[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR 2016
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST 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
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PART 6
DEPARTMENT OF ENERGY
Page
Environmental Management...................................... 1
Nuclear Regulatory Commission................................. 101
Applied Energy Funding........................................ 153
Office of Science............................................. 300
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Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PUBLISHING OFFICE
96-876 WASHINGTON : 2015
COMMITTEE ON APPROPRIATIONS
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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 APPROPRIATIONS FOR 2016
__________
Wednesday, March 18, 2015.
DEPARTMENT OF ENERGY--ENVIRONMENTAL MANAGEMENT
WITNESSES
DAVID KLAUS, DEPUTY UNDER SECRETARY, MANAGEMENT AND PERFORMANCE,
DEPARTMENT OF ENERGY
MARK WHITNEY, ACTING ASSISTANT SECRETARY, ENVIRONMENTAL MANAGEMENT,
DEPARTMENT OF ENERGY
Mr. Simpson. I would like to call this hearing to order.
Good morning, everyone. We are just a few minutes late, but we
have before us today David Klaus, the Deputy Under Secretary
for Management and Performance, and Mark Whitney, the Acting
Assistant Secretary for Environmental Management. This is the
first time for both of you to have testified before this
subcommittee and we appreciate your being here today.
While the subject of this hearing is the budget request for
the Office of Environmental Management, this hearing will also
provide members of the subcommittee an opportunity to discuss
issues of management and performance on a department-wide
basis.
The budget request for the Office of Environmental
Management totals $5.8 billion, $63.8 million or 1.1 percent
below the fiscal year 2015 inactive level. I do not include in
those figures the $472 million requested for the federal
contribution into the Uranium Enrichment Decontamination and
Decommissioning Fund. The budget request incorrectly counted
this contribution as part of the Defense Environmental Cleanup
Appropriation, though the Congress directed how to account for
these costs in a transparent manner in the fiscal year 2015
act. Continuing to count these funds as part of the funding for
the Defense Environmental Cleanup creates confusion and makes
the overall funding levels provided en mass to the overall
funding levels provided to those sites.
The Department of Energy is facing some very difficult
challenges in its cleanup program this year. Transuranic waste
programs are essentially running in place or were stopped
altogether following the shutdown of the Waste Isolation Pilot
Plant. While the department has set ambitious goals to get that
facility operating for fiscal year 2016, there are significant
hurdles to overcome to meet this timeline. Meanwhile, relations
with many of the states are at an all-time low as milestones
previously promised will no longer be met.
The path to resolution is unclear and funding will not be
available to make up for the department's management and
performance failures. Fortunately, there have been modest gains
in project management and project management has been a focus
area for this Secretary. Nevertheless, whether these efforts
will lead to demonstrable improvements in performance is
unclear. Of the 29 projects in the $52 billion project
portfolio managed by the Office of Environmental Management,
nine of those projects, estimated to cost $20.7 billion to
complete, are considered in the red and will not be completed
within current estimates.
Restoring confidence in the department's ability to deliver
on its commitments will be necessary before progress can be
made on renegotiating the numerous cleanup agreements that must
be modified over the next several years.
Please ensure that the hearing record, responses to the
questions for the record, and any supporting information
requested by the subcommittee are delivered in final form to us
no later than four weeks from the time you receive them. I also
ask members to submit any additional questions for the record
to the subcommittee by close of business tomorrow.
With those opening comments, I would like to yield to
today's ranking member, Mr. Honda from California.
Mr. Honda. Thank you, Mr. Chairman. Ranking member Kaptur
is unable to be here at the moment so, Mr. Chairman, I ask
unanimous consent that her opening statement be entered into
the record.
Mr. Simpson. Without objection.
Mr. Honda. Environmental Management has the important job
of cleaning up the environmental impacts of over five decades
of nuclear weapons development and nuclear energy research and
I believe we have some cleanup still to be done in and around
Lawrence Livermore National Lab in California. So I look
forward to your testimony about your budget proposal and
requested plans for 2016 and to our discussion to follow. And
before I yield back, I just want to say good seeing you again,
David.
Mr. Klaus. All right, good to see you.
Mr. Honda. Thank you.
Mr. Simpson. Thank you. David, the floor is yours.
Mr. Klaus. Thank you, Chairman Simpson, Congressman Honda,
and members of the subcommittee to come. I appreciate the
opportunity to appear before you today to discuss elements of
the Department of Energy's fiscal year 2016 budget request and
the efforts of the Office of the Under Secretary for Management
and Performance.
Since the onset on his tenure, Secretary Moniz has made
clear that the department must renew its focus on improving
management and performance in order to address the many
challenges presented by the department's portfolio. For that
reason, in July of 2013 the Secretary implemented a top-level
reorganization, a primary aspect of which was the establishment
of the Office of Under Secretary for Management and Performance
to focus on having the department operate more as an enterprise
rather than a collection of silos, which some have previously
described the way in which the department operates. The
reorganization also aimed to improve project management and
increase the efficiency and effectiveness of mission-support
functions across the department.
Consolidating mission-support functions in the Office of
the Under Secretary for Management and Performance establishes
a senior policy official dedicated to the task of management
improvement on a full-time basis. The continuing goal is to
institute enterprise-wide solutions to common challenges faced
by programs across the complex such as information management,
acquisition, and human resources. Specific examples of key
management initiatives undertaken by this office since it was
established are included in my full statement.
Separately, moving the Office of Environmental Management
under the purview of the Under Secretary for Management and
Performance brings the department's strongest project
management capabilities, resident in the Office of Acquisition
and Project Management, directly to bear on the department's
most complexing yet vital challenges in project management.
The fiscal year 2016 budget provides $6.4 billion for
programs within the Office of the Under Secretary for
Management and Performance. Given the subject of this hearing,
the balance of my testimony focuses primarily on project
management principles and major projects within the Office of
Environmental Management. My colleague, Mark Whitney, the
Acting Assistant Secretary for Environmental Management, will
focus on the specifics of the budget for environmental
management.
The portfolio of large projects undertaken by the
Department of Energy is not only unique from other projects in
the public and private sector, but with few exceptions, each of
these projects is unique from other departmental projects.
These diverse, one-of-a-kind projects present uncommon
challenges. In light of these challenges, the department has
struggled with project and contract management with too many
projects going over budget and taking longer than originally
planned.
To meet the challenges associated with project management,
changes are being instituted to improve the department's
performance on major projects across the agency. In addition to
the aforementioned reorganization to create the Office of Under
Secretary for Management and Performance, the Secretary
recently initiated a multi-faceted program to improve project
management, including strengthening the Energy System's
Acquisition Advisory Board, establishing a Project Management
Risk Committee, and improving the peer review process. The
department, led by the Project Management Risk Committee, is
also exploring other actions that can improve project
management.
For projects within the Office of Environment Management,
we are strengthening the project review and assessment
function, which will bring greater focus and discipline to the
major projects in this program, including the waste treatment
project at Hanford, the salt waste processing project at
Savannah River, as well as numerous smaller cleanup projects
across the complex.
Ultimately, though, the key is execution. The reforms that
Secretary Moniz is putting in place are designed to emphasize
continuous improvement in our contract and project management
by, for example, requiring detailed upfront planning before a
shovel hits the ground, ensuring that federal project directors
and contracting officers are well trained and certified,
improving our cost estimating capabilities, conducting more
frequent and better project reviews, selecting proper contract
types, and tying fees to final outcomes.
As public servants we have a solemn responsibility to be
accountable stewards of the taxpayer dollars. The reforms and
processes we are instituting at the Department of Energy with
respect to project management are critical to ensuring that we
meet this responsibility.
In closing, a primary aim of the Office of Under Secretary
for Management and Performance is to serve as a pivotal point
where operations, accountability, evaluation, and sound
management come together. This responsibility is heavily
motivated by the environmental cleanup obligations of the
department. With this in mind, the fiscal year 2016 budget
request supports clear, discreet progress in the cleanup of the
environmental legacy of the Cold War. The department will
continue to strive to institute improved and lasting project
management processes and standards. More importantly, the
department is committed to conducting the environmental cleanup
within a framework that integrates worker and community safety,
regulatory requirements, and best business practices.
Mr. Chairman and members of the subcommittee, that
concludes my statement. I would be pleased to answer any
questions you may have.
Mr. Simpson. Thank you. Mr. Whitney.
Mr. Whitney. Good morning, Chairman Simpson and Congressman
Honda. I'm pleased to be here today to represent the Department
of Energy's Office of Environmental Management and to discuss
with you the achievements that the program has achieved and
accomplishments that we anticipate under the President's fiscal
year 2016 budget request.
Our request for $5.818 billion will allow the EM program to
continue the safe cleanup of environmental legacy brought about
by five decades of nuclear weapons development and government-
sponsored nuclear energy research. The request includes $5.055
billion for Defense environmental cleanup activities and as you
noted, Chairman, an additional $472 million for the Defense
contribution to the Uranium Enrichment Decontamination and
Decommissioning Fund. The request also includes a total $542
million for the Uranium Enrichment Decontamination and
Decommissioning cleanup activities, and $220 million for non-
Defense environmental cleanup activities.
EM continues to pursue its cleanup objectives safely within
a framework of regulatory compliance commitments and best
business practices. The rationale for cleanup prioritization is
based on achieving the highest risk-reduction benefit. Most
importantly, EM will continue to discharge its responsibilities
by conducting cleanup within a safety-first culture that
integrates environmental, safety, and health requirements and
controls into all of our work activities. This ensures
protection for the workers, the public, and the environment.
We continue to make cleanup progress. We have produced
nearly 4,200 canisters of vitrified high-level waste at the
Savannah River site in South Carolina and at West Valley in New
York. Converting it to a solid glass form safe for long-term
storage and permanent disposal. This is about half of the
entire sludge at the Savannah River site in the Savannah River
site tanks.
We converted and packaged additionally over 19,600 tons of
depleted uranium hexafluoride for permanent and final
disposition at Portsmouth. At Hanford we have completed cleanup
of the bulk of the river corridor, including more than 500
facilities and 1,000 remediation sites. At Oak Ridge we are on
track to complete preliminary design for the Outfall 200
Mercury Treatment Facility and that will be complete by the end
of this fiscal year.
The fiscal year 2016 budget request will allow us to
continue to make significant progress in our ongoing cleanup
priorities of liquid tank waste treatment and recovery of the
Waste Isolation Pilot Plant. For example, at the Idaho National
Laboratory the request supports operations of the integrated
waste treatment unit in preparing for cleaning and grouting
activities to support final closure of the final four tanks
there. The request will support high-level waste tank progress
at the Savannah River site with planned production of
approximately 130 canisters of vitrified waste derived from
tanks and processed at the Defense Waste Processing Facility.
In addition, the request will support completion of
construction of the Salt Waste Processing Facility at the
Savannah River site in 2016.
The fiscal year 2016 request will also allow us to expedite
tank waste treatment at the Office of River Protection at
Hanford through the direct feed low-activity waste approach, by
continuing design of the low-activity waste pretreatment
system, and continuing construction of a low-activity waste
facility, the analytical laboratory, to balance the facilities
all in the waste treatment plant.
The fiscal year 2016 request provides funding in accordance
with the Waste Isolation Pilot Plant recovery plan. There are,
of course, many sites around the EM complex that have TRU
waste, transuranic waste, that is planned for disposal at the
Waste Isolation Pilot Plant. With that said, resumption of WIPP
operation remains a high priority and we will resume waste
operations and waste emplacement activities in fiscal year
2016.
Building on the successful demolition of K-25 in Oak Ridge,
the fiscal year 2016 request supports demolition activities of
the K-27 facility, the last remaining gaseous diffusion plant
process facility at the East Tennessee Technology Park in Oak
Ridge. The request also allows for continued planning and
design of the Outfall 200 Mercury Treatment Facility there.
The request also completes major facility cleanout and
demolition projects, including a plutonium finishing plant at
Hanford.
Lastly, but certainly not least, the fiscal year 2016
request will also EM to address key infrastructure needs across
the complex, especially upgrades to the firewater system and
replacement windows in the B hot cell at the Savannah River
National Laboratory.
In closing I am honored to be here today representing the
Office of Environmental Management. We are committed to
achieving our mission and will continue to apply innovative
environmental cleanup strategies to complete work safely and
efficiently, thereby demonstrating value to the American
taxpayer. Thank you, and I would be pleased to answer any
questions you may have.
Mr. Simpson. Thank you, and thank you both for being here
again today. As you can tell, there are a variety of hearings
going on in almost every subcommittee. I am supposed to also be
at the Interior subcommittee and at the Labor HHS subcommittee
and I cannot, obviously, be in three places. Members have those
obligations for a variety of subcommittees, but the EM program
in the Department of Energy is obviously a very important
program and completing the work to clean up the legacy of the
nuclear past is vitally important if nuclear energy is going to
be a part of the future frankly.
Mr. Klaus, you lead the Office of Performance Management,
which was established by the Secretary not long after he was
confirmed. Can you explain your role with respect to overseeing
project contract management at the Department of Energy, as
well as your responsibilities for the Office of Environmental
Management? Is it business as usual within the department or
are the Secretary's organizational reforms changing the way the
department does business? What do you believe to be the root
cause of the department's continued struggle to execute its
large capital projects? What is the department doing to get off
the GAO's high-risk list entirely? What are you doing
specifically to change the way the department is executing EM
projects?
Mr. Klaus. Well, I guess just one note with regard to the
high-risk list. We are pleased that when we were first on the
high-risk list, it was for all projects. And then as of about
two years ago, we were removed from the high-risk list for
projects under $750 million on which we are making better
progress. We also are working hard within the department and
particularly within Environmental Management to break down the
larger projects into smaller projects where we have
demonstrated greater success. So instead of having one major
contract that covers a large number of different elements of a
particular cleanup, we have ``chunked'' it down so that we can
work on discreet projects and have greater success on those.
With regard to the Secretary's project management
initiatives, one of the things that he has done is to focus on
accountability and, frankly, execution and discipline. From the
standpoint of accountability, one of the things that we
recognize is that not all projects had what we now refer to as
a ``project owner''. The project owner is an official within
the department who brings together responsibility for the
project, but also the budget and the ability to identify where
those funds are. So we have now identified project owners for
each of these projects. In fact, Mr. Whitney is the project
owner for many of the major projects because he brings together
both the budget responsibility, but also the ability to execute
on those projects. And that is where we are trying to focus the
accountability.
A second aspect is better discipline. We have strengthened
our independent review capability or are in the process of
strengthening our independent review capability. We also
established a project management risk committee. That project
management risk committee is comprised of our best experts in
project management from across the department. So, for example,
we have the lead project manager from NNSA, the Office of
Science, the Office of Environmental Management, and the
experts from the Office of Acquisition and Project Management.
That group meets as a committee to review projects from each of
the different areas. The Committee was recently established and
the first project that it reviewed was the low-level activity
waste project at WTP. This project was about to reach critical
decision 1 from the standpoint of whether it was ready to go,
whether the technology was mature, whether we had the
appropriate contract managers and officials in place, and
whether the contract structure was right. That review took
place over two or three different meetings of the Committee and
really put the officials who are managing that project on the
spot to answer those key questions. The goal is to make sure
that when that decision came forward on whether we were ready
to go to critical decision 1 that it reflected the best input,
knowledge and cross-departmental expertise. We are doing that
on an ongoing basis with projects across Environmental
Management and, frankly, across the entire department.
Mr. Simpson. Speaking of contract management, the Office of
Environmental Management has been adjusting its contracting
strategies to shift more risk for performance to its
contractors. EM tried to do this with its renegotiation of the
contract for the Salt Waste Processing Facility, but the
contractor would not agree to modify the current contract for
what they viewed as unfavorable terms. Now DOE is left with an
outdated contract and few mechanisms for keeping the project on
track.
In contrast, EM was successful in negotiating a contract
change to cap federal costs at the Separations Process Research
Unit in New York and progress at that site has been proceeding
at a snail's pace since the cost cap was reached several years
ago.
EM has proposed a similar contracting model for the award
of the EM contract in Idaho, but has met with significant
industry pushback. What do you hope to accomplish through the
use of the cost-cap contracting model? Do you believe that the
department got the outcome it was hoping for at SPRU? Is it
really a contract model for success, or are there alternative
contracting reforms you are considering? And when you get to
the point where a contractor has repeatedly failed under this
contracting model, what are the government's options at SPRU?
At what point does the department take responsibility for
completing the cleanup in a timely manner? And what have you
learned from these experiences with this contracting model?
Mr. Whitney. Do you want me to start?
Mr. Klaus. Why don't you start, sure.
Mr. Whitney. Okay. Thank you Chairman Simpson. Yes, I think
one thing I would like to point out is the recent request for
proposal that was released Friday for the Idaho Corps Clean Up
Project. That did not have a cost cap. I think each project,
each scope of work needs to be treated differently, and
different types of contracts need to be used depending on the
type of work, if it is a discrete project, very discrete
activities, discrete scope of work. You can use one type of
contract that might have more of a fixed cost or a fixed unit
rate associated with it, but there are other projects that have
less certainty and perhaps more risk, those are not appropriate
for. The RFP that came out for the Idaho Clean Up Contract on
Friday did not have the cost cap and, but I do think that our
intent is to balance the risk and the rewards between the
taxpayers and the contractors doing the work. And so we share
in the risk and we allow the contractors to share in the
rewards when the job is performed well. And so we are
continuing to learn how to best structure these. As new
contracts, we have several new contracts coming up within the
next few years and we will try to continue to find the right
balance to achieve that.
Mr. Simpson. One of the challenges I guess is to make sure,
or ensure that when we do a bid, we have a sufficient number of
bidders to make it a true bid. And that was kind of the
challenge at the Idaho, when they were originally talking about
it before you made the changes to the RFP that came out on
Friday. Are you finding that we have a sufficient contract
bidding under this model that we are moving towards I guess?
Mr. Whitney. I think to date we would say that we have had
a level of competition that we are comfortable with that gives
the government and the taxpayer the best value and for the
Idaho contract of course, we have had a lot of discussion. And
one of the reasons that we engage so much with industry, when
we came out initially with draft information on the proposed
contract, and then with the draft request for proposals in
December, was to get their feedback. And so we have spent a lot
of time meeting with them, doing site tours, doing individual
sessions, to try to understand what the contract terms would
mean for that competition in ensuring that we have a level of
competition. And so with the release of the RFP this past
Friday, and the proposals anticipated within the next 60 days,
we hope that the final RFP is structured in a way to encourage
as much competition as possible. Because you are right, we
think that is how you get value for the government, the more
competition the better.
Mr. Simpson. What do you do, like in SPRU, where the cost
cap is met and the activity is essentially slowed down? What
options does the department have?
Mr. Whitney. On SPRU, we negotiated with the contractor and
it was a bilateral agreement to cap the government's cost at
145 million dollars. There were some mistakes made, quite
frankly, by the contractor, that contribute to the situation we
are in right now with the project not being complete and us
having exceeded that 145 million dollars. The contractor has
accepted that responsibility, is moving forward with the
project. I understand they are probably spending about three
million dollars a month to complete the clean-up of the
project. It is not going to be complete on the schedule that we
would like but we think we have protected taxpayer interests on
the cost and we will continue to work with the contractor. And
that clean up job at SPRU is important for us and we are still
committed to completing that, working with the contractor
there.
Mr. Simpson. Okay. The largest increase in the EM budget
request is for the Office of River Protection, which is
requested at 1.4 billion, or 202 million over the fiscal year
2015 level. Part of this increase is to support modifications
to the waste treatment plant consistent with the Department's
new framework agreement, even though the funds requested for
the WTP line itself is flat at 690 million. It has been three
years since the subcommittee first directed the department to
re-baseline the WTP project. That still has not happened. Why
should Congress dedicate an even greater portion of overall
clean up funds to advance WTP before a performance baseline is
established?
Mr. Whitney. Thank you. Thank you for acknowledging also
the department's new approach. I think under this new approach,
which we have proposed to modify the consent decree with the
State of Washington, we are trying to achieve a treatment of
tank waste as soon as reasonably possible, as early as 2022,
and that is through the direct feed activity waste approach.
And Mr. Klaus mentioned that low activity waste pretreatment
system which is a critical component for that and our funding
for that in the FY16 budget as well. The low activity waste
makes up about 90 percent of the waste in those tanks and we
admit that we of course have had technical issues with the high
level waste portion of the project and the pretreatment system,
and we need to work through those. Until we are able to work
through those technical issues and we have a technical issue
resolution project ongoing, and we anticipate that concluding
in FY16, perhaps into FY17, only then will we understand
completely the schedule and the cost associated with the
project. We are continuing to move forward. We think this is
the right approach, to one, start treating waste as soon as
possible, two, once we have resolved the technical issues
associated with the other facilities and the waste treatment
plant, we will have a basis with treating the low activity
waste that will help us as we learn lessons in that process,
and feed into the high level waste mission as well. So we feel
like this is the right approach. We feel like it is a sound
approach. We do not have the same technical issues with the low
activity waste approach as we do with the high level waste
approach.
Mr. Simpson. So is it the technical issues that you have
got to resolve that have kept you from re-baselining the
project?
Mr. Whitney. Yes, sir.
Mr. Simpson. Basically. Okay, Mr. Honda.
Mr. Honda. Thank you, Mr. Chairman and thank you for being
here. Sounds like you got a job that is virtually almost
impossible. And I wanted to ask a question about the thing you
call root cause analysis and it sounds like it is a process by
which you go back to the get go and try to figure out what
happened and how it can be, how some of the mistakes can be
avoided and what lessons are learned. Could you explain a
little bit about the root cause analysis and help me understand
its application on the kinds of projects that you are working
on and the projects that we are working, I guess you could
start out by saying these projects were required or came about
because, and then go from there.
Mr. Klaus. The root cause analysis with regard to project
management really took place and was initiated in conjunction
with being put on the GAO high risk list--we did a substantial
root cause analysis of our entire project management system and
what we tried to do is identify why it is that we were missing
schedules, why we were going over budget and what mistakes we
were making. I think we have instituted a number of changes.
One of the ones that I mentioned earlier was that instead of
doing a single large contract that covers five or six different
types of clean-up activities in a particular site, we issue
five contracts, where we have a much more definable scope of
work where we can define what the risks are, that we can as Mr.
Whitney suggested, where if we can really define what the risk
is and what the scope of work is, identify where we can do it
on a fixed fee contract or one that really minimizes the risk
to the government by putting the responsibility to implement
that on the contractor insofar as they have the ability to
perform. The Secretary's project management reforms build on
that initiative. One of the lessons we learned when we went
back is that we discovered we were getting pressed by, frankly,
regulatory requirements or pressure from, ``why are you not
cleaning up this site now.'' When asked why are you not moving
forward, we would rush to start building a project before we
had fully reached design maturity. And that would cause us to
go back and then re-do some work or restructure issues, et
cetera. So one of the things that the Secretary's project
management reforms do is reinforce the discipline that we have
on making sure that we do not start digging before we are
really ready to do it and that we have broken contracts out in
discrete ways in which we can. And as I said, we have made sure
that we provide training and certification to all of our
project managers. We have actually reached a point where 100
percent of our major project managers are certified at
appropriate levels. So we have really moved forward in terms of
doing that.
With regard to why we moved forward on those projects, you
know we are dealing with the legacy waste of the atomic weapons
complex. The nuclear weapons program moved forward for 50 to 60
years and left a residue of cleanup challenges that are going
to take us 30 or 40, or if not more, years to clean up. They
were very focused on meeting the mission and basically put, in
many instances, for example, in Washington, at Hanford, they
put the waste into tanks, saying we will deal with that later.
Well, later is now. And that is what drives our requirement to
move forward on those cleanups and make sure we prioritize them
so we deal with the risky ones first and protect the
environment and protect the public that surrounds our sites.
