement. But, also, in fact,
at Oak Ridge, again, I would mention the very first DOE hub,
CASL, which is exactly on computer simulation for design of
next-generation fuels and safety systems, et cetera, for
nuclear power.
So I just think that the--this has been a huge edge. It is
for us. It has been a huge edge also in the national security
context. And, in fact, having the supply chain for cutting-edge
competition has been very important for us.
So you mentioned speed. Well, right now we don't have the
fastest computer in the world. Right now that is in China.
And the Chinese, the Japanese, the Europeans--everybody is
really committing to this so-called Exascale push, which is why
in this budget we have, I think, a $141 million request
specifically to move Exascale, with $50 of that in NNSA and $91
in the Office of Science.
I do want to emphasize that it is not just about speed.
That is important. But, frankly, understanding the
architectures of these bigger and bigger machines,
understanding how one writes the--let me call it, roughly
speaking, software for utilizing this--I think, when you put it
all together, I would say we are in the lead, but we won't stay
there if we stand still.
So the road to Exascale--I mean, we see Exascale as, you
know--maybe, let's say, the end of the decade or a year or two
after that. But the road in getting there will have many
discoveries that will, I think, permeate the bigger picture
about developing and using these kinds of cutting-edge
capabilities.
Mr. Fleischmann. Okay. As a follow-up, you mentioned CASL,
which I think is very important.
Could you please for the committee tie in how the
supercomputing allows us and has benefited specifically the
CASL program, to tie that in. I think it is very clear that
supercomputing and CASL--it is a prime example of why we need
this program.
Secretary Moniz. Yes. So the CASL is the hub at Oak Ridge.
It has got many partners, both other labs, academic. I might
mention Idaho is part of that, in fact. Los Alamos as well.
Universities are part of that.
Of course, Oak Ridge is one of our premier centers for
high-performance computing. That is critical to the performance
of CASL.
I would like to emphasize that CASL is pretty much at now
its first 5-year installment. It has gotten very, very good
reviews.
And it has provided products as promised that have gone out
in terms of industry being able to adopt these tools. So I
think it is a--you know, I think the program has received very,
very positive reviews.
Mr. Fleischmann. Mr. Chairman, do I have any more time
remaining for a quick question?
Mr. Simpson. Quick one. Yes.
Mr. Fleischmann. Just to show our competition
internationally, Mr. Secretary, we have a commitment to
supercomputing in this country.
But for the benefit of the subcommittee, where is the rest
of the world in terms of their commitments?
Secretary Moniz. Well, as I say, the Chinese, the Japanese
and the Europeans, in particular, have a major commitment,
probably in Russia, too, although I don't know as much about
that, to be honest.
But I think, in terms of the competition, to understand the
intensity, what I would say is that, you know, the Chinese in
their--I forget the exact number--but tens of petaFLOPS
computer, the world's fastest at the moment, they have a lot of
American-origin components in there.
However, it is well known that their plan going forward is
that the next generation will have completely indigenous
components. And so that is a change in the game.
Mr. Fleischmann. Thank you, Mr. Chairman.
Thank you, Mr. Secretary. I yield back.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. Mr. Secretary, I would like to pull back
to a higher altitude and ask some more fundamental questions.
Is there a right to nuclear power?
Secretary Moniz. The issue----
Mr. Fortenberry. Because--I think you can anticipate why I
am asking this, because this has set, basically, the
architecture in the way in which we deal in treaty obligations
and in international relations with other countries.
And, yet, as we know, in certain types of nuclear power, it
is a quick sprint when the other resource factors are there to
nuclear weapons capability. And so we have this distinction
that, again, lays a certain set of working premises, but then
leads us to the potential for future problems that are very
grave.
We have the world on the verge of nuclear weapons
proliferation. That is the reality. If certain things don't go
our way, you can see this happen in the Middle East. If other
countries get shaky in terms of their agreements with us, they
have advanced economies and scientific capacity to develop this
quickly.
