[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR 2017
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
_________________________________________________________________________
SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
MICHAEL K. SIMPSON, Idaho, Chairman
RODNEY P. FRELINGHUYSEN, New Jersey MARCY KAPTUR, Ohio
KEN CALVERT, California PETER J. VISCLOSKY, Indiana
CHARLES J. FLEISCHMANN, Tennessee MICHAEL M. HONDA, California
JEFF FORTENBERRY, Nebraska LUCILLE ROYBAL-ALLARD, California
KAY GRANGER, Texas
JAIME HERRERA BEUTLER, Washington
DAVID G. VALADAO, California
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.
Donna Shahbaz, Angie Giancarlo, Loraine Heckenberg,
Perry Yates, and Matthew Anderson
Staff Assistants
___________________________________
PART 7
DEPARTMENT OF ENERGY
Secretary of Energy
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
___________________________________
Printed for the use of the Committee on Appropriations
ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR 2017
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
_________________________________
SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
MICHAEL K. SIMPSON, Idaho, Chairman
RODNEY P. FRELINGHUYSEN, New Jersey MARCY KAPTUR, Ohio
KEN CALVERT, California PETER J. VISCLOSKY, Indiana
CHARLES J. FLEISCHMANN, Tennessee MICHAEL M. HONDA, California
JEFF FORTENBERRY, Nebraska LUCILLE ROYBAL-ALLARD, California
KAY GRANGER, Texas
JAIME HERRERA BEUTLER, Washington
DAVID G. VALADAO, California
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.
Donna Shahbaz, Angie Giancarlo, Loraine Heckenberg,
Perry Yates, and Matthew Anderson
Staff Assistants
___________________________________
PART 7
DEPARTMENT OF ENERGY
Secretary of Energy
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
___________________________________
Printed for the use of the Committee on Appropriations
___________________________________
U.S. GOVERNMENT PUBLISHING OFFICE
20-704 WASHINGTON: 2016
COMMITTEE ON APPROPRIATIONS
----------
HAROLD ROGERS, Kentucky, Chairman
RODNEY P. FRELINGHUYSEN, New Jersey NITA M. LOWEY, New York
ROBERT B. ADERHOLT, Alabama MARCY KAPTUR, Ohio
KAY GRANGER, Texas PETER J. VISCLOSKY, Indiana
MICHAEL K. SIMPSON, Idaho JOSE E. SERRANO, New York
JOHN ABNEY CULBERSON, Texas ROSA L. DeLAURO, Connecticut
ANDER CRENSHAW, Florida DAVID E. PRICE, North Carolina
JOHN R. CARTER, Texas LUCILLE ROYBAL-ALLARD, California
KEN CALVERT, California SAM FARR, California
TOM COLE, Oklahoma CHAKA FATTAH, Pennsylvania
MARIO DIAZ-BALART, Florida SANFORD D. BISHOP, Jr., Georgia
CHARLES W. DENT, Pennsylvania BARBARA LEE, California
TOM GRAVES, Georgia MICHAEL M. HONDA, California
KEVIN YODER, Kansas BETTY McCOLLUM, Minnesota
STEVE WOMACK, Arkansas STEVE ISRAEL, New York
JEFF FORTENBERRY, Nebraska TIM RYAN, Ohio
THOMAS J. ROONEY, Florida C. A. DUTCH RUPPERSBERGER, Maryland
CHARLES J. FLEISCHMANN, Tennessee DEBBIE WASSERMAN SCHULTZ, Florida
JAIME HERRERA BEUTLER, Washington HENRY CUELLAR, Texas
DAVID P. JOYCE, Ohio CHELLIE PINGREE, Maine
DAVID G. VALADAO, California MIKE QUIGLEY, Illinois
ANDY HARRIS, Maryland DEREK KILMER, Washington
MARTHA ROBY, Alabama
MARK E. AMODEI, Nevada
CHRIS STEWART, Utah
E. SCOTT RIGELL, Virginia
DAVID W. JOLLY, Florida
DAVID YOUNG, Iowa
EVAN H. JENKINS, West Virginia
STEVEN M. PALAZZO, Mississippi
William E. Smith, Clerk and Staff Director
(ii)
ENERGY AND WATER DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
2017
----------
Tuesday, March 1, 2016.
DEPARTMENT OF ENERGY
WITNESS
HON. ERNEST MONIZ, SECRETARY, DEPARTMENT OF ENERGY
Mr. Simpson. The hearing will come to order. We have a lot
to discuss today, so I will keep my remarks brief. The
President's budget proposes numerous spending gimmicks to avoid
the discretionary budget caps established by the Bipartisan
Budget Act. I think it is unlikely that any of these gimmicks
can be enacted. While, in some cases, that is fine, since the
funding proposed is for the Presidential initiatives of an
administration in its final year; in other cases, important
activities will be drastically curtailed and hundreds of jobs
could be lost if this committee does not budget for these
funding needs.
Equally disappointing is that, even with the $747 million
increase in your budget request, the budget funds
administration priorities at the expense of nuclear and fossil
energy--accounts that can help secure our Nation's energy
security both now and in the future. And while the Mission
Innovation initiative claims to advance all clean energy
solutions, even the most casual review of the budget indicates
that the new funding is intended almost entirety for EERE.
We will need to use the hearing process to conduct careful
review of the entire request so that we can construct a budget
that provides a true ``all-of-the-above'' strategy.
Secretary Moniz, I look forward to your testimony today and
further discussions on all of these items. Please ensure that
the hearing record questions for the record and any supporting
information requested by the subcommittee is delivered in final
form to us no later than 4 weeks from the time that you receive
them.
Members who have additional questions for the record will
have until close of business Thursday to provide them to the
subcommittee office.
Mrs. Lowey.
Mrs. Lowey. I guess Mr. Rogers is on his way? Thank you.
Mr. Simpson. Mr. Rogers is on his way, and Ms. Kaptur is on
her way also.
Mrs. Lowey. Well, thank you very much, Mr. Chair.
And welcome. It is really a pleasure, Secretary Moniz. I
thank you for coming before this subcommittee.
The Department of Energy plays a critical role in America's
national security and economic prosperity. Its focus on
research, development, deployment of clean energy, efficient
technologies makes the Department a leader in scientific
innovation, job growth, and the battle against climate change.
Mr. Secretary, your budget request for $30.2 billion in
discretionary spending, an increase of $747 million from the
fiscal year 2016 enacted level would fund robust investments in
major initiatives that provide the foundation for the domestic
energy revolution in our Nation and help better prepare for our
future energy needs.
It is critical we take real steps to address climate
change. The science is conclusive: human activity is
contributing to a change in the world's climatic patterns. And,
unfortunately, those who still doubt the science refuse to act
to prevent further damage to our global ecosystems and
environment.
Investing in clean energy saves money down the line by
mitigating the impact climate change will have on our Nation
and the world. That is why the Department of Energy's focus on
clean energy, including carbon capture technology, is so
important.
Additionally, I appreciate your efforts during the
negotiations of the Joint Comprehensive Plan of Action with
Iran, and I know we agree that Iran must never be permitted to
develop nuclear weapons. Today, I look forward to hearing your
assessment of Iran's compliance to date, the IAEA's
verification safeguards, and inspectors' access to key sites
throughout Iran.
Lastly, as domestic energy production has steadily
increased, so has the frequency of trains carrying crude oil
through communities in my district. Everyday, upwards of 80
rail tank cars carry highly volatile Bakken crude oil through
Rockland County, New York, endangering homes, schools, and
businesses near the tracks. While progress is being made on the
safe transport of crude oil, we need to act faster to guarantee
the security of Americans who live near America's extensive
railways. I look forward to hearing about the progress
Department of Energy has made in studying the characteristics
of crude oil and methods to reduce volatility prior to and
during shipment.
Mr. Secretary, I thank you for your service and look
forward to your testimony.
And I thank you, Mr. Chairman.
Mr. Simpson. Thank you.
And when Chairman Rogers and Ms. Kaptur arrive, we will
allow them to make their opening statements.
Mr. Moniz, Secretary, go ahead.
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Secretary Moniz. Thank you, Mr. Chairman, Ranking Member
Lowey, and members of the committee. I appreciate the
opportunity to talk here with you today about the DOE fiscal
year 2017 budget proposal. The request totals $32.5 billion, an
increase of $2.9 billion, or 10 percent, from the fiscal year
2016 appropriations. But, unlike previous budgets, the fiscal
year 2017 budget has three major components.
First, a request for annual appropriations totaling $30.2
billion, an increase of 2 percent above the fiscal year 2016
enacted appropriation. And I note that both the national
security appropriations request and the total domestic
appropriations request would each be a 2-percent increase in
appropriated funds. It is supplemented by a request totaling
$2.3 billion in new mandatory spending. These requests are
under the jurisdiction of the authorizing committees but are
integral to our appropriations funding. It includes $750
million for R&D and $674 million for uranium enrichment D&D, to
which we will return.
Turning to the major mission areas, the first going to the
science and clean energy mission. This totals $11.3 billion in
appropriations funding; $1.6 in the new mandatory. The
fundamental driver for the science and energy budget is Mission
Innovation, for the increase. I will return to this initiative
in more detail in a moment.
Second mission area, ensuring nuclear security, the fiscal
year 2017 budget includes $12.9 billion for NNSA, a 3-percent
increase with three broad programmatic objectives: maintaining
a safe, secure, and effective nuclear weapons deterrent without
nuclear testing now and well into the future; reducing the
threat of nuclear proliferation, including support for
implementation of the Joint Comprehensive Plan of Action,
referred to by the ranking member, and proposing a major shift
in our plutonium disposition strategy; and, third, supporting
the safe and reliable operation of our nuclear Navy.
Our third major mission area, organizing, managing, and
modernizing the Department to better achieve its enduring
missions, the fiscal year 2017 request provides for $6.8
billion for these activities, including $6.1 billion for the
Office of Environmental Management, $300 million above the
fiscal year 2015 enacted and fiscal year 2016 request levels,
but roughly $100 million below the fiscal year 2016 enacted
level.
The $6.1 billion budget includes $5.45 billion in new
appropriations and a proposal to authorize $674 million in new
mandatory spending authority from the USEC fund. The $1.6
billion USEC fund is an existing--not new--mandatory spending
account, and our proposal is in keeping with the spirit of the
current authorization that revenues from the beneficiaries of
past uranium enrichment services, rather than taxpayers at
large, be used to pay the cost of D&D of the now shuttered
facilities. The USEC fund is one of three Federal funds
totaling nearly $5 billion that can be used in this manner.
Finally, I want to acknowledge that underpinning all of
these priorities is stewardship of the Department as a science
and technology powerhouse for our Nation with an unparalleled
network of 17 national laboratories harnessing innovation to
successfully address national security, boost manufacturing
competitiveness, mitigate and adapt to climate change, and
enhance energy security. We are working hard to strengthen
these strategic relationships between the Department and our
national laboratory network.
I also want to highlight the crosscutting R&D initiatives
in the budget. Among these, our largest increase is for grid
and modernization, which we increase by $83 million to $378. As
part of this initiative, the Grid Modernization Lab Consortium
will accelerate the pace of innovation in this area. Our second
largest crosscut increase is for the energy and water nexus
initiative, which we increase by $68 million to $96 million.
The supporting budget details for each of these areas are
provided in a 40-page statement for the record that previously
had been submitted to the committee, and I request that it be
inserted into the record.
Mr. Simpson. Without objection.
[The information follows:]
Secretary Moniz. Thank you.
Now, turning to our Mission Innovation and why we believe
it certainly merits the support of this committee and the
Congress, within the total science and energy budget, we have
identified the subset of clean energy research and development
described as Mission Innovation. The fiscal year 2017 budget
includes $5.86 billion in appropriations funding, an increase
of 21 percent for clean energy R&D activities that support the
U.S. Mission Innovation pledge, and that pledge made with 19
other countries is to seek to double public support for clean
energy research and development over a 5-year period. The
Mission Innovation countries represent over 80 percent of
global government investment in clean energy R&D, so this is
leveraging a major investment, increase in investment, in
energy technology innovation.
We believe Mission Innovation is long overdue. In 2010, the
American Energy Innovation Council, comprised of CEOs from
multiple U.S. business sectors, recommended that the government
triple its investment in clean energy R&D. The council made
three key points, and I will quote: ``First, innovation is the
essence of America's strength. It has been our Nation's
economic engine for centuries. Second, public investment is
critical to generating the discoveries and inventions that form
the basis of disruptive energy technologies. Private companies
cannot capture the full economywide value of new knowledge and,
thus, systematically underinvestment in research and
development relative to the benefits it produces. And, third,
the costs of RD&D are tiny compared with the benefits. But
today's investments are simply too small. They will not offer
an expanded range of economic security and environmental
options in the future.''
That concludes the statements from the AEIC.
Now, the pledge to seek to double the level of government
investment over 5 years is ambitious but needed. Bill Gates,
who was a leader of the AEIC, has recently met with a number of
Members of Congress and has reiterated publicly the need for
greatly increased government-sponsored energy R&D. The
objective of Mission Innovation is to greatly expand the suite
of investable opportunities in clean energy technologies needed
to support economic growth and competitiveness; strengthen
energy security; increase access to clean, affordable energy;
and enable the global community to meet environmental goals.
The scope of Mission Innovation spans the entire innovation
cycle from the earliest stage of invention through initial
demonstration with an emphasis on growth in early stage R&D.
Mission Innovation also includes all clean technologies,
renewables, energy efficiency, nuclear and coal, with carbon
capture. Mission Innovation is complemented by the Breakthrough
Energy Coalition, an independent initiative launched
simultaneously with Mission Innovation. The coalition is
spearheaded by Bill Gates and includes 28 investors from 10
countries, another major leveraging opportunity. The coalition
is committed to providing investment in new technologies
originating from the innovation pipelines in the Mission
Innovation countries with the intent of taking these
opportunities from early stage R&D through ultimate market
deployment. These investors are committed to higher risk
tolerance and patience for returns on their capital than
compared to normal investors, usual investments, but also
combined with a willingness to take the most promising
innovations all the way past the finish line to deployment.
The fiscal year 2017 budget proposal of $5.8 billion
represents a 21-percent increase, as I said earlier, above
fiscal year 2016, a critical first step in a 5-year doubling
pathway. This increase will support, again, a broad-based
portfolio of new initiatives and expanding existing across all
DOE science and energy technology program offices and spanning
six separate appropriation accounts under the subcommittee.
In particular, I want to single out the fiscal year 2017
budget proposal for $110 million to establish Regional Clean
Energy Innovation Partnerships. We propose to establish up to
10 regional partnerships as not-for-profit consortia
competitively selected to manage regional clean energy R&D
programs focused on the energy needs, policies, resources, and
markets of the individual regions. The program design and
portfolio composition for each partnership will be based on
regional priorities. As research portfolio managers, not
performers, the partnerships will connect resources and
capabilities across universities, industry innovators,
investors, and other regional leaders to accelerate the
innovation process within each region.