Mr. Honda. Someone through the Chair, then what I gather is
that at one point in our history we had initiatives of
developing nuclear power, nuclear weapons, and other kinds of
activities around this country in certain places, and we went
forward without really thinking of its total future impact. We
just did not know enough about it then probably, and now, from
hindsight, we understand what it is that we left behind with
what kind of problems that we caused. So this is really an
effort by the government to clean up the kinds of messes that
we have created and in doing so, we provided sufficient funding
to be able to do this in a timely manner so that you are not
caught up in a lot of litigation or a lot of pressures coming
from the outside rather than being internal pressures.
Mr. Whitney. Want me to take it?
Mr. Klaus. Well, I will take a quick bite at it. I think
folks have--I think the estimates that I have seen are that We
probably have somewhere between a 190 and 220 billion dollars'
worth of clean up effort to go forward. Congress and the
administration have identified that you can only tackle that
in, I guess at this point our proposal is a 5.8 billion dollar
bite at a time. It is a long term challenge. I think we are
going to be at this a while. And we have made enormous
progress. I mean, I do not want to--at one point we had 107
sites that we were cleaning up. We are down to 16. At one point
we had 3000 square miles of area that had potential
contamination. We are down to about 250 square miles of
contamination. That is not small. And the challenges that are
left are in many respects those we find to be the toughest
challenges. But I think it is really a question of how we as a
country are tackling the legacy of the nuclear weapons system
that we built for protecting the national security of this
country, going back to World War II. We started this with the
Manhattan Project and from that point forward, that is kind of
how we got there.
Mr. Honda. Thank you Mr. Chairman.
Mr. Simpson. And I would just say, along the very lines
that Mr. Honda was talking about, the science changes also. In
Idaho we dug trenches and they buried nuclear waste in the
trenches because earth is a great barrier. We found out that
probably was not the best thing to do, but at the time it was
the best thing that we thought. And things change over time and
I am certain that as we sit here today, there are things that
fifty years ago, or that fifty years from now, we will look at
and go, yeah, maybe that was not the best thing to do. But at
the time, you have to do and go with the best knowledge you
have and the best science that you have. So that is not only
true in this arena, it is true in every arena we deal with. So
that does create challenges. And even if we could put the 220
billion dollars this year all appropriated, you still could not
clean it up this year. I mean, some of this is long term stuff.
The challenge that you really face, a lot of the challenge you
face, is a lot of this is new stuff. And while it sounds like I
am being very critical of the department and I do want you to
get off the high risk and all that kind of stuff, a lot of
these things are the first time they have ever been built or
designed and they present unique challenges. If I ask the Army
Corps to go build a dam, they have built a lot of dams. They
can pretty much tell me what it is going to cost to build that
dam. This is a little different. So while we are critical, and
we want to hold your feet to the fire as we have tried to do in
this committee to make sure that we are getting the best buck
for the taxpayer, I am sure you want to do the same thing. And
we do want to, as I said, we do want to clean this up, because
if we do not, there will not be a nuclear future in this
country. That is just the reality. Mr. Fleischmann.
Mr. Fleischmann. Thank you Mr. Chairman. I appreciate your
comments. Mr. Klaus, good to see you this morning. Mark it is
always great to see you. I do want, for the record to say I am
the chairman now of the nuclear clean up caucus and I cherish
that position and Mr. Whitney, I appreciate your being at our
inception meeting and I know our great chairman is also a
member of that caucus as we can come together in a bipartisan,
in a nonpartisan way, to clean up these nuclear legacy sites,
particularly all across the nation, but we have a particular
problem as you all well known in Oak Ridge. Mark, you know our
site well. If East Tennessee Technology Park, ETTP, is only
funded at the President's budget request level, what will be
the impacts to the ETTP D&D work?
Mr. Whitney. Thank you Congressman Fleischmann. The budget
request for Oak Ridge is 366 million dollars and I believe with
that request, and really building off the tremendous momentum
that we have at that site and the great work that the team
there has done, building off of the K-25 demolition project
success just last year, moving straight into K-31, that
demolition project will be complete in the very near future and
we will be able to move right into K-27 and begin the
demolition of that. I do not anticipate we will necessarily be
able to finish the demolition of K-27 in FY16 but we will be
well on our way. And that as I noted, in my opening statement
is the gaseous diffusion plant process building at ETTP, and
that will be a significant milestone, not just for Oak Ridge,
but for the EM clean-up program.
Mr. Fleischmann. Okay, thank you sir, now, at that 366
billion level though, I have heard that there is potentially a
high number of layoffs. Could you speak to that?
Mr. Whitney. I do not have the data on that. Of course we
will, when we provide funding guidance to the contractors and
they will prepare analysis and provide us the impacts of the
funding guidance, we will be able to address that, and I will
certainly be happy to come back and talk to you about that when
we have that information.
Mr. Fleischmann. Sure, because as you can understand, one
of our missions of course, is to protect our workers that do
such a tremendous job there in this clean up mission. My
understanding is also that the TRU waste processing center
would be impacted with an expected shortfall of 3 million
dollars in funding required to maintain facility work at ORNL
in Y12. Including the layoff of approximately 30, possibly 30
full time equivalent workers, is that your understanding as
well sir?
Mr. Whitney. That is not my understanding at this point.
The TRU waste processing center, of course we are recompeting
that contract right now. And so a lot will depend on how that
contract, how we end up structuring the final contract, the
winning proposer and what the price tag associated with that
work is. And again, on that one, I will certainly of course
come back and talk to you when we have more information
associated with that.
Mr. Fleischmann. Appreciate that. And my final question
sir, it is my understanding that the L Basin at Savannah River
is at storage capacity for spent HIFER fuel and rapidly
approaching capacity for other nuclear fuel. I am concerned
that the H Canyon funding is not adequate to meet current
reprocessing needs. Have your plans for reprocessing spent fuel
changed? Do you anticipate any future storage costs or delays
in being able to receive shipments? And what impact, sir, if
any, will there be to Oak Ridge considering L Basin is at
storage capacity for the HIFER cores?
Mr. Whitney. Yes, the L Basin right now, has 120 of the
HFIR cores, and in order to receive additional cores from HFIR,
we would need to create additional space, re-rack or install
additional racks in L Basin. We, of course, have been working
very closely with our colleagues in Office of Science, and at
the Oakridge National Laboratory in the Federal Officer there
as well, to understand their timeframe.
Right now it looks like, you know, their onsite storage at
HFIR for their fuel, for their spent fuel, would probably be
exhausted later this decade or early next decade. We are
continuing to work with them, have had detailed discussions. We
certainly want to make the EM assets available to other
programs, to support their missions, and part of that is
understanding the incremental costs associated with processing
the fuel in H Canyon, so we are working through those thing
with Office of Science right now, and I suspect that ultimately
that will not be an issue.
Mr. Fleischmann. Well, again, Mark, I want to thank you for
your commitment to clean up. That is my steadfast commitment as
well, and I look forward to working with your office, so that
we can ultimately tackle this problem, which is national
problem. And I thank you. And Mr. Chairman, I yield back.
Mr. Simpson. Thank you. And before I turn to Mr.
Fortenberry, let me must follow up for a second and ask a
question on the line of questioning that Mr. Fleischmann was
asking. When you put together your budget, do you do an
analysis of the potential impact on jobs at the various sites?
Because it is--these are not jobs programs, these are mission
programs, and yet we represent people who are employed, and to
be fair to them, they need to know, or at least roughly know if
the potential budget you are proposing for a given site is
going to cause layoffs on the site, so that they can make plans
and stuff. Do we do an analysis of that?
Mr. Whitney. Yes. Yes, we do. You know, generally, from the
time that we formulate the budget and prepare the budget, a lot
can happen between that, and the budget actually being enacted
including Congress, among other things, and understanding what
the carryover is, as you move into the next year to help,
potentially, offset a lower funding level. And so we do an
initial valuation to try to understand some of the workforce
impacts.
You are right, we try to look at the--we do not try to, we
look at the complex as a whole and try to allocate our
resources where we get the most risk reduction benefit, and so
that is what is reflected in our budget request this year. Of
course with the high-level waste tanks and WIPP recovery,
continuing those, and you see that.
And what it does mean is many other sites have a lower
budget number than they did previous years. And so we do a
calculation in the type of work impacts, the type of
calculation you do; $100,000 per FTE is one calculation that is
commonly used, and you can do the quick math that, the bottom
line is a lot can change between the time that you formulate
the budget, and the time that the budget is actually enacted
the following year. So to give a specific number is just very
difficult to do.
Mr. Simpson. No. And you hate to throw a number out there
and scare the heck out of people, and say there is going to be
30 people laid off at this facility in Oak Ridge; when in fact,
that might not happen until you know what the budget is going
to look like.
Mr. Whitney. Yes.
Mr. Simpson. I understand. Okay. Mr. Fortenberry?
Mr. Fortenberry. Thank you, Mr. Chairman. Good morning,
gentlemen.
Mr. Whitney. Good morning.
Mr. Fortenberry. Are we paying for Canada's reprocessing of
their spent fuel?
Mr. Whitney. No, sir. We are not. Canada is funding the
entire project, and we anticipate actually being able to
process the HEU liquids in FY '16, at least beginning the
campaign. And so that, the HEU liquids that are coming in that
Canada is funding, as well as some pre-stage spending for fuel
of our own, will be processed in H Canyon, in FY '16.
Mr. Fortenberry. So the full cost of that are being borne
by the Canadians?
Mr. Whitney. Yes, sir. That is my understanding.
Mr. Fortenberry. And the plans to reprocess the Japanese
and German spent fuel as well?
Mr. Whitney. The processing of the German material, are you
referring to the German spheres, Congressman?
Mr. Fortenberry. I do not have that----
Mr. Whitney. Okay. Let me, I think that might be it, that
will also be paid for by the Germans if it occurs. You know, we
have to make sure the technology is right before we receive
that material to make sure it is actually workable. It is a
unique fuel type, we have not necessarily processed at H Canyon
before, and so they are also funding that effort to develop the
technology and make sure the technology readiness level is
appropriate before we even receive the waste. So we will not
receive waste, we will not agree to do anything until we know
that the technology works, and they will fund that technology
development effort.
And on the Japanese material, that is part of the global
threat reduction initiative, and under that Foreign Research
Reactor Return Program, this is a little different but it is
part of the Non-proliferation Program. High-income countries
pay for the campaigns.
Mr. Fortenberry. Okay. So we are not subsidizing stable,
high-income countries, as you put it, their return or their
movement of fuel to us for reprocessing blending down?
Mr. Whitney. We are not subsidizing the movement of the
fuel or the processing campaign, there is, of course we
maintain the facilities, and so we pay for the base operations
of H Canyon, and K-Area to receive the material, and so that is
part of our appropriation in the request we make.
Mr. Fortenberry. So, we are subsidizing it through the hard
cost, that they pay for variable to cost, we are paying for
fixed cost?
Mr. Whitney. They pay for the incremental cost.
Mr. Fortenberry. The question then becomes, is that fair?
Mr. Whitney. I believe the----
Mr. Fortenberry. I am with you on the non-proliferation
goals, please understand, and if the United States has to take
a decided leadership role here, who else will? But at the same
time other countries with thriving economies, with stabilized
governments; we are not talking about Former Soviet Bloc
countries here, with minimal threats for the prospects of some
kind of proliferation, the need to cost share.
Mr. Whitney. And I will tell you that we have begun a
working group within the department, NNSA and EM, to look
exactly at the cost of operations of our facilities
specifically Savannah River, where both programs are users of
the facilities to try to understand. Sometimes it is very
difficult to actually, you know, you have a base operations in
trying to determine exactly what one campaign share of the cost
is.
And so that is one of the things that we are looking at;
one, understanding all the campaigns and the needs for the
different programs over the next several years, and then trying
to see if we can attribute the cost appropriately across the
program.
Mr. Fortenberry. It is just math. It is just math. If the
facility costs a certain amount, it has a lifetime of a certain
amount, this processing from other countries takes up 5, 10
percent of your capacity, there is your number.
Mr. Whitney. And we, of course, are willing to talk to you
more about this, and probably better if also have our
colleagues from NNSA with us when we do. And so, we would
definitely like to reach back out to you.
Mr. Fortenberry. The point being, in certain circumstances
there might be reasonableness to subsidize, indirectly, the
movement of these fuels, particularly when there is
proliferation threat. But again, with strong partner countries
with strong economies, you called it high-income, to ask for a
fairer portion that is beyond just the variable or incremental
cost, as you put it, seems to me to be reasonable.
Mr. Whitney. Mm-hmm. I will look at that.
Mr. Fortenberry. Is that reasonable to you, Mr. Chairman?
Mr. Simpson. It sounds reasonable.
Mr. Fortenberry. Okay. I will yield back.
Mr. Whitney. Thank you.
Mr. Simpson. Thank you. The Department reported to place
conditions on the extension of the $2.2 billion annual contract
in order to meet deadlines for packaging TRU waste, according
to an accelerated timeframe and Los Alamos, which may have
inadvertently provided incentives for the contractor to cut
corners, in a way that ultimately led to the shutdown of WIPP.
These circumstances sound disturbingly similar to the story
we heard at the waste treatment plant, where the contractor
provided strong financial incentives to the contractor; or the
contract provided strong financial incentives to the
contractor, to improperly declare safety-related design issues
solved, or resolved.
What exactly failed at Los Alamos? Why do we believe the
contractor--or do you believe the contractor cut corners? Why
does EM continue to struggle to provide effective oversight of
its clean up contractors? Is this a problem with contract
structure? Or is there an inadequate focus on safety issues as
EM struggles to meet its performance goals?
And the more difficult question, which I do not know that
you can answer, because it is kind of a relative sort of thing.
Where should the line be drawn between providing incentives to
achieve a certain level of performance from the contractor, in
setting up a situation where only bad things can happen? How
will the New Federal Oversight Plan prevent these events from
happening in the future, to the extent we can?
Mr. Whitney. I will start and then you can?
Mr. Klaus. Sure. Sure.
Mr. Whitney. Yeah. Congressman Simpson, you are exactly
right. It is the balance; it is a very delicate balance. You
want to incentivize the contractors to get the work scope done,
and particularly when you have tangible, concrete performance
elements that you can assign to the contractor and to the scope
of work.
At the same time, safety, and we say this and we have to
mean it, safety is our top priority, and we have prioritize
that above everything, and having a strong safety culture is
not mutually exclusive with having a strong performing
contractor that is heavily incentivized, or properly
incentivized to get the work the work done. We have to have
both and they can both coexist, and we have to find that
balance.
With respect to Los Alamos, we have, actually on Sunday, we
will be formerly standing up the Environmental Management Los
Alamos Field Office, and one of the reasons is to align
accountability and responsibility for the cleanup program, from
Los Alamos directly to EM Headquarters, instead of having that
managed by another program.
And so there is focus on the cleanup, a singular focus on
the cleanup activities, and accountability will also--you know
flows through that chain as well. This also allows the other
contractor to focus on their core national security mission, so
it is a balance.
With respect to LANL, there is the final--the Phase 2
Accident Investigation Board Report will be coming out soon,
and that will outline some of the things that we need to
address, and look forward to correcting those items and working
with the contractor to do so.
Mr. Simpson. Okay. In their October 2013, letter--the item
was submitted to the Advisory Board, you stated DOE has taken
steps to form an independent project team to evaluate potential
future missions for the advanced mixed waste treatment plant.
Who are the members of the project team, and have they made any
progress?
Will EM issue publicly-available report for their work? And
how serious is EM in identifying future missions?
And are you identifying infrastructure improvements that
might need to be made? Is there any funding in your budget
request for any infrastructure investments that the advanced
mixed waste treatment plant to complement the current and
future missions?
Mr. Whitney. So the Advanced Mixed Waste Treatment Plant
has been a very successful facility, and has operated very
successfully for many years. And so, definitely as a
department, and the environmental management, when we have a
facility that is operating well, if it is possible to reuse
that facility rather than building another one we would like to
do that. I will have to get back with you, Chairman Simpson, on
that letter and where we are with respect to the commitments
made in that letter. And I will do so.
[Insert]
Mr. Simpson. Okay. Mr. Whitney, if higher levels of
spending were possible, persistent management mishaps and
difficult technical issues, both of those, continue to plague
the cleanup program, how many of the missed milestones, or of
those that you anticipate you will miss over the next few
years, are strictly funding related? And how many are due to
other issues, and what are those issues? And what are you doing
to improve your relationship with state regulators in the
communities as you work through these site-by-site challenges?
Mr. Whitney. I will have to get back with you, Chairman, on
the exact numbers and the attribution of those, whether it is
funding or technical issues. It is generally a combination of
both. For the FY '16 budget, we have--in FY '16 we have over
100 milestones. We have 40 compliance agreements that help
govern our work, and in the past we have been pretty
successful.
Ideally we would be 100 percent successful on the inner
milestones, but there have been a combination of technical
issues that have arisen, as well as some budgets that
ultimately did not, you know, come to the fruition of what we
anticipated when we signed up to the milestone. But we have
been successful in about 90 percent of the--of meeting about 90
percent of our milestones. Again, ideally we would meet them
all.
And our relationship with the regulators is absolutely
critical to us, we treat it very seriously. And I think the
fact that we have met 90 percent of those, and we are able to
work in the vast majority of cases with our regulators, both
the state and with the EPA to find a common ground on how to
renegotiate the milestones in the path forward. I think we have
been fairly successful there.
Mr. Simpson. Well, the Department's relationship with the
stakeholders could be adversely impacted by missed cleanup
milestones. Many states either have already levied fines or
looking to levy fines. New Mexico, in particular, has announced
unprecedented amounts for such fines. Can you please clarify
for us, what you see as the Department's responsibility at Los
Alamos and other sites for paying fines? How will you determine
whether the Department has a liability to New Mexico or any
other state where fines might be imposed?
And if fines are due, can you verify the Department has the
authority to pay fines from appropriated funds, and does it
come from appropriated funds or from the Justice Fund?
Mr. Whitney. I will, on New Mexico specifically, if you do
not mind Congressman, sine that is the subject of active
administrative litigation based on the compliance orders issued
by the State.
Mr. Simpson. Okay.
Mr. Whitney. I would just say that we are in discussions
with the State, and our relationship with New Mexico and the
New Mexico Environment Department is very important to us, and
we treat very seriously, like all the regulators. And we are
committed with respect to LANL, to doing the cleanup there, and
to get the LANL up and operating again, and the same with WIPP,
of course, as I had mentioned. And with respect to the ability
to use appropriations, I think we will have to get back with
you on that, if you do not mind.
Mr. Simpson. Okay. Well this whole idea of fines, as I told
you yesterday when we talked, that I am fearful that states are
looking at fines as the golden goose, if you will, getting
money, because they are under budget constraints also, and if
they can receive money for some of these things, and I think
that is the inappropriate use of fines.
Fines are imposed that, if you miss milestones because you
are holding back, you are not doing your job, you are not
paying attention, you are not spending the money that has been
appropriated to do something. It is to keep your feet to the
fire. When you have challenges that you meet that were
unanticipated and that kind of stuff, but you are trying to
address them, then I think fines are kind of inappropriate.
But I think states, as I said, might be looking, or some
states anyway, might be looking at it as a way of getting
additional revenue for a variety of things. So I do have some
concerns about that. I would like to know where the fines come
from, where the money comes from, and whether it is
appropriated dollars, or if it can be appropriated dollars, or
if it is out of the Justice Fund.
One other question I have. The Department issued a notice
this week, for public comment on using new criteria to
determine whether a planned uranium transfer would have an
adverse material impact on the uranium industry, and is
required by statute. How does the Secretary currently make this
determination? If not, the impacts on the price of uranium,
what additional factors do you have in mind that you believe
should be taken into account? And do you believe these
additional factors will make it easier or harder for the
department to meet the criteria to transfer uranium?
Has the Department ever held back on a planned transfer
because you were concerned about the impact on the industry?
Mr. Whitney. Well, certainly the department is concerned
about the impact on industry, and the public comment period for
the most recent secretarial determination began in December and
extended until January 22nd, I believe. We actually extended it
for a time just to ensure that we received all the comments,
and I understand they were very substantive comments. We are
currently reviewing those prior to the determination being
made.
Mr. Simpson. Okay. Ms. Roybal-Allard.
Ms. Roybal-Allard. Thank you, Mr. Chairman. I apologize for
being late. I was in labor H and----
Mr. Simpson. I told them that. I should have been in labor
H.
Ms. Roybal-Allard. Yes. The chair was most generous in
letting all six members respond to my questions, so it took a
little bit longer than I anticipated. Assistant Secretary
Whitney, first of all, I would like to commend you for the work
that the department has done in cleaning up 107 sites
throughout the nation.
Today I'd like to talk about one of the 16 remaining sites
in my State of California, the Energy, Technology, Engineering
Center. In your opinion, is the department on track to issue
the draft environment impact statement for this site this year?
Is the department on track to meet the 2017 deadline for soil
remediation, including the establishment of a clean-up remedy
for the ground water?
Mr. Whitney. Thank you, Congresswoman. I actually recently
had the opportunity to visit ETEC, just within the last couple
months. That is a very important site for us, of course, and we
are committed to doing the clean-up there. I need to better
understand it.
Ms. Roybal-Allard. In the middle of our winter, you were
lucky.
Mr. Whitney. Yeah, it was nice.
Ms. Roybal-Allard. Yes.
Mr. Whitney. It was nice. I did have to come back.
Ms. Roybal-Allard. Good timing.
Mr. Whitney. But it was very nice. The FY-16 budget does
fully fund our NEPA activities, including the draft
environmental impact statement. Once the environmental impact
statement, of course, is published there will be a public
comment period, and then we will work towards a final EIS. So
the FY-15 budget and the FY-16 budget fully fund those NEPA
compliance activities.
In parallel, the state, has a CEQA process which is similar
in nature to the federal NEPA process. They are currently going
through that as well. Once we have that final environment
impact statement we will better understand the nature and the
full scope of the work and the schedule. I would be honored to
come back and talk to you as we move through the process.
Ms. Roybal-Allard. But so far you feel like it is moving in
a timely manner----
Mr. Whitney. I do.
Ms. Roybal-Allard [continuing]. And they may meet the goal?
Mr. Whitney. I do.
Ms. Roybal-Allard. Okay. Undersecretary Klaus, the
department is doing incredibly important work right now. Since
2011 under the cloud of the Budget Control Act reductions, the
Department of Energy has been asked to do more with less. Can
you address the impact that the FY-16 spending reductions will
have on your operations, including your work on the sites in my
State of California?
Mr. Klaus. Well, I do not have the specific numbers if you
are asking in terms of science budgets, and in terms of how
that affects the labs or whether you are asking about the
clean-up program. The major one of which, I think, Mr. Whitney
just addressed.
I can tell you that within your state you have the Berkeley
Lab, you have got SLAC up at Stanford, and you have the
Lawrence Livermore Lab. I can say that those are--and I have
visited two of the three of those--those are very important
laboratories. Not just from the standpoint of the government
work that goes there, but from the standpoint of the many users
who use those facilities.
I think the number at Berkeley, I believe, is there are
over 10,000 users per year of those one-of-a-kind facilities.
It is where we develop the new biotech drugs. It is where the
drugs come from. It is material science that affect our ability
to do all sorts of requirements. It is where nanotechnology
takes place, etcetera. I do not know specifically the
reductions that you are referring to, but I do think that if we
reduce the level of funding at those facilities, I think there
are something like 60,000 applicants for the 10,000 slots that
are available to utilize some of those user facilities. If we
have to cut the number because we do not have the capacity, the
dollars to be able to do that basic science, I think it is
critical to moving the U.S. innovation economy forward. If that
is what you are referring to----
Ms. Roybal-Allard. Yes.