So the reason I am asking you this is related back to our
earlier question regarding the strategic thinking--the robust
strategic thinking, the interdisciplinary strategic thinking,
between us and the administration.
How do we reexamine some of these working premises? And
then maybe outcomes flow from there--or at this point probably
what would seem like an impossible policy idea of, like, for
instance, an international nuclear fuel bank where you can
actually get ahold of the inventory of nuclear material that is
in the world and work toward, again, stability in this arena,
whereas right now we are on the verge of grave instability.
Secretary Moniz. In terms of your opening statement about
our right to nuclear power, I think--well, of course, going all
the way back to President Eisenhower's Atoms For Peace, I mean,
there was the idea that, of course, we would support and
welcome the spread of nuclear power with the appropriate
conditions. And today that largely means, for example, IAEA
safeguards, et cetera.
The second point, of course, is that, just to emphasize, as
you well know, the nuclear power reactor, I would say, is not
in and of itself their proliferation--the center of the
proliferation risk as opposed to other fuel cycle activities
that might surround it, which is why, of course, we have the
strong focus on the----
Mr. Fortenberry. Well, that is why I said----
Secretary Moniz [continuing]. Materials.
Mr. Fortenberry [continuing]. Certain types of nuclear
power generation.
Secretary Moniz. That is right. Yeah.
So, look, I think the--I think we have effective programs
with the IAEA. We support the IAEA quite strongly. I might add
the IAEA--and I was at the first ministerial meeting last
June--I think it was last June--or--no--well, I don't know.
Anyway, I think it was last June. They had the first energy
ministerial meeting on nuclear security.
So I think this is very, very important, that the IAEA is
elevating organizationally and in terms of focus security, in
some sense, to the same level of safety, which has been
traditionally their focus.
Mr. Fortenberry. That is a great point. If I could
interrupt, that is an excellent point.
And I think it puts us on the trajectory toward trying to
re-create a policy framework that diminishes the possibility of
further proliferation.
That international agency, I think, has an excellent
director, and it is my hope that they are robustly supported
not only by us, but around the world.
Secretary Moniz. Yeah. If I mention that as a factoid, then
the--as I mentioned, last week was the third of the nuclear
security summits that President Obama started in 2010. Then it
went to South Korea, then The Hague.
2016 that will return to the United States, and later--
probably 6 months later would be the second IAEA energy
security--nuclear security ministerial, with the idea that that
may be then an institutionalized way of carrying forward this
discussion at a high level.
Mr. Fortenberry. Yeah. That, I agree, is also another very
important platform. In fact, I was at the first one that the
President held.
A group of us from Congress went on the bus over there, and
we could not figure out the common thread between us. It was
the most diverse group of members on a single bus I have ever
seen.
And, finally, I think, now-Senator Markey mentioned to me,
``Have you figured out why we are all on this bus?'' I said,
``I cannot.'' He said, ``It is everyone who voted against the
U.S.-India civil nuclear trade deal.'' Because we had concerns
about the nuclear proliferation treaty dynamic.
Secretary Moniz. I see.
Mr. Fortenberry. And--but, yes, I think that is another
platform that is very important, and it is achievable.
The other ideas that I have suggested are, again, shifts of
paradigm in thinking, but--and maybe the IAEA is the right
agency or the place where a broader movement in terms of
nuclear security--standardization of nuclear security can
occur.
But this is the kind of--again, we don't have a lot of time
here. I mean, project out where we are going to be in 2030 and
this could go either way.
Secretary Moniz. Uh-huh.
Mr. Fortenberry. Yeah.
Thank you, Mr. Chair.
Secretary Moniz. Yeah.
Mr. Simpson. Ms. Kaptur, did you have any further
questions?
Ms. Kaptur. Just very quickly. Thank you, Mr. Chairman,
very much.
I just wanted to mention to the Secretary that I don't know
if the department has done any evaluation of the impact of the
Chinese dumping of solar panels on the global market, I had
mentioned this in prior years.
But the intellectual property that exists in many smaller
companies, certainly in my region, I think is important to the
country.