This approach tracks recommendations from the National
Research Council's ``Rising to the Challenge,'' which noted
that, quote: ``Until very recently, U.S. Federal agencies have
done little to support State and regional innovation cluster
initiatives. This is not the case abroad. Clusters have been
embraced globally as effective vehicles for mobilizing and
coordinating public and private activities to spur economic
growth'' end of quote.
To address these growing global challenges and enhance the
competitiveness of local and regional economies in our country,
the NRC recommended that regional innovation cluster
initiatives by State and local organizations should be assessed
and, where appropriate, provided with greater funding and
expanded geographically, and that is what we are proposing.
The fiscal year 2017 budget also supports
increasedinvestments in successful ongoing innovation programs,
including initiatives with the national laboratories supported in
previously appropriations acts. These include: ARPA-E, Energy Frontier
Research Centers, advanced manufacturing centers, bioenergy centers,
advanced transportation technologies, advanced nuclear reactor
technologies, and next-generation carbon capture technologies, to name
a few.
Finally, I would just highlight the overall budget for the
DOE Office of Science, which is the largest Federal sponsor of
basic research in the physical sciences and a major driver of
discovery science, supporting more than 24,000 investigators
and over 300 U.S. academic institutions and our laboratories.
The fiscal year 2017 budget provides $5.67 billion for science,
an increase of $325 million, or 6 percent; $5.57 billion is
requested as appropriations funding, and $100 million is
proposed as new mandatory spending authority to support a
competitive grant program for university researchers that can
open up new directions for the Office of Science. Some of the
use-inspired research programs within the Office of Science,
like EFRCs, are counted in the Mission Innovation pledge.
That concludes my summary. Thank you for your patience.
And, in closing, I want to thank the subcommittee, again, for
its interest and its support, and I look forward to our
discussion. Thank you.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Simpson. Thank you, Mr. Secretary.
Ms. Kaptur, do you have an opening statement you would like
to make?
Ms. Kaptur. Thank you, Mr. Chairman, very much. I thank you
for your courtesy and say to the Secretary: I am sorry I wasn't
here for your full testimony; I had a truly conflicting event.
But I thank you, Mr. Chairman, and thank you, Secretary Moniz
for being here today and for your exemplary leadership.
Secretary Moniz. Thank you.
Ms. Kaptur. In recognition that this may be your last
appearance at this hearing, although no matter who wins in
November, I think they would be very well served by keeping you
on.
I would like to recognize the exceptional job----
Mrs. Lowey. He is shaking his head.
Mr. Simpson. Is that a no?
Ms. Kaptur. Your family may not agree, but I am your chief
lobbyist. I will tell you that.
Secretary Moniz. Correct about that.
Ms. Kaptur. I would like to recognize the exceptional job
you have done at the Department of Energy and in service to our
country. It has been a pleasure to work with you. Too few
Americans realize just what an enormous energy revolution is
happening around our world, but it is a credit to your work and
concerted effort at the Department, as well as those who filled
your position before you, all the way back to President Jimmy
Carter, who created your Department. Americans who saw the need
for our country's energy independence and what could happen if
we didn't pay attention to fundamentals on energy supplies to
our people.
Please, let me present two charts that make it clear how
far America has come toward restoring an independent energy
America. And I hope that all of my colleagues have this. But as
you can see, between 2008 and 2014, the amount of crude oil we
produce here at home has increased by 50 percent, while our
dependence on OPEC has been cut almost in half. This is an
extraordinary achievement in energy security for our country.
We in the world will have to adjust to these positive trends.
America's long-term commitment to science and basic energy
research has really started to yield results that matters
strategically and economically. And I am very pleased to see in
your budget request a significant push toward increasing
research and specifically toward ARPA-E's funding. I also note
how pleased I am about the private-public partnership, the
dynamic relationship that you are building through Bill Gates'
Mission Innovation initiative. As Mr. Gates has become fond of
saying, if we are going to truly tackle climate change, we need
an energy miracle, and that miracle can only be possible with
continued large investments in the highest level research that
I know our people are capable of.
I am specifically interested in hearing from you today
about the Department's work in energy storage and distributed
generation as well as--and you addressed this a bit--the
energy-water nexus and the, also, energy-water food nexus,
which people are talking about more and more, as well as
efforts toward grid modernization and, obviously, upgrading our
nuclear capacities. Now, as great as this American energy
revolution is for the climate, our economy, and for our
national security, we must not forget that when a dynamic
economy--a dynamic economy can only grow through innovation.
And many of my colleagues like to point out the fact there are
now more Americans working in the solar industry than there are
in the coal industry.
I am pleased to put on the record the company in my region,
First Solar, that is truly a leader in photovoltaic--I thank
you, Secretary visiting there personally--a company based on
technologies of the future.
While we are encouraging new industries, it is vital that
we don't forget about the people who are losing their jobs
across our country in this transition and to think forward with
them. Beyond the miners in Ohio, West Virginia, and Kentucky,
there has also been the women who work on the coal trains and
in the coal plants and on the docks, who ship coal, who are
struggling. Economists like to say that markets will adjust and
capital will go toward its best use, but human capital is not
quite as flexible. When people have worked hard in one industry
for generations, they can't just snap their fingers and adjust
to another job. So I think it is important for all of us to
remember and to respect their hard work, and America simply
must fashion a smoother pathway to energy transition for these
workers who face job loss, healthcare loss, pension loss, and
many times the loss of their homes. Surely, this country can do
better than this.
With that, I will close my remarks. I thank you, Mr.
Chairman, again, and Mr. Secretary, for your remarkable work as
well as for being with us today, and we look forward for the
questions, and I thank my colleagues for their courtesy.
Mr. Simpson. Mrs. Lowey.
Mrs. Lowey. Question?
Mr. Simpson. Yes.
Mrs. Lowey. Thank you for your courtesy, Mr. Chair.
And thank you, again, for your important testimony. I saw
that smile when there was a question as to whether you would
remain. We all do appreciate the service to your country. Thank
you.
Secretary Moniz. Thank you very much. I appreciate it.
Mr. Simpson. That is a happy smile he is giving.
Ms. Kaptur. Relief.
Mrs. Lowey. Mr. Secretary, it has become increasingly clear
that our Nation's electricity grid requires transformation to
address reliability and security issues. This challenge was
crystalized in the wake of Superstorm Sandy when more than 8.5
million households and businesses--that is tens of millions of
people--experienced power outages, and in some places,
restoring power took weeks. This will be a monumental challenge
given the grid is arguably the most complex and critical
infrastructure in our Nation. I would be interested in your
sharing with us the most pressing issues in securing the
electricity grid that Congress should be addressing, in
particular, should there be baseline standards to protect our
electricity grid or better coordination between the public and
private sector? The budget request includes funding for a grid
institute to focus on technologies related to critical metals
for grid applications. Why do you believe this is such a
critical investment? Is it so important that it should displace
other activities?
Secretary Moniz. Thank you, Congresswoman Lowey. First of
all, as I said in my opening remarks, we have emphasized a
significant increase in grid funding precisely because of the
importance that you have just described. Indeed, in our
Quadrennial Energy Review published last April, which looked at
all energy infrastructure, we noted that the grid had a special
role because most of the other infrastructures require its
operation for them to function. So that is one point.
So, in terms of our challenges, I think we have several
challenges. One, certainly, is modernizing the grid to include
advanced technologies. The grid institute is one piece of that,
by no means the only one. For example, we also have a
manufacturing institute that was competitively awarded in North
Carolina on what is called wide band gap semiconductors,
another technology that is very critical for the kinds of power
and electronics we need. We need to do a much better job
integrating IT into the grid all the way from the distribution
system, including going behind the meter into people's homes to
allow much better energy efficiency programs all the way to the
big grid that--in which we need to have early warning systems
about problems, a program, by the way, that our Recovery Act
funds did a lot to advance. So there is a whole set of
technologies that we need to develop and deploy on the grid.
Second, beyond the individual technologies, it is a big
systems issue. It's all got to work together, obviously,
especially the electric grid, because of its real-time nature.
And to succeed there, ultimately--we are developing in our
proposal--we would do a lot of tool development there as well,
but then interfacing that with both the private sector and with
the State regulatory authorities is absolutely critical.
A third issue is we need to harden the grid against a bunch
of risks. Some of those risks are weather. And, unfortunately,
we anticipate more extreme weather with the warming. Some of
those risks are things like cyber, where we have an extensive
interaction with the private sector with utilities in terms of
advancing cyber protection. And make no mistake about it: the
attacks on the energy infrastructure from cyber are continuing
to escalate.
I will just mention on the hardening, I did visit, a month
and a half ago, Florida Power & Light down in Florida where, of
course, they have both wind and sea surge challenges, and it is
impressive to see what is happening, actually, in terms of
hardening the grid and taking every opportunity while hardening
it to add intelligence at the same time.
So that is kind of the picture. Ultimately, we want a grid
that--oh, I should have added one more, because you mentioned
Sandy. Another one is, in response to Sandy, with our
laboratory Sandia in the State of New Jersey, we are, I think,
out in front in terms of putting a rather large microgrid into
the system to protect public safety in key transportation
corridors while having that integrated into the larger grid.
So there are many, many directions here, but they all aim
to a--really, a complete modernization of the grid that will in
some sense have, through more intelligence, be integrated all
the way from the consumer all the way up to the high-voltage
grid that you need to move, say, renewables over a large
distance.
Mrs. Lowey. I have one other question on a local issue,
although it affects many communities. But I hope, Mr. Chairman,
at some point, we can continue this discussion on
cybersecurity, because I think this is what most of us fear the
most.
On oil produced in the continental United States, one out
of every seven barrels is shipped by rail, and as a result, it
is critical that the public regulators and industry understand
the safety implications of such a vast quantity of volatile
liquid moving through our communities. The omnibus included 2.7
million for the Department to complete this second phase of the
crude oil volatility study. Recognizing that the study is not
complete, are there any conclusions you can share with us
today, and when should we expect the final results? And do you
believe there is followup work from the phase 2 study that
would be valuable to our understanding the issue? If yes, what
agencies shouldbe responsible for that additional work?
Frankly, I look forward to your response and the continued
work, because I have watched these trains come through right
next to waterways. They haven't all modernized, so we hope they
are moving in that direction. So I would be most interested in
your commenting, responding to my question.
Secretary Moniz. Thank you. One thing I would note, by the
way, is that in one year, in the last year, there has been
roughly a 20-percent decrease in the movement of oil by rail.
So that trend has been a number of reasons, including
additional pipeline infrastructure, but also some decreased
production, for example, in--say, in the Bakken Shale in North
Dakota. Nevertheless, 20 percent reduction is mined, but there
is still 80 percent left, so we still need to address the
issues that you have raised.
I am afraid I have to say that the Sandia study, which is
cofunded by DOE and DOT, will be still nearly a year in
completion, including the physical combustion tests that remain
to be done. So sometimes one can get impatient, but it is
research, and it will be roughly a year.
I think going forward, after that, the specific programs
will depend upon the outcome, but I do emphasize that the
partnership with DOT is very important. I mean, frankly, I
think our Sandia lab in this case provides a lot of the
technical oomph, but you would like that, then, to influence
the regulatory responses. And, of course, that is where having
a partnership really helps.
So--but I am afraid it will be next--early next year before
we can have the final results.
Mrs. Lowey. Well, I look toward to hearing about them, and
hopefully, there won't be any dangerous accidents before that
time, because once it occurs and it affects our streams and
rivers, as you know, I have been told that you just can't clean
it up. So I thank you, and I look forward----
Secretary Moniz. Well, it is expensive. It is expensive,
certainly. But, also, of course, we have had a lot of--we had
some time back now, fortunately, but considerable loss of life
as well through these accidents.
Mrs. Lowey. Thank you.
And thank you, Mr. Chairman.
Mr. Simpson. Mr. Valadao.
Mr. Valadao. Thank you, Chairman.
Welcome, Secretary Moniz. It is always a pleasure to have
you here.
Last year, I had an opportunity to tour Berkeley lab, and I
was actually very impressed with a lot of the work they do,
with specifically ag and drought-resistant crops, something
that, obviously, has very close ties to my life and my
district. So I appreciate the effort being put there. And I
also want to thank you for your work improving the national
user facilities, like those at Berkeley lab, to make them more
networked, more efficient, and better able to capture
scientific creativity.
But my question specifically is, the President's fiscal
year 2017 budget request includes 68 million, increases across
several programs for the energy and water nexus. As you know,
we are facing a historic drought, historical water and energy
challenges in California, and as a farmer, I am well aware of
the close connection between energy and water and understand
that research could be helpful in coming up with some
solutions. I would like to see the increase in research and
development that provides solutions for California and the
entire Nation. With many worthwhile programs, the committee is
faced with difficult decisions regarding funding. My question
is: Why should we fund the increase, and how will this research
impact my district, State, and the Nation? And, more
specifically to that, especially with the movement we see in
anti-GMOs and a lot of the technology that goes into food
production and the efficiencies that can be gained through
those, are there real opportunities out there that the public
will receive well coming from these labs? And how does the
planned research leverage existing resources and expertise such
as those in Berkeley lab?
Secretary Moniz. Thank you. First of all, I would just
note, though--well, thank you for the comments about Berkeley
lab, and I am very pleased that you were able to visit. I would
just note that today is the first day of the new director of
the Berkeley lab. Paul Alivisatos was an outstanding director,
and Michael Witherell is taking over today. So it is a big day
at Berkeley.
Two things. I mean, you mentioned, obviously, the impact
upon crops and farming, and I would just note, quite apart from
the energy water work, the very strong work in genomics going
on in the Department, including at Berkeley, is quite important
for looking at vital crops for a variety of purposes,
including, of course, bioenergy, in our case, being an
important one. The energy-water nexus, we think, is a
tremendously important area, and that accounts for our
substantial increase. I would note that I think it would have
an impact--it could have an impact in terms of your State and
your region quite substantially. For one thing, it will be
looking at a lot of wastewater issues and the opportunity of
reusing, recycling water in many contexts. It will be looking
at--we have proposed a new hub for desalination. We will
propose system studies about minimizing water use and tradeoffs
between different approaches. We will be looking at, for power
plants, things like dry--advanced dry cooling, trying to reduce
the energy penalty in those. And I might also add--by the way,
on the biology side, we also proposed a small program, a $10
million biome project that would be looking at, essentially,
the microbial communities associated with plants.
But I would just also note--and this is very premature--
but, recently, last week, I spoke with Minister Steinitz from
Israel, who as you know, Israel has a tremendously advanced
water management approach for agriculture and for other uses.