Mr. Klaus [continuing]. From the clean-up standpoint, you
know, we just face a continuing challenge to try and accomplish
as much as we can within the resources that are available,
recognizing this is a long-term challenge that we have got to
meet.
Ms. Roybal-Allard. I have one other question for you.
Mr. Klaus. Sure.
Ms. Roybal-Allard. Secretary Klaus, I realize that this
hearing is on the EM program specifically, but I would like to
take advantage of having you here to ask a question related to
your role as the Chief Operating Office at the department.
My colleagues and I, we spend a great amount of time
thinking about cyber security and how we can best mitigate
cyber risks in this constrained funding environment. Can you
tell us a little bit more about the efficiencies achieved by
the cyber security crosscut?
Mr. Klaus. Sure. Actually, one of the things a cyber
security crosscut does is, in fact, what it is designed to do
is to give us an accurate assessment of what we are spending on
cyber security across the department. The reason that we need
to do that is that there is no central funding for all cyber
security across the department. We do fund a portion of that
through our CIO office, but a lot of the cyber security work
takes place in the Office of Intelligence, in the NNSA.
Part of what is going on, and just, sort of, to take two or
three steps back, historically IT really developed in each of
the programs. We have never really had a centralized IT system
within the department, so each of the programs, as IT became
more and more important, developed their own IT. They built
their own central servers, etcetera.
We are at a point now where we have multiple IT systems in
different programs. From a cyber security standpoint that is a
much bigger challenge because we have to develop cyber security
and put it in place at each of the different systems, and each
of the different access points. One of the things that we are
trying to move forward to with the Secretary's overall
management iniative is to bring those systems together and
operate more as, if you will, an enterprise. If we can
consolidate those systems then we have fewer access points, and
we will have more of an ability to manage cyber security
effectively. I don't know the number of systems we have, but if
we can consolidate down to fewer systems then we will achieve
both efficiency, as you ask, and we will be able to see from
the crosscut that we have achieved efficiently from the
standpoint of better use of our IT dollars. We will do a better
job on cyber.
Also, we will be better prepared, for example, to take
advantage of the new technologies, to go to the cloud. It is
much harder to do that through multiple systems than it is if
we can consolidate and reduce the number of pathways and
systems that we need to do that. So I think that is a good
example of, frankly, why the Office of Undersecretary for
Management Performance was created. It was to have the
department operate as an enterprise as opposed to silos. In
this case, accomplishing the cyber, particularly given, as you
know, the nature of the information that we have within the
department, it is something we can better achieve if we do that
as an enterprise rather than in silos.
Ms. Roybal-Allard. Okay. I would like to follow-up with you
on that.
Mr. Klaus. Sure. Be pleased to do that.
Ms. Roybal-Allard. At a later time, okay? Thank you.
Mr. Simpson. One last question, many of the clean-up sites
have coped with tight budgets by first reducing workforce for
subcontractors, resulting in a disproportionate impact on small
business. Is the number of subcontracts going to small business
decreasing for the Office of Environment Management, and have
you identified new strategies to promote greater opportunities?
Are you taking any actions to make sure the bulk of the
reductions do not fall on small business?
Mr. Whitney. Thank you, Congressman Simpson. The small
business participation in the Environment Management program we
feel is critical, for many reasons, including the performance
of the program. I wish I had our score card for this past year
on small business participation, on my desk before I left, I
wish I had brought it, but yes, we have exceed the Department's
goals for small business participation.
I believe prime subcontracts, it was around 8 percent, and
if you include the direct contracts through our M&O contracts
it was over 10 percent small business participation, so we are
very proud of that, and definitely are mindful of anything that
we do that might have impacts on the small business community
because of importance.
Mr. Simpson. I appreciate that. I bring that up because I
just want to know that you have got your eye on the ball there
because it is part of the infrastructure in these communities
of cleaning up these sites and so forth.
Lastly, not a question, let me just say I encourage you to
get out to Idaho and meet with our Attorney General and other
officials and resolve the disagreements or different
interpretations of the agreement because I really do not want
the EM side of this laboratory in Idaho to affect the lab site.
Our inability, or if they prevent us from bringing in research
quantities of nuclear material.
It would greatly impact the future of the Idaho National
Lab and our ability as the lead nuclear lab in the country to
do the job which we have asked them to do. So I really do not
want these two entities going at one another, so I would
encourage you to get out and resolve these differences so that
we can resolve the overall issue of allowing these research
quantities' material to come into the state. It makes sense to
do it, and it is the smart thing to do, so thank you for doing
that.
I will tell you that every person that held this job before
you has left with grey hair. Now, that didn't affect you, Mr.
Klaus.
Mr. Klaus. I will be glad to have more of it, sir.
Mr. Simpson. You have already got it.
Mr. Klaus. Thank you, sir.
Mr. Simpson. I hope you are getting some of that coloring.
Mr. Klaus. I know. I am, sir.
Mr. Simpson. It is a difficult job you all do, but it is a
highly important job for the future, and thank you for the work
that you do, and the challenges that you face, and trying to
meet those for both the taxpayers of the country, for cleaning
up the waste, and to do it in an efficient manner. So thank you
all and thank you for being here today.
Mr. Klaus. Thank you.
Mr. Whitney. Thanks for the opportunity.
Mr. Simpson. The hearing is closed.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Tuesday, March 24, 2015.
NUCLEAR REGULATORY COMMISSION
WITNESSES
STEPHEN BURNS, CHAIRMAN, NUCLEAR REGULATORY COMMISSION
KRISTINE SVINICKI, COMMISSIONER, NUCLEAR REGULATORY COMMISSION
WILLIAM OSTENDORFF, COMMISSIONER, NUCLEAR REGULATORY COMMISSION
JEFF BARAN, COMMISSIONER, NUCLEAR REGULATORY COMMISSION
Mr. Simpson. Hearing come to order. Today's hearing is on
the budget of the Nuclear Regulatory Commission. We have before
us Stephen Burns, the Chairman of the Commission, and his
fellow Commissioners, Kristine Svinicki, William Ostendorff,
and Jeff Baran. Thank you for all being here today and we look
forward to your testimony.
Our government should not make policy based on energy
sources that the market favors at any given time. It is our job
to address our energy needs strategically and to work to create
an environment where all forms of energy can compete. A robust
energy portfolio is the best path to a secure energy future. I
believe that nuclear energy is a critical component of that
portfolio.
The Commission plays an important role in assuring nuclear
energy's success. Nuclear energy must continue its strong
safety record, but regulations need to ensure safety without
placing undue burdens on the industry. We must move forward on
long-term waste storage, and the Commission must be prepared to
advance new and innovative nuclear technologies.
I look forward to your thoughts on all of these subjects
and many more. And I would also ask that witnesses to please
ensure that for the hearing record, questions for the record,
and any supporting information requested by the subcommittee be
delivered in its final form to us no later than four weeks from
the time you receive them. Members who have additional
questions for the record will have until close of business
tomorrow to provide them to the subcommittee office. With that
I will turn to my Ranking Member, Ms. Kaptur, for her opening
statement.
Ms. Kaptur. Thank you, Mr. Chairman, very much. Thank you,
Chairman Burns, and Commissioners Baran and Svinicki and
Ostendorff. Thank you so very much for being here today and for
the important work that you do for our country.
Nuclear energy is a critical component of our nation's all-
of-the-above energy strategy, and I think we are united as a
committee on that. To meet this need we currently rely on an
aging fleet of nuclear power generation facilities with an
average age of 34 years. Many have already outlived their
initial 40 year licenses and with others quickly approaching
it.
We know also that safety is paramount. One in three
Americans live within 50 miles of a nuclear power plant. So you
have serious work in your portfolios. As a member who
represents one such facility, the Davis-Besse Nuclear Power
Plant in Oak Harbor, Ohio, our region is keenly aware of the
need to strike a balance between the jobs and economic
opportunity these facilities support in the surrounding region.
But we need to ensure the highest level of oversight and
security to protect local people and communities.
Unfortunately, our region has experienced three incidents
with the potential for great calamity if oversight and
regulation are not handled properly. Design flaws in the past
and lax oversight brought our region within three-quarters of
an inch from disaster.
I am interested in hearing more about your plans for
relicensing and continuing operations at these facilities while
maintaining the utmost attention to safety. The NRC faces
additional security concerns in addressing spent fuel storage
and eventual disposal. The current approach is far from ideal.
I think we can all agree on that. In the absence of real
forward motion on Yucca Mountain or another site, our nation
has no long-term solution to this pressing challenge. More than
$10 billion has been spent on Yucca, yet America has nothing to
show for that investment.
The government has to live up to its responsibility to
provide for the eventual safe disposal of commercial spent fuel
that is currently stored at these sites, and I look forward to
your thoughts on how we can meet this obligation. And as we
discussed in the past, I have a particular interest in the
training of personnel who work in nuclear power facilities and
would be very grateful for additional insight you could provide
us on how we make sure that is done in the most excellent way
for the current generation and the next.
Thank you so very much, Mr. Chairman, and we look forward
to your testimony.
Mr. Simpson. Thank you. Mr. Burns?
Mr. Burns. Good morning and thank you, Chairman Simpson and
Ranking Member Kaptur. My colleagues and I appreciate the
opportunity to appear before you today to discuss the NRC's
fiscal year 2016 budget request.
NRC, as you know, is an independent federal agency
established to license and regulate the nation's civilian use
of radioactive material and nuclear facilities, to ensure
adequate protection of the public health and safety, to promote
the common defense and security, and to protect the
environment. The resources that we are requesting for fiscal
year 2016 will allow the NRC to continue to ensure the safe and
secure use of material and facilities in the United States.
In addition to the agency's routine regulatory and
oversight activities, the fiscal year 2016 budget is expected
to include and will cover continuing work in the licensing and
construction of new reactors, the continued implementation of
lessons learned from the accident at the Fukushima Daiichi
Power Plant in Japan in 2011, and preparation for licensing of
small modular reactors.
The NRC readily acknowledges that it is in a changing
environment. Since 2001 the agency grew significantly to
enhance security and incident response and to prepare for the
projected growth in the use of nuclear power in the U.S. That
forecast in growth has been adjusted downward in response to
changes in the nuclear industry. And as is appropriate, we are
being scrutinized by our stakeholders and the Congress for our
responsible use of resources. The Congress has charged the NRC
with a critical mission to ensure public health and safety and
the common defense and security, and we can never lose sight of
that mission. Still we can and should maintain our focus on
that mission while also taking a responsible and hard look at
whether we are effectively using our resources.
Our fiscal year 2016 budget reflects the NRC's efforts to
demonstrate its responsiveness to the current environment in
which we find ourselves. Continuing with trends that began in
2014, the 2016 budget request reflects a reduction in both
dollars and staff from budget proposals in recent years. But it
will still provide for the necessary resources in our view to
carry out our mission.
As required by law, the fiscal year 2016 budget request
provides for 90 percent fee recovery, less the amounts
appropriated for certain specific activities. As such,
approximately $910 million of the fiscal year 2016 budget
request will be recovered from fees assessed against NRC
licensees. Our proposed fee rule for the current fiscal year,
2015, which was published for public comment yesterday on March
23, includes estimates for reductions in the overall licensing
annual and hourly fees.
Another key step the NRC is taking to prepare for changes
in its environment is Project Aim 2020. The project was
initiated in June 2014 to enhance our ability to plan and
execute our mission while adapting in a timely and effective
manner to our dynamic environment. After gathering perspectives
from internal and external stakeholders to forecast future
workload and the operating environment in 2020, the staff
recommended to the Commission a number of measures designed to
transform the agency over the next 5 years to improve our
effectiveness, our efficiency, and our agility. The staff's
report was provided to the Commission on January 30 of this
year, and the Commission considers this to be an important part
of the dialogue about the future of the NRC. We want to be
timely in acting on the report, but we also want to do so
deliberately and smartly. And although the NRC recognizes the
need for adaptation and change, we are also keenly aware that
any major organizational change if not done wisely can have a
detrimental effect on our mission and on the morale of our
employees. We have a critical mission and some of the most
dedicated and knowledgeable employees in the federal
government.
One final initiative I would mention is the Commission's
focus on the past few years on its rulemaking process in order
to understand and, if possible, reduce the cumulative effects
of regulation. We are continuing to engage our stakeholders on
this issue and will receive further recommendations from our
staff for additional improvements this spring.
In sum, we are cognizant of our changing environment and we
are committing to taking a hard look at ourselves in order to
assure that we are prepared for the future.
This concludes my formal testimony on the fiscal year 2016
budget request. Again, on behalf of the Commission, I thank you
for the opportunity to appear before you. I look forward to
working with you to advance our important safety and security
mission. I am pleased to answer any questions you have. Thank
you very much.
Mr. Simpson. Thank you. Do any other Commissioners have
opening statements you would like to make? Ms. Svinicki?
Ms. Svinicki. Thank you, Chairman Simpson and Ranking
Member Kaptur, for the opportunity to appear before you today.
The Commission's Chairman, Stephen Burns, in his statement on
behalf of the Commission has provided an overview of the
agency's budget request as well as a description of some key
agency accomplishments and challenges in carrying out the NRC's
important work.
The NRC continues to implement safety-significant lessons
learned from the Fukushima accident in accordance with
established agency processes and procedures while also
maintaining our focus on ensuring the safe operation of nuclear
facilities and the safe use of nuclear materials across the
country. The current period of implementation of Fukushima-
related regulatory actions, which is a set of complex,
interrelated actions lasting several years, will require
discipline and focus from the NRC staff as they review and
process an extremely high volume of regulatory submittals and
inspect the implementation of these requirements at licensee
sites. At the same time the agency will be carrying out a set
of complex rulemaking activities related to Fukushima actions.
In short, very demanding work continues before us.
Concurrent with this, the NRC is undertaking a
comprehensive initiative to improve agency budget formulation,
budget implementation, and program execution; in other words,
an effort to sharpen our delivery of the basics. This is truly
a homegrown initiative involving the efforts and feedback of
many hundreds of individual NRC employees who have demonstrated
strong ownership of its core elements. These elements are--
rightsizing the agency, streamlining agency processes to use
resources more wisely, improving timeliness in regulatory
decision making, and promoting a more unified agency purpose
through agency-wide priority setting. We look forward to
reflecting progress on these fronts in future budget submittals
to you.
I appreciate the opportunity to appear today and look
forward to your questions. Thank you.
Mr. Simpson. Mr. Ostendorff.
Mr. Ostendorff. Good morning, Chairman Simpson and Ranking
Member Kaptur. The Chairman has already provided an overview of
NRC's budget, the changing environment, and steps we are taking
to improve the operations of the NRC through Project Aim.
I am in complete alignment with his testimony. I do want to
expand just a bit upon the status of post-Fukushima safety
enhancements.
Along with Commissioner Svinicki, I have been involved in
all the Commission's decision making related to what safety
changes we should require as a result of the operating
experience from a tragic earthquake and tsunami in Japan 4
years ago. Looking back over the actions NRC has taken over
these past 4 years as a result of Fukushima lessons learned, I
firmly believe the agency has acted on a foundational basis of
science and engineering. We have appropriately given highest
priority to Tier 1 items associated with greatest safety
significance.
I will not go into any details, but will make two very
brief comments. First, as a career nuclear submarine officer, I
spent 16 out of my 26 years in the Navy operating submarine
reactor plants. I am confident based on that experience of the
NRC's safety actions post-Fukushima.
The second is as I compare our safety actions to that of
the broader international community, I am convinced that the
NRC and the United States industry continue to be world leaders
in nuclear safety. I had a chance just last week to visit the
industry's Regional Response Center in Phoenix. I believe
Commissioner Svinicki was there with Commissioner Fuketa from
the Japanese agency just the week before. I think those steps
we have seen in the industry and the regulatory body have been
significant, but perhaps not widely published.
In closing I appreciate the chance to be here today and I
look forward to your questions.
Mr. Simpson. Thank you. Mr. Baran.
Mr. Baran. Chairman Simpson, Ranking Member Kaptur, thank
you for the opportunity to appear today before the
subcommittee. It is a pleasure to be here with my colleagues to
discuss NRC's fiscal year 2016 budget request and the work of
the Commission.
First and foremost, NRC is focused on our mission of
protecting public health and safety. Yet the agency faces a
different environment than what was expected just a few years
ago when substantial new reactor construction was anticipated
and no licensees had yet announced plans to shut down any
reactors.
To meet our responsibilities now and in the future, we need
to enhance the efficiency, effectiveness, and agility of the
agency. In order to avoid disrupting the agency's work, I think
it is important to set a thoughtful trajectory to the
appropriate resource and staffing levels over the next few
years. We need to make sure that we do a good job matching
resources to expected workload.
Before I joined the Commission, my colleagues had the
foresight to initiate Project Aim, an internal working group
tasked with looking at the changes NRC should make to prepare
for the future. This is a valuable and timely effort. We are
actively deliberating on the recommendations of the Project Aim
team, and I expect that the Commission will approve some
prudent actions in the near term.
While we work to increase the agency's efficiency and
agility, we need to ensure that NRC also maintains its focus on
its ongoing safety work. Currently, five new reactors are being
built in the U.S. and five reactors recently ceased operations
and are entering decommissioning. At the construction sites,
NRC is conducting oversight to ensure that the new plants are
built safely and in accordance with regulatory requirements.
For the decommissioning plants, the agency reviews requests for
exemptions from some of the requirements that apply to
operating plants. Meanwhile, the NRC staff is beginning a
rulemaking to take a fresh look at a number of decommissioning
issues.
NRC is continuing to address post-Fukushima safety
enhancements and lessons learned, as my colleagues indicated.
Progress has been made in several areas, but we recognize that
more work remains to be done.
NRC also is responsible for having an efficient and
effective licensing process for new designs and facilities.
While NRC continues its work on pending applications for new
reactors, we need to be ready to accept and review applications
submitted for new technologies. We are expecting to receive the
first application for a small modular reactor design next year
in 2016. NRC already is reviewing an application for a new
production facility for medical isotopes and anticipates
additional applications of this type in the future.
Thank you, and I look forward to your questions.
Mr. Simpson. Thank you all and first let me say I
appreciate the work that you all do. This is both a challenging
and a very important job for the future of this country and for
nuclear safety, and I do appreciate the hard work that all of
you do.
All of you I think, or almost all of you, mentioned in your
statements Fukushima and the lessons learned there in trying to
increase the safety in our reactors and so forth and our safety
plants. We all talk about lessons learned. Can you give me some
examples of what have we learned from Fukushima?
Mr. Burns. Certainly, Mr. Chairman. I think one of the
things that we learned actually built on a lesson I think we
learned in terms of the agency's response after the 9/11
attacks, and that is having the availability of supplemental
equipment that could be used to provide additional power or to
assure essential systems were operational or could be put back
in operation after an event. If you look at the Fukushima
accident, the inability, particularly in units 1 through 4, to
restore the electric diesel generators, that was one of the
primary problems that led to additional problems. One of the
things that we have done, and Commissioner Ostendorff
mentioned, is reflected in these regional support centers, but
also onsite centers at each of the facilities, is basically
stockpiling of this additional equipment--pumps and valves,
things like that--that might be needed in the event of a severe
event.
So I would say perhaps that is the most significant lesson
that we have learned in terms of making that availability of
equipment, to cope with those unusual and rare events, being
able to do that, that is probably the most important lesson. My
colleagues might have something else to say.
Mr. Simpson. Kristine.
Ms. Svinicki. Mr. Chairman, thank you for that question.
Commissioner Ostendorff in his statement just now, which I had
not heard until just now, made an important point, which is
that if you look across the international nuclear community,
you see tremendous coherency in terms of the set of near-term
actions that we all are calling our lessons learned from
Fukushima. And at bottom, it is really no more complicated that
this--witnessing and experiencing something like the Fukushima
accident I think challenged all countries with mature nuclear
programs or those who are considering nuclear to really
confront their assumptions about high-consequence, low-
probability natural events. And so when Chairman Burns talks
about further enhancing the set of equipment onsite to mitigate
in these low-probability, high-consequence events, as
Commissioner Ostendorff pointed out, you see across nations
that that was the immediate first step.
Now countries can also overreact. I am proud of the United
States having from early days after the accident, President
Obama stood outside the White House with our Chairman at the
time, Chairman Jaczko, and he asked for assurances, for NRC to
give assurance to the nation that nuclear power plants were
safe. We did not shut all our plants down as Japan did. We did
a quick look and as the safety regulator, we were able to tell
the American people it was safe to continue operating plants,
but that did not mean that there were not opportunities for
enhancement. As we have prioritized those, those are under
implementation and have been for some time.
So I think at bottom that is the core lesson learned.
Mr. Ostendorff. I want to chime in. I agree with everything
that Chairman Burns and Commissioner Svinicki said. One thing,
and Commissioner Svinicki and I went through this in great
detail 4 years ago. I think one of the most significant steps
decision-making wise NRC as a body went through was to look at
the near-term taskforce, which our staff in a short, 90-day
period, presented to the Commission in July of 2011. It had 12
recommendations with different subparts to that. This is a very
thoughtful body of work, but two comments I would make,
Chairman, in response to that report.
One, our level of knowledge has significantly increased
over the last 4 years as we have gotten into details working in
very collaborative engagement with industry to figure out what
really makes sense here, where do we add value.
And the second piece I would say is we have been very
thoughtful in saying we cannot do all this at one time nor
should we try to. Let us take those high-priority action items
and sometimes it takes a little bit longer than we thought it
would, but we believe it has been important to get it done
right the first time rather than get it done fast.
So I would just add those comments.
Mr. Simpson. Is industry in agreement with that?
Mr. Ostendorff. I believe so.
Mr. Simpson. Jeff.
Mr. Baran. I think my colleagues have done a really good
job covering this. But the only thing I would add--I think one
of the important lessons learned that the near-term taskforce
detected right away when they worked in the immediate aftermath
of Fukushima is really the cliff-edge effect of flooding, which
I do not know that was fully appreciated. So the plants there
did pretty well in terms of the seismic event, the earthquake
itself. But the flooding is what really knocked out the power
and the ability to provide core cooling that was so essential.
And so I think one of the focuses that the NRC has had over
the years before I arrived obviously was the work on flooding,
the focus on flooding. There were walk-downs immediately after
the event to check the status of defenses against flooding. And
then there has been an effort ongoing to reevaluate the
flooding hazards, to make sure that in the decades of the past
since some of these plants were licensed, we make sure we
really understand what are the potential flooding hazards in
our plants, prepared to mitigate it with new equipment or to
protect against it with any modifications that might be
necessary.
So I think that is a key lesson learned that has been
responded to significantly in what the NRC has done in the past
few years.
Mr. Simpson. Thank you. It is my understanding that the
Commission will work to develop and issue a supplemental
environmental impact statement for Yucca Mountain, that
noncontroversial subject, this year because the Department of
Energy will not. Can you lay out for us the schedule to
complete the EIS Supplemental? And as you do so, could you
please highlight for us what responsibilities and activities
the Commission will have to take on as a result of Department
of Energy's decision to only provide an update to the 2009
technical report? And can you please tell us how much the
Commission will need to spend in 2015 to address EIS
Supplemental activities that the Department of Energy completed
during the previous EIS process? Do you have sufficient funds
to complete the Supplemental?
Mr. Burns. The basic schedule, Mr. Chairman, is about 12 to
15 months, so perhaps about this time next year we would issue
the Supplemental Statement. We do have the funding. You may
have mentioned it. There is approximately $4 million left in
the carryover funds the agency has. That would be sufficient to
cover doing the Supplemental EIS as well as there are some
other activities related, primarily the archiving of some of
the documents, assuring the documentation on the overall, that
we have on the overall application and review process are
preserved appropriately. We have been preserving them but there
are some others. Those are the steps. We can provide the
details if you like. But that is essentially what we would do
with that. And I am not sure whether I answered all of the set
of your questions, but if I have to, I can try to supplement.