And I would just direct your attention to what has
happened, the fallout of those actions by the Chinese across
the globe and certainly within our own country and our own
innovation platforms that exist. So I wanted to just bring that
to your attention.
And then, secondly, I believe that, in regions such as I
represent, there is a tectonic shift going on in power and the
production of power and the confluence of the, as I mentioned
earlier, shutdown of coal-fired utilities, the nuclear industry
that is--many plants up for relicensing at the same time as new
natural gas discoveries are coming on board.
And I don't really know what that means for unregulated
states versus regulated states, but I would hope that the
department--if there is a Federal role for us to play for those
regions that are undergoing significant change, that there
would be--are we just going to let companies die?
I guess that is what the capitalistic system is all about,
but I would just have to say that, for unregulated markets and
merchant economies, these transitions can be really brutal.
And so I would ask you, if you can give us any guidance of
actions we could take to provide smoother transitions, it would
be very instructive to us.
So I thank the chairman very much.
I don't know if the Secretary wishes to comment on either
the solar issue or the changing nature of power production in
some of our regions, but I would welcome his comments.
Secretary Moniz. Well, on the solar issue, I would just
mention, of course, that our trade representative, Mike Froman,
who--we have launched two WTO actions on solar from China. So
those are in process.
On the second, I would just mention--this is no simple
issue--we certainly have been--for example, the nuclear
closures we have been certainly looking at, but, you know--and
we have had discussions with some of the companies.
We don't have a lot of authorities in that regard. I think
a lot of those issues would be at a state level and a state
regulatory issue.
And I think one of the issues is to what extent--and it is
different in different regulatory structures--to what extent is
fuel diversity, for example, you know, kind of valued in terms
of how one is moving forward.
But I would note that, again, one of our major efforts is
this--I referred to earlier the Quadrennial Energy Review. That
is a process which--this year. It is administration-wide. DOE
has a special role with our analytical capacity and this new
office we created.
The focus for this year is specifically on energy
infrastructure, transportation, storage and distribution of
energy, electricity and fuels. And it is clear that one of the
focal areas is going to be a set of regional fuel resiliency
studies.
That, of course, couples directly into this issue of fuel
diversity because--for example, in my part of the country, New
England, it is well known that there is--especially in the
winter when it got very cold--there is a real mismatch of
natural gas transport capacity into a region that has become
very natural gas-heavy in the power sector.
But, of course, we also had issues with propane certainly
in the upper Midwest, other parts of the country, too, in fact,
even in the South, but especially in the upper Midwest where we
had terrible propane problems, a lot of infrastructure issues.
There became an enormous differential of price between propane
at the Kansas and Texas hubs because it was an infrastructure
bottleneck issue.
So we are going to be looking at that and looking at it
also on a regional basis, and I think that can at least provide
a foundation for the issue you are talking about.
Ms. Kaptur. Thank you.
Thank you very much, Mr. Chairman.
Mr. Simpson. Thank you, Mr. Secretary, for being here
today. We have taken about two and a half hours of your time.
So I appreciate you sitting there throughout that and answering
our questions.
You obviously are in charge of a very important department,
in my opinion. That is why I was so excited to become chairman
of this subcommittee, because I think the Department of Energy
is truly both wide-ranging and important to the economic future
of this country in a variety of ways that we have talked about
today. You face many challenges, obviously.
My job is not only to do the appropriation for the energy
and water appropriations bill, but it is to help make you the
most successful secretary of the Department of Energy that we
have had.
Secretary Moniz. Thank you.
Mr. Simpson. When that happens, then we all win.
Secretary Moniz. We all win. Right.
Mr. Simpson. So I look forward to working with you over the
coming months as we put together this budget and try to address
both the concerns that you have and the concerns that have been
expressed here by members of this committee and try to address
the future.
Secretary Moniz. Good. Thank you, Mr. Chairman.
Mr. Simpson. Thank you.
Secretary Moniz. Thank all the members who provided very
helpful questions today.
Mr. Simpson. You bet. Thank you. We are adjourned.
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