And I will be visiting there in early April, and we are talking
about trying to maybe get a joint energy, water, food program
going there. So that is just something that we are just tossing
around. But that could be very, very interesting and certainly,
they have tremendous experience and great, great technologies.
Mr. Valadao. Mr. Secretary, the budget request proposes 190
million for the exascale initiative within the Office of
Science. Developing exascale computing represents the next
technological lead in high-performance computing, but many
challenges remain.
What is the current timeline for developing an exascale
system in the United States, and do you believe the Department
will achieve that target? And where does the United States
currently stand in relation to the international development of
exascale systems, and what role do these computers play in
protecting our grid and other types of technology?
Secretary Moniz. The exascale initiative----
Mr. Valadao. I am glad you are struggling with that word
too.
Secretary Moniz. I am struggling, because I think I need
some water, is what I need.
The exascale initiative, I should first note, is 190
million in science and an additional nearly 100 million in
NNSA. It is a joint project.
The target for exascale is mid next decade to have a
functioning system. As you said, there are many challenges,
energy management being one of the great ones. What I want to
emphasize is that we are always taking major steps, and right
now, we are implementing something called CORAL at Oak Ridge,
Oregon, and Livermore, which will, within a few years, be
operating in, let's call it the 200 petaflop scale, so 0.2
exascale region, and so that is already, you know, presenting a
number of challenges we will have to address.
And then we will go on to exascale, as I said. There are
going to be very interesting challenges for various
applications. Grid is one of them, big modeling of energy
systems, but also, of course, our national security needs
really depend upon these cutting-edge computers. I might say
with Congressman Fleischmann in Oak Ridge, we recently renewed
a major hub that simulates light-water reactors, looking at
higher efficiency, more safety, et cetera, so many
applications. But we are getting into a region now where--it
certainly can't be thought of as simply a hardware challenge.
There are machine learning issues. There are big data
analytics, lots of issues in terms of how you manage the
storage and the flow of information that is really a new
frontier. So I think we are still, you know, 7 or 8 years away
from exascale, but we will be a good chunk of the way there
over the next 2 or 3 years.
Mr. Valadao. All right. Thank you, Chairman.
Mr. Simpson. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Mr. Secretary, on page 3 of your testimony, you reference
transformational clean energy technologies for transportation,
and you talk about intermodal freight and fleets. And, boy, I
represent a lot of those in our region of the country. You
don't specifically mention public fleets, and as you proceed,
assuming the budget is approved, budget request is approved, I
would hope that you would pay some attention to the fleets, for
example, in our city public transit systems that are big energy
users and probably short-changed in terms of new technology.
Also, the postal service is a massive user of energy across
this country. So I just wanted to mention that in reading--I
don't expect any reply, but I did want to note the absence of
those publicly.
Secretary Moniz. One comment?
Ms. Kaptur. Yes.
Secretary Moniz. The comment I would make is that public
fleets do have a very special role in what we are looking at,
and one reason is that for public fleets, the issues of
managing what you might call an alternative fuels
infrastructure are relatively easier in other contexts, so they
are an important focal point.
Ms. Kaptur. I am moving to another topic.
On the energy-water nexus, terms that I hear very carefully
and with great deal of interest, with climate change, if you
come to our region of the country, our fresh water region of
the country, around the Great Lakes and U.S. and Canada, you
will see unmet potential to save enormous amounts of energy in
the four season canopies that actually raise a great deal of
the fruits and vegetables that are consumed. Over the last, oh,
100 years, 80 years, because California had special climatic
conditions and certain availability of water, a lot of that
fruit and vegetable production--in fact, over half of it--moved
to the State of California from places like Ohio. And what we
are finding is that because we have the water now, but we don't
have necessarily the most modern production facilities, we need
some attention here. And let me give you an example.
Recently--and I want to put this on the record--a company
from Canada, called Nature Fresh, located in Ohio, and they are
building a 200-acre first wing of a production facility using
the waste heat off of North Star Steel. So the CO2
is going to come in and feed the plants. But even till today,
with the so-called latest technology, a third to a half of the
bottom line of these operations is energy. We simply have to
perfect the material science, the energy science, and link it
to very careful use of water and nutrients in these facilities.
I think we could have a rebirth in the Great Lakes, and you can
see it happen on the Canadian side. I am not quite sure why it
is not happening completely on the American side at the same
robust level. But if we could cut that energy cost, we could
absolutely give rebirth. And we are much closer to markets,
three quarters of the population of the country, and we don't
have the heavy carbon footprint of moving all that across the
country. So I just wanted to bring that to your attention.
And one of our greatest impediments is that we are having
trouble finding where the waste heat sources are for
CO2. I don't know if anybody's got infrared shots or
something on some satellite somewhere, but it would sure be
nice to know where this waste heat exists so that we could
focus it on this very important industry that is nascent, that
could really green up in our part of the country. I think
material science is important, because people look at
conventional materials, but, actually, with light, you can
raise--in a room like this, you can raise a lot of product in a
room like this. So the energy equation on this one is really
critical. And I know that members of your Department are
thinking about this. The first reaction we got from Energy is:
Oh, we can't look at that; that is agriculture. Take my word
for it: the energy issue is not an agriculture issue. It is a
Department of Energy issue, and the material science is a
Department of Energy issue. So I am very, very excited about
your energy-water nexus pathway here.
And I also wanted to mention, and I know you have listened
to us, but as we think about energy-water nexus, as you look
across the Great Lakes, at our sewage treatment facilities,
which have nutrients as an end product, and if you look at our
water treatment facilities, they are mammoth energy users. For
every city that I represent, Cleveland, Lorain, Sandusky,
Toledo, if you look at the energy bill, it will blow your hat
right off.
And the question is, how can we link the energy water theme
to helping these big cities save millions of dollars on their
treatment costs for water and wastewater? What does the
Department of Energy have to, offer in this regard? I just pose
the question. I know you are open to it. You are open to all
ideas that could help us on the energy front, and I would only
challenge, as we think about grid and you come to older
industrial communities where you have automotive, steel, rail,
all these older treatment facilities--Flint, Michigan, being
the most recent disaster that we had in the country on the
water side--but if you look at these communities and say, what
can the Department of Energy do there that is transformational?
I don't have the answer, but I know there is something in your
tool kit that if we fashioned it the right way and did some
pilots around the country, where we could really help these
places. And so when I think of energy-water nexus, I think
about where people live and the systems that keep them alive
through fresh water and our wastewater treatment. So I just
wanted to put that on the record. Now, if you want to comment,
please do. I don't expect an answer, just an openness.
Secretary Moniz. Well, just a brief comment, because I
share your enthusiasm for the energy-water challenge. As I
mentioned already earlier, the whole issue around wastewater
will certainly be an important part of what we are doing. The
second point I want to make is that the energy and water
discussion that we have generated at DOE has from the beginning
been a multi-agency discussion. So partnering with other
agencies on specific problems is certainly something that we
intend, and the USDA, for example, could be one of those.
The other point I would make, because I want to stay
onmessage with one of my favorite themes, is the kind of energy
efficiency opportunities that you raise in this kind of urban water
context is a good example of what a Regional Innovation Partnership
might focus on, because it is something that region, really thinks is
important. And it is exactly one of our motivations that different
regions will focus on different important problems that maybe others
aren't thinking about in the same way. So in the upper Midwest, the
industrial area, they have some very, very specific challenges.
Ms. Kaptur. Thank you, Mr. Chairman.
And I just wanted to say that when the Secretary goes to
Israel, I wish I could go back there with you, but I will just
put on the record that the Cleveland Jewish Federation along
with many others have worked very hard to develop a
relationship in Beit She'an, which is near the Jordanian
crossing, and we have actually, brought scientists from there
who have developed the most incredible production facilities
for food, that I think have application here. And so we think
we have some knowledge in our part of the country and have
visited parts of Israel where natural partnerships exist, and
we would love to share information with you on that. And I will
wait for the second round.
Thanks, Mr. Chairman.
Secretary Moniz. We would appreciate getting that
information, yes.
Mr. Simpson. Mr. Honda.
Mr. Honda. Thank you, Mr. Chair.
And welcome, Secretary Moniz.
Before I get started, I just want to make a quick comment
about my thanks to you for your role in the U.S.-Iran
agreement. I think that the President put together a great
team. But without your background, without your experience,
without your presence, I don't think that the confidence in the
public in what we what was developed would have never have been
able to be understood or confirmed, and I think you lent that
credibility.
And to President Obama, I think that him appointing to the
Department of Energy scientists--first scientist was Steven
Chu; the second was yourself--both of whom have wonderful, not
only policy but also research and intelligence in terms of
application of what you know into your society and how we can
better use whatever it is that is coming out of the Department
of Energy, and I think your presence answers the question about
how well we can expend research and development moneys into the
fabric of the society. And I think the shifting of leadership
of the Berkeley labs from Paul to--what is it, Michael?
Secretary Moniz. Mike, yes.
Mr. Honda [continuing]. Should be a transition that should
be smooth, and also we are going to be celebrating that
Molecular Foundry very soon, which is also another investment
we have made in this country that has been able to deploy a lot
of things that we take for granted in our lives.
Having said that----
Secretary Moniz. Thank you.
Mr. Honda [continuing]. I would like to shift towards
utilizing the technology into what we every day call
weatherization. And, you know, the science--you know, really,
the science is a foundation for our technology and our
innovation. And I would like to invite you to my district,
Silicon Valley, where we are developing a lot of clean energy
technologies. But let me start off with the access to renewable
energy. Renewable technologies can provide households with
clean power, lower utility bills, and have the potential to
unlock economic growth across the country, if not just, you
know, regionally, but many people can't get these technologies
because due to cost of bringing in these technologies or
unsuitable space in their living areas or not owning their own
living space either.
Last year, the President launched a National Community
Solar Partnership headed by the DOE, and I was wondering what
the status of the partnership is?
What progress have you been making so far at improving
access to solar energy? If you have any suggestions for what we
in Congress can do either through appropriations or through
authorization to help accelerate that progress, and how has the
private sector responded to the need for investments in the
community solar projects?
Secretary Moniz. Well, thank you. And, by the way, in terms
of your Silicon Valley district, I would just note that June 1
and 2, we will be in that region hosting a Clean Energy
Ministerial of 23 countries and the EU, so that might be a
chance to interact there.
Mr. Honda. Great.
Secretary Moniz. First of all, the solar deployments,
distributed solar in houses, is really dramatically increasing.
In fact, earlier, it was said about the number of jobs. I would
just note that at the end of November, there were 208,000
direct solar jobs in the United States.
So it is really quite impressive. And the job growth in
solar is at 12 times the pace of job growth of the economy as a
whole. We are adding about 2 million jobs a year in the
economy, the pace is enormous.
Now, in terms of what we are doing in terms of advancing
this, obviously, a very important part is the continued driving
down of costs. That is clear. The cost of solar panels, et
cetera, is going along very well. However, very importantly is
working with the communities andthe cities in terms of what are
sometimes called the soft costs. Those can dominate the cost of a
system for a consumer.
So, in our SunShot Program, we bring that in as a key
element. You know, we don't have, of course, the regulatory
capacity, but we do technical assistance. We try to share best
practices, and we are seeing, I think, those soft costs come
down.
Frankly, in the United States, those costs at one point
were about two and a half times as great as the costs in, for
example, Germany, so a lot of streamlining and working with the
communities, I think, is quite important. But we are seeing
dramatic increases. I forget exactly, but I think we are now up
to something like 9,000 megawatts of home solar systems.
Mr. Honda. If I may, Mr. Chairman, a followup question
would be in that light of driving the costs down, making it
more accessible, increasing more jobs, the issue of
weatherization is a policy we have where we go into homes of
low-income, fixed-income seniors to reduce their costs of
energy and through insulation. What does it take for us to add
solar to this program, and how do you see that happening?
Because we have been working with the green energy initiative
and, you know, trying to pinpoint how we can do this with these
communities. If we are truly going to drive down the costs of
energy, I think adding solar to it will increase that
possibility and, also, for them, you know, reduce dependency on
fossil fuels.
Secretary Moniz. Right. I may need to get back to you with
a more detailed suggestion, but I think we would need
authorization to, for example, integrate that into the
weatherization program, which, I believe--and I am speaking a
little bit outside of my lane--can only be used for lowering
energy use--insulation, windows, et cetera--versus actually
providing generation.
But I completely agree with you that it is the integrated
look that makes the most sense.
Mr. Honda. But the idea that you are increasing, again,
another source of energy, does that not reduce the cost of
utility for the homeowner?
Secretary Moniz. Well, sure. To the extent to which it is
generating and potentially even selling back to the grid.
Mr. Honda. Right.
Secretary Moniz. That gets to the whole net metering thing.
But I think an important point is that looking in a system way
at decreasing the amount of energy needed and then bringing in
things like solar and LEDs, for example, really makes a
sensible system. The LED, for example, requires only one-sixth
of the electricity. So integrating solar, efficient appliances,
like LEDs, and addressing the building efficiency altogether, I
think, makes a lot of sense, and that would be a great program
to put forward.
Mr. Honda. If I may ask, if we can work with your staff in
developing this approach.
Secretary Moniz. Great idea.
Mr. Honda. Thank you, Mr. Chairman.
Mr. Simpson. Thank you.
Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Secretary, good morning. Pleasure to see you again.
Thanks for coming before the committee, and thank you for your
leadership as well.
Mr. Secretary, I ran track in high school. I was a triple
jumper, long jumper, but one night----
Mr. Simpson. Really?
Mr. Fortenberry. Yes. Unbelievable.
There is a relevant point here, I hope. One night I got put
in a mile relay. Several people were probably hurt. I don't
remember the exact circumstances, but I was in, I think, lane
8. And in a longer relay--back then it was the mile relay--the
lanes are staggered. So, to our ongoing point about
nonproliferation, we have various lanes of this throughout the
government. Now, I started the race way out front. By the
second curve, everyone had pulled even, and because I didn't
have sprinter speed, by the end of that turn, people were
passing me by.
The echo system in which we are considering
nonproliferation concerns me, in the sense that we, again, have
separate lanes between agencies. Perhaps you are the one most
out front in the Energy. Defense, State, to a degree Treasury,
Homeland Security, and then I think the National Security
Council has coordinating responsibilities as well. But if we
are all in our separate lanes, is there enough cross-
pollination communication to begin to really press forward and
discern whether or not the current architecture, the current
definitions of our programs, the emphasis areas are meeting the
potential threats that are out there?
The reality is you have spent enormous energy on this Iran
agreement. I assume that was, of course, an appropriate
diversion for your resources but a very big diversion.
As we move into the future, where technology is more
available, where the threats of nonproliferation grow with
nonstate actors, is the current ecosystem for our
nonproliferation efforts in the government sound? And what are
we doing to think through the policy of potential changes that
could achieve the goal of what we all want to see--as close to
a probability of zero that something goes wrong in this arena?