Mr. Simpson. That pretty much covers it. I have suggested
in the past that we not, as this debate on Yucca Mountain went
forward, that we not do anything to ruin that cave because we
are going to need a cave that size to store all the study
papers that have been done on Yucca Mountain; it is probably
the most studied piece of earth on earth. In a report provided
to the Committee in August 2014 the cost for the Commission to
complete all the activities required to authorize construction
at Yucca Mountain was estimated at $330 million. What could the
Commission accomplish towards moving the Yucca construction
license forward in 2016 and how much would you need to do that
if you assume a willing, responsive applicant, and what would
you need for the Department of Energy to do in 2016 to support
those activities?
Mr. Burns. As I say the approximate $330 million would be
for activities with respect to the NRC's completion of its
role. That primary thing beyond this step where I talked about
the completion, the EIS, then we have the adjudicatory hearing
which is provided for by law; there are close to 300
contentions in front of our licensing board. So much of it
would go to that and then I think there are probably some
supplemental staff activities if you got through the hearing
process. And assuming a favorable decision, you would have some
staff activities. My understanding is that I think somewhere in
the order to $25-$30 million might be the amount for agency
activities reflecting a resumption of the adjudication for the
fiscal year 2016 period. Again I think if you have, from my
perspective, a willing applicant--because again the significant
step you are now in is an adjudication where you in normal
terms you expect an advocate for the application, like you
would in other types of licensing proceedings. Again because
the NRC's role is as a licensing authority and the oversight of
the application process.
Mr. Simpson. I showed you a coin that I had in my office
the other day.
Mr. Burns. Yes, you did.
Mr. Simpson. And it was from 2009. It was a nice coin that
they minted. It was to commemorate the application of license
for Yucca Mountain. I think that is going to be a historical
coin at some point in time.
It is my understanding that Waste Control Specialists, a
private company that provides waste treatment storage and
disposal has announced their intent to apply for a license for
the interim storage of used nuclear fuel by April 2016. In
developing the fiscal year 2016 budget request did you estimate
the resources that would be needed to process this license and
were they included in this budget request?
Mr. Burns. I believe that they are not in the request. That
is my----
Mr. Simpson. Can you please discuss what activities were
included in the budget for nuclear materials and waste safety?
And if Congress does not include more than requested can you
tell me that they requested activities will have priority over
license applications that were not proposed as part of this
request? In other words over WCS?
Mr. Burns. Well, the activity that are in that part of our
budget would reflect other ongoing activities with respect to
licensing related to materials, oversight of existing fuel
facilities and the like that are within that portion of the
budget. I might need to get back to you unless one of my
colleagues may want to----
Ms. Svinicki. If my memory is correct the Waste Control
Specialists alert to us for notification came a bit late in our
budget formulation process. So we did not. It was not because
of any intentional decision, but just because of that timing.
We did not include funds explicitly for review or starting the
review of such a storage facility application. I should mention
that we have a well established regulatory framework for a
spent fuel storage installation. It is 10 Code of Federal
Regulations, Part 72. So we do not need to come up with a new
framework for reviews such as this, and commensurate with that
we would anticipate or our staff informs us that resource
requirements in the first year would not be significant. I
think if funds were not appropriated specifically to support
the review our staff has informed the Commission that it would
likely be possible to reallocate amongst funds. It is one of
our larger budget lines so we should be able--I cannot make a
commitment that it would take priority over other work. We
would have to look at that, but we do think it could likely be
accommodated.
Mr. Simpson. Okay.
Mr. Ostendorff. I will just add the estimate we received
from our staff, Chairman Simpson, was about $3 million. If the
application is full and complete and detailed enough--and we
have had some experiences in the agency dealing with a similar
application back in the 1990s with a private fuel storage
facility of a similar nature that was proposed for the State of
Utah.
Mr. Baran. Just briefly to build off Commissioner
Ostendorff's remarks, what the staff was telling us was that $3
million was what it probably cost for the safety and security
review. You would also have to do an environmental impact
statement which would be about $2 million. And their
expectation is that process, the review process, would take
about three years assuming no contentions were filed. In other
words three years without the adjudicatory step. So $5 million
over a three year period is their estimate right now without
actually, of course, seeing the application.
Mr. Simpson. I have had people come to me and talk to me
about deep bore hole storage. Have you guys done anything on
that? Would they need a license? Obviously they would need a
license. Is that a reality? I heard it mentioned just yesterday
as a matter of fact.
Mr. Burns. As far as I know as an agency we have not done
anything with respect to the deep bore hole storage. If as you
say, if it is an entity that we would have the responsibility
to license we would prepare to do what we need to do in terms
of the technical criteria and reviewing it. But, to date, as I
understand, we have not.
Mr. Simpson. An interesting idea.
Ms. Svinicki. I would just like to distinguish that where
deep bore hole is discussed, it is typically a disposal option,
not a storage option, so just making that distinguishable case.
Mr. Simpson. But it would still need licensing?
Ms. Svinicki. Yes. It would. And I believe that DOE's Blue
Ribbon Commission spoke to this technology option for disposal
as something that was promising, but as the regulator we have
not conducted any work on it.
Mr. Simpson. Okay. I don't know how this--and I just say
this for whoever is listening--I don't know how this is going
to work out in our budget and stuff. The House obviously
believes that Yucca Mountain is the law of the land and we need
to be following the laws that exist and we need to proceed down
that line. The Senate has a provision that they have tried to
implement relative to interim storage, and they have put that
in their bill. And so far we have knocked them both out when we
conference because as Senator Feinstein and I discussed it is
either--it is not one or the other, it is both as far as the
House is concerned if you are going to do those. And so I don't
know how it is going to work out with the Senate this year. We
all know that if Yucca Mountain were to open tomorrow that we
would need additional storage beyond that to capacity anyway.
So I have been supportive of moving forward with the pilot
program and of moving forward with Yucca Mountain, but as I
said that is kind of out of the technical area and into the
politics area. So, Marcy.
Ms. Kaptur. Thank you, Mr. Chairman. Chairman Burns, 14
commercial nuclear reactors will go through relicensing over
the next 10 years, and some of these are facing a checkered
past of safety concerns. What assurances can you share that due
diligence is being taken in the relicensing process and that
there will be an emphasis on continued safe operations?
Mr. Burns. Well, safety is at the heart of everything we do
and the touchstone for our requirements, whether we are
conducting inspections and oversight or doing undertaking our
licensing responsibilities. The Commission's renewal process
has been well established. There are about 75 units that have
gone through the license renewal process already. License
renewal focuses primarily on the aging effects and assuring
that those are managed in the renewal term. Beyond just the
license renewal we have ongoing oversight, particularly over
the last 15 years or so. And partly from lessons learned from
our own experience and looking at ourselves as well as the
performance of licensees, we developed what we called the
Reactor Oversight Process. That is intended to look at the
various areas of not only operation but radiation safety and
other types of performance, and from our inspection program
assess the performance of licensees. So that is what I would
call the primary focus in terms of integrating performance,
assessing performance, and assuring that there is adequate
oversight based on the results of inspections and reports of
events and things like that at power plants.
Ms. Kaptur. If you were to compare the variety of designs
in the plants that you will be evaluating for relicensing,
compared to a nation like France for example, how many
different designs do we have in this country compared to
others, and are you thinking about streamlining the number of
plants that are out there in order to have more symmetry
between what it is we are regulating?
Mr. Burns. Well, I am not sure I know a particular number.
There have been several major vendors within the United States
that constructed or provided the design for power plants. For
example, Westinghouse, General Electric Corporation, formerly
Combustion Engineering Corporation, and Babcock and Wilcox. So
there are those basic designs and there may have been
variations in terms as they developed. Within France again I
won't say there is a single design or one design, but basically
my understanding is that the French having obtained the
Westinghouse technology then basically adapted it. They have in
effect a homegrown facility and essentially have used that
design at most of the French installations. What we did in the
United States is--and I think this was one of the lessons
learned actually coming out of the Three Mile Island accident--
was in looking at enhancing standardization. And one of the
things that we did in terms of adopting the licensing process
we are using now for new reactors is focusing on design
certifications that then can be applied in different individual
applications. And we have gone through in terms of certifying a
number of designs, a Westinghouse design, a General Electric
design for example. As I say there are policies, particularly
in the '80s and on into the '90s, in terms of enhancing that
standardization which I think has benefits to the industry, but
it does have benefits I think for us in terms of our oversight
and inspection.
Ms. Kaptur. Does anyone else wish to comment because we
have about 100 plants operating in the country? I guess with
relicensing the question is can there be more standardization
or is that an impossibility? Yes, I think both the
Commissioners Svinicki and Ostendorff wish to comment. And I
thank you both.
Ms. Svinicki. Thank you. Speaking to your question about
what assurance can the NRC give in terms of the safety of aging
plants, I think a key assurance that NRC gives is that any
emerging issue will not await a relicensing review, and
Chairman Burns spoke to this a bit in his response. Many of the
issues that have been encountered, concrete aging for ocean
side plants in the northeastern United States, the material
corrosion of the vessel head at Davis-Besse. These things do
not await any review, the agency takes regulatory action
immediately. So I would hope that would be an assurance to the
public that we don't store up these issues and wait for any
kind of relicensing or license renewal process.
I would draw a key distinction between France and the
United States and it is that France has in essence one
operator, Electricite de France, and therefore there is greater
coherency and consistency among the program they have
implemented across their country. And while some speak to a
more homogenized power reactor fleet that France has as an
advantage, and I am sure it does pose advantages, in the same
way that the all of the above energy policy is intended to
provide strength through diversity of supply, having diverse
designs in the United States is viewed by many as a strength of
the U.S. system if there should be some emergent, unpredicted
phenomenon or aging management issue that would arise. If you
have a diversity of plants you have a greater likelihood that
it will not be problematic at all of them and essentially would
not be emerging all at the same time. So there are two ways of
looking at whether or not there is strength in resiliency and
having the same plant built over and over again. That is just a
perspective that some have.
Ms. Kaptur. Of 100 plants in our country, if you could
classify them by design, how many different designs do we have?
I know it is not 100.
Ms. Svinicki. It is not 100 designs, but what is
interesting is because there are site specific adaptations and
then there was knowledge gained over time evolving and
improving the designs, candidly the answer many give is that
there are 100 different plants. And that is the complexity of
NRC's regulatory challenge. Even if the same design has been
built it has probably been modified for each location. Now the
significance of those adaptations and modifications varies, but
I think if the French regulators come here they see a rather
dazzling diversity in our fleet compared to their own.
Ms. Kaptur. You know, the auto industry had to streamline
and had to reduce the number of models. And it is still about
the task of doing that. And when you have a lot of permutations
and combinations, forgetting just that they are nuclear power
plants, just mathematically you have more chances for error.
Now where that balances, I don't know. I am just saying that I
think it is something to really think about in the relicensing
process. And looking forward how we use whatever power we have
to streamline and to limit the possibility for error, and for
mechanical failure and different things that happen inside
these plants. I think Commissioner Ostendorff wanted to make a
comment as well.
Mr. Ostendorff. Yes. Thank you. I wanted to maybe just
piggyback on both the Chairman and Commissioner Svinicki's
comments. I wanted to talk about just very quickly one program
we have that I think gets to part of your concern and that is
called a Component Design Basis Inspection Program. It is for
our existing operating nuclear power plants. Every three years
each of the nuclear power plants in the United States undergoes
a five week inspection. That inspection is to look at is the
pump that is supposed to pump water, pumping at the hundreds of
thousands of gallons per minute it is designed to. Is the
electrical distribution system functioning as it is designed
to. So on top of some of the aging management concerns that
have been alluded to by my colleagues, there is a very deep
dive inspection done every three years at each power plant,
looking at a focused area to ensure that we have a good
understanding of the basic engineering operation and is that
plant operating as designed. So I think to a certain extent one
of your concerns comes from how do we know that these are safe
with the various designs. That is one component we think is
very important to our regulatory approach.
The second piece, and this is relating to Commissioner
Svinicki's comments, I would say that yes, there are a number
of different designs in the United States. At a high level we
have pressurized water reactors and boiling water reactors. So
two fundamental types of designs, but they are all water
cooled. We are not talking about for our commercial power
reactors--we don't have molten salt or the high temperature gas
reactors, some other experimental designs. So they are in two
fundamental families. But what we have seen over decades it
that as industry and NRC have worked together to ensure that
equipment upgrades are accomplished at these different design
plants, we are seeing a convergence on some systems. I will use
one example. Many of our systems have gone from analog to
digital control systems for feed water control. So you will see
a lot of commonality in digital feed water control
installations at various nuclear power plants. Just as one
example how there is a lot of commonality in upgrade features
based on lessons learned and operating experience.
Ms. Kaptur. Thank you for that. Commissioner Baran, did you
want to add something here? You were shaking your head there.
Mr. Baran. Sure. I agree with everything my colleagues have
said. The only other thing I would mention is just as part of
the response to Fukushima one of the requirements was that
there be equipment on site and also in regional response
centers to deal with situations where there was a loss of power
at a plant. And one of the things I would mention in terms of
standardization is all that equipment and all the connections
for that equipment are standard across the country. So the
generators, the pumps, those types of equipment. If there was
anything that happened, a beyond design basis event, at a
plant, an emergency situation, there is equipment that is going
to be on site at that plant to deal with that in terms of
mitigation, but you could take equipment from any other plant
in the country or from the regional response centers, and it
would all fit and work at every plant. And so that is a key
kind of standardization development that I think is directly
relevant to safety.
Ms. Kaptur. Chairman Burns, you happened to mention in one
meeting that we had about the different ways in which equipment
was colored for connections. Do you want to restate that for
the record here in trying to standardize for ease of operation?
Mr. Burns. Yes. What I discussed with you, I had recently
visited the North Anna plant which is south of Washington
between Fredericksburg and Richmond. And Dominion Power
operates North Anna, was one of the lead plants in terms of
doing what we call the FLEX equipment, this additional
equipment to respond to the beyond design basis accidents, and
what they did is a lot of the things that you would expect
connections to, cabling or some sort of piping. They would be
pumps and things like this. They would have in effect color
coding. Color coded so the equipment that you would bring in
when you look into the plant that it helps you recognize where
you need to make the connections. And I think that is a very
good, very smart way of doing things in terms of helping the
people who are there, who are under duress because you have got
this event going on. They want to make sure the plant is safe.
I think it helps them in terms of getting the right things
done.
Ms. Kaptur. I hope that as you proceed in the relicensing
process that these kinds of good practices, best practices are
shared industry wide. I am sure that you are doing that, but I
just want to encourage it in any way that I can having lived
through three different incidents in the region that I
represent. Anything we can do to streamline, anything we can do
to promote safety as this relicensing occurs I think is a very
good step.
In that regard, in your testimonies and comments here this
morning the one word I have not seen is workforce development
and training. And that is of concern to me. As you conduct your
affairs what can you tell us about how the NRC engages and
provides oversight for the training of nuclear power plant
personnel? Not just the in plant operators, but the contract
and the critical skills that most often are hired through these
contracted relationships. I am talking particularly about
plumbers and pipefitters, electricians, boilermakers, who are
called in at different points, but they might not be full-time
employees of that company. What can NRC do to recognize,
engage, elevate the vital importance of these skilled trades
people in the operation and repair of our nation's nuclear
power endowment, or do you just leave that to somebody else? Or
do you think about that training aspect and the regularity of
how workers are trained?
Mr. Burns. You know, I think we do think about it and it is
reflected in the requirements that we expect licensees to meet
in terms of conducting all of their operations. Now in terms of
company personnel, but for contract, contract workers and I
think as you and I were discussing, off and on outages where
you come and do refurbishment, you may often have--use a
contract workforce. And often that is--these are folks
sometimes who may go around the country, go other places.
Part of that, the fundamentals go to, and it may not at
first blush seem like it is about training, but I think it is,
it is things like our quality assurance requirements, that say
that in order to conduct an activity in the plant, the safety-
related activity, or other activity important to safety you
need to understand what are the things you need to do.
You have to have personnel who are equipped and trained and
understand what it is. The environment they are going into,
what it is they are expected to do. You know, you may have a
sheet that they need to sign off, so critical to that, is
understanding that those requirements, and that is an
expectation, and that is something, we in terms of our
inspections that we audit, with respect to the conformance to
those types of requirements.
So at a sort of general overview, I think maybe I will
leave my answer there, and then my colleagues might have
something they would like to add.
Ms. Svinicki. If I may, Congresswoman. To the extent your
question went to looking to the future and preparing for the
workforce of the future. Maybe in the realm of encouraging not
so much compelling, but I have engaged with a number of nuclear
power plant operators in the United States when I visit their
plants. I engage them on the topic of local vocational and
technical community colleges, and what I am pleased to hear is
that many of them have extensive cooperative programs with
local vocational colleges.
I was, as Commissioner Ostendorff notes recently at the
Palo Verde Plant out in Arizona, Maricopa County has a
community college program. The plant is almost exclusively
hiring and helps to design the curriculum for that vocational
program. Again, this is welders and maintenance crafts people,
trades people. They have worked with the community college to
develop the curriculum.
And as a result they are hiring almost exclusively trades
people that come out of that program, because they know that
they will arrive on site with the right training to the high
quality nuclear standards required. The same thing in Bay City,
Texas, near the South Texas project. I actually visited the
community college there, and engaged with students that are
either summer hires, and hope eventually to work full time in
various trades roles at nuclear power plants.And I do not kid
myself that this was all philanthropy. Frankly, these plants
need to have access to a pipeline of workers for the future.
And so in their own interest, if nothing else, they have
engaged with local trade schools to make sure that they have a
pipeline of people who will be ready to do the job on day one.
Ms. Kaptur. Well, first of all, I congratulate you for
going to those institutions. And I would like to invite you to
my region, and to meet the people that, three times, prevented
catastrophe in our region. And to take a look at the pipeline
through which they came in order to do their job, and to
consider how we can learn from the matrix of entities that are
out there producing this talent, and I think we can do a better
job of linkages between those places that are training with
those who are doing this incredibly difficult work. And I will
be there myself if you come.
Ms. Svinicki. Thank you. I will take you up on that.
Ms. Kaptur. Because I think the NRC has something to learn,
and to appreciate from what is being done in places like I
represent. But I just wanted to point out the absence of that
whole focus on workforce in training in the testimony that was
presented today. Thank you, Mr. Chairman. I know there are
others waiting.
Mr. Simpson. Ms. Lowey.
Ms. Lowey. Thank you very much, Mr. Chairman. I apologize
for coming late. As the Chair knows we have several hearings
all scheduled at the same time today. So thank you for being
here.
My congressional district includes Indian Point, which
houses one decommissioned, two nuclear power plants, owned and
operated by Entergy, another country's spectra--another
company's spectra has proposed the Algonquin Incremental Market
expansion, which is called the AIM Project, which would expand
a natural gas pipeline which transverses the Indian Point
property.
This is of great concern to me and to many of my
constituents, and I strongly believe that the NRC has not
adequately investigated the risk nor responded substantively to
the concerns that have been raised.
Why did the NRC rely on Entergy's hazards analysis instead
of performing an independent analysis of risk and consequences
of construction and operation of the AIM Project? That is the
first question.
Mr. Burns. Well, actually Congresswoman, the NRC did review
the analysis, and did its own confirmatory analysis of the
energy hazard analysis which they are required to submit to us.
Ms. Lowey. But it was not an independent analysis of risk
and consequences of construction and operation, was it?
Mr. Burns. Well, it was an analysis by our staff. We are
independent of the applicant or the licensee. So, from that
standpoint I think we provided--our staff did do an analysis
and documented that analysis in an inspection report, I think
the end of last year, November last year.
Ms. Lowey. Is this typical procedure, where you rely on the
owner's analysis?
Mr. Burns. Well we expect the owner--I think it is typical
that we expect the licensee, who has ultimate responsibility--
is responsible for safe operation on the site; we would expect
the licensee to submit the analyses, and then we would review
that, and reach our conclusions, whether it conformed to the
analytical standards or the outcome. And from my understanding
that is what the staff did.
Ms. Lowey. Now, did the NRC evaluate the impact of drilling
fluids used in the horizontal directional drilling for AIM on
the spent fuel, rod pools located at Indian Point?
Mr. Burns. My understanding is that the horizontal
directional drilling is planned for that portion of the
pipeline that runs under the Hudson River, and the Staff does
not review or inspect how that drilling will be performed
particularly in the river and that location is about a half-
mile or so away from the site is a--or the spent fuel pool
building, as I understand it.
The spent fuel pool buildings are seismically--qualified
seismically designed, and the impact of drilling fluids would
not have an impact as we understand it, on those structures.
Underground drilling with drilling fluids would have to be very
close in proximity to the spent fuel pool buildings in the
protected area, for that to be of a safety concern to the
agency.
Ms. Lowey. Well, as I understand it, compared to AIM, there
is a smaller pipeline with lower gas pressure near the Turkey
Point Nuclear Power Plant, in Homestead, Florida. However, the
NRC predicted a greater damage radius in Florida, than it did
for AIM at Indian Point. Can you explain why? It does not make
any sense.
Mr. Burns. Well, at the Turkey Point, as I understand it,
at the Turkey Point 6 and 7 application, the applicant
evaluated the natural gas pipeline near the proposed units, the
staff evaluated the potential effects in the same manner as it
did for the AIM Project, and the resulting effects were lower
Turkey Point due to the smaller sizes of pipeline.
What the applicant at Turkey Point did, is it submitted an
analysis that used a very conservative assumption on, I think,
on the confined explosion, and it resulted in a larger
calculated distance for the pressure release, or pressure wave,
than the NRC analysis.
Again, I think that at the core here, the applicant decided
to use a very conservative analysis, we thought, using
appropriate analyses that were acceptable. If they wanted to
use a more conservative analysis they could, but in terms of
the outcome, you know, we believe that both the Turkey Point
situation and the Indian Point situation were satisfactory.
Ms. Lowey. Well, another question. I do not understand why
the NRC used the ALOHA Manual instead of the NRC regulatory
guide 1.91, when it performed a sensitivity study and
determined that a delayed closure of the pipeline's isolation
valves after rupture would result in only a minimal increase in
over-pressure, and heat flux at safety-related structures,
systems and components at the plant. The ALOHA Model assumed an
incident at the end of the pipeline. Why was a rupture in the
middle of the pipeline not considered?
Mr. Burns. Okay. Again, from my understanding and speaking
with the NRC staff, the ALOHA Model calculates the release rate
of gas based on the pipeline and its operating characteristics,
and computes the resulting effects of a vapor cloud explosion.
Jet fire heat flux, and cloud fire based on flammable
concentration limits, and since an instantaneous explosion of
the pipe rupture is not considered realistic and not computed
by the ALOHA Model, the calculated release of gas from using
that model was used to determine the amount of gas available
for an instantaneous explosion.
Now, the evaluation of instantaneous explosion used in the
Regulatory Guide, as opposed to the ALOHA Model, to compute, it
is basically used to compute the TNT equivalent for determining
the minimum safe distance, where the overpressure would be
predicted to occur.
Ms. Lowey. Well, that was puzzling to me. Does not
Regulatory Guide 1.91 have provisions for jet flame, cloud fire
and vapor cloud?
Mr. Burns. Now, essentially, again, my understanding is
that the Regulatory Guide 1.91 calculates minimum safe distance
by evaluating potential explosion at the source based on a
amount of explosives in terms of TNT and in terms of you having
a certain amount of TNT at that particular point, and it uses
that to evaluate for a potential explosion. There are not
provisions in the Reg Guide for vapor cloud explosion or this
heat flux, jet flame or the cloud fire.
Ms. Lowey. Why is that?
Mr. Burns. I would have to get my staff to explain that
more. Again, I think the idea is that the Reg Guide assumes
there is an equivalent explosion to TNT, whatever the source of
the explosion is. But we can certainly, for the record, provide
you some more information or have the staff brief you or your
staff on that issue.