Secretary Moniz. Well, as we have discussed now for a
couple years, I think we both share a strong commitment to
nuclear nonproliferation as really an overarching
responsibility and a big threat.
First, let me just say that I do think that this is an area
where I feel that the interagency coordination actually is
pretty good. Lots of meetings at the National Security Council
drawing upon particularly DOE, State, Defense, and Homeland
Security. So I feel pretty good about that.
Second, I think the report--that it was the first time the
NN Program provided to Congress, last March or April was a
comprehensive report that did a little bit of kind of over-the-
horizon looking in terms of threats. And that is something that
we could come back and discuss in much more depth.
Mr. Fortenberry. I think we ought to do that.
Secretary Moniz. OK. That would be great.
Mr. Fortenberry. Mr. Chairman, I know you are interested,
as well, in this question. I think this is so absolutely
critical, that if we could concretize some--realistic time in
the short term, that would be helpful.
Secretary Moniz. No, we would be delighted to do that. In
fact, the whole point of the report, was to stimulate
discussion. And, in fact, part of the origin of that was we are
required by statute to submit every year a report on our
weapons program. And it is a good, comprehensive report. And
then we felt we should do the same thing with nonproliferation.
Third, I would just say that I think it touches a little
bit on what you were saying--there are a variety of threats.
Obviously, we have seen in the press recently things about
ISIS, for example, possibly having some interest in
radiological materials. There is an example of a focal point
where we really have to look at it.
And there, I will just say that--I am going to be honest--
while we continue to have some good collaborations with Russia
on nonproliferation issues and securing materials, particularly
in the former Soviet Union, the reality is the current
situation with Russia does not make our collaboration quite as
robust as it was some years ago.
The implications of that relationship, the strain in that
relationship, are not often carried over to what it means for
nonproliferation.
Mr. Fortenberry. Yes. I think in previous testimony you had
said that, although there is significant stress in the
relationship, the science-to-science, technical-to-technical
cooperation continues as one of the remaining threads of any
kind of relationship. I hear what you are saying now; even that
is under duress.
Secretary Moniz. It has probably gone a little bit south.
Mr. Fortenberry. Let me go to a specific point, though,
that is a particularity in regards to your comments and our
ongoing discussion, particularly given that there is a decrease
of $62 million in your current request for nonproliferation
programs. Can you explain that?
Secretary Moniz. The decrease is largely associated with
the----
Mr. Fortenberry. Russian.
Secretary Moniz [continuing]. Proposed shift in the MOX
program.
Mr. Fortenberry. OK. But outside of MOX, that is my
understanding, that non-MOX proliferation programs, there is a
decrease of about $62 million relative----
Secretary Moniz. I see.
Mr. Fortenberry. Do you want to come back to that?
Secretary Moniz. Well, in terms of the specifics, yes, I
would have to come back to that. But----
Mr. Fortenberry. Look, I get it. Spending isn't always
necessary to achieve the best outcomes----
Secretary Moniz. Well----
Mr. Fortenberry [continuing]. But in this case----
Secretary Moniz. But, also, there are considerable uncosted
balances right now. So we actually don't see a spending problem
in the program.
Mr. Fortenberry. That was my understanding, that this would
be carryover funds.
Secretary Moniz. Yes.
Mr. Fortenberry. But that also begs the question, what is
not being used and for what reason?
Secretary Moniz. Well, partly is, as you said, some of our
programs have gotten dialed back with Russia. I mean, that is
just a fact.
Mr. Fortenberry. The second issue related to this--I was
going through your testimony, and we are moving forward on
research, aggressive research, on small modular reactors,
again, to the point of, when we look out on the horizon--and I
am not talking about next year's budget hearing; I am talking
about 30 years--when this technology is pervasive and it has
become much smaller and scaleable, the implications for
nonproliferation are huge, as well.
Again, this is this delicate line we have between civil,
peaceful purposes and weapons programs, in effect. And, you
know, you are a couple of switches away, frankly, from moving
one intention to the other. That is the reality.
So, as we move forward with scaleable technology that is
easier to use, more implementable, that is widespread, this
also has proliferation implications I see.
Secretary Moniz. Certainly, although we should emphasize
that the principal nonproliferation risks are associated not
with the reactors but with the potential surrounding fuel cycle
activities, specifically enrichment or reprocessing. And I
think what we need to do is to continue to encourage any
development of nuclear power not to be accompanied by those
activities.
And, you know, that was one of the issues with regard to
Iran, in terms of the set of fuel cycle activities that was
going on, in contrast to most nuclear power countries that buy
fuel on the international market, for example.
Mr. Fortenberry. But along with that development there will
be new pressures to have standalone enrichment, potentially, or
a diversion of certain types of fuels. This is just--again, the
smaller scale that it gets, the harder that it is to control, I
would think.
One of the controls that we have now is that it is such a
grand investment of infrastructure that it has to be led by
large nation-states. And, without that, I worry, again, as we
granulize this technology----
Secretary Moniz. If I may, I would just argue that there is
a counterargument, in fact, that if a country is deploying only
a very small amount of nuclear power, there is absolutely no
rationale whatsoever for developing the surrounding fuel cycle
activities.
Mr. Fortenberry. OK. That is fair enough. But I think you
understand the trajectory of my question.
Secretary Moniz. Oh, it is a balance.
Mr. Fortenberry. Yeah. All right.
Thank you, Mr. Chairman.
Mr. Simpson. Mr. Fleischmann.
Mr. Fleischmann. Thank you, Mr. Chairman.
Good morning, Mr. Secretary.
Secretary Moniz. Good morning.
Mr. Fleischmann. Before I begin my questioning, I wanted to
convey a personal note of thanks to you, sir. When you were
sworn in as Energy Secretary, your very first visit was to my
beloved city of Oak Ridge. I appreciate that. You took the time
to sit with me, go over the issues that were critically
important to our community. And I have thoroughly enjoyed
working with you and look forward to working with you this year
on our endeavors.
Oak Ridge is a special place. It sits in two counties,
Anderson and Roane Counties. It has a great history, from the
Manhattan Project forward. Its people are outstanding, and they
are committed to what we are doing. There is so much there--
national security, leading the world in innovation. I think we
have the premier lab in ORNL. I know our distinguished chairman
might have some other thoughts. But I did get him to visit, and
he brought the committee.
Mr. Simpson. Not bad.
Mr. Fleischmann. Not bad. That is right. And we brought
some potatoes along, too, from Idaho.
But the legacy cleanup activity has been incredible. It is
going to be long-term, but we clean up and we reclaim there.
But when members of the majority and the minority visit Oak
Ridge, as you have done several times, there is a ``wow''
factor. It is just so critically important.
So I want to thank you again for your dealing with those
things with me and working with me. I know there are times when
we agree, there are times when we disagree, but I have
appreciated that working relationship, sir.
Secretary Moniz. Thank you. Me, too.
Mr. Fleischmann. Mr. Secretary, I know you have been
closely involved with the decisionmaking on the uranium
processing facility, the UPF, that is going to replace Y-12,
which has done a great job, given the nature of facility, the
age of the facility.
This committee has been very clear on the need for UPF.
Would you kindly update me and the committee on the design
progress made in the last year, sir?
Secretary Moniz. I would say quite good. The first part of
the project, in terms of some of the site preparations, have
been completed. In fact, I just happened to bring a flow sheet.
There are six main projects to the end of the project in
roughly 2025. The first on-site readiness is completed, and the
second on-site infrastructure and services is well underway.
Then we will go into a next stage--and, by the way, in
fiscal year 2017, we do request a significant increase for the
UPF. It is on the ramp up. Then, in the fourth quarter of 2016,
we will have the baseline for stage 3. And then, eventually, in
the fourth quarter of 2017, we expect to have the baseline
meeting 90 percent design for the last two parts of the
project, getting eventually to the main process building.
So we think this modular approach--and, again, the red team
that Tom Mason led was very important for that. And we think
this is, frankly, a superior approach to the initial design
that was having cost challenges. And I think we are just on a
good track.
Mr. Fleischmann. Mr. Secretary, thank you----
Secretary Moniz. And it is very important that we do the
UPF.
Mr. Fleischmann. Thank you so much. And I appreciate your
commitment to that project.
You alluded to the fiscal ramp-up in fiscal year 2017 for
the additional funds. And for the benefit of us all, can you
please talk about the funding challenges and how we can keep
the project on time and on schedule?
Secretary Moniz. Well, I think, first of all, keeping the
project, you know, on schedule and on budget is clearly very
important.
And here I would say a few things. One is, I think our
substantial revision of the project management structure at the
Department is taking hold, and it is working well. Certainly
our target is to keep at least almost all of our projects
within, say, 10 percent of the design parameters. We
established a new risk committee. We have institutionalized the
whole structure. The risk committee meets every week going over
projects. Our Associate Deputy Secretary plays a major role.
We need to keep the discipline of not so-called baselining
until we have at least 90 percent design completion of
projects. I think we just got into so much trouble before with
putting out numbers for a schedule and cost that just did not
have a basis in design.
Third, I think we need to adopt--and I think the UPF is a
good example of it--more the philosophy, if you like, of the
Office of Science, which over the years has been by far the
most successful in executing major projects among our three
major programs. I shouldn't say ``executioners''--but science,
defense programs, and environmental management are the three
places where very large projects occur.
And what I mean is that, once there is a solid baseline, it
doesn't mean that problems don't arise. But when they do, you
work to keep the project in the budget box and not just have
the automatic reaction, ``Oh, okay, well, we'll just keep the
project escalating.''
So the UPF is an example where a fundamental relook was
done and the modular approach introduced. So I think that is
what we are doing, and right now I think it looks pretty good.
Mr. Fleischmann. Thank you, Mr. Secretary.
I see that our distinguished full committee chairman has
arrived, so I am going to yield back until the next round. But,
again, let me thank you again, and the future at Oak Ridge will
be bright. Thank you, sir.
Secretary Moniz. Thank you.
Mr. Simpson. Mr. Rogers, the chairman of the full
committee.
The Chairman. Thank you, Mr. Chairman. Sorry to be late,
but we have 26 hearings going on this week.
Mr. Simpson. That is what I understand.
The Chairman. And 21 last week, and I am trying to make as
many as I can.
Mr. Secretary, thank you for being here and answering
questions about your budget request.
The work you do at the Department of Energy has significant
implications for our ability to grow our economy. The
investments you make in the way energy is sourced, stored, and
distributed not only determines the future of our energy
security but also whether hardworking Americans can expect to
have access to reliable energy at an affordable price. Energy
impacts every industry, every sector of our economy, so much so
that we can't understate the role it plays in an employer's
ability to grow a business or a family's ability to plan and
stick to a household budget.
With families now paying more for power and growing unrest
in energy-producing countries overseas, the question of how we
achieve energy independence is more important than ever. So the
question remains, knowing that we have abundant energy
resources right here in this country, why is the administration
committed to leaving that power in the ground?
This administration's priorities with regard to coal are
very clear. Rather than supporting an ``all-of-the-above''
energy policy, as they claim, their actions suggest that their
true intention is to keep coal in the ground, and they do so at
a very high cost. Coal is the cheapest and most abundant
natural resource in this country. Businesses, schools, and
communities can rely on it during storms and record cold
temperatures and other unexpected circumstances.
Meanwhile, the administration's war on coal has left 10,000
coal miners in my district laid off. They are trying
desperately to find work in some other job when they should be
at work providing us with access to the affordable and reliable
energy that coal provides. Nevertheless, the administration
continues to write rule after rule intended to regulate coal
out of the marketplace and my constituents out of work.
Today, you present us with an energy budget that slashes
funding for coal research in favor of renewable energy.
Congress has repeatedly restored funding for coal research
development and, in doing so, has sent a very clear message
about our priorities for our national energy policy. Yet again,
you have ignored congressional direction in favor of the
priorities set by extreme environmental groups and the EPA.
The Department has requested a reduction from 2016 levels
for CCS and power systems while restructuring it in order to
integrate funding for coal and natural gas carbon-capture
projects. Congress has separated these funding streams in the
past in order to ensure that the funding appropriated to
develop clean coal technologies for each resource are utilized
as intended.
Furthermore, while you have given renewable energy a
sizable $825 million increase, you have reduced fossil energy
investments by $272 million. That is a 43-percent reduction,
which you propose to make up for with budgetary gimmicks.
You continually state that you are committed to an ``all-
of-the-above'' energy policy and that this begins with a
commitment to low carbon. If that were the case, this budget
request would make the necessary clean coal technology and coal
research investments that seem to be missing in an effort to
implement that policy.
With coal generating 40 percent of the electricity in this
country, CCS technology and investment in fossil energy
research is vital to developing an energy economy that is
reliable, affordable, and efficient. This budget request does
not make the necessary investments in achieving that goal.
These topics are critical to ensuring the affordability and
reliability of the many energy resources we have in the country
and important to our national security. I look forward to
further hearing your testimony and answering questions.
Thank you, Mr. Chairman.
Mr. Simpson. Mr. Secretary, let me state something that you
know is the issue we face here with this budget proposal that
the administration has presented us.
You state in your opening statement: The request consists
of $30.2 billion in discretionary spending, $640 million above
the fiscal year 2016 enacted appropriation--that is $640
million above last year--and $2.3 billion in new mandatory
spending proposals requiring new legislation.
Is the Department going to propose new legislation to the
authorizing committees?
Secretary Moniz. Yes, sir, our intent is to--at least some
of those requests.
Mr. Simpson. Even if, as an example, with the $673 million
in USEC funds that you plan on transferring over to use in EM,
in cleanup, if the authorizing committee authorizes that, it is
going to score against them. If we do it in our budget, it is
going to score against us. So PAYGO is going to have to go.
So we have a budget that proposes $640 million above last
year. It also decreases funding for the Army Corps of
Engineers' budget by $1.369 billion, or a 22-percent reduction.
You have to remember this is an Energy and Water Committee, so
we have to look at the overall budget.
Somehow we are going to have to make up the $1.369 billion
in the Army Corps of Engineers' budget, because I can't see
this bill passing Congress without making that up. Everybody
has an Army Corps of Engineers project in their district,
frankly, and, consequently, Congress is going to insist that we
make that funding up.
So now we are down almost $1.4 billion. We are down $673
million that will come out of the USEC fund. Even if we somehow
find the $674 million to put in EM, the EM proposed budget at
that time is still $100 million below last year's level, which
is going to cause some problems. WIPP is $34 million, or 11
percent, below last year's level.
So we are going to have to make some considerable
adjustments as we try to fill in these other accounts. And it
looks like the place that you are going to find it is the place
that has increased the most in your budget, which is one of the
ones nearest and dearest to your heart, and that is the
research and development initiative that you have suggested for
a 21-percent increase. And while I don't disagree with what you
are trying to do in this initiative, at this level it is going
to be very difficult to make up ground and put funding in
there.
I know that you understand this. We have had this
discussion. But I just wanted to state that. These are the
challenges this committee is going to face in putting together
this budget.
Let's talk for a minute, if we could, about a subject near
and dear to all of our hearts: MOX. The budget request proposes
to terminate the MOX project and begin pursuit of an
alternative to dilute and dispose of 34 metric tons at the
Waste Isolation Pilot Plant in New Mexico. WIPP is a pilot
repository for a certain amount of particular defense waste,
and DOE has requested to move forward with a significant
expansion in the WIPP mission.
To date, DOE has done a safety assessment for disposal of a
relatively small portion of plutonium but has yet to perform a
safety analysis for the full 34 metric tons. There was an
independent study, a safety analysis, performed by an outside
group that warned of safety and regulatory problems that could
be encountered with disposing of large amounts of plutonium in
WIPP, the most significant of which is the possibility of
criticality.
Is the safety analysis DOE has performed thus far truly
scaleable, or are there implications to disposing of a much
larger amount of plutonium in WIPP? Are you looking at these
safety issues now that they have been brought up to you? Do you
believe they have merit? And how might the full analysis change
the cost to dilute and dispose alternative? For instance, are
you currently allowed to ship weapons-grade plutonium to WIPP?
Secretary Moniz. Thank you, Mr. Chairman.
If the chairman will permit, I just would like to make two
brief comments on the last two questions.
Mr. Simpson. OK.
Secretary Moniz. First, for Chairman Rogers, I would
certainly welcome the chance to come and talk over the entire
coal program and get your perspectives further but, also, to
add our perspective, which I think is a pretty robust program.
So perhaps we could think about that offline, if you would
permit.
Secondly, on the overall budget that Chairman Simpson
raised, I do want to note that, first of all, things like WIPP
in the big budget context, that decrease is all part of the
plan. I mean, that is a full funding plan for moving towards
restart of operations. There was a peak because of some of the
capital work that was going on. There will be additional
capital work in the future in terms of a new ventilation
system. So that is already in there.
And things like the USEC fund, we did propose a specific
offset there in terms of restoring the fee. A quarter-mil-per-
kilowatt-hour fee over 10 years would more than offset what we
would use out of the USEC fund. So I think we do have some--we
have addressed part of your problem, at least.
Mr. Simpson. At least part of it.
But let me ask you, not on that point, the previous point,
at WIPP, if we fund WIPP at 11 percent below last year's level,
a $34 million decrease, is it still on schedule at that level
to open the latter part of this year?
Secretary Moniz. Yes, it is. Yes. And--yeah, absolutely. We
are committed to that, of course, safely. I mean, doing it
safely, that is our plan.
Going to the MOX question and the criticality issue
specifically, so we asked Sandia Laboratory to do an analysis
of the assertions in the High Bridge report, and, frankly, they
concluded that the risk of criticality issues at WIPP are just
unfounded.
First of all, we note that, of course, we do have almost 5
tons already there in the same form that would go there if,
with the Congress, we are able to change the pathway on the
scenario in the High Bridge report with criticality control
overpacks containing the diluted plutonium being crushed, et
cetera--Sandia evaluated it as rather simplistic and not at all
credible.
In addition there are other issues. I mean, there is no
separation of the plutonium even in being crushed, so it is not
like somehow you assemble a critical mass. I would also add
that the chlorine in the salt is a very good neutron absorber.
It is actually a very good geological medium for doing this. So
we just don't think that that is a valid critique.
I would also add that there are an additional 6 tons of
plutonium already at Savannah River that are already, you know,
labeled for going to WIPP, which would not have been part of
the MOX program. And then another 7 tons, we believe, could
certainly be accommodated at WIPP without anything like
additional Land Withdrawal Acts or anything.
So, you know, we believe that this is a very sound--a very
technically sound pathway.
Mr. Simpson. Let me tell you, contrary to popular belief,
that the reason Congress has concern about the dilute and
dispose alternative is not because of our concern about the
South Carolina delegation. There are other issues that cause
concern, and that is: We put a lot of money into MOX. Four
years from now, when you are gone, I am gone, a new Congress is
sitting here and we have moved down a road toward something
that we haven't got an approval for yet.
The reason I ask that is, have the Russians agreed to this
in more than just ``Yeah, we think we could probably go along
with that''? Do we have a signed agreement with Russia? Do we
know what they are going to ask in return, if anything, to
approve of this? Because, you know, they are pretty good
dealmakers. And I suspect there is something on their table
that they would like, and is it something can we accept? And if
we have stopped MOX, do we then force ourselves into having to
accept whatever they want to do? Concern one.
Concern two, the State of New Mexico. I don't see a lot of
excitement in the State of New Mexico, in listening to their
Senators. And I don't know that they have made a decision, and
I am not suggesting they have, but there is obviously concern
there. If we have to do another land withdrawal 2 or 4 or 6
years down the road when we have stopped MOX and can't go back
in that direction, are we sitting here with our thumbs up our
nose wondering what we are going to do next? You know? That is
the concern I have.
Secretary Moniz. Well, again, certainly the pathway, for
the first 13--for 13 tons, which is all the plutonium at
Savannah River, we think is pretty straightforward there. We
would have to do additional safety analyses, and then there is
the additional 27 tons, most of which is at Pantex at the
moment, to take care of.
On the Russian question, well, the answer is ``no,'' and in
a certain sense ``of course not,'' in the sense that we have
not, you know, kind of triggered the formal process, which
exists in the agreement, to see about endorsing the change.
As you indicated and as we have discussed previously, we
have had certainly a number of discussions--I have had a number
of discussions with Rosatom. The Deputy Secretary has, as well,
with their deputy. They have expressed certainly a willingness
to listen. But until, I think, we see with the Congress what
our pathway is, we have not had of a formal initiation of a
process.
Now, as you know, and as I think we have been very
consistent for the last 2 to 3 years, is that our problem is
the current pathway is not viable. We believe the dilute and
dispose is both faster and cheaper, and the faster is
important--much faster, by the way. We are talking a lot faster
to move.
Mr. Simpson. By a factor of what?
Secretary Moniz. We are talking about--the MOX approach
will probably not actually put plutonium into a reactor if--and
talking about uncertainty--if we can find somebody to burn it.
There is no commitment to accept MOX fuel in any reactor in the
United States. But if we get over that, then we are probably
talking 2040-ish to begin versus maybe 15 years earlier with
dilute and dispose.
So I think we have strong motivation. And our problem is,
as we have always said, that to complete the MOX program we are
going to have to bump up the funding to at least $800 million a
year, probably closer to $1 billion a year, for a long time.
And so I have always made it clear, if the funds are there
and the Congress wants to do it, we will do MOX. But we just
don't see it as being realistic. And, again, I am not talking
about just the MOX factory but the whole system and its
operations, with certainly north of a $30 billion lifecycle to-
go cost.
Mr. Simpson. So there are all these positive results.
Certainly South Carolina has agreed to this, right?
Secretary Moniz. No, as I think you know quite well that
this remains--look, I am not going to sugarcoat it. This is a
very tough issue, obviously, for all kinds of reasons--some
local, but also some policy reasons.
Mr. Simpson. Sure.
Secretary Moniz. And, clearly, no one likes the idea of
having gone quite some ways in building that particular
facility. As you say, I mean, it is nearly $5 billion of sunk
costs. But I am just looking at the to-go costs, and they are
at least a factor of two--I think more, frankly--than dilute
and dispose. So that is the tough question, the tough issue we
face.
Mr. Simpson. Well, as I said, for me and I think for a lot
of Members of Congress--and I understand that, you know, in
South Carolina you are talking about jobs and a few other
things like that, which are very important.
Secretary Moniz. Uh-huh.
Mr. Simpson. But, for me, it is that I have seen too many
times the Department head down a road over the years and get
halfway down that road and find a fork and decide it doesn't
want to go. And we end up with these monstrosities out there of
half-finished projects or projects that have cost us four times
what we thought they were going to cost us. So it is
frustrating to me.
What I would need to see, frankly, is a signed agreement
with Russia that this is going to be okay, because I want to
know what I am getting into. I would want to know that New
Mexico is on board and South Carolina is on board and we are
not going to be paying fines to South Carolina. That is what I
would need to see.
Secretary Moniz. There is a bit of a chicken-and-egg issue.
And, look----
Mr. Simpson. You bet there is.
Secretary Moniz [continuing]. As you know, I have been
discussing this now for years. I am happy to get together with
both chambers, both parties, all the parties, and see what we
can do for a path forward.
But, you know, let's face it, I mean, it is hard to see a
convergence, because we have always said at the current funding
level--and we try to extend it. We did extend it, working with
Congress. We are following the edict of continuing to construct
with the $340 million. But I don't think there is much argument
that at that level of funding the project just does not reach
completion.
Mr. Simpson. Is there a stop-work order out there?
Secretary Moniz. No, there is not.
Mr. Simpson. There is not?
Secretary Moniz. No, no. There is not.
Mr. Simpson. None have been prepared and are ready to be
issued?
Secretary Moniz. Certainly not to my knowledge, I think the
confusion may come by, I mean, the language is there that if
Congress endorses the shift of direction, then a stop-work
order in fiscal year 2017 would be issued, but not in fiscal
year 2016. We are following the congressional direction----
Mr. Simpson. OK.
Secretary Moniz [continuing]. And constructing.
Mr. Simpson. Mr. Rogers.
The Chairman. Mr. Secretary, you were directly involved in
the negotiations with Iran on the Joint Comprehensive Plan of
Action. Those negotiations, of course, have concluded. And DOE
is expected to play some sort of role in implementing that
agreement, but it is not clear to me exactly what that amounts
to.
Is there funding in your request for that nuclear agreement
with Iran? Did you request any funds to implement it?
Secretary Moniz. There are no specific funds. Frankly, it
is a relatively low expenditure in terms of supporting travel
in kind of our normal nonproliferation activities. Most of
these meetings we're supplying technical experts. For example,
right now, we have a couple of people in Vienna right now
meeting with Iranians to resolve some questions. But we have no
major expenditure.
And, of course, I spend some of my time on the phone and in
meetings, but that is the kind of thing that we are doing. And
a lot of it is what we normally do of supporting the IAEA,
because they are the ones who actually have the verification
responsibilities.
The Chairman. The administration has said that, under the
terms of that agreement, so much information on Iran's nuclear
activities would be collected that if Iran pursues a nuclear
weapons program it would be detected.
This week, though, GAO released a report that says that the
International Atomic Energy Agency, IAEA, the agency
responsible for verifying and reporting back to the
international community on Iran's compliance, quote, ``faces an
inherent challenge in detecting undeclared nuclear materials
and activities,'' end of quote.
Do you believe the verification measures that exist will be
sufficient to monitor compliance and detect unlawful use of
material?
Secretary Moniz. Yes. First of all, the inherent challenge
is clear, because if it is undeclared it is inherently a
challenge compared to the declared facilities in a breakout
scenario.
But, look, as Jim Clapper, our Director of
NationalIntelligence, has said, you can never say 100 percent on any
particular activity, but he then added that the insight that we get is
dramatically enhanced. Certainly, the barriers to trying a clandestine
program are substantially higher. There are unparalleled verification
measures in there. We feel quite confident about it.
The Chairman. GAO also described concerns that, absent a
complete accounting of Iran's past nuclear program being
provided to the IAEA, the Agency would be limited in its
ability to detect undeclared activity going forward.
What information regarding the nature or composition of
Iran's past nuclear activities does the agreement require Iran
to disclose?
Secretary Moniz. The IAEA investigation into the so-called
previous military dimensions was closed out in a report by the
IAEA, although they certainly are not proscribed from
revisiting that should new information appear. But, right now,
our focus is clearly on verification in the future.
And, again, the measures are extraordinary. For example,
for the first time anywhere, the IAEA has been monitoring the
entire uranium the life cycle since January 16. That is a novel
thing. And for 25 years monitoring that fuel cycle, for 20
years monitoring all production of the sensitive centrifuge
parts, et cetera.
The Chairman. How would the agreement identify covert or
undeclared activities that Iran might have or might develop
over the next 15 years?
Secretary Moniz. Well, at some point, as I said earlier for
a different reason, we may want to get together in a different
setting to discuss some of that.
But, basically, it is tracking the uranium; it is tracking
all parts of the centrifuge; it is using other means of getting
information and then exercising what is also novel, the IAEA's
ability to go anywhere, within reason, to go anywhere in a
fixed time period. That is, again, a novel feature of this
agreement. And other stuff--and we could go into more detail in
a different setting.
The Chairman. I look forward to that.
Secretary Moniz. OK.
The Chairman. Thank you, Mr. Secretary.
Mr. Simpson. Ms. Kaptur.
Ms. Kaptur. Thank you.
Thanks, Mr. Secretary, for your endurance here.
Your budget request includes funding for a new competition
for regional energy innovation partnerships. And I know you
care about them a great deal.
Do you have a conceptual idea yet of how regions of the
country would be divided or topics would be divided?
And you intend these partnerships to be fuel-neutral, yet
they are included in the EERE function in the budget. Does the
Department have a proposal to address this limitation?
Secretary Moniz. Yes. The proposal is parked in the EERE
budget, but the regions would not be restricted to that. If
there is a better way of putting that into the organizational
structure, we are happy to discuss that with Congress. So
number one is it is not restricted in how the regions would
shape their portfolios.
Second, we have drawn our own little map for our own
thinking, but I think, we very much hope to go forward with
this. I think it is a novel and very important approach. And
that would be something that we would want to discuss with
Members, in terms of how those are structured.
We have tried to have a look at what are the R&D resources
in different States and how might one put together the regions
of contiguous States. But, again, that is something, I think,
that we would have to discuss before actually executing.
Ms. Kaptur. Thank you very much.
In terms of the national labs, we know what a tremendous
asset they are and how much you pay attention to them.
You have recently stood up the Clean Energy Investment
Center. And my question is, is this only to serve investors, or
are others going to be somehow engaged in all of this? And how
do you believe the center should serve business?
Secretary Moniz. Well, the Clean Energy Investment Center
is intended to provide transparency into the national lab
programs for investors. That is the goal. On the other hand,
you know, this is a public activity. This is not privileged
information, so it is transparent. And I think we could
consider businesses to be investors if they are interested in a
particular technology.
We also, by the way, just hired, about a few weeks ago, an
excellent person to head that center. Dr. ``Malpotra'' I think
his name--something like that, approximately.
Ms. Kaptur. It will be in Washington?
Secretary Moniz. Malhotra.
Ms. Kaptur. It will be in Washington, or have you not
picked a place?