Ms. Lowey. Well, thank you for your comments. As you can
see I have many people, including myself, that have real
concerns about the proximity. And I hope we can follow up on
that, and have an additional in-depth discussion. Thank you,
Mr. Chairman.
Mr. Simpson. Thank you. Mr. Fleischmann.
Mr. Fleischmann. Thank you, Mr. Chairman. And good
morning, everyone. It is great to be with you all. My first
question is, can you provide an update on the operating
approval process at Watts Bar Unit 2, please? And my follow-up
question to that will be, when do you think we can expect to
see Unit 2 reactor generating electricity?
Mr. Burns. TVA has proposed a fuel load date, I think it is
in about June this year. I expect to get a recommendation soon
from our staff with respect to the licensing decision on Watts
Bar 2, you know, assuming there are no issues identified, I
think the nominal prediction is, again, assuming they receive
the licenses after the final Commission review is toward the
end of, for operation, toward the end of this year.
There may be a couple other matters that the Commission has
to look at in terms of late contentions or something but that
is what I understand the schedule to be.
Mr. Fleischmann. Okay. And then for when it is generating
electricity, do you think by the end of this year, is that
what----
Mr. Burns. Again, that depends also on what the Tennessee
Valley Authority, plans are. I think some of their announced
plans talk about the end of this year, or early next year.
Mr. Fleischmann. Okay. Thank you. I want to turn to a
topic that very important to me and I know very important to
this entire Sub-Committee, the small modular reactors. They
provide an opportunity for clean, reliable energy and this Sub-
Committee has been strongly supportive of SMR development. I
have got four questions.
How many SMR licenses do you expect to begin reviewing in
fiscal year 2016, and was that workload included in the budget
request?
Mr. Burns. I believe we expect one application in 2016, and
we did provide for that review in the budget.
Mr. Fleischmann. Can the NRC provide and update of the
licensing processing for the new scale of small modular reactor
design? And it is my understanding that you are currently
working with them at the pre-application stage?
Mr. Burns. That is correct. And that is the application we
expect in 2016.
Mr. Fleischmann. Can you provide the Committee with the
timeline for the NRC to complete its review and approval for
design certification for the new scale, SMR?
Mr. Burns. Yes. We can. If I could I would provide that for
the record. I do not have it in my head at this point.
Mr. Fleischmann. Fair enough. And we would ask you to do
that. Does the NRC require additional funding to complete
review of the design certification application for new scales
SMR? What about other applications for advanced reactor design?
Mr. Burns. At this point I do not believe that we require
additional funding for that. We have tried to put in the 2016
budget what our expectations are. Some of those expectations
are--those expectations reflect our communication with industry
in terms of their plans. The same way we have some work with
respect to advanced or next generation reactors, that we have
on going, and I believe at the current level of activity, are
covered within the budget request for 2016.
Mr. Fleischmann. Okay, sir. Can you comment on creating a
multinational certification process for future Generation 3
reactors such as SMRs, and Generation 4 type reactors?
Mr. Burns. Yes. The United States participates, and the NRC
is a participant in the Multinational Design Evaluation
Program, which is--basically it is supported out of my former
organization, the Nuclear Energy Agency, at the OECD in Paris.
It was founded, and actually the U.S., among other European
regulators, are the ones who founded that initiative, and it is
a way of communicating with respect to approaches to design,
learning from experience in the development, and implementation
of new designs.
The step it has not gone so far as, and I think a step that
is probably some time off, is an absolute international
harmonization over particular design standards.
In other words, we are not at the point of, say, the
airline industry, whereas if you build the aircraft in the
United States it is recognized immediately in, say, France or
Brazil, or vice versa.
I think we are some time off from that but, again, through
this, MDEP, the Multinational Design Evaluation Program, I
think there are good steps toward harmonization. Again,
communication and learning from experience, and we continue to
support that.
Mr. Fleischmann. Well, as a follow up, and I thank you for
your answer to that question. As a follow up to that, what are
your views of these multinational applications going through
country certifications simultaneously, rather than
sequentially? And this would help to reduce cost and time to
license new reactor designs. Is that correct, sir?
Mr. Burns. Let me make sure I understand your question. If
they went through simultaneously----
Mr. Fleischmann. Simultaneously as opposed to
sequentially.
Mr. Burns. Potentially, the reason I say potentially is
because in some circumstances, and we have seen this, and I
think in our country, where, there has been great interest in
terms of obtaining the U.S. design certification from the NRC
because then that is viewed as an effective good housekeeping
seal, that is then looked to by other countries in terms of
their proceeding with implementation of those particular
designs.
Again, to the extent that there is harmonization, I can
see, you know, potential benefits. But again, each country, the
responsibility under, for example, the Convention on Nuclear
Safety is that each country still needs to make its
determination with respect to its regulatory regime whether it
meets its safety requirements.
That said, you know, I would agree that, coming to greater
harmonization, learning from the experience of others, not only
our own country, but from others is a helpful thing.
Mr. Fleischmann. Thank you very much. Appreciate you all.
Mr. Chairman, I yield back.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman. Let me address
an issue that is, I think should be in forefront of all of our
minds. Where are we going in the 21st Century with regard
nuclear technology, the proliferation, not only of the
intellectual assets, to be able to derive power, but potential
military applications.
And then you talked about not yet a harmonization of design
standards, but not yet a harmonization of nonproliferation
efforts either, some movement in that regard, but clearly with
the tensions with Russia, a suspension of a lot of very good,
older programs that have helped secure those material. That is
where I want to start and specific question would be; in your
work, what do you see as the greatest thread to
nonproliferation, both domestically as well as internationally?
Mr. Burns. I think from----
Mr. Fortenberry. Are these lines between commercial and
military usage blurring?
Mr. Burns. Well, I think you have always had the issues in
terms of those lines.
Mr. Fortenberry. Yeah. Just because we create a line, does
not mean there is a line.
Mr. Burns. No. And I would draw on the experience, and in
the United States, for example (NSG), has supported the effort
of, say, the Nuclear Suppliers Group, in terms of looking at
dual use technologies and assuring--getting high assurance that
technology is used appropriately in civilian applications.
Mr. Fortenberry. Which has been very helpful, obviously as
an entity outside formal regulatory authority to regulating
this dynamic.
Mr. Burns. Yes. But we also have as I said about the NSG,
is essentially much like this Multinational Design Evaluation
Program I spoke to. A cooperative effort of various states and
various suppliers in the nonproliferation community,
particularly through the IAEA. Within our own country we have,
again, requirements with respect to export controls and export
reviews.
We have responsibility in that area, as does the Department
of Commerce and the Department of Energy. So I think those
efforts--I think those are the efforts that are important in
terms of a country-specific application and implementation.
Mr. Fortenberry. Is it enough?
Mr. Burns. I think what we have today needs----
Mr. Fortenberry. What you have got going on, the
technology is out of bottle, so to speak. The ability to do
these things is widespread now, much more widespread, and will
continue to grow. So that comes down to then, control of
materials which, hopefully, will always be in the hands of
nation states. In some places nation states, the whole concept
is under threat and is collapsing.
So, again, it creates--we ought to constantly be
reevaluating our framework here, which is going back decades to
an era where we decided that we are going to have Atoms For
Peace. There is going to be peaceful nuclear usages. And there
is going to be a military dimension in our country that is an
important component of our own deterrents from the use of
military weapons.
Yet at the same time, again, lines of distinction are not
as neat as they used to be and with enhanced capabilities
through, again, the intellectual capabilities of doing this
stuff, are we in front of that curve. We also have enhancement
of, though interconnectedness with other countries to harmonize
efforts as never before, but are we in front of it?
Mr. Burns. I am not sure. I do not think I would say we are
behind it. I think this is something we looked at, we learned
from experience, we have learned from the information we have,
that we receive, in terms of the nature of the threat that is
out there.
We have requirements, as we are obligated to do in the
United States under our treaty obligations with respect to
material accounting and control.
Again, I think within our export policies and in terms of
our implementation, I think those are effective. By the same
token, I would not disagree that greater awareness and thinking
about the context in which we are internationally, particularly
since I started out as a young lawyer in the late 1970s, we are
certainly more interconnected with respect to civilian nuclear
technology, components come from all the world. e-Commerce is
all over the world.
Mr. Fortenberry. Can we have a robust, full, and complete
understanding of that inventory?
Mr. Burns. The inventory? I think we can have a complete
understanding or at least a robust understanding of inventory
with respect to material within the United States. I think that
is the objective. Do we know where every widget, component, et
cetera, goes? Probably not.
Mr. Fortenberry. This begs the earlier point of what can we
do better in this regard.
Mr. Burns. We would probably say we can always do better,
but again, I think we have a regime that in terms of looking at
items that are, for example, dual use items, items that are
controlled for export, that addresses the threat and addresses
the national interest.
I think a lot of what we can do is make sure we are
dedicated to implementing that and carrying through on it.
Mr. Fortenberry. I can come back, Mr. Chairman, if the time
is up, or I can keep going, either way.
Mr. Simpson. How much longer do you have?
Mr. Fortenberry. One minute.
Mr. Simpson. Go ahead.
Mr. Fortenberry. Back to this issue of inventory of
material, ultimately, again, a new architecture of non-
proliferation, if we are going to continue down the same
pathway and ensuring that commercial uses are not readily
transferrable to military uses, and if we are going to clean up
messes and identify prior material that has been out there and
that is loose, and then secure that going forward, does it not
beg a construct that has all inventory counted everywhere?
Mr. Burns. It is good to know where everything is. Again, I
think within this country, we have pretty high standards, and I
think we do that. This has been an issue certainly at the fall
of the Soviet Union and efforts that were undertaken both on a
bilateral and multilateral basis to address that, try to
address those issues.
Again, I think that within our own country we have done
pretty well.
Mr. Ostendorff. Can I add? I used to be the number two
official of the National Nuclear Security Administration where
all the DOE non-proliferation programs resided, and have been
watching this area for a number of years, from my time in the
military, my time working for the House Armed Services
Committee, and then for the last five years, NRC.
I would say this Commission has been heavily engaged with
the White House, Department of State, Department of Energy, the
intelligence community, to ensure that we have proper
situational awareness of where the materials are outside of our
country.
I think with the advent of the Nunn-Lugar programs in the
1990s, there was a lot of stuff that was found 20 years ago
that surprised a lot of people. I think our awareness today in
2015 is infinitely better than where it was 20 years ago.
We do not have authority as an agency to conduct our own
assessments overseas, but we are fully plugged in with the
interagency group and the intelligence community to have the
awareness that I think is your concern.
Mr. Fortenberry. This is the key, because you are not going
to be able to control the technology, the information
technology, like we were able. It is the flow of material. That
is the key if we are going to keep ourselves safe.
Thank you, Mr. Chairman.
Mr. Simpson. Mr. Valadao.
Mr. Valadao. Thank you, Chairman. Thank you very much for
coming out and spending some time with us as well.
The NRC is proposing to amend its regulations related to
the medical use of by-product material. It has been suggested
that the training requirements for physicians treating patients
with therapeutic radiopharmaceuticals can vary widely,
depending on the drug.
Is it currently the case or is the NRC proposing a rule
that would make this the case? How does the NRC determine
physician training requirements?
Mr. Burns. I am sorry, Congressman. I may have to provide
that for the record. I am not sure of the status. There was a
rulemaking effort. I am not sure exactly of the status of where
it is now. I will be happy to provide you the full information
on that.
Mr. Valadao. I will skip the next one on the same issue.
The decommission sites, the U.S. Nuclear Regulatory Commission,
NRC, held a public briefing on July 15, 2014 to give the
Commission an overview of the nuclear power plant
decommissioning process, status, and issues related to the four
nuclear plants that recently entered decommissioning, including
San Onofre nuclear plant, in my home state.
Chairman Burns, can you briefly describe the challenges of
decommissioned plants and the public reaction, and do you
expect additional plants to enter the decommissioning process
in 2016?
Mr. Burns. To answer the last question first, we do not
expect additional plants in 2016. We have not been informed of
that, recognizing there are some plants that some utilities may
be evaluating because of some of the economic challenges that I
think the chairman noted at the beginning.
What we are doing now, we have successfully gone through
the decommissioning process with a number of facilities, and as
you know, more recently we have had five facilities come into
the decommissioning process.
One of the things the Commission has done is ask the staff
to undertake a rulemaking to ensure that we have an effective
and efficient process there. The way primarily we have gone
through the process now often requires the utility or the
licensee to ask for exemptions from our requirements, although
that has been effective from the standpoint that we maintain
health and safety, it is a bit cumbersome sometimes, and also
in terms of the perceptions of the local community about what
is going on, or sometimes it may not be as best communicated as
it can be.
That is the thing we are looking at. Again, licensees, we
have had a well established process for them in terms of what
they need to address from a safety standpoint, security
standpoint, and to work to those requirements.
As I say, we are working through the process now, and we
hope to get a rule in a few years that would make it a little
more effective and coherent.
Mr. Valadao. Thank you. Thanks a lot, Chairman.
Mr. Simpson. Thank you. You are the first one that made the
mistake of the NRCC. I thought about that all the time. The
NRCC is the National Republican Congressional Committee. We get
them confused all the time.
Let me delve in a little bit about the operations of the
NRC itself. As you noted, the Commission has received the
Project AIM Report and is in the process of reviewing
recommendations. Although you are still reviewing the report,
were you able to incorporate any of the Project AIM
recommendations into the fiscal year 2016 budget request?
The report recommends that the NRC--brilliantly
recommends--that it have the right number of people with the
right skills at the right time. Easier said than done
sometimes. The Commission must be staffed at a level that can
respond to the needs of the nuclear industry but licensing fees
should not make it harder for nuclear energy companies to
compete.
I think most of you mentioned at one point during your
testimony today about right sizing the agency. What exactly do
you mean by ``right sizing the agency,'' where is un-right
sized now, and what needs to be done to address that, if you
will.
Mr. Burns. Yes. The particulars of the AIM Report were not
the fiscal 2016 budget, given the timing. The report came out
at about the time, I think, the budget was released or
submitted to Congress.
The idea, I think, in the Commission in developing the 2016
budget was focused on are we concentrating our resources on the
work that needs to be done, and that is both the importance of
our safety oversight mission, safety and security oversight
mission, and also in terms of the licensing work that is put on
our plate.
Overall, it reflects a reduction in terms of the overall
resources that are available in 2015 to 2016. It is looking at
those areas where there is not as much a need for resources.
Some of that area will be in the nuclear reactor area because
of the number of applications is not what it was expected to be
say six or seven years ago, as I noted in my statement.
Let me stop there. If there is something I did not answer
in your set of questions, I would be happy to.
Mr. Simpson. Are there others who would like to comment on
right sizing the agency and what exactly that means? Kristine?
Ms. Svinicki. One of the things that the Commission is
deliberating on now both in terms of embarking upon it and what
form it might take is what is called a ``rebaselining.''
In our prior careers, many of us know if there is a major
Government acquisition or long multi-year construction project,
at some point, departments and agencies will rebaseline that
project. It is to make sure that you have fundamental adherence
to what you were trying to accomplish, you do not have a lot of
mission creep, a lot of bells and whistles.
Rebaselining for NRC, if we pursue it, may take a form of
looking at work in-house, work projections, truing that up to
the world as we understand it now, and then deciding what skill
sets and people you would need to have, and then creating the
organizational agility to move those people to that work,
perhaps with better performance than we have done to date.
We have seen some of the vectors in the external economy
emerging for a number of years now, and we still find that we
have bureaucratic obstacles to moving people to work that is
needed.
I think to a person, we all feel like that should not be,
so we are going to look organizationally at having a better
understanding. I know it sounds so straightforward, and to me,
``right sizing'' means we probably think we are maybe a little
larger than we need to be, to be real honest with you.
If we thought we were under-sized, we would not have asked
for a budget flat or declining. By virtue of mathematics, I
think you define ``right sizing'' to mean we need to perhaps
trim down in some areas. We may have other skill sets that are
critical and in shortage.
My understanding is the NRC has not rebaselined
fundamentally, I think, in 15 years. I think an agency in my
personal opinion can benefit from going back to just looking at
the fundamentals every now and then and seeing if you are in
alignment with the world as it exists, although we are still
deliberating on a set of recommendations.
Mr. Simpson. I would agree with that. I would note that
over the years, I have been very supportive of increased
staffing that was necessary at the NRC or that we thought was
going to be necessary, for example, for SMRs.
We wanted to make sure there was not delays in doing the
license applications and stuff that we thought would be coming
along because of insufficient staff. We have plussed up the
staff in order to make sure they were available, and then we do
not have the license applications that we originally thought
maybe three or four years ago might come at this time.
They might be there in the future. We might need those
personnel at the time.
It is a constantly changing environment, and the nuclear
renaissance that we thought was going to be bigger than it
currently is, we thought we would maybe have several more
reactors that we would be licensing around the country than we
currently do.
Rebaselining, right sizing, whatever you want to call it, I
think is an appropriate thing to do.
How do you determine what your fees are going to be that
you are going to charge the industry? Ninety percent of your
budget comes from fees charged to industry; right?
Mr. Burns. Correct.
Mr. Simpson. How do you determine what that is going to be?
Mr. Burns. Ultimately, it is based on the final
appropriation that we receive, and I believe in consultation,
in terms of both the estimate of the types of applications that
come in.
As you may recall, there are two types of fees. There is in
effect a fee for service, for example. An applicant comes in
and wants a license amendment or a new license. There is a fee
paid there. Then there is in effect an annual fee that is
imposed on operating power reactors.
Mr. Simpson. How much of that 90 percent is from fees that
are charged because someone wants an application or an
amendment or something like that? How much of it in the base
out there that is charged to everybody?
Mr. Burns. My CFO is telling me apparently it is about one-
third related to applications, the so-called Part 170 fee, so
that would mean about two-thirds are derived from the annual
fee.
Mr. Simpson. A key outcome of the Project AIM
recommendations is the development of an overhead structure
that is well defined, reasonable, and acceptable to external
stakeholders.
How have or will you involve stakeholders in the
transformation of your budget process?
Mr. Burns. What we have done through the AIM process, we
have engaged stakeholders on that. I think we will continue to
do that as we implement--I forecast, as Commissioner Svinicki
says, we have not completed deliberations, but I think it may
be safe to say to the extent where these things have impact on
the stakeholders, I think it is important to engage them as we
go forward, so that we understand what the concerns are and
then in reaching some solution, we have something that is
workable and effective.
Mr. Simpson. In your testimony, you mentioned that the
Commission has recently received a benchmarking report looking
at how the NRC fee practices compare with those of other
regulatory agencies.
What has the NRC learned from this report, and how does the
NRC fee practices compare, and how has this information been
incorporated in the fiscal year 2015 rule fee?
Mr. Burns. I think we are in the process of still getting
the report. Apparently, we just received a draft report, and
our CFO will be taking a look at it. I would imagine to the
extent it is relevant, again, the rule that was published
yesterday was a proposed rule, and I think to the extent that
it helps us, from my standpoint, understand where we ought to
be with the final rule, we would take that into consideration.
Mr. Simpson. I look forward to seeing how these changes are
being implemented and how the Commission is working to do that.
I am a little concerned in the effort to streamline the
rulemaking process. The NRC staff now spends significant
resources on new rulemaking efforts--we talked about this
yesterday--prior to obtaining Commission approval.
How is the need for a new rule determined? Is that a staff
driven decision or is that a Commission driven decision?
Mr. Burns. For the most part, Commission driven decisions.
The staff, obviously, we rely on our staff from looking at
things, like operating experience, industry requests, or the
like, to identify areas where there might be a need for a new
rule or modification of existing rules.
For most rulemaking actions, it requires Commission
approval.
Mr. Simpson. At what stage does it require Commission
approval?
Mr. Burns. For the most part, it would require approval at
the proposed stage.
Ms. Svinicki. If I may bring to the subcommittee's
attention something that I recently discovered. It occurred in
2006. I joined our Commission in 2008.
Once again, forecasting a strong nuclear renaissance in the
United States, in 2006, the Commission undertook to delegate to
the agency staff a significant set of what I call ``front-end
Commission approval and involvement steps'' in looking at what
rulemaking's would be embarked upon.
Again, I would expect that Commission in 2006 thought they
were going to be facing a crushing agency workload related to
having 28 new reactors under construction and the various
things that were forecast in that time period, and they did not
think it was sustainable for the Commission to be so involved
in the early approval steps for new rulemaking activities
before they were embarked upon.
These were steps such as requiring the staff submittal to
the Commission of a rulemaking plan, requiring the submittal of
early regulatory analyses. Again, these are precursors well in
advance of a proposed rule stage.
The Commission delegated many of those activities to office
directors and waived wholesale other requirements, such as--
although the sound of this committee is a bit strange, we have
a committee to review generic requirements, and it is a body
made up of senior staff that looks across programs, and in some
ways is looking at the cumulative impact of agency rulemaking
activities. The requirement for review by that committee was
waived and was left entirely discretionary to agency staff.
I think some of these steps, while I am sure well
intentioned and probably well merited given what they predicted
in 2006, were key in involvement of the Commission, which in my
view, has a unique opportunity to look across programs in the
agency that office directors simply do not have that
perspective.
As we look at having X number of rulemaking's, either
active or inactive, ongoing, people throw around this number of
60 rulemaking's, I challenge myself as to whether that change
in the Commission's involvement in 2006 perhaps had some impact
to where we are today. I have not engaged my colleagues on this
research I just discovered in the last couple of weeks. I was
not aware this significant change had been made at that time.
I think again it is nearly 10 years later, is it worth the
Commission maybe looking at that? Possibly. I hope to engage my
colleagues on that.
Mr. Simpson. Commissioner Ostendorff.
Mr. Ostendorff. I would add to Commissioner Svinicki's
comments to say in our current deliberations by the Commission
on Project AIM, this is one specific aspect that I believe will
be discussed and vetted, and I cannot predict the outcome in
the context of the rebaselining of work effort mentioned by
others.
Mr. Simpson. I am just curious. I am trying to get this in
my head. If the staff is out there working in a particular area
and they decide this is something we need to actually write a
rule on, how far do they go before the Commission has to say
yes, that is an area we need a rule written on? How much work
and money is expended on looking at proposed rules before the
Commission gets involved and says yes, proceed with that, or
no, we do not need that? Where do you step in, at what point?
Mr. Burns. Again----
Mr. Simpson. As you can tell, I am a little bit concerned
about staff driven rules rather than Commission driven rules.
Mr. Burns. Certainly. No, I understand that. As
Commissioner Svinicki said or indicated, I was not particularly
aware of some of the information in terms of this.
Again, as Commissioner Ostendorff said, I think this is
something right for us to look at. The Commission can always
step in. We have the responsibility. We have the ability to
obtain--each Commissioner individually can obtain the
information they want to carry out as they see fit their
responsibilities.
We as a collegial body can reverse a direction on a
particular thing, and I think the importance for us is even if
we have a circumstance now where there may be some rulemaking
activity that may be going on that does not formally come for
the approval, we actually have the ability to do that and
maintain awareness. We do get reports from our staff on various
activities.
I think the responsibility rests with us in terms of
obtaining that oversight and awareness of what is going on.
Mr. Simpson. Well, I will tell you what drives part of my
concern I guess. When we on the one hand talk about right
sizing the agency, which we talk about right sizing the agency.
And on the other hand, we talk about rules being driven. I have
been around long enough, both at state and federal level, to
know that bureaucracies have a tendency to, when hands are
idle, we think of things to do. And that concerns me to some
degree, and I am just wondering how much of this thinking of
things to do drives some of the rules, if at all. I don't know.