Secretary Moniz. This is a very small activity. It would be
included in the Office of Technology Transitions that we have
asked for, I think, $8.5 million for.
In fact, there would be several functions in the Office of
Technology Transitions. One of them is the Clean Energy
Investment Center. Another one is--we have listened to the
Congress that asked for the formation of whatwe have labeled it
Technology Commercialization Fund. It is a fund explicitly put together
with 0.9 percent of the applied energy programs funding. It is about a
$20 million fund that will be run out of the OTT competitively for the
labs, again, to commercialize technologies. That was put into the--I
think it was the 2005, I think, Energy Policy Act. And we are proposing
to implement that in 2017.
I might add, in terms of this structure of the OTT, it is
not exactly the same subject, but going back to Chairman
Rogers' comments earlier, opening statement, I would note that
another initiative--and I think it is relevant to some of the
things that Congresswoman Kaptur has mentioned in the past--is,
about 2 years ago, we formed a Jobs Strategy Council and
brought in two excellent people to do that. And I think they
have had very good impacts, including, by the way, they have
had some work with Paducah.
But, in the budget, we are asking to formalize that into,
again, a small office whose focus would be often in working
with labor, but the focus is on energy jobs in the country and
what do we do to support them. So that is another initiative in
the fiscal year 2017 budget.
Ms. Kaptur. Thank you for those clarifications.
I wanted to turn quickly--just as a comment, the budget
request proposes to establish a new hub focused on enabling
technologies related to desalination. And the hub is proposed
as a 5-year, $25 million initiative, and it would be a
centralized research and development effort.
Coming from an area that won't need desalinization, I just
wanted to point out that there are many water-related needs and
power-related needs in other parts of the country related to
clean energy, and I would hope that they would get equal
attention. So that is in the way of an advertisement for the
Great Lakes. And just wanted to----
Secretary Moniz. I would add, the Energy-Water Nexus
Program is much bigger than that.
Ms. Kaptur. All right.
Secretary Moniz. That is where that comes in.
Ms. Kaptur. All right. Thank you.
And I have to end on a little light story. And it actually
is a light story. And that is, you work at very high levels,
Mr. Secretary. You negotiate with the Soviet Union--or, excuse
me, Russia, although it certainly looks like what it used to
be.
But out in Ohio, there are two farmers. One guy is named
Dick, and the other guy is named John. And Dick runs a--he is a
very innovative farmer, but he farms under a canopy. And he and
John are always in competition, kind of like Jeff was in
competition as a high jumper.
But Dick figured out that if he uses light something
happens. And so he grew tomatoes that were so productive on
vines that were one-third larger than John's tomatoes--and John
runs a big processing company called Hirzel's--that John pulled
his tomatoes out of where he was growing them, and he drove
down in his truck down to Dick's operation to spy on how he was
getting this higher yield. And they are sort of figuring out
down there on the ground that light has a whole lot to do with
success and higher yields.
And so I want to say that, to help our region of the
country, that the ingredient of energy and light rays and light
frequencies is something that needs attention, more than it is
getting. And the way in which these folks are trying to
compete, unsubsidized in a global marketplace, could really be
enhanced by your department.
You already know that; you have heard me say it. But they
are competing against cap-and-trade-subsidized systems in
places like Brussels, Belgium, that get a 50-percent subsidy.
And so, for us to be competitive, the energy piece is critical.
And the folks at the Department--not you, but the people who
work under you--have to understand this.
And it is not as difficult a challenge as providing power
to Orion in deep space, but it is a real challenge on the
ground. And it shouldn't be so difficult for these folks that
are out there trying to make it in the marketplace to have the
benefits of high science.
So I just wanted to end with that little story, because I
want both Dick and John to be successful and to have the very
best energy knowledge that they can possibly have in materials
science so they can be the most successful farmers in the
world.
Secretary Moniz. I would suggest they also capture carbon
dioxide and put it in a greenhouse.
Ms. Kaptur. Well, help us do that.
Mr. Simpson. Mr. Honda.
Mr. Honda. Thank you very much.
And let me shift a little bit towards energy storage. We
know that energy storage technology can fundamentally improve
the way with generate, deliver, and consume energy by
increasing the electrical grid's capacity, flexibility, and
reliability. And when it is paired with renewable energy,
storage can increase the amount of clean energy that can be
distributed throughout the grid and throughout the community,
from homes, cars, to the grid.
Can you give us an assessment of the status of energy
storage technology, and is the technology ready for widespread
deployment? What are the barriers we need to overcome to speed
up the deployment of storage technologies? And does DOE have a
strategy to increase the deployment of storage energy
throughout not only the electric grid but make it more
available for homes and utilization of our electric cars and
distribution of that?
Secretary Moniz. Yes. Thank you. That is really an
important subject. And we do in the fiscal year 2017 budget
propose some significant increases there, I think up to $225
million over--I think it is over three different programs,
Office of Electricity being one of them. Of course, the Energy
Efficiency and Renewables Office has a particular focus on the
automotive side and on the integration of things like electric
vehicles into the distribution system. So those are all going
forward.
The role of storage in the grid is certainly extremely
important. As you know, in California, there is an initiative,
in fact, requiring storage to be included.
I must say that one of the things which is not a technology
issue is we probably do not yet have developed the kind of
regulatory structures to properly value storage in the grid, in
terms of what it actually does for the whole system. It is
obvious in terms of intermittent renewables, but there are
other things in terms of grid stability, frequency stability,
et cetera.
So we are focusing on that. I think there has been a
tremendous advance in the last years. Costs have come down
probably 70 percent in the last 7, 8 years, but we still have a
ways to go.
In the automotive sector, for example, to be more specific,
we model large-scale battery production based upon current
technology as, let's say, around $250 per kilowatt hour of
storage. We need to cut that down by at least a factor of two
for it to really expand in the marketplace.
But we are optimistic. I mean, at the pace we are going, I
think, you know, we will be there certainly within a decade.
Mr. Honda. Thank you, Mr. Chairman.
Mr. Simpson. Mr. Fleischmann. And I have to tell you that
when you say ``Idaho potatoes'' in the same sentence that is
redundant.
Mr. Fleischmann. There you go.
Mr. Simpson. All potatoes come from Idaho.
Mr. Fleischmann. And we love your Idaho potatoes. And when
I visited your lab, I had some of the best Idaho potatoes in
the world. So thank you.
Secretary Moniz. Actually, Mr. Chairman, if I may, I was
just handed a note that I misspoke on something. I should
clarify, unfortunately, for Chairman Rogers, that in the budget
we do have explicitly $13 million for the JCPOA implementation.
So I would like to just correct that for the record.
Mr. Simpson. OK.
Mr. Fleischmann.
Mr. Fleischmann. Thank you.
Mr. Secretary, several years ago, some shortsighted changes
were made to the management structure in the Department of
Energy Oak Ridge Federal office. These problems have removed
incentives for the many DOE program offices to work together in
an integrated way that marshals all of our assets for greater
results. The changes also have resulted in serious conflicts
with local elected officials on top DOE priorities.
Mr. Secretary, we need your help in removing the stovepipes
and integrating Oak Ridge programs again. My question for you
is, will you work with me to address these problems, sir?
Secretary Moniz. Congressman Fleischmann, I know the
programs feel that the new organization, if you like, kind of
better aligns what they are trying to do. So if there are
issues, however, of kind of bridging between them, that is
certainly something I am happy to discuss with you and the
programs and see if we can improve that.
I do add that, from the program side, they feel the new
organization is actually giving them better alignment with what
they are trying to do. Now, Oak Ridge, admittedly, is a
complicated site. Not only does it have the three major
programs there, but even just geographically you have some of
the military stuff sitting in the laboratory. And I know that
is a challenge, so I would be happy to discuss that.
I also want to say that we are moving, I think,
expeditiously in terms of hiring the new science manager.
Mr. Fleischmann. And I thank you. And these changes were
made prior to your tenure and prior to my tenure. And there was
an individual, who is a mutual friend of ours, who had that
role. And that model was something, back years ago, that worked
very efficiently, and I would just put that forth for your
consideration, sir.
My next question is going to be on high-risk excess
facilities. You named a panel within the Department of Energy,
sir, to find solutions to the problem of high-risk excess
facilities. What were the panel's findings? And what is your
plan and timeline for reducing the risks in taking down these
buildings, sir?
Secretary Moniz. Get more money.
Mr. Fleischmann. Yes, sir.
Secretary Moniz. Yeah, so we have used our Laboratory
Operations Board that I formed in 2013 in looking at what I
would call really systemic problems.
The three areas I would just note that are kind of, in some
sense, I view as connected--one is that, for the last two
budgets, we have insisted on a principle, although calling it a
principle may be elevating it too much, but a principle that
the programs shall not put forward budgets that further
increased deferred maintenance. You know, it is the old theory
of holes--you have to kind of stop digging, and you have to
just stop at some point. So the last two budgets, including
this one, respect that principle.
Second, there was a major--really, the first, as far as I
know, systemic study of kind of what I would call the general
infrastructure needs at our laboratories and sites. And I am
happy to say that, you know, it is a big bucket, but we are
putting drops into it. And this budget, again, has a
significant increase in addressing the general infrastructure
issues.
The excess facilities are, frankly, more difficult,
including sometimes the issues of boundaries, like transferring
responsibility from NNSA to Environmental Management, and then
when one runs into the budget problems that the chairman
described earlier.
So all I can say there is that, you know, I think we are
facing the problem. As you say, we charge this committee to
look at these issues, and we are doing our best within the
budget constraints. And at Oak Ridge that is certainly an issue
to be concerned about.
Mr. Fleischmann. Thank you, sir. Yes, it is.
One last question. As you know, in Oak Ridge, we not only
clean up legacy sites, we reclaim them for economic
development. And I think we do that perhaps better than
anywhere in the country.
And I want to thank you again for your efforts to restart
the stalled land transfer process for excess Federal land that
is important to many DOE communities that lose tax revenue from
the Department, substantial landownership.
We are grateful for the advancements that have occurred in
the last 2 years, but has it become apparent that the process
needs to be streamlined. The current system allows unlimited
time with too few constraints on the many decision-makers
involved in the process.
Mr. Secretary, would you consider authorizing a closer look
at the process to find ways to streamline and shorten this
process, sir?
Secretary Moniz. I would be happy to have that looked at.
Streamlining is a good thing, so we will do that.
Mr. Fleischmann. Thank you.
Secretary Moniz. In some cases, I might add, in some
cases--you said multiple sites. And, in some cases, there are
also different opinions in the community about how that is
done, so it is not a cookie-cutter kind of issue. But we will
look at it.
Mr. Fleischmann. Thank you, sir.
I yield back.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Secretary, I will probably return to the
nonproliferation question this afternoon with General Klotz and
get his perspective on whether or not the current construct is
needing to be rethought, where we are in terms of a long-term
assessment, but also probably--well, I will mention your
interest in some additional meeting within the coming weeks or
months.
Secretary Moniz. Let's do that. That would be great.
Mr. Fortenberry. OK. Excellent. Thank you.
Regarding MOX, we are stuck. It is too expensive to
complete. There are, really, three variables, that being the
main one, too expensive to complete. There is a fairness issue
to South Carolina, and then, third, what do you do with this
fuel if we don't move forward.
Again, rethinking the whole construct, you talked about a
Mission Innovation agreement in clean energy, R&D there. Has
there been any thought to again--and it has broader
implications, I think, with the IAEA and the entire
international community and the entire fuel cycle and waste
disposal problem and blend-down problems--of creating some of
type of new international architecture of a shared agreement in
which we are participating with other countries in this rather
than trying to carry this load by ourselves?
Secretary Moniz. Well, first of all, at a general level, I
think as you know, at the very end of March, the President will
host here the national security--no, the----
Mr. Fortenberry. The nuclear summit.
Secretary Moniz [continuing]. Nuclear security summit.
Thank you. And that is, of course, a global discussion about
nonproliferation architectures.
With regard to plutonium disposition specifically, there
certainly has not been any discussion of the type that you have
suggested. Of course, fundamentally, it comes down to Russia
and the United States as having the large amounts to dispose
of. And we should also note that at least my understanding is
that, you know, Russia is not exactly either burning up the
plutonium at this stage either. It is a tough, expensive
proposition, as we have found.
Mr. Fortenberry. The blend-down option and storage in New
Mexico is a reasoned alternative, from your perspective?
Secretary Moniz. Yes. Well, first of all, I do want to
emphasize that for the 34 tons, plus, by the way, the
additional 6 tons that I mentioned at Savannah River which are
not intended to be MOXed, we are not stating that necessarily
all of that goes to New Mexico. We have said that 13 tons on
top of the 5 that are already there can certainly be
accommodated at WIPP, and the 6 tons are already scheduled to
go to WIPP. Of course, WIPP has to get reopened, and that is
going to be another 5 years before they are--let's say roughly
5 years until they are in full operation.
But, technically, it is very simple. We have done it. As I
said, we already have 4.8 tons diluted and disposed at WIPP.
This exists. So there is really--frankly, there is far less
technical risk in that approach than there is with MOX--far
less.
Mr. Fortenberry. Is that your recommendation?
Secretary Moniz. Yes. So, in our budget, we have
recommended a shift, but this is, of course, up to the Congress
to decide.
And then we need to go through--as the chairman said, we
will need to go through kind of the formal process with Russia.
I do note that that process was already exercised in the other
direction, where the United States approved Russia to change
its----
Mr. Fortenberry. It diverted it to another----
Secretary Moniz [continuing]. Disposition pathway.
Mr. Fortenberry. Right. In 2010, if I recall correctly?
Secretary Moniz. 2010, yes, I think that is right.
Mr. Fortenberry. Well, let's just keep the idea on the
table of perhaps some, again, new international framework. Even
though, as you have said, the lion's share of this is Russia
and the United States, maybe there is some different approach
that would allow for better cost-sharing rather than
independent pathways.
Secretary Moniz. The only thing that I could think of--and
I am not recommending it, like, you make MOX fuel and you have
it burned in a reactor in another country.
But, frankly, I don't think we want to get into the
business of sending this to other places. SoI think we are
going to have to dispose of it domestically.
Mr. Fortenberry. Let me quickly turn to the International
Atomic Energy Agency. And from your perspective--the Agency's
ongoing shift of mission, or the concurrent missions of nuclear
safety to nuclear proliferation, nonproliferation, has
heightened.
Are their resources robust enough? Who is the primary
leader of the International Atomic Energy Agency's culture? I
think we have an excellent Director now, but we can't always
guarantee that. Could you speak to those issues, please?
Secretary Moniz. Well, first of all, I might say it is not
only the Director but also the--the DG, but also the deputy
directors, who really do the lot of the day-in, day-out, for
example, with verification in Iran. Very senior people are
there quite frequently these days. So I think there is a great
degree of competence.
And I have said before that we always, especially at Los
Alamos, provide training for their inspectors. As far as budget
goes, the Director General has said that, you know, they have
adequate budget. They did need for Iran a plus-up of something
less than $10 million a year, but they have budget.
But that, of course, assumes that they do get voluntary
contributions to specific programs beyond their normal, kind
of, dues, if you would like. So, for example, there is a
significant program in terms of use of nuclear energy for all
kinds of alternative applications in society. That depends
critically upon getting, voluntary additional contributions.
Mr. Fortenberry. But in terms of continuity of the
organization, continuity of leadership, are you comfortable
with, oh, I guess, the oversight mechanisms, our intimacy with
the organization, their dependence upon us, so that we can help
in a profound manner shape the interior culture there, in order
that we have, again, a continuity of process, like we are
seeing now, which I think is good and strong and robust and
growing? This is going to become more critical into the future,
I think.
Secretary Moniz. I think that the issue of continuity--
well, first of all, I think the United States, I certainly
think that we have a very good relationship with the leadership
at IAEA. And, again, I don't just mean the Director General but
going down more of the organization. Certainly, our lab people
are there very, very frequently, you know, working on specific
issues at the staff level.
But I think the Board of Governors mechanism has been
working quite well. Obviously, we are a major player in that,
but, in general, I think it is working well. Certainly, in all
of this Iran business, you know, the Board of Governors was
always quite helpful, I would say.
Mr. Fortenberry. Yeah.
Thank you, Mr. Chairman.
Mr. Simpson. Just to clarify your statement, your own red
team suggested that selling the MOX fuel in the United States,
that there would be a demand for it. That the only question out
there was that--yes, they did. They didn't believe that that
would be an issue.
Secretary Moniz. Oh, I see. They didn't believe--all I am
saying is that----
Mr. Simpson [continuing]. They weren't going into--well,
who is going into a contractor commitment right now when they
have no idea what the future of MOX is going to be? What
company is going to go into that? Nobody is.
Secretary Moniz. I agree with that, Mr. Chairman. I would
also observe, however, that that was the case before the issue
of changing pathways was raised.
Mr. Simpson. But there was interest at that time from TVA,
wasn't there?
Secretary Moniz. There was some interest expressed.
Actually, Duke--I think it was Duke----
Mr. Simpson. Duke.
Secretary Moniz [continuing]. Had expressed interest and
then explicitly withdrew it, is my recollection. I will check
on that. But it does require--because to use it, of course,
requires a relicensing from the NRC.
Mr. Simpson. What I am suggesting is that your own red team
is not as certain that it would have to be sold internationally
because nobody has an interest in it.
Secretary Moniz. Oh, no, no, no. Please----
I want to make known, I just raised that in the context of
the question asked about internationally. I don't think that is
a viable idea. I think it is a bad idea to think about
selling----
Mr. Simpson. Well, yeah.
But you are saying that there would be no interest in the
United States for it.
Secretary Moniz. So the question is, in the United States--
what I said--and this was before any discussion of changing
from MOX--there did not seem to be a high degree of enthusiasm.
Mr. Simpson. Did your own red team suggest that there
wouldn't be an issue with trying to sell it, that there would
probably be demand for it, that that wouldn't be an issue?
Secretary Moniz. I would say on neither side. They neither
said that it couldn't be sold, nor did they kind of endorse the
idea that it could easily be sold.
Mr. Simpson. I have to tell you--so they refused to kind of
participate in that question.
Secretary Moniz. Well, it is as you have said; it is hard
to know. I mean, now, what we are saying is we could be talking
2040 before the first fuel is available. So it is a long way
off.
Mr. Simpson. You know, in all honesty, this is what makes
it so hard for us, to hear from legitimate sources two stories
that are totally opposite.
I am not a nuclear engineer; I am a dentist. And here I am
trying to solve some problems, moving forward politically, when
I am hearing different stories from both sides from legitimate
people that I respect on both sides. It is like everybody is
looking at it from their perspective and that is it. Anything
that this side brings up must be just bull, and the same on the
other side.
Consequently, I am sitting here, going, okay, what do we
do? We move forward so that in 2 or 4 or 6 years, when you and
I are having a scotch in the bar wondering what we did while we
were here, the Congress at that time is trying to figure out
how do they move forward.
Secretary Moniz. Well, again, we believe that, again, the
dilute and dispose is a much morestraightforward--technically,
certainly, a much more straightforward path and a much faster one.
Mr. Simpson. Probably cheaper.
Secretary Moniz. Huh?
Mr. Simpson. Probably cheaper.
Secretary Moniz. And a lot cheaper.
Mr. Simpson. But there are questions out there. And while
everybody says, oh, the Russians will go along with this, you
know, you have a lot more confidence in the Russians' agreement
with us than I do.
Secretary Moniz. I have not made that statement, that they
will go along with it. I just think that we need to----
Mr. Simpson. They are disposed to--they are open to it.
Secretary Moniz. We have had very good discussions. They
are open to this discussion. But we have not launched the
process in a formal way, so----
Mr. Simpson. A lot of times, in a discussion with my wife
on something that we disagree on, she is open to a discussion;
it is how much it is going to cost me, and vice versa.
I don't mean to say that. I am in trouble now. I am not
going home this weekend.
Secretary Moniz. I will refrain from commenting on that.
Mr. Simpson. Mr. Secretary, at the United Nations climate
change conference over the summer, the President announced
Mission Innovation, a multiyear plan to double clean energy
research over the next 5 years.
After analyzing how this is proposed to occur, I was
disappointed that Mission Innovation favors the EERE account
when compared to other energy technologies. When comparing
funding classified as Mission Innovation with last year's
enacted level, fossil energy remains relatively flat, nuclear
energy gets a 7-percent cut, domestic fusion gets a 90-percent
cut, and EERE gets a 49-percent increase.
The math doesn't seem to add up. This isn't an ``all-of-
the-above'' initiative. This is another attempt of the
Department to increase EERE accounts. I like EERE. This is not
being critical of EERE, but not at the expense of other basic
science and applied energy research.
If the goal is to double clean energy research and
development, why don't all Mission Innovation funding accounts
receive proportional increases?
Secretary Moniz. Well, obviously, the different accounts
were looked at different ways, but I would emphasize--so if you
take fossil energy--and note, by the way, that, again, it is
not only the fossil energy R&D account that we should be
talking about. There are also roughly $5 billion of tax credits
that I talked about for CCS. So, there are other elements.
There are elements of fossil in ARPA-E. There are elements of
fossil in Science. So it is a much broader picture.
Within the FE account, a major shift was done, I would say,
towards more innovation for new technologies because, frankly,
we kind of took decisions in terms of the large-scale
demonstration projects.
As you know, there is a big shift of funds there with
some--there are some projects going along great, either
operating or close to it. The Air Products project has been
operating for 3 years. They have cut 3 megatons, roughly, of
CO2 underground for EOR. The ADM ethanol project
will be starting up I think in, like, a month time scale. The
Petra Nova coal plant, post-combustion plant, that will be
starting up in--end-of-the-year kind of time scale.
So there are some, but there are others that just didn't
close for whatever reason--HECA and FutureGen. Summit did not
get its funding. So we have reoriented to, for example, in the
budget, proposing to move forward with a set of, you know,
smallish but important pilot projects to look at more novel
capture approaches that may significantly reduce costs, so
really getting into chemical looping, into oxy-combustion, et
cetera. So I think that there is, actually, a heightened focus
on innovation within that budget.
I also just would repeat something that Congresswoman
Kaptur raised, that while it sits in the EERE budget--and maybe
we can discuss how that should be approached--these regional
partnerships are not restricted--our view is that they are not
restricted to EERE subjects.
So I think it is a little bit more nuanced than what you
said, but there is no doubt there is a large increase in the
EERE.
Mr. Simpson. I would tell you, if they are parked within
EERE----
Secretary Moniz. Yeah.
Mr. Simpson [continuing]. And there is no authorizing
legislation for them specifically, then they are subject to the
restraints of EERE.
Secretary Moniz. OK.
Mr. Simpson. There would have to be separate language----
Secretary Moniz. All right. Well, then that would be
something we would love to work with the Committee on. Yeah.
Mr. Simpson. The current initiative in the private sector
called Breakthrough Energy Coalition is being spearheaded by
Bill Gates that you have mentioned to advance the public
research pipeline and commercialization of these energy
research investments.
The Department and the national labs have been trying to
improve technology transfer issues for years. We have talked
about it on this committee as long as I have been on this
committee. How is this a different effort?
The Department has many programs that seek to usher in
technology developments through the difficult process toward
commercialization. How will the Breakthrough Energy Coalition
efforts complement the Department's current commercialization
efforts in the Loan Programs Office and ARPA-E?
Are we just adding a new program on top of things that
already exist within the Department of Energy that we have been
trying to do that aren't working well? If so, why aren't we
transferring out of those into something new?
Secretary Moniz. Well, I think there are two different
issues here, Mr. Chairman.
First, we already discussed a little bit earlier some of
the new approaches with the Office of Technology Transitions
and the Technology Commercialization Fund, which, again, is
something that Congress asked for over 10 years ago that we are
moving.
Now, the Breakthrough Energy Coalition, I really want to
emphasize, of course, it is not governmental in any sense. It
is clearly private investors, in fact, from 10 countries. And
they are certainly not looking just to look at technologies
coming out of the laboratories. I mean, for example, the ARPA-E
track record, I think, is exceptional. They have 36 companies
that have spun out already. Those are not typically--I mean,
some may be, but they are not typically out of the labs. They
are awards that went to universities, to small companies, et
cetera.
And the issue is that we are going to have to up the game.
And part of the Energy Investment Center that we did in the OTT
is about enhancing the transparency and the ability of external
investors to see into what we are doing at the labs--for the
labs specifically.
And I want to emphasize it is not only the Breakthrough
Energy Coalition investors. We are not giving them a
proprietary right to this. I think they are going to be very
active in this. That is kind of the idea. There may be some
joint technology roadmapping exercises. But our job is to
increase the transparency to the entire investment community to
be able to come in and, you know, see what is most promising
and move it out.
Mr. Simpson. OK.
Let's talk about the lab commission results for just a
minute. Last year, at this hearing, we talked about what the
Department is doing to repair what the lab commission deemed a
broken trust between the Department and the national
laboratories. Uneven levels of risk management between DOE
headquarters and field offices was identified as one of the
causes of this broken trust.
Since the lab commission report was published, what has the
Department done to better align oversight activities between
headquarters and field offices? And what about the field
offices and the labs? Do you see areas where this relationship
could be improved?
Secretary Moniz. Certainly. And, of course, one of the
things that we did do was submit (to the Congress), I think it
was just last week, a very detailed response to the CRENEL
commission, I think is the one you are referring to, just as we
had earlier for the Augustine-Mies commission for the NNSA.
I think we are well on our way toward addressing many of
the issues. There are a couple of areas where we have met with
the chairs of the commission and we don't fully agree with the
recommendation, but by and large we do.
I would also note--and I will come back to your question
specifically that in my cover letter for the report I think I
laid out something of what the vision is for the national labs
and the Department relationship.
But I also noted that I think, since the end of the cold
war, there is no doubt that a transactional approach has kind
of grown in, in my view too much, relative to a more kind of
strategic partnership. And I think, as you know, since I have
come to this office, I have been working on that pretty hard,
and I think we have made some real progress. We are not there.
And, also, there are issues of something raised earlier, in
effect, about how transitions occur, and then we see what goes
on. And that is certainly an issue that the lab directors are
very focused on--how do we institutionalize things that have
worked and improved issues.
Now, I think the issue with the field office, of the site
offices, I think there has been some streamlining there,
certainly, in terms of the reporting relationships. When all is
said and done, it depends on the people, to be honest, the
people in the program office, the people in the field, and how
they work with the lab or the site.
So, I think we have streamlined. We have taken areas--
security, for example. Some years back, also in
counterintelligence, which is obviously especially important
for the weapons labs, very, very different reporting
relationships. The NNSA has done a reorganization internally to
give a clearer shot, straight to the senior levels of NNSA for
the labs.
So I think we are working it, and I think it is improving.
But, you know----
Mr. Simpson. OK.
The commission recommended that DOE conduct better
oversight of the indirect cost tools at its national
laboratories--that is, overhead costs of operating
chargedproportionally across the board to all programs, in contrast to
direct programs costs that are directly appropriated by Congress for a
particular purpose, such as funding for a certain kind of energy
research or a construction project. These costs are significant and can
cost over 50 percent of the estimated cost of a particular program, in
many cases.
Do you agree with the commission's findings that the DOE
programs should be tracking the indirect overhead costs of the
labs? And is DOE taking any action at all to establish better
accountability of these costs?
Secretary Moniz. First of all, of course, we do track the
indirect costs. And we had a long discussion, I might say, with
the CRENEL co-chairs about this. This is one area where we are
trying to work through how we respond to that recommendation.
The problem is that, in contrast to universities, in
universities there is kind of a pretty common indirect cost
structure. And, of course, largely, it is because there is a
common auditor for anyplace that has Federal funding. Almost
all universities have one auditor, coming out of HHS. And there
are, from OMB rules, because of the Federal funding there,
specific caps in terms of part of the indirect cost pool, et
cetera.
Now you come to our laboratories and the M&O contract
structure, and the indirect cost structures at different
laboratories are quite different. They do not have the same
structure. And it is not that one is better than the other;
they are just different ways of assigning costs directly or
indirectly. They are all audited, right? But there is no kind
of, one magic number that we can say for all the laboratories.
So we are interested, absolutely interested, in
transparency. I think, as the commission did, we need to at
least break out our evaluations for different groups of
laboratories. Like, the defense labs are different from the
science labs, are different from the energy labs. Even in the
science labs, the multipurpose science labs, like Oak Ridge,
very, very different from a Jefferson Laboratory, single-
purpose laboratory. So we probably need, like, four different
buckets. And we need to find, then, some way of comparing true
costs that go into an indirect cost idea, pool, and bring those
together and be able to present those to the Congress and to
others.
But it is not quite as simple. That is one of the areas
where we said explicitly, look, you know, we can't just take
that as it is. In addition, there are proprietary--because
these are contracts often with a private sector company that is
using its own corporate systems in terms of the accounting
structures in the laboratory. So it is an issue.
Mr. Simpson. OK.
The laboratory commission also recommended that DOE change
its accounting rules for the program, further providing the
LDRD program relief from overhead costs that are charged to
other R&D programs at the labs.
Do you agree with the recommendation to unburden the LDRD
program from paying laboratory overhead costs?
Secretary Moniz. I think the question is--I think usually
it is phrased as--well, the recommendation, I think,
effectively was, like, a 6-percent cap unburdened or maybe an
8-percent cap burdened. It is a question of whether the burden
is in or not and what the number is.