But I have heard concerns about the number of rules and so
forth, and I am trying to drive at where is the Commission's
responsibility versus how far can these go before the
Commission actually gets involved? I know you can get involved
at any stage along the way, but do you? And that is why I ask
these set of questions. So it is an issue that we will continue
to look at. Marcy.
Ms. Kaptur. Thank you, Mr. Chairman. Chairman Burns, on the
issue of the continued storage of spent nuclear fuel, the NRC
determined that spent fuel could be safely stored on site well
past the reactor's life span. I understand that there is a
legal challenge to the NRC's waste confidence rule. Could you
give us an update on the status of that challenge please?
Mr. Burns. Certainly. The continued storage rule is really
a, well, a continuation if you will of the Commission's
previous waste confidence rule. The waste confidence rule of
course dated from the early 1980s. The challenge, the
petitioners who were challenging the agency's final rule now
called continued storage, have filed for a petition for review
in the Court of Appeals I believe here in the District of
Columbia Circuit.
And my understanding is that the expectation is the
briefing will be done before the court toward the latter part
of this year. The general counsel is confirming my impression.
Ms. Kaptur. What do you expect the challenger's argument
will be in court?
Mr. Burns. I haven't read the petitions for review, which
are normally often very general or very cursory at this stage
of the proceeding. Again, I think they will question the
Commission's conclusions with respect to the outcome of the
rule itself. I think the Commission's action was completed
before I came onto the Commission in November. But having been
involved in this rule as general counsel before and my
experience with it, I think the staff has done a good job in
terms of considering the various comments on the rule and
establishing a firm basis for it. So we will put ourselves in
front of the court and the process allows it to be.
Ms. Kaptur. Should the court side with the challengers,
what would be the impact to the rule and by extension to the
operating plans?
Mr. Burns. I wouldn't want to speculate too much because
again, it depends on what the court says. There are
circumstances which the court may say, you need to correct and
effect, there might be some procedural issues you need to
correct. But the court might say, we are not going to stay the
agency's actions in other cases, and it could be the opposite.
So I wouldn't want to speculate too much on that. Again, if the
court thinks we need to do something else, again, I think we
are confident that we have done a good job already. But if
there is something we will do, we will address what the court
tells us to do.
Ms. Kaptur. Thank you. I am very impressed with this panel,
Mr. Chairman. I think it is energized. It is informed, and I am
really glad that you invited this number of people up. They
seem quite awake and attuned to the challenges ahead. I just
wanted to go back to an experience that I have had and share it
with you, because you might be in a position to do something
about it.
Commissioner Ostendorff, you having come from the military
will maybe identify with what I am saying here. I view working
in these plants as not just another job. And what has surprised
me over the years in our region where we have had very serious
challenges, those that actually helped both the company and the
public, were never properly acknowledged. In the military, when
you do something really exceptional you get a battle ribbon.
When you are part of a corps that has a brotherhood and
sisterhood, your commander even has a special medal that is
struck that he hands to special people that meets along the
way. And I have been actually surprised and disappointed that
we haven't done more to recognize these exceptional Americans.
I don't think they even got a letter from the governor of the
United States for preventing hazard in our region.
So I am just asking you, and I don't know who could
actually do it, but you have how many staff that work at the
NRC?
Mr. Burns. About 3,700.
Ms. Kaptur. Three thousand seven hundred people. There must
be somebody there somewhere that cares about people who work in
these plants, either directly or on contract, and could help us
figure out when they do something great, like, they run into a
plant that is at a critical moment and at risk to their own
lives, they have done things that have stopped damage. My gosh,
they should have a big medal, and they get nothing.
So I am just saying to you, if somebody could look at the
workforce issue. I have invited Commissioner Svinicki out to
our area, and you are all welcome, I want you to meet some of
these people. And maybe as you go through these plants, by
happenstance you bump into them. But they are remarkable. I
couldn't do what they do. I don't have the muscular strength to
do some of what they do and the training they go through. I
just think that there should be something initiated that
acknowledges their importance and recognizes it when they do
something great. And I don't think we do that as a country at
the NRC. And I don't know why we don't. If you don't have
legislative authority to do it, let me know. But I think it
could be done under the existing authorities that you have.
So all I am asking you to do is to think hard about where
something remarkable has been done, to figure out a system of
acknowledgement. I am not asking for any money. Maybe you would
have to pay for a little patch they could sew on their uniform.
For those that are contracted employees, who regularly go into
some of these plants, they work so humbly. And they just don't
get any recognition of a national nature and I think they
deserve it.
So they are not military. They receive their own
apprenticeship and journeymen's cards in the community that I
represent. And I really respect them, and I think our federal
government should to. Do you have a means to think about this
within the NRC? Do you need a formal letter from me to ask you
to think about how to identify some of these folks? Yes
Commissioner Ostendorff?
Mr. Ostendorff. I appreciate it. I think all four
commissioners here agree with the sentiment and the spirit
behind your remarks and your question. Let us provide some
feedback to you on this area if we may. I think that there are
some industry representatives even in this hearing today. I do
believe, from our experience collectively, when we go to
nuclear power plants we will see some indication that various
licensees are providing some recognition to their employees.
But I would like to have the opportunity to give you a more
fulsome response and in addition, what else we might be able to
do.
Ms. Kaptur. Yeah, I really think some of these folks that
helped us 25 years ago or more, they are still alive. The
incident that occurred in 2003 I think it was, some of the
workers who were contract workers ended up staying in motels
where they moved from plant to plant, where nuclear particles
were on their work clothes. I am going, is this really
happening?
So I just think there is something missing in the way we
treat the people. The worst example I have of how people have
been treated in nuclear power plants is the example of under
the former Soviet Union when Chernobyl occurred and workers
were sent in with no protective. They were sent in to their
deaths, right.
We don't have that situation here in this country. We have
more respect for those who have these skills. But I just think
that we need to regularize recognition. I don't know how one
does that working with the private sector because these are
private plants. But I think when workers who are contracted
workers go into a facility that is having difficulty, their
national government should care about them and should
acknowledge that service to our country. And with the private
sector, we need to figure out how to do that. And if you could
tell me who to work with within the NRC, I will be your
strongest advocate because they deserve a recognition that they
never get.
So thank you for allowing me to put that on the record. I
wanted to ask, on securing radiological material, the omnibus
included direction that the NRC provide a report to the
committees that evaluate the effectiveness of the requirements
of 10CFR part 37 and determines whether such requirements are
adequate to protect high risk radiological material. Has the
NRC initiated this review, and can you speak to what you have
found if you have or how you are implementing the requirements
for radiological source licenses?
Mr. Burns. Congress set the requirement basically to do a
review after two years, and we will be prepared to do that. I
am sure that we will take some steps before we reach the two
year mark to get there. Part of the background on the
requirement was to allow a period of time for implementation of
this part 37 that addresses source security because there is a
fairly new rule. And so we will do that. We are very
conscientious about the requirement to do the review, and we
will do so.
One of the things that the agency--part of the background
of this too is a requirement that goes back to the Energy
Policy Act of 2005 related to source security. And there is a
periodic task force that the NRC and other sister agencies who
have an interest in it participate in. And there was a report
last year which concluded that there were essentially no gaps
in domestic source security. But again, I think it is important
for us to follow through on the language because we have a new
rule. You want to understand from the experience with your
implementation, is it doing what you tried to design it to do?
And so we will take that on in terms of doing the report
within the next two years that was requested.
Ms. Kaptur. Thank you. Mr. Chairman in closing, this will
be my last comment, your leadership Chairman Burns is so
important and every one of the commissioners. I have been
impressed with every one of you this morning. And I have had to
deal with the NRC now for over three decades. Without
leadership being set at the top for a well managed
organization, things happen downstream that are very dangerous.
And so I just encourage you to set the kind of leadership
to revive the NRC and its multiple connections around the
country, to managing this very important asset that exist
within the United States of America. And I wish you well in
your duties and to enliven your board, to keep your board
engaged and make sure that the Commission does what it is
chartered to do. And thank you very much for your testimony
this morning.
Mr. Burns. Thank you.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. What is the future of the nuclear
industry?
Mr. Burns. Well, as the regulator, I am not sure that I am
really the one to speak to that from----
Mr. Fortenberry. But you could look at the trajectory of
the current dynamics, both here and internationally and give me
a--since you are immersed in this world. It would be helpful to
have your perspective on that.
Mr. Burns. And again, I will perhaps take from my prior
experience.
Mr. Fortenberry. I just looked at you. Anybody else can
answer it if they want.
Mr. Burns. Well, what you see, you see a very dynamic and
concentrated building program in China and other interests in
emerging, what we call emerging nuclear countries such as
Vietnam. India, now that it is mostly back into the fold, has a
vigorous program. So that is what you are seeing, and then the
Gulf states as well. So that is what sort of picture you are
seeing internationally. It is a cloudier picture in Europe,
although you have the United Kingdom. And in Eastern Europe, a
lot of interest in new nuclear development.
In the U.S. you have, again, a dynamic that between things
like cheap natural gas, questions in terms of how the energy
market is regulated or unregulated and things like that, that
have led to the current lower interest in pursuing some of the
applications we thought we might have a few years ago.
That said, as we recently had a hearing on the Detroit
Edison, or as they are renamed, the Fermi 3 plant in Michigan,
and there is also Dominion and its potential for North Anna 3.
Both of those utilities have indicated to us they are
interested in pursuing the combined licenses, partly as part of
their future planning portfolio. They will defer a decision
whether they will actually construct until the early 2020s,
again, looking at energy markets, issues about carbon pricing
and things like that. All of which are fairly much outside the
NRC's regulatory regime.
Mr. Fortenberry. But in the race for commercial markets,
who is leading that? You said it is very dynamic?
Mr. Burns. Well, what I said is in China you have an
extraordinary vigorous construction program. You have had US
technology in terms of Westinghouse. They are building the
AP1000, but the Chinese have also looked at interests in
others, such as Areva designs and have built them, Areva, the
French company. So again, you have U.S.-based marketing from
the US based industry as well as other players in the market.
The Russians are very vigorous in terms of their marketing
strategies for their newer designs.
Mr. Fortenberry. So if we have got no harmonization of
design standards, do we have harmonization of security
initiatives? Not only in terms of actual commercial plant
protection, but again, applying these lessons for the potential
diversion of materials or accounting for materials.
Mr. Burns. Well, in terms of the designs themselves, I
think in terms of material accounting and control, that is not
so much in the reactor design. That is in terms of the fuel and
the types of fuels that are used. And again, I would say with
respect to----
Mr. Fortenberry. I don't want to impose on things that are
outside your purview, but again, sitting from where I sit, when
you look across the spectrum of nuclear security issues, you
operate within a certain set of parameters, ensuring that we
have commercially licensed, safe use of radiological materials
here. However, this has implications moving forward in a world
of fast moving technology and new resource players with large
capacity, to make us all think critically as to how again, back
to your words, which I like, harmonization either of design,
but certainly harmonization of commitments to material security
as well as non-proliferation, is the key question. And you
might occupy a sort of narrower seat in that bandwidth, and I
understand that. So I won't put you in an awkward position.
But at the same time, in terms of all of us working
strategically to ensure that your mission is met, these other
questions loom very large as well, I would assume for you.
Mr. Burns. Oh, yes, they certainly do. And again, in terms
of us looking at designs, obviously in many instances we are
looking at the design in the United States. But as I said, we
have responsibilities with respect to potential export of
design and export of particular equipment.
I think as Commissioner Ostendorff said earlier, we work
well within the inter agency community in terms of those types
of issues. And again, there are controls domestically, we have
our safety, our security. We have safeguards, requirements, and
again to the extent that we are involved in terms of approval
of exports and export of technology, that is part of our
responsibility. And also working with the inter agency
community, particularly Department of Energy, Department of
Commerce in some of these other areas.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Simpson. I thank you all for being here, Chairman Burns
and Members of the Commission. Normally for the 12, 13 years,
whatever it has been that I have been on this committee,
whenever we have had the NRC testify, we have always had the
chairman come up and give the budget requests and stuff. And I
think it was important to have all the commissioners come up,
so that we had a chance to get to know you and talk to you. And
I know that you don't all think the same thing. If you did,
only one of you would be necessary.
But it is good for us to get a chance to know you a little
better and talk to you about the important work that the NRC
does because it is vitally important work. And it is very
critical that the NRC maintain the credibility that currently,
I think exists and has across the country, both for the public
to know that we have safe, nuclear operating plants in this
country and also for the regulated industry to know that you
are working with them to make sure that we are not unduly
driving the cost and making nuclear energy less competitive or
anything like that.
So I appreciate the challenge that you face. We look
forward to working with you and hearing about how you are
implementing some of the rebaselining or whatever you want to
call it and the rule making processes that you are going
through and those types of things. So thank you all for being
here today. Committee is adjourned.
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Tuesday, March 17, 2015.
U.S. DEPARTMENT OF ENERGY, APPLIED ENERGY FUNDING
WITNESSES
FRANKLIN ORR, UNDER SECRETARY FOR SCIENCE AND ENERGY
DAVID DANIELSON, ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND
RENEWABLE ENERGY
JOHN KOTEK, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR NUCLEAR ENERGY
CHRISTOPHER SMITH, ASSISTANT SECRETARY FOR FOSSIL ENERGY
PATRICIA HOFFMAN, ASSISTANT SECRETARY FOR ELECTRICITY DELIVERY AND
ENERGY RELIABILITY
Mr. Simpson. The hearing will come to order.
I would like to welcome our witnesses: Dr. Franklin Orr,
Under Secretary for Science and Energy; Dr. David Danielson,
Assistant Secretary for Energy Efficiency and Renewable Energy;
John Kotek, Principal Deputy Assistant Secretary for Nuclear
Energy; Pat Hoffman, Assistant Secretary for Electricity
Delivery and Energy Reliability; and Christopher Smith,
Assistant Secretary for Fossil Energy. Big panel this morning.
In 2012, the President unveiled an all-of-the-above energy
strategy that sought to develop every source of American-made
energy. Over the years, we have come to realize that this all-
of-the-above approach really means a prioritization of
renewable energy research and development at the expense of
nuclear and fossil energy accounts.
Together, your programs account for almost $4.5 billion of
the Department's budget request for fiscal year 2016. As in
previous years, half of this request is for the Office of
Energy Efficiency and Renewable Energy.
I agree that an all-of-the-above approach should fund
research in new energy sources, but we also need to ensure that
we are efficiently and effectively using our existing sources.
Last year, fossil and nuclear energy sources provided about 85
percent of all electricity produced in this country. Just
increasing the production efficiency by 1 percent of any fossil
or nuclear energy source would have a tremendous effect on net
electricity generation. A true all-of-the-above approach would
not make these sources the lowest priority of the Department of
Energy.
Each of you has an important role in managing and
developing the future of these diverse energy sources. I look
forward to hearing how your vision supports a true all-of-the-
above approach and continues to make investments in our energy
future.
Please ensure that the hearing record, questions for the
record, and any supporting information requested by the
subcommittee are delivered in the final form to us no later
than 4 weeks from the time you receive them. Members who have
additional questions for the record will have until the close
of business tomorrow to provide them to the subcommittee
office.
Mr. Simpson. With that, I will turn to Ranking Member
Kaptur for her opening statement.
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Ms. Kaptur. Thank you, Mr. Chairman, very much.
Good morning, Dr. Danielson.
Mr. Danielson. Good morning.
Ms. Kaptur. Welcome back.
And, Dr. Orr, Secretary Smith and Hoffman and also Mr.
Kotek, so glad to have you all here today. America just keeps
producing this incredible talent that you represent, and that
bodes well for the future. Thank you for all being here today
to present to our subcommittee your 2016 program requests.
It is no secret that United States reliance on foreign
energy imports presents a significant strategic threat as well
as drain on our economy of jobs and productivity. Last year,
America turned a corner, producing more energy than we
imported. The President's--I should mention, imported energy
remains America's number-one category of trade deficit. Your
offices deserve a great deal of credit for your
accomplishments.
And I just want to put on the record some numbers so we
have the big frame in which we are operating. For 2014, our
overall trade deficit as a country in every category was up 6
percent, over half a trillion dollars, $505 billion. That was
up from 2013, when our trade deficit for $476 billion. Yet
domestic energy and the boom here at home with natural gas kept
the deficit in check--gas and additional oil. Oil costs, at the
same time, plunged, but U.S. production by fracking has reduced
our dependence somewhat.
2014 petroleum imports fell 9.6 percent to $334.1 billion,
and that was the lowest we have seen since 2009. And U.S.
petroleum exports actually went up 5.9 percent to $45.7
billion.
Nonetheless, as a country, in the energy realm we sustained
a $289 billion deficit last year, and that translates into lost
jobs in our country--if you calculate 5,000 jobs for every
billion dollars of trade deficit, of 1,445,000 jobs just in
2014 alone.
We must push forward even harder to meet the energy demands
of a new era with an all-of-the-above clean and innovative
energy strategy. And you are all about that.
You all have exciting jobs in inventing the future, and the
applied Offices of Energy Efficiency and Renewable Energy,
Nuclear Energy, Fossil Energy, and the Office of Electricity
provide important resources that the American people need to
success at home and abroad. And the gap is huge still.
Secretary Smith, the work you and your predecessors did to
help develop the new drilling technology spurred a revival of
American oil and gas production. That resource helps meet
America's strategic challenges while domestically creating jobs
and advancing our economy. You don't get enough credit for
that.
Our renewable energy installations are growing their share
of the generation market, and innovation will propel them
forward. We must strive for full-price parity while supporting
domestic manufacturing.
Energy conservation: Energy efficiency presents a huge
opportunity for our country, and it is heartening to see
American business and both in the public and private sectors
rise to the occasion. It makes good business sense, c-e-n-t-s
as well as s-e-n-s-e.
Buildings and vehicles are becoming increasingly efficient
beyond where we ever imagined. And targeting the biggest energy
users, like the steel industry, the auto industry, the glass
industries--all of which, by the way, I represent--and
America's industrial heartland and focusing additional
attention there can yield real results.
The Advanced Manufacturing Office has an important role to
play in developing energy-saving processes that will help drive
down costs for producers and ultimately consumers, and it is a
win-win for everyone.
The energy innovation championed by your offices holds the
key to unlock the full potential of America's modern energy
economy. And we look forward to hearing your goals for
advancing our Nation to a place where she is more sustainable
here at home, diversified, and--very important to me--self-
reliant.
Thank you, Mr. Chairman. I look forward to the testimony.
Mr. Simpson. Thank you.
And, again, welcome to all of you.
It is good to see you again, John.
Mr. Kotek. Thank you.
Mr. Simpson. As I understand it, Dr. Orr is going to give
an opening statement and that any other opening statements will
be included in the record and so forth.
So, Dr. Orr, the floor is yours.
Mr. Orr. Thank you very much, Chairman Simpson, Ranking
Member Kaptur, and members of the subcommittee. Thanks for the
opportunity to appear before you today to talk about the
Department of Energy's applied energy budget for fiscal year
2016.
As both of you observed, we are in the midst of an American
energy renaissance, and the good news is that there is no
shortage of primary energy resources--wind, sun, fossil,
nuclear--that we can put to work to supply our energy needs.
But the question we have to face carefully over time is how
we take advantage of them. And this is really a central message
of human ingenuity--how we supply energy services by using some
primary energy resource to make something like electricity or
transportation services, services that we all take, I think,
for granted but also are woven through every aspect of human
societies. We need to apply our ingenuity to supply those
services safely, cleanly, reliably, and economically, and
thereby enhance the Nation's energy security while mitigating
carbon emissions and other impacts.
So DOE is charged with advancing the all-of-the-above
strategy to enable the transition to a low-carbon economy
through innovative, lower-cost, clean energy technologies. And
we employee the expertise and capabilities of 17 national labs,
13 of which are under the part of DOE that I am supposed to
look after, and they have tremendous expertise and ability to
influence and help us do what we do.
As Under Secretary for Science and Energy, my job is to try
to coordinate the Department of Energy's scientific research
efforts with applied energy research and development, including
by enhancing the productive links among all the science and
energy programs. And we will reassemble this afternoon, I
think, to talk about the science programs, so we actually will
get a chance to see where we stand on that. The fiscal year
2016 science and energy budget request reflects our attempt to
make those links and our attempts to make them stronger.
The Department's total science and energy request, which
also includes the Loan Programs Office and ARPA-E and the
Energy Information Administration request, is $10.7 billion,
about $1.4 billion above the fiscal year 2015 enacted level.
For the applied energy portion of our science and energy
portfolio, the fiscal year 2016 budget is $4.76 billion, an
increase of $1.06 billion over the fiscal year 2015 enacted
level.
Before I talk a bit about the applied energy programs'
budgets, I will note that my colleagues are here to join me, as
was observed earlier, and I am very grateful that they are here
because I am pretty new at this. And I am fully aware that the
actual knowledge sits on either side of me, and they will be
called into action for sure as we go forward.
In the energy efficiency and renewable energy area, which
you can think of as three distinct offices, the budget request
continues a diverse suite of sector investments in sustainable
transportation--that is $793 million; renewable power
technologies at $645 million; and development of manufacturing
technologies and enhanced energy efficiency in our homes,
buildings, and industries at $1.03 billion.
A key highlight in this office is its advanced
manufacturing work. The budget request for that area includes
$404 million to fully fund two new clean energy manufacturing
institutes, and then it continues funding for four institutes.
In nuclear energy, DOE proposes $908 million, $74 million
above the fiscal year 2015 enacted level, to continue
supporting the pursuit of several new concepts and nuclear
reactor designs, including increased funding for licensing
technical support for development of small modular reactors.
For the Office of Fossil Energy, the Department requests
$842 million to continue development of carbon capture,
utilization, and storage technologies for coal plants and
research to improve the performance of the natural gas
infrastructure. We have made a commitment to coal and natural
gas in concert with new carbon capture use and sequestration
tax credits in the administration's POWER Plus initiative to
harness our domestic fossil resources in an environmentally
prudent manner.
The Office of Electricity Delivery and Energy Reliability
is working hard to accelerate the modernization of the Nation's
grid. To carry out this work, the fiscal year 2016 budget
request proposes $270 million to support research and
development activities, cybersecurity work, and grant programs
to develop and update energy assurance plans for States,
localities, and tribes.
The request also includes $20 million for a fifth energy
program in my office, the Office of Indian Energy Policy and
Programs, which works to address the fundamental challenges to
broad clean energy deployment on tribal lands. The request also
includes $11 million for a new Tribal Indian Energy Loan
Guarantee Program that leverages our department's Loan Programs
Office to help improve access to capital for energy products in
Indian country.
So the Department's all-of-the-above applied energy
portfolio is quite widespread, and, as I mentioned before, my
office is working to try to increase the productive links
amongst these programs to increase their efficiency and to
coordinate on some of the big shared challenges that we have to
face.
So one significant way to do this is through the
crosscutting initiatives that we introduced in the fiscal year
2015 budget. So the fiscal year 2016 request includes just over
$1.2 billion in crosscutting research and development across
six initiatives: exascale computing; grid modernization;
subsurface technology and engineering; supercritical carbon
dioxide power generation technology; cybersecurity; and new for
this year, the energy-water nexus.
So the applied programs are involved in five of these
crosscuts, so let me say a word about each of them to give you
an idea of how that works.
So we are starting here with the grid modernization
crosscut, which is focused on providing tools to set the Nation
on a cost-effective path to the flexible, secure grid of the
future. Investment in a modernized grid is a critical component
of energy and economic security, and, through this crosscut, we
are focusing the efforts of our experts across the relevant
offices on this particular challenge.
The subsurface technology and engineering crosscut is
focused on a fundamental objective: mastery of the subsurface.
Specifically, adaptive control technologies that can control
where fluids go, where they flow in the subsurface, can have a
transformative effect on a host of subsurface applications,
ranging from carbon and nuclear waste storage to responsible
geothermal and hydrocarbon extraction.
The supercritical technology crosscut is aimed at working
to mature a supercritical CO2 technology that could
improve efficiency of electric power generation and harness
that in a way that would reduce costs and reduce the footprint
of the equipment required. The crosscut team is working towards
a pilot-scale facility to evaluate just how transformative this
technology can be over a range of operating conditions that
would apply to a wide range of thermal energy sources.
For increased coordination on cybersecurity, DOE requests
$306 million to fund the cybersecurity crosscut. Cybersecurity
is increasingly important in today's modern age, and DOE is
working to protect its cyber assets as well as to strengthen
the security of the national grid.
And, finally, I will mention the energy-water nexus
crosscut. It is new in our fiscal year 2016 budget request.
Water use is absolutely fundamental to electric power
generation. Some 40 percent of the withdrawals of water that
come through the system are associated with cooling and
electric power generation. And through data modeling and
analysis as well as targeted technology development, this new
initiative positions DOE to support the Nation's transition to
more resilient energy-water systems.
And before I finish here, let me say a word about one more
initiative my office is overseeing that cuts across all the
Department's applied energy programs as well as the Office of
Science. This is the Quadrennial Technology Review.
The purpose of this effort is to inform the future of the
Department's science and applied energy research portfolio by
examining the state of existing and emerging energy
technologies and by identifying the most promising research and
development opportunities across those technologies. It is
meant to give us a picture of where we are and where it makes
sense to go in the research effort going forward.
The release of that report is planned for the summer, and I
will look forward to briefing the committee and other Members
of Congress when that review is complete.
So let me conclude by saying that the Department of Energy
is pursuing an all-of-the-above approach to build a portfolio
of advanced energy technologies that will lead us to a low-
carbon economy. And, in doing so, a key aspect we are focused
on is fostering increased coordination and efficiency
throughout the science and energy enterprise.
I and my colleagues here would be pleased to answer your
questions on how the fiscal year 2016 budget supports those
efforts and our effort to use the funds efficiently and
effectively. Thank you very much.
Mr. Simpson. Thank you.
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Mr. Simpson. Let me ask you just a general question first.
The price of energy, in whichever form it is, has a great
impact on other forms of energy. Natural gas is making nuclear
energy less competitive and every other form of energy less
competitive. And, as you know, our economy kind of goes,
rightfully so, to whichever is the cheapest form of energy
production.
What I am really concerned about is reliability. Because
prices of various forms of energy, whether it is wind, solar,
natural gas, oil, nuclear, whatever, will go up and down.
Mr. Orr. Yep.
Mr. Simpson. How does that affect your department and where
you put your resources as you are looking at the future of
energy development in this country?
Mr. Orr. So you are absolutely right that energy prices are
commodities. They are hard to predict--well, if asked about
this, I usually say that the price will go up and then go down
but not necessarily in that order.
Mr. Simpson. Yeah.
Mr. Orr. But the real goal of the Department of Energy and
really the Nation as a whole, I think, is to have a well-
diversified portfolio of energy resources in the mix and energy
conversion methods that give us the flexibility to adapt to
those price changes as they happen.
I don't discount the markets as important. They are
fundamentally important to this. But we also want to make sure
that we don't have all our eggs in any one basket. And I think
that means that we need a long-term view that makes sure that
the well-diversified portfolio is there, and that means
investing across the spectrum of energy technologies in the way
that we have been trying to do.
The Department is really aimed at supplying the fundamental
idea flow into the marketplace that will, over time, affect the
prices of all those conversions, in addition to responding to
the commodity prices. So I think the important issue is that we
not react too much to short-term price fluctuations.
If you remember back to the mid-1980s, when the price of
oil went down, for a period we paid less attention to investing
in research for the future than we should have, and so we don't
want to do that again. We really need to make sure that we
build a diverse and capable portfolio for the future.
Mr. Simpson. Well, I appreciate that, because one of the
concerns is that while natural gas is cheap and so forth, I
don't expect it to stay that way forever. While the outlook
looks good right now, the reality is, as Dr. Danielson and I
were talking yesterday, the price of solar has been coming
down----
Mr. Orr. Yep.
Mr. Simpson [continuing]. And we still need to do research.
Same thing with nuclear and----
Mr. Orr. Uh-huh.
Mr. Simpson [continuing]. Other commodities that we work
on. And we shouldn't de-emphasize those because of the current
situation that we are in.
Mr. Orr. Uh-huh. And I would observe also that using energy
efficiently across the full portfolio, as you observed at the
beginning, is an important way we can make sure that everything
we do is more efficient and, therefore, more cost-effective.
Mr. Simpson. Dr. Orr and Mr. Kotek, I would like to take a
few minutes to talk about the Department's nuclear energy
program. What is your vision for the strategy of moving forward
DOE's nuclear energy program, its research and development
activities, and DOE's assets across the enterprise?
Mr. Kotek. Would you like to start?
Mr. Orr. Well, I would say that we believe fully that there
needs to be a nuclear energy component in the Nation's energy
mix. And we are committed, through both the research for
advanced reactors and things like small modular reactors and so
on, to contribute in an important way to that future.
I would actually like to ask John to fill you in on some of
the details of what is in the budget.
Mr. Kotek. Yep. Thank you very much.
As I look at any program budget, you know, I think the
overall program categories are right. I mean, we have work
going on to extend the safe operating lives of today's
reactors. We have work going on to develop multiple pathways
for new deployments, including small modular reactors, which
could be a great opportunity for both, you know, domestic and
export markets. We have research going on on alternative fuel
cycles and alternative, you know--and disposal methods on the
back end. And then we have some crosscutting things, workforce
development, computational capabilities, and then, of course,
the research infrastructure, which of course I am very familiar
with, at our lead lab in Idaho and elsewhere.
So a question I have is, you know, what is the right vector
going forward and what are the right areas of emphasis. And so
what we are trying to do is we are trying to draw on the best
ideas across the nuclear industry and beyond. So you may be
familiar, earlier this month we had a series of workshops
across the country involving our labs, universities, industry,
and others to really give us input that is going to help guide
those future investments. And so I am looking forward to
receiving that synthesized input to help us guide our
programmatic directions and budget requests in fiscal 2017 and
beyond.
Mr. Simpson. Thank you.
Dr. Orr and Mr. Smith, last year's omnibus included
direction to develop--and you guys don't mind if I have a cold
and keep coughing and all that kind of stuff.
Mr. Orr. Oh, that is all right.
Mr. Simpson. But last year's omnibus included direction to
develop a comprehensive program plan and research and
development roadmap for the Office of Fossil Energy.
I know it is too early to ask for the specifics, but I want
to get a broad sense of your vision for this roadmap
development. And what is your vision for the fossil energy, and
where will the biggest technological advancement opportunities
exist?
Mr. Orr. Chris, why don't you just dive right in on that?
Mr. Smith. Well, thank you, Mr. Chairman, for the question.
First of all, I would emphasize that I think we have a very
robust request this year for the Office of Fossil Energy, a
total request of $842 million for this year, which is an
increase over the fiscal year 2015 omnibus bill. So we think
that this is a very important part of the strategy, and it is a
key component of the technologies that are going to provide
power and energy in the future.
In terms of the request, there is an increase for carbon
capture. We think this is going to be an important part of what
we are working on throughout this fiscal year and going
forward.
There is also an increase in the request for natural gas
technologies. There we are going to be focused on environmental
sustainability and safety of producing oil and natural gas. We
feel that one of the most important components of our R&D
program, in terms of a government role, is to give communities
the confidence and the assurance that we have good science that
is quantifying things that people are concerned about in terms
of production technologies and that we can develop and deliver
these molecules safely, get them out of formations and get them
to the burner tip and to power plants, where they can provide
energy for our economies.
So those are our two broad programs, the coal program and
the oil and natural gas program. We think both of them are
really important in terms of diversity of energy supply,
reducing our reliance on imports, and ensuring that we are
looking at reliability and the benefits we can provide for our
economy.
Mr. Simpson. Thank you.
Ms. Hoffman, this year's budget request contains a proposal
for two new grant programs aimed at assisting the States with
electrical reliability planning programs and formula grants to
update energy assistance assurance plans.
Can you discuss how the proposal came about? Are the
proposals intended as multiyear programs? And will these grants
go out under the same formula as previous grants?
Ms. Hoffman. Thank you very much.
I appreciate the question because the interface and the
dialogue with States are an extremely important issue as we
move forward for grid modernization and looking at energy
security of the electric grid.
Both of these programs were to address specific
conversations and dialogues that need to occur at the State
level, the first for the energy reliability programs. These
programs are looked to be competitive programs where it will be
an ongoing program in support of reliability investments. So
how do we really keep the State engaged in very tough
conversations that have to occur between the utility planners
and the States and the policymakers for grid modernization?
The second effort is energy assurance plans. These plans,
we are looking at grants to the States. This program would
probably be updated every--request to have these plans updated
maybe every third year.
The intent of this program is to really go after having the
States have a good situational awareness of their energy assets
and how these assets are changing over time so they can really
look at the availability in an emergency. For example, you look
at Hurricane Sandy--where was the availability of gasoline in
the New York area? Or as you look at maybe an earthquake or
other sort of events--what assets do you have to rely upon?
Those must be updated on a regular basis so that the State
energy offices and the State constituents really understand
what the options are in an emergency.
Those are the two goals of the program--what we hope to
achieve. It is an important effort as we look at assurance in
the future.
Mr. Simpson. Thank you.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Dr. Orr, I listened carefully to what you said about the
water-energy nexus, and I am very interested in comments from
yourself and the other panelists on this topic.
Could you summarize some of the key findings of your
report--I read this summary--and tell us how they are
influencing your program?
Mr. Orr. Uh-huh.
Ms. Kaptur. And let me just say, as a representative of
several large cities, places like Cleveland, Lorain, Toledo, in
the industrial heartland, I am wondering if your focus in the
energy-water nexus is merely on energy-producing plants and
their water-draw or if your program includes thinking about how
to help some of our older cities deal with their power needs
related to their water and their sewage treatment.
I am interested in your--I read the summary. I didn't read
the whole report----
Mr. Orr. Yeah.
Ms. Kaptur [continuing]. But I----
Mr. Orr. You can be forgiven for not reading that.
Ms. Kaptur. Okay.
Mr. Orr. Yeah. So----
Ms. Kaptur. So, in any case, you know, the question is,
what are your findings? What is some of the direction, and
would it include a look at both sides of that?
Mr. Orr. Yes, indeed. And the reason that this is a
crosscut is because there is exactly that interlocked use.
So part of the effort--we will actually talk about this
again this afternoon in the hearing, because part of this
involves our science program, in building much more detailed
and careful models of how water flows through the whole system.
But there is also emphasis on specific work of using
nontraditional waters, both to provide energy and to be treated
in such a way that they can have beneficial uses, and that can
include the whole water treatment area.
And then, of course, there is the whole question of the
sustainable, low-energy water utilities that will allow us to
increase energy efficiency and perhaps energy recovery for
water and wastewater treatment.
So it is an attempt to focus the efforts of the Department
of Energy, which, you know, we are involved in a lot of water
use through energy generation, but also to recognize that it is
linked to all kinds of other things that we do through
agriculture and everything else. So cities are certainly an
important part of that, and I anticipate that that will cover
both of those areas.
Ms. Kaptur. With the intensive interest of the Federal
Government in the 17 Western States--and I can understand the
water-shortage challenges that many places face. I don't
represent that part of America, but I wanted to just put on
your screen some of the cities and the--going through some of
the water plants and sewage treatment plants in the district
that I represent, and the efforts that they are trying to make,
very slowly, too slowly, to produce power on site, to try to
reduce their energy footprint. Many of these facilities are
over 50 years old.
So I just wanted you to see that----
Mr. Orr. Uh-huh.
Ms. Kaptur [continuing]. Particularly in these heavy
manufacturing regions, where there has been--two-thirds of the
jobs have been lost, and yet they have these antiquated systems
that they are dealing with. And they could use some of your
expertise as you think through how you are going to structure
the energy and water nexus.
Mr. Orr. Yeah. One component, I should have said the first
time around, of this would be enhanced technical assistance and
R&D related to a variety of the areas that you just mentioned.
We could talk more about that if that would be helpful.
Ms. Kaptur. If you just look at this panel, you see people
from Gary, Indiana; Los Angeles; Cleveland; Toledo. I mean, so
I think that there would be a great deal of interest in that,
though I can't speak directly for my colleagues on that.
Does anyone else wish to comment on that energy-water
nexus? Anyone else on the panel?
Mr. Danielson. I can add a little bit about some of the
work that we have in the fiscal year 2016 budget in this area.
One area that the Under Secretary mentioned is the
importance of developing more sophisticated models to actually
understand the water-energy system in the United States. And
so, through our Water Power Program, we are investing some
funds in developing new models for how to manage water power
systems in a more effective way. And those will be integrated
with other models that will be a more comprehensive set of
models around energy-water use in the country.
In the area of technologies for producing more freshwater,
our geothermal program is proposing a research and development
effort to use low-grade geothermal waste heat to make
freshwater. There is a project we have today on an exciting
technology called forward osmosis being done at Idaho National
Laboratory, which is a technology that presents a lot of
opportunity there for taking low-grade geothermal waste heat
and producing freshwater.
And then, finally, we have an effort in our Advanced
Manufacturing Office, about a $4 million effort, on sustainable
water utilities. Our water processing infrastructure uses a lot
of energy, and a lot of energy comes into those systems. We are
going to be doing research and development and technical
assistance with water utilities to help them lower their energy
footprint and also find ways to convert waste into energy that
they can use on site to lower their energy costs.
Ms. Kaptur. I am glad you said that latter point, because,
though I can't direct what you do, I can talk and suggest
ideas, that you look at the United States in terms of its
watersheds and that the watersheds of the West are very
different than the watersheds of the Great Lakes, let's say.
Mr. Orr. Indeed.
Ms. Kaptur. And if you look at our watersheds and what is
happening in the Midwest, in the Great Lakes region, with
drainage and the large amounts of freshwater, and you look at
the facilities that treat the water or treat the sewage, we
have large amounts of organics that are associated with
processing on site. They are like big mixing bowls, right? And
we have a problem throughout the Great Lakes with water runoff
that is polluted with manures from agriculture and so forth.
But if one starts thinking about these big mixing bowls and
the way of reprocessing that regional waste, that organic
waste, in a manner that produces heat, let's say, or produces
power, that kind of thinking is not really going on, because
people aren't thinking about the watershed. They are just
involved in their own little operation, whatever it might be.
But your kind of technical assistance to regions like that
could really be important to unleash the creativity and
innovation that is possible on those sites that have had
multibillion dollars of investment over the years but they
don't view power as part of their mandate. So I just think this
is a really important initiative.
And I have one other question in the first round, and then
we will move to others.
To your knowledge, Dr. Orr, is the Department of Energy
effectively engaged in some manner in assisting Europe and
Ukraine to meet their strategic energy challenges as they
grapple with Russian aggressiveness rooted in Russia's energy
relationships with Western Europe and now the invasion of
Ukraine? Is the Department of Energy aggressively involved in
any kind of effort to try to help Europe reposition----
Mr. Orr. Uh-huh. So----
Ms. Kaptur [continuing]. From an energy standpoint?
Mr. Orr. [continuing]. We, of course, are in more or less
constant contact with energy colleagues around the world. The
Secretary has participated in a series of clean energy
ministerials, for example, that have some relationship to the
issues you mention. And I know that there is effort in thinking
about the questions of natural gas availability in Ukraine.
I am too new to the program to know for sure any details of
that, and I don't know whether--maybe I will ask Chris Smith to
jump in on that.
Mr. Smith. Well, thank you, Dr. Orr.
So I will make a couple of points on the ways that the
Office of Fossil Energy has been directly engaged.
So, as Dr. Orr mentioned, this is a--you know, it is a
long-term challenge. It is multifactorial. There are a lot of
moving parts here.
Over the long term, we have been engaged with our partners
throughout Europe to help take the lessons that we have learned
here in the United States with regards to development and
production of unconventional oil and gas resources and try to
transfer some of that knowledge, some of that information to
some of our allies and trading partners in Europe.
A couple years ago, predating this effort, I traveled with
one of my colleagues from the State Department and engaged in
an IEA engagement that was putting together what they called at
the time the golden rule, sort of a golden age of gas, that was
an attempt to take the lessons learned in the United States and
establish a playing field in Europe, in terms of thinking about
shale gas extraction.
It is those types of long-term collaborations that are
critical. So, as Dr. Orr mentioned, in the immediate term, we
do have teams that have been working with our allies and
trading partners to think about planning, to think about
contingency planning, some things that we do well here in the
United States. But, also, over the long term, there are a lot
of issues around development of infrastructure, around putting
in place smart rules, around commonsense regulation to make
sure that infrastructure can be built safely and that resources
can be developed prudently. And that is the type of
collaboration that we have had to have over the long term and
over the short term.
Ms. Kaptur. Thank you very much.
For the record, I would like to ask if maybe Dr. Orr could,
or by letter, develop a reply to that question a little bit
further, focused in at least three areas. One is the
possibility--I represent the largest coal-shipping port on the
Great Lakes. It may be cost-prohibitive to ship coal from our
full committee chairman's district in Kentucky through the Port
of Toledo to Ukraine, which is the shortest distance, by the
way, from the United States to the ports of Northern Europe.
But I have asked myself the question, if they use that coal, it
would actually be better coal than they have in Ukraine, so it
would lower the carbon footprint. Is that possible?
Number two, small-package nuclear. Could we do something
quickly to help some of the countries that are involved adjust?
And, thirdly, LNG. Can we do anything on export quickly?
Not 5 years from now, but quickly. Are there short-term energy
initiatives that we could undertake to help that situation,
which is being lived in real time right now. I would very much
appreciate that.
Mr. Orr. Yeah, we will be happy to do that for you.
Ms. Kaptur. Thank you.
Mr. Simpson. Mr. Fleischmann.
Mr. Fleischmann. Thank you, Mr. Chairman.
And, Dr. Orr, I want to welcome your entire panel. I really
appreciate you all being here before us today. I work very
closely with many of you all, and I appreciate each and every
one of you all's commitment to our Nation's energy needs. This
is a critical area for, I think, discussion, not only for my
constituents, I think, but for the whole Nation as we move
forward.
I have a few questions. Last Thursday, I had the privilege
again of visiting the Oak Ridge National Lab's Manufacturing
Demonstration Facility with Deputy Secretary Liz Sherwood-
Randall. We saw the world's largest polymer 3D printer being
installed and watched as manufacturing parts were being
printed. I wish the full committee could visit this amazing
facility that last year made the world's first printed car.
Dr. Danielson, we have been there together, as well. Our
subcommittee's investment in these programs will help foster
innovation and promote U.S. leadership.
My first question is for you, Dr. Danielson: How does
advanced manufacturing connect to EERE core research programs
that you divided into sustainable transportation, renewable
energy, and energy efficiency, sir?
Mr. Danielson. Thank you, Congressman. And we have been
very excited to see the work that has come out of the
Manufacturing Demonstration Facility at Oak Ridge. It is a
model for what we want to see with our advanced-manufacturing-
oriented efforts going forward, and with the manufacturing
innovation institutes, as well.
One thing I will point out is that we are in a pretty
exciting and unique time as it relates to manufacturing
competitiveness in the country. The low energy prices mentioned
are a result of some early great work done by the Fossil Energy
department here. We are seeing significant increases in labor
rates overseas. And we are also seeing a whole suite of new
advanced manufacturing technologies emerge, especially here in
the United States, that have the potential to give us a
competitive advantage.
And so what our focus has been, in our Advanced
Manufacturing Office, which is a significant focus in this
budget request, is we are looking to invest in those advanced
platform, foundational manufacturing technologies that will
apply to a wide variety of the technologies within our
sustainable transportation offices, renewable electricity, and
end-use efficiency.
To give you an example, in the additive manufacturing area,
we are seeing opportunities not only in sustainable
transportation for more efficient engines, but we are also
seeing it be applied more broadly in the building technologies
office, as well. Just recently, Oak Ridge National Lab is
leading an effort to put out an open call for America's best
innovators' ideas that Oak Ridge will then go, and within a
short period of months using 3D printing, prototype those
advanced technologies and show what they can do.
And so we are seeing some exciting synergies amongst the
Advanced Manufacturing Office's capabilities, resulting in end-
use innovation in the various sectors that we invest in in
energy.
Mr. Fleischmann. Thank you, sir.
This question is for either Dr. Orr or for Dr. Danielson.
Can you please tell me how the Advanced Manufacturing Office
might benefit other technology programs, such as the vehicle
technologies program and the Carbon Fiber Test Facility at ORNL
or the building technologies program, any of those three?
Mr. Orr. Well, let me give you a brief answer, and then
Dave can help out.
The good thing about these fundamental changes--additive
manufacturing, the 3D printing is an example of that--is that
there are many applications that kind of cut across. They are
fundamentally enabling for more efficient, lower materials
requirements, lower cost, and much faster prototyping. And all
of those things can find applications in lots and lots and lots
of ways.
So we have good examples and good applications to start
with, but they should have much broader impact.
Mr. Danielson. And I would add that although this additive
manufacturing capability, for example, was initially funded out
of the Advanced Manufacturing Office, we are seeing the Vehicle
Technologies Office engage on this with the 3D-printed car
technology that you just talked about, in addition to the
automotive industry using 3D printing as a way to much more
quickly and cheaply develop new molds so that they can lower
tooling costs for manufacturing.
We have also seen the first ever 3D-printed packaging and
heat sinks around advanced power electronics between the
Vehicle Technologies Office and the Advanced Manufacturing
Office work at Oak Ridge.
And we are also seeing, as I mentioned in the building
technologies area, all kinds of opportunities that are just
emerging as we get these offices engaged with the capability,
including advanced new nozzles that can enable much more
efficient heating, ventilation, and air-conditioning units.
Mr. Fleischmann. Thank you.
For several years now, it has taken congressional direction
to fund the nuclear infrastructure at the Oak Ridge National
Laboratory. The hot cells are essential capabilities that serve
multiple missions for the United States Government, yet they
lack an institutional steward.
The Office of Science has provided a portion of the funding
needed in this budget request, but support for these facilities
is still not evident in the fiscal 2016 request for the Office
of Nuclear Energy despite direction from Congress to work
jointly with the Office of Science on this issue.
Mr. Kotek, I was pleased to see in the fiscal 2016 budget
proposal that the Office of Science, for the first time, is
providing partial funding for the nuclear infrastructure at Oak
Ridge National Lab. This funding, while an important step, only
partially covers the operating costs. What do you see as your
role to ensure full funding for these multi-program facilities?
Mr. Kotek. Thank you for the question.
It was my understanding that the transfer of responsibility
to the Office of Science was to be for the complete
responsibility. And so I will go back and work with the folks
in the Office of Science to understand what their plans are,
and maybe there will be an opportunity to ask them about that
later. But at least my understanding for this budget request
was that was to be moved over entirely into their office.
Mr. Fleischmann. Okay. Thank you.
Mr. Kotek, I would like to discuss the Modeling and
Simulation Energy Innovation Hub funded with your office.
The hub's primary task is to create a computer model that
simulates a reactor. What has the hub accomplished? How far
along is this model? And how is it being used?
Mr. Kotek. Thank you very much for the question.
The model is being used, you know, fairly widely by
industry to understand a range of issues that can occur within
nuclear reactor types. And, as you may know, we have several
different reactor types that are currently in use.
And so what we have started with is the simulation of a
pressurized water reactor, a certain type of reactor that is
commonly in use. As we look and go forward, what we are looking
to do is take that capability and use it to help us examine
certain phenomena in other reactor types, so boiling-water
reactors and even small modular reactors.
So it is something we expect to see broadly applicable by
the time we are done with this second 5-year term.