Mr. Simpson. Yeah.
Secretary Moniz. Because what they were recommending is to
have a real 6 percent, especially for the weapons labs, to be
able to spend on program.
Mr. Simpson. Do you make a recommendation in that regard?
Secretary Moniz. No.
Mr. Simpson. Let me----
Secretary Moniz. Well, let me just say that I think the
driver of that recommendation is--because it can be either way.
I mean, you know, either way is fine, I think. But I think
their driver of the critical importance of LDRD I fully
support.
LDRD has just led to tremendous amounts of innovation, new
directions that become important. And, historically, the
weapons labs have needed the higher amount, frankly, often as
part of their recruitment tools. A lot of young people come in,
post-docs, beyond post-docs, through LDRD programs, and then
over time their careers go into, for example, the weapons labs,
the weapons programs.
Mr. Simpson. Right.
By May 2, you are supposed to make a decision that you are
going to continue U.S. participate in ITER. I know it is not
May 2 yet--did I say May 2?
Secretary Moniz. Yes.
Mr. Simpson. I know it is not May 2 yet, so I won't ask for
your recommendation. But we will write our bill before May 2,
so I hope we can have some input from you before then about
what direction you might be heading as we try to put our bill
together probably early next month maybe, hopefully. The
sooner, the better. Because we want to get this bill done. We
would actually like to have you have an appropriation bill by
October 1.
Secretary Moniz. That would be nice.
Mr. Simpson. Novel concept, huh?
Secretary Moniz. That would be good.
Mr. Simpson. Yes.
Other questions?
Secretary Moniz. Well, on that, by the way, Mr. Chairman,
okay, we will stay in touch. I just don't know to what extent
we will have sufficient information in that early April
timeframe. But we will at least touch base on it.
Mr. Simpson. OK.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
I was thinking, Mr. Secretary, as you were testifying, it
is so wonderful to have your new energy at the Department of
Energy. You really do inspire people, including the people at
the Department of Energy and people outside the Department of
Energy.
I can remember former Secretaries who were--maybe they
didn't have your high acuity, but they were ponderous and many
times indecipherable and not very affable. And I think energy
was harmed, the goal of energy independence for the country and
of innovation was harmed. You really do bring a spark to it
that is really refreshing. So thank you.
Now I will ask you some hard questions after that. I am
going to ask you for some ballpark estimates here. For Yucca
Mountain and for MOX, just approximately, how much money was
already spent on those two projects by our government in the
billions? If you want to just total the two of them up for me,
approximately?
Secretary Moniz. MOX I think has been approximately $5
billion.
Ms. Kaptur. OK.
Secretary Moniz. On Yucca, I would have to really look, but
I am guessing--anybody know? 12ish, maybe.
Ms. Kaptur. Something like that.
Secretary Moniz. I would have to get back to you for the
record on that.
Ms. Kaptur. So between $15 and $20 billion.
Secretary Moniz. Well, there remains something--again, I
don't have the numbers at hand. But I think there remains
something like $25 billion in the waste fund. But I think, in
terms of expenditures, again, I will get back, but it is
certainly less than that.
Ms. Kaptur. OK. That is a lot of money.
And let me ask you, on a scale of 1 to 100, for Yucca
Mountain, if you had to lay odds at a betting table that that
would ever materialize, would you want to take a guess on a
scale of 1 to 100? Would you put your chip on any number?
Secretary Moniz. No, but I would say that we continue to
say we think it is unworkable because obviously, there is very,
very strong resistance in the State. And that goes back to the
need for a consent-based process.
And I might say that, of course, in this fiscal year 2017
request, we have asked for an increase in the nuclear waste
arena precisely to get the consent-based process moved to the
next stage.
Ms. Kaptur. And what about MOX? Would you put any chip down
on any number from 1 to 100--100 being yes, it is going to
happen; no, it isn't?
Secretary Moniz. Well, no, I am not going to--again, I am
not going to put a number in, but just to say again that we
believe that for MOX to work we have to have appropriations on
the order of a billion dollars a year for the whole program for
a lot of decades.
And, certainly, in our current budgeting environment, it
is, by demonstration, not feasible. And that is why we went to
the dilute and dispose, which is much less expensive, much
faster. It raises the issue the chairman has raised. I mean,
you know, that is a fact.
Ms. Kaptur. Well, I raise this issue just to raise
consciousness within the Department about the process that we
follow and the amount of dollars that have been expended. I
have never served on a committee where----
Secretary Moniz. Yes.
Ms. Kaptur [continuing]. Anything like this has ever
happened.
Now, let me turn to Portsmouth for a second. And looking
toward the future, could you clarify what your budget request
actually does both in the discretionary and mandatory funding
relative to Portsmouth? What is the goal for Portsmouth?
Secretary Moniz. Well, the goal is, for Portsmouth and
Paducah and finishing Oak Ridge, as well, the goal is to go
through the D&D and be able to, you know, have those sites used
in a different way.
Now, with the proposed budget, we would, if anything,
increase somewhat the D&D at Portsmouth, in particular, by also
moving forward with the disposal cell that we need in addition
to the actual D&D work.
Now, as discussed earlier and the chairman noted, we have
proposed that $674 million be used out of the authorized
mandatory USEC fund, which, again, I repeat, is one of three
funds of relevance to this that are already in the treasury, if
you like, totaling almost $5 billion.
Now, we recognize there is a challenge there. We did offer
an offset for that. It is not one that is universally
applauded. But the reality is, when the fee was stopped some
years back, that was at a time when the actual dimensions of
the cost of cleanup were not known. And now we think we have
got, like, $22 billion to go for the UE D&D. And, now we know
that. And the original principle was that the users of the
service ultimately paid for the cleanup as well.
So, anyway, we are putting that forward. I mean, if there
are other offsets, fine. But, again, that would be about a
quarter-of-a-mil charge. But, clearly, if, as the chairman
suggested, for some reason that were not to be done, then, that
is a big hole that has to be filled somehow.
Ms. Kaptur. Well, I wanted to comment there. You know, if
you were to try to explain to the people who live in the
places, the counties, the highest unemployment counties in
Ohio, what the future of that site is, how simply could one
explain it to them?
And then my second question really is, let's say that--I
mean, everything has a useful life, even human beings, and we
have to face the inevitable. If, in fact, the inevitable has to
be faced at Portsmouth at some point--and we have people that
live there--what thoughts are being given to--I notice that you
have a proposal for another clean energy manufacturing
institute. I don't quite understand what is being done at all
the other ones. But is there something that can be done that is
transformative for the people that are involved there that
might be able to be put in place ahead of time?
Secretary Moniz. Well, so, again, we are using Portsmouth
as an example. First of all, there remains a very substantial
D&D work, which does take a pretty big workforce, and that will
go on for some time.
Now, in terms of alternative--look, with all of our sites,
if we can help with, you know, generating more forward-looking
activities, I mean, you know, that is really great, because
these are communities we have worked with for a long time.
At Portsmouth, one of the obvious possibilities, where we,
again, run into a current resource challenge, is that the
large, specially designed building for the event centrifuge
would remain a place where you would think we would eventually
build a national security--so-called national security train
for enriched uranium.
But, again, it is a few billion dollars to do that. And so,
in the meantime, what we do is--and we have even identified
additional material--is that we use other unobligated materials
to make the nuclear fuel that can be used in a reactor to make
tritium for our weapons program.
But, eventually, we are going to need a domestic U.S.
technology enrichment facility. The ACP is the candidate at
hand. The building is unique in being designed to handle those
huge centrifuges. But, right now, you know, it is deferring it
rather than putting up the several billion dollars to build
that facility.
Ms. Kaptur. I know this isn't in your wheelhouse, but when
I think about our chairman, Mr. Rogers, and all the work he has
done for the Appalachian Regional Commission, I think about the
training that we need for certain types of fields and
professions, and I look at those counties, though I don't
represent them--there is a former mayor of Youngstown,
Williamson I think, that the President appointed, relative to
automotive communities that were bottomed out.
There may be some consortium that can be put together, I am
just suggesting, to kind of look at over the next 3 years, 5
years, 10 years, and the people involved, so that we don't get
the kind of depressed, hopeless scenario that I have seen in so
many other places. So I just wanted to put that on the record.
Secretary Moniz. And as we discussed the other day, I
suggested that we follow through in having the head of our jobs
program----
Ms. Kaptur. Yes.
Secretary Moniz [continuing]. Get together with you to
compare ideas.
Ms. Kaptur. That would be welcome.
Mr. Chairman, I just have a final question on Ukraine,
switching gears here. Ukraine operates 15 reactors at 4 nuclear
power plants, most of which came online before the Chernobyl
disaster. Kiev recently announced it requires an estimated $1.7
billion to extend the life of its fleet of Soviet air and
nuclear power reactors and bring them up to current Western
standards.
Are there any activities in your budget request to support
these goals? Or do you know of any such goals that may be set
by other countries? And how difficult do youbelieve it is going
to be to upgrade their aging nuclear facilities?
Secretary Moniz. To be honest, I can't say I am familiar
with their upgrade needs. We can look into that. Certainly, we
remain involved with Ukraine in terms of their energy security
issues, helping them devise their plans going forward. So I
will check with those people to see if they can answer that
question.
Ms. Kaptur. I would really appreciate it if they could get
back with me.
Secretary Moniz. OK.
One of the things that we did do, which was not a money
issue, we kind of helped to facilitate having Westinghouse do
fuel for those Soviet-era reactors. So Westinghouse has now
done some fueling for those reactors.
Ms. Kaptur. Thank you, Mr. Secretary.
Thanks, Mr. Chairman.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. Mr. Chairman, thank you.
Mr. Secretary, quickly, I know we are running short on
time, but just in terms of the vision for distributed energy--
you talked about this earlier a bit. But in terms of the real
microscale, the homeowner, if you will, on the horizon, because
of the increasing efficiency in battery technology and the fall
in prices and, I assume, the expanding expertise, such as in
the installation of solar, are we seeing a rapid move--or do
you anticipate a rapid move toward a rethinking of the entire
energy infrastructure in the country so that, down to the micro
level, the homeowner, in effect, becomes an energy farm?
Now, earlier this year, I lost an air conditioning unit.
There was a mouse in it. I called a technician. He replaced the
capacitor. The thing started to smoke--the air conditioner, not
the mouse.
But what this led me to was a long process by which I
installed geothermal in the house. That was made possible, of
course, by tax credits, low-interest loan program, rebates from
the local electric company, and the----
Secretary Moniz. A heat pump?
Mr. Fortenberry. Geothermal.
Secretary Moniz. Geothermal heat pump.
Mr. Fortenberry. Yes. So, glad to do it. The return on
that, if you discount the cost of the air conditioner, probably
the payback period is minimally 6 years, maximally 10 years.
Now, I have the ability to do that. Again, this is
complicated, though, and it takes up resources as well. But it
is--I purposefully did it because I wanted to move my own
personal home in that direction. What do you see on the horizon
on this regard?
Secretary Moniz. Frankly, I think very much what you said.
I think that storage at various scales, from the grid to the
endpoint, to the consumer, I think, is going to come faster
than people think. And that is pretty transformative.
Mr. Fortenberry. Is that just battery?
Secretary Moniz. Yeah, I am thinking battery. Yes. It could
be other things, but battery.
And I think one of the huge challenges is--we are seeing it
with solar and net metering, but a broader issue is that, as
the technology enables much more of this distributed
generation, much more efficiency, much less demand, et cetera,
there is a very fundamental utility business model of the
future----
Mr. Fortenberry. Oh, I have heard about it. I mean, there
are legacy costs here that are huge that are still being
carried over forward in the future, and the transition is
difficult.
Secretary Moniz. Right. And then they will be distributed
generators who are still grid-connected. Then there will be
those who go off the grid. And how do you then allocate the
fixed costs for the system.
So I think we have interesting technology challenges, but
the technology solutions are going to lead to other kinds of
challenges. And they are already. We are seeing the beginning
of it.
Mr. Fortenberry. Yes.
I am going to yield to my colleague Mr. Fleischmann. I
think he has one final question.
Mr. Fleischmann. Thank you.
Mr. Fortenberry. Is that all right, Mr. Chairman?
Mr. Fleischmann. Thank you.
Mr. Secretary, on an interesting different subject, as you
know, I am a vocal advocate in the fight against cancer. I lost
my mother at a very early age. As part of the privilege of
being on the full Appropriations Committee, I also sit on the
Labor, Education, Health and Human Services Subcommittee, which
funds NIH. And I got to thinking the other day, with the
administration's Cancer MoonShot initiative, perhaps a role for
the Department of Energy, not exclusive to our great
supercomputing research and availability, but inclusive of
that.
Does the Department of Energy see a role in the fight
against cancer in the MoonShot initiative, sir?
Secretary Moniz. Yes, indeed. And sorry to hear about your
mother. But we think we can make a big push on this cancer
initiative, and we think DOE can have a very important role.
Let me make a few points, if I may.
First of all, that has been recognized in the
administration, as I am one the Cabinet members on the Vice
President's group OK?
Mr. Fleischmann. Thank you.
Second, long before the Cancer MoonShot--well, not long
before; it depends. Last June, let's say, Mr. Lowy, the acting
director of the National Cancer Institute, came to see us,
asking for our help. And the driver was principally
computation, because cancer is a big data issue.
So we, with some of the labs and some of the NIH people,
put together, at the end of the year roughly, three small pilot
programs that addressed different parts of the cancer issue
that we want to go and execute, frankly, as part of our normal
business.
Let me emphasize--because mission issues always come up.
Let me emphasize: Radiation, biology, and cancer has been part
of the Department of Energy's work since the Atomic Energy
Commission because of the issues of radiation from nuclear
tests, et cetera, and nuclear stuff. The Genome Project, in
some sense, evolved from that history, using our special
capacities.
So, in that context, we are putting together a concept that
will marry unguided machine learning at very large scale, at
peta scale, with big data analytics and the modeling and
simulation capacity that has always been a distinguishing
feature at the labs. And those three tools will come together
in looking at the cancer issue.
What is interesting is our computer guys are excited,
because the cancer problem is going to lead to different kinds
of questions and architectures in addressing the cancer problem
that they think will ultimately help on the weapons program. So
it is kind of interesting.
But the answer is yes.
Mr. Fleischmann. Thank you. I wish you the best in those
endeavors, sir.
Secretary Moniz. Thank you.
Mr. Fleischmann. Mr. Chairman, I yield back.
Mr. Simpson. Thank you, Mr. Secretary. We appreciate you
being here today and taking such an extraordinary amount of
time with the committee and answering our questions. We look
forward to working with you to meet the challenges we face in
this budget so that we can put together a budget that will move
the Department of Energy forward.
Thank you. The hearing is adjourned.
[Whereupon, at 12:28 p.m., the subcommittee was adjourned.]
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