Mr. Orr. And could I just add to that that, in building
these models, they look at the underlying physics of the
details of the fuel rods and bundles, of how the fluids flow
around them, and building better descriptions of those than to
have applications kind of throughout the nuclear enterprise
but, actually, more broadly in other kinds of power plant
applications, as well.
So the knowledge base that is applied in that specific area
will have much broader application.
Mr. Kotek. Absolutely.
Mr. Fleischmann. Thank you, gentlemen.
As a followup to that, I have two questions.
One of the unique features of the hub is its management
structure. It is comprised of a consortium of national labs,
universities, and industry partners.
Can you talk about the successes and lessons learned from
this approach? And how does each of the different partners
contribute to the hub success?
Mr. Orr. Well, as you know, there has been some
experimentation in the way we have done the hubs in a variety
of places. The ones that have been very successful--and I would
cite the battery hub led out of Argonne as another example of
those, and the Oak Ridge effort--have started with a capable
organization leading it, so a group that is used to managing
complicated enterprises. It needs a good leader, a person who
is in charge who really is in charge and who has the technical
chops to deal with all the players.
It needs to have the right range of expertise of people
contributing to it. And because of the way these things have
been selected in a competitive proposal kind of environment,
there is a real test as the teams have to assemble and make the
argument that they are well enough equipped to do that.
And then they need to keep focused, to keep their eyes on
the ball as they work through. The fact that they have funding
for a finite time has a way of focusing the intention of all of
the participants on really making progress that can matter.
So each of the problems is a little bit different, so you
have to adapt those ideas in the right place, but I think we
have seen enough examples of very successful hubs that we can
see how to do that going forward.
Mr. Fleischmann. And one final question: Can you describe
how the Office of Nuclear Energy's other research activities
into advanced modeling and simulation complement the activities
of the hub?
Mr. Kotek. Certainly.
So we have had work underway under our NEAMS Program, the
Nuclear Energy Advanced Modeling Simulation Program, that
develops specific codes looking at what they call high-impact
problems. So there is integration between the two activities,
but the CASL hub is focused on, you know, sort of this broader
request of reactor modeling. The NEAMS Program is looking more
at specific issues, so what they call high-impact problems, all
right? So looking at, for example, the question of
understanding tube vibration within a steam generator. That is
a specific thing that we would dive into under that program to,
sort of, you know, in part, build off of what we are doing
through the CASL effort.
Mr. Fleischmann. Okay.
Thank you all.
Mr. Chairman, I yield back.
Mr. Simpson. Mr. Honda.
Mr. Honda. Thank you, Mr. Chairman.
And welcome, all of you. Good to see all of you.
And, Dr. Danielson, good seeing you too.
Dr. Danielson, this year's budget request proposes a
significant increase for Clean Energy Manufacturing Innovation,
or CEMI, institutes as part of the White House initiative to
revitalize American manufacturing, including establishment of
two new CEMI institutes.
This committee has been very supportive of the Advanced
Manufacturing Program within the Office of Energy Efficiency
and Renewable Energy. And in the Cromnibus for fiscal year
2015, the committee included the Revitalize American
Manufacturing and Innovation Act, or the RAMI, to authorize a
National Network for Manufacturing Innovation.
But I know some folks, at least in my district, are a
little confused by the way the budget request rolls out these
centers, because they expected that the RAMI authorization to
reprogram $250 million would mean a more rapid expansion of the
program, whereas the budget request seeks appropriations for
the centers and goes about the establishment of the nationwide
network more slowly than they envisioned.
So can you explain to us how your vision, to the extent you
can, the administration's vision for rolling out the network?
And can you give us an update on how the existing institutes
are working out right now?
Mr. Danielson. Yes. Thank you, Congressman.
The National Network for Manufacturing Innovation is an
interagency effort across Department of Commerce, Department of
Energy, Department of Defense, and a number of other agencies.
The vision is to build a national network of innovation
centers that will allow the United States to tap into those
emerging advanced manufacturing technologies that are just
around the corner, that we think, if the United States can
assert leadership, will establish us as a major player and make
us a magnet for the manufacturing jobs of the future.
The Department of Energy's request would support four
ongoing institutes that would already exist going into fiscal
year 2016 and would fund two fully front-funded new institutes
at $70 million each. This would be in addition to the
Department of Commerce putting forward in their budget a
proposal to do two new institutes, I believe, the Department of
Defense looking to do one new institute, and the U.S.
Department of Agriculture doing one more institute, as well.
The RAMI bill you are talking about, I think, authorized
transfer authority, but that is not an authority that we are
planning to use in fiscal year 2015 or 2016.
Mr. Honda. So with the RAMI project in mind, how would that
go about becoming realized?
Mr. Danielson. The institutes that I just spoke of are in
the budget request this year. And, in my office alone, this
budget requests support for six total institutes in addition to
the institutes that I mentioned that the other agencies will be
putting forward.
Mr. Honda. Okay.
Mr. Danielson. But I would be happy to take that question
for the record to give you a little more clarity on the
interagency strategy around NNMI.
Mr. Honda. It would be really helpful for me. Thank you.
Mr. Danielson. Okay.
Mr. Honda. The SunShot Initiative, access to solar for
lower-income folks--2016 marked the halfway point of the
President's SunShot Initiative to make solar-power costs
competitive without subsidies by 2020. Can you update the
subcommittee on where we stand in achieving that goal?
And, as I understand it, we are currently 70 percent of the
way towards achieving the goal of reducing the cost of solar-
energy technologies. It is the halfway mark, and we are more
than halfway there, yet the request increases the solar-energy
budget by almost 50 percent.
This may be a stupid question, but can you explain the
challenges that remain to be overcome and how these justify the
increase, which I am not unhappy about, in your budget request?
Mr. Danielson. Thank you, Congressman. You and I visited
SunPower manufacturing----
Mr. Honda. Right.
Mr. Danielson [continuing]. Facility in your district,
which I think is a great example of some of the momentum that
we are building in the United States around solar
manufacturing.
We have made significant progress since 2010 when we kicked
off the SunShot Initiative--and that was in 2010--with the goal
by 2020 of achieving directly cost-competitive solar without
subsidies.
When we are here, about 40 to 50 percent of the way through
that decade-long initiative, I would say we are about 50 to 60
percent of the way to the goal. And we have seen significant
reductions in module prices, but we still have a lot of work to
do. We are at about 70 cents per watt on modules, and we need
to get another 40 percent reduction, down to about 50 cents per
watt, for direct cost-competitiveness.
We really have three major thrusts within the program that
are becoming more urgent as we approach this SunShot goal. The
first is innovation in modules for much more efficient modules,
low-cost modules, and modules that can give the United States a
competitive advantage as it relates to manufacturing.
And I will note that last year was a great year for solar
manufacturing in the U.S.--an announcement of 2 gigawatts of
new capacity that will come on line, which is doubling the U.S.
solar manufacturing capacity, including a gigawatt-scale plant
to be built up in Buffalo, New York, that is based on
technology that we originally funded, in addition to DOE-funded
technologies scaling up in Michigan and Oregon.
Mr. Danielson. Secondly, in addition to the technology
innovation on modules, we have a major focus on grid
integration, which is part of the grid modernization initiative
that has been put forward. Whereas we get more and more cost-
effective distributed solar power, we are going from having
maybe thousands of centralized power plants that need to be
controlled to potentially millions of distributed power
plants--small solar power plants, that need to be integrated
into the grid in a reliable, resilient fashion. So we are
looking at things like control strategies, control of energy
storage behind the meter, smart inverters that can sense what
the grid needs and adjust what is being put back.
Finally, one of the sticky cost points with solar is on
what we have called soft costs, which includes things like
permitting, customer acquisition, financing costs, and a number
of other areas. We are also investing in an increased way in
attacking those finance costs by working with industry partners
to streamline documentation, and are working with a number of
jurisdictions around the country to develop technology
solutions to dramatically reduce the red tape and the
permitting time and cost associated with solar, as well.
Mr. Honda. It sounds like it is a good investment, that we
could drive this thing forward more quickly.
Something I brought up in our hearing with Secretary Moniz
is my desire to do more in the way of helping low-income
families gain access to solar energy so that they can reap the
benefits of reduced energy bills that are currently largely
enjoyed by more affluent Americans.
Can you tell us a bit about what the Department is doing to
improve access to solar for all Americans?
Mr. Danielson. Yes. Thank you very much.
You know, one of the important programs that is under my
purview is the Weatherization Assistance Program.
Mr. Honda. Right.
Mr. Danielson. It is a program that, since 1976, more than
7 million low-income families have had retrofits of their homes
to enable up to, on average, about $400 a year of energy
savings, in addition to making these homes actually comfortable
and warm in winter and things like that.
Solar thermal is a measure that is currently on the
weatherization approval list, so that is a technology that is
available to low-income families to be able to access solar
energy to heat their homes and cut their energy costs, as one
example.
Mr. Honda. For the chair, if I may ask another question?
The budget request for weatherization assistance, again,
includes two initiatives: the $50 million for competitively
selected products to demonstrate financing models that would
support the retrofit of low-income and multifamily buildings;
and second was $20 million for certain local communities to
develop economic development roadmaps in achieving the clean
energy goals.
Can you provide us more details about this proposal? And
would it be through the States or directly to the project
recipients? And what sort of financing models are you currently
considering for this program? And what criteria would you use
to make an award?
This sounds like this new proposal represents your vision
for the future of weatherization, and that would be an activity
that would supplant the existing form of grants, grant
programs. Are there comments you can make on that?
Mr. Danielson. Yes. Thanks for that question.
Those are two important new initiatives we put forward
under the Weatherization Assistance Program within the 2016
request.
The first you mentioned was the multifamily program----
Mr. Honda. Yeah.
Mr. Danielson [continuing]. And the challenge there is
that, with the Weatherization Assistance Program today, a
disproportionate number of the retrofits occur on single-family
homes relative to the number of multifamily homes there are.
And so this program is meant to competitively try out new
programs that would unlock private capital to allow the
multifamily side of the equation to have a significantly larger
number of retrofits.
One example of a program that could enable that are PACE
programs, as you know--that is Property Assessed Clean Energy--
which allows financing to be repaid through municipal taxes
however we would put this out for the best ideas that the
Nation's finance community would have to put forward.
And then on the local energy program, under the Recovery
Act, we were able to establish partnerships with municipalities
and cities directly through the EECBG program, Energy
Efficiency Community Block Grants, and we found that to be
incredibly productive. We ended up successfully retrofitting
more than 700 million square feet of buildings through that
program.
And since the Recovery Act has sunsetted, we don't have a
direct mechanism to engage on innovative clean energy policy
development and deployment program development with localities.
This program would put forward the first time we would be
working directly with those localities on innovative programs
to help them lower their energy bills and their carbon
footprint.
Ms. Kaptur. Would the gentleman yield at some point?
Mr. Honda. Yeah.
Ms. Kaptur. I just wanted to follow on Congressman Honda's
excellent questioning here on this differential between single-
family units versus multifamily units.
I am going to throw in a third perspective here, and that
is, as the program is developed, think about neighborhoods that
both single-family and multifamily are located in certain
neighborhoods. And what is not happening at the local level, in
my opinion, is that the systemic energy needs of a given
neighborhood are not thought through initially because of the
way the program functions.
So, for example--and I will just take historic preservation
neighborhoods, which tend to be located in the older parts the
cities----
Mr. Honda. Sure.
Ms. Kaptur [continuing]. All right? And because of the
historic preservation tax credits and all the other things that
attend to them, what is happening is that the private sector is
reluctant to invest for different reasons, but the houses leak
energy because they are not allowed to put in windows that
actually save energy because that violates some historic
preservation code.
And, from a market standpoint, over time, these
neighborhoods aren't going to make it. I hate to be that bold
in saying that, but there has to be an energy perspective that
takes in the neighborhood.
In some of the neighborhoods I am talking about and have
visited, there is waste heat from big industrial plants that
sit in the same neighborhood. There are landfills that leach
methane that could be put into an energy grid for that
neighborhood. But nobody is thinking big enough. They are
thinking at the unit level or at the apartment level. But it is
not--it can't be a successful strategy.
So I just would urge you to think about a footprint that
includes a neighborhood and--for instance, on a landfill, if
you could put up solar panels, let's say, and help to move
power into one of these older neighborhoods, wow, what you
could do for those communities. But nobody is thinking at a
systemic level.
So I just thank you for yielding. I just wanted to put that
on the record.
Mr. Honda. Yeah. Well, that would give a more comprehensive
carbon footprint kind of an impact, if we do that. And I think
historical designations is a problem also, so I think that is
what you are talking about, that third point on the soft cost
challenges that we need to look at. So perhaps we can figure
out how we could work through that problem.
My last piece on the weatherization was----
Mr. Simpson. Quickly.
Mr. Honda. Yes. Thank you, Mr. Chairman.
The inclusion of solar in the weatherization program,
because it is not part of the program. How can we work together
where we can include solar in the weatherization program so it
would impact also more temperate parts of country rather than
just the high-impact neighborhoods, parts of our country?
Mr. Danielson. Thank you, Congressman. I would actually
like to follow up with you directly on that specific issue.
As I mentioned, I know that solar thermal is on the
weatherization approved list. And I do want to dig in to
determine where we are in terms of photovoltaics and getting it
onto that weatherization approved list.
Mr. Honda. Thank you so much, Mr. Chairman.
Mr. Simpson. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman.
Thank you all for coming today.
This is an important discussion for a variety of reasons,
one of which, though, that we do not consider is that the
externalities of traditional energy production--we talk about
those not being embedded into the cost fully, in terms of
environmental impact, but there are other considerations, as
well, such as entanglement in foreign affairs, that make a
compelling case that we should, as quickly as possible, as is
feasible, have a market-driven policy to move toward
sustainable energy, a more robust sustainable energy dynamic in
our country, using renewables, that is undergirded by public
policies that help correct or advance certain distortions that
the market can't take of by itself. So, market-driven, certain
public policies that assist that, in order for us to bridge to,
again, a more robust integration of renewables into our
portfolio.
So what you do is important in a very broad sense. And I
think the growing awareness of this in the country is real. The
growing demand for it is real. The innovation in the
marketplace in terms of reducing cost and making it competitive
is real. And those are all good dynamics.
In this regard, my question follows up a bit on what you
just spoke with Mr. Honda about, but I would like just a broad
overview of the current status of the wind/solar energy
industries, battery technology, as well as the opportunity for
homeowners to build out their own distributed energy systems.
Now, one of the difficulties that utilities have--and it is
very understandable--is they are carrying legacy cost from 40
years. And 40 years ago, they were told, ``Build out your
energy systems, delivering as much power as you can, as cheaply
as possible, for economic development reasons.'' Now they are
being told, ``Conserve as much power as you can, and integrate
a renewable portfolio, but, yeah, you still have to pay your
bills.'' So they are caught in this difficult transition
period.
So the more that we can, again, creatively recognize the
legacy difficulty but have smart, market-driven policies that
actually encourage the fullness of the development of
renewables that meet a growing market demand, that meet the
interest of American consumers, and that do untangle us from
some of the externality problems that really are hard to
quantify in terms of traditional energy production,
particularly in foreign affairs--dependence on Middle Eastern
oil, for instance--I think it provides the justification
legitimacy not only for this conversation but for certain
expenditures.
So I am with you in spirit. We just need to, obviously,
make sure we are using the taxpayer dollar wisely, not
investing in things that, again, are foolhardy from a market
perspective. But, nonetheless, when there are market dynamics
that are broken or have gaps or are too long-term to be of
benefit to fix this short-term problem of real externality
costs, we need to move in those directions aggressively.
Home-based distributed energy production using wind and
solar, geothermal potentially, I think is one way to do that.
But give me an overview of the status of these opportunities,
if you will.
Mr. Orr. Maybe I will start, and then Dave can----
Mr. Fortenberry. And I also want to save time for a modular
nuclear discussion.
Mr. Orr. We can do that.
Mr. Fortenberry. Okay.
Mr. Orr. So there is actually a common thread among some of
the comments here, and that is that we really need to be
thinking about the way we supply energy services as a set of
interlocked, complex systems.
And part of that is the technology part, and I have to say
that all of us engineers amongst us are probably happiest in
that part of the sandbox. But part of it is the market
structures and the policy arena.
The market structures are changing as the mix of
distributed and central generation changes over time. My own
personal opinion is that we are not evolving to a system with
no central generation; we are just evolving toward one with a
lot more distributed generation----
Mr. Fortenberry. Well, the two can be complementary, I
think.
Mr. Orr. Indeed.
Mr. Fortenberry. And I think we are living with the
residual of some----
Mr. Orr. Yeah.
Mr. Fortenberry [continuing]. Tension, but that is giving
way to a more realistic future of complementarity, I think.
Mr. Orr. Yeah. I----
Mr. Fortenberry. And that ought to be the goal.
Mr. Orr. I agree with that.
But the market structure was put together with the central
model in mind, and so, therefore, there has to be some
evolution. It is deeply connected to the whole grid
modernization part of it, and it is regulated in a relatively
complex way across the country.
So this is a problem, I think----
Mr. Fortenberry. If I could interject right quick, I liked
the phrase--I think you said it, Dr. Danielson-- ``the soft
cost of implementing solar.'' There a variety of soft costs
here that may not make sense, but because of the legacy of
complexities----
Mr. Orr. Yep.
Mr. Fortenberry [continuing]. Particularly a regulatory
model that is diverse, that creates this.
Mr. Orr. That is a good way to say it.
So that gives us a real challenge, and it is one that we
can participate in in a very big way but don't control entirely
because so much of this is regulated at the State and local
level. So I----
Mr. Fortenberry. But where are we in terms of a timeline to
get to--I just laid out a certain set of goals.
Mr. Orr. Uh-huh.
Mr. Fortenberry. In terms of reaching those goals, what are
we looking at?
Mr. Orr. I think we are actually relatively early days in
figuring out the details of that.
Pat, maybe you are the right one to--Pat Hoffman has been
engaged in a series of conversations with utilities and grid
operators and others, various stakeholders, as we think about
these market strictures going forward.
Ms. Hoffman. It is an important discussion, and it is also
a challenging discussion, as you appropriately brought up, in
that we know that the grid is evolving, and I think we need to
really create a set of parameters where we can have a
transparent conversation on how the grid should evolve but
allow for the incorporation of distributed energy resources and
technologies at the customer level.
What we are actually looking at is how do we merge both of
those capabilities, having a strong distribution system but
also allowing customers to advance with on-site generation
technology.
Mr. Fortenberry. Okay. So that is the academics. So where
are we in terms of realistic implementation of this?
Ms. Hoffman. So we----
Mr. Fortenberry. Are there templates/models out there? And
then where is the front end of the curve?
Ms. Hoffman. So we----
Mr. Fortenberry. I am sorry to cut you off. Our time is so
limited. I just want to kind of get to the core of the problem.
Ms. Hoffman. We have done several different demonstration
programs where we looked at pilot projects where we have
integrated solar with storage on the distribution system. We
have our project in Vermont that brought 2 megawatts of solar
with energy storage at an optimized distribution level. We----
Mr. Fortenberry. At competitive market rates? Or does it--
there is a deep capital subsidy there, I would assume.
Ms. Hoffman. The purpose was to increase the resiliency of
the electric grid. So there was a value of having increased
resiliency. The whole purpose of that was to support an
emergency response facility at a local school, which they
needed additional reliability. So you are going to have to--
there is a lot of----
Mr. Fortenberry. There is a value beyond the market. I
understand.
Ms. Hoffman. There is a value beyond that. So there is
progress being made.
Mr. Fortenberry. I think you understand what I am driving
at. Let's just take a typical homeowner who has this desire to
place themselves in a smart grid situation, where they create
on a typical city lot a distributed energy mechanism, backed up
perhaps by a centralized utility structure, but maybe even put
themselves in a position to make money, if you will, through
small-scale wind, small-scale solar, some implementation of
geothermal.
A back-of-the-envelope analysis by me would suggest that
that is a $30,000 to $50,000 upfront cost based upon a probable
$3,000 utility bill a month, something like that. Is that a
fair assessment of where we are?
Mr. Orr. Gosh, the actual dollar numbers depend hugely on
where you are in the country and what the----
Mr. Fortenberry. I get that. But in terms of an average, a
basic template model----
Mr. Orr. But I can give you an example. I mean, I am one of
those people, in my previous reincarnation, living in
California, I actually make more electric power using a PV
system than I use, but, you know, I need those grid services
because my solar cells don't generate electricity at night. And
so I should have to pay for that portion of the grid services.
I think the California model has not yet quite gotten there
in recognizing the balance of those costs. But I think
utilities and--we all realize that we have to do this. So it is
a really important conversation going forward, and it has to
have all the stakeholders present in it.
Ms. Hoffman. So, two things.
We need to create a market and a distribution system that
allows for better valuing of services. One of the things is how
do you price differently at the distribution system. But, also,
it is the conversation with the States, going back to the
reliability conversation earlier, of how important it is to
have that dialogue for grid modernization and how we are going
to lead the evolution to that.
Mr. Fortenberry. Are we 30 years out? Five years out? Ten
years out? Depends on the segment of this you are looking at?
Mr. Orr. Okay, so now I am going to engage in rank
speculation.
Thirty is too long. We will have made big progress. I would
say we will have made quite significant progress over the next
5 but will not have solved every problem that----
Mr. Fortenberry. Okay. Thank you.
Mr. Orr. That is my guess.
Mr. Fortenberry. Right quick, the status of battery
technology in the market, as well as small modular reactors?
Mr. Orr. Yeah. So who wants to--batteries here quickly.
Small modular here.
Mr. Danielson. Thank you, Congressman. And if we don't get
to it, we will take for the record your questions on wind and
solar, as well.
Mr. Fortenberry. Okay.
Mr. Danielson. On batteries, we have seen tremendous cost
reduction in the last few years. In 2008, we were at around
$1,000 per kilowatt-hour. A kilowatt-hour can take you 3 or 4
miles in an electric vehicle or can interact with the grid.
Today, we have prototype cells that are working and showing
that, if we took those into manufacturing, it would be about
$300 per kilowatt-hour. So we have seen a 70 percent reduction
there.
Most of the production we are seeing in batteries is in the
electric vehicle space right now. But we have significant
capacity in this Nation. About 20 percent of global capacity
for battery production is in the United States now.
And then the other forms of grid storage particularly
lithium ion batteries, which is what my office invests in, like
flow batteries or other low-cost storage methods, are under the
purview of the Office of Electricity and Pat Hoffman.
Ms. Hoffman. So, with respect to flow batteries, there has
been a significant reduction in flow battery costs. We have
achieved about $350 per kilowatt-hour. And what we are going
after is to continue to drive that cost down because we know
the value that energy storage brings in integrating all those
pieces of grid assets.
Mr. Kotek. And then on the small modular reactor piece, we
as a department had engaged in cost-shared arrangements with
two companies to try and bring forward designs to the--for
design certification. One of those companies had made a
corporate decision to reduce their funding, so we are not
investing in that one anymore, but the other company is in fact
moving forward. Hope to have the design certification
application to the Nuclear Regulatory Commission within the
next 2 years.
And then there are other companies, you know, that we are
not working with that are also developing----
Mr. Fortenberry. Are there other countries investing in
this technology heavily?
Mr. Kotek. Yeah.
Mr. Fortenberry. Who?
Mr. Kotek. We certainly have seen the Japanese with
designs. China has had several interesting reactor concepts
that I think could fit into SMR space. And there are probably
others, as well, but those are the ones I know the most about.
Mr. Fortenberry. Thank you, Mr. Chairman.
Mr. Simpson. Mr.--Ms. Herrera Beutler.
Ms. Herrera Beutler. I get that a lot. That is why I have
two names, because then it is like, two names, it has to be a
girl, right?
Thank you all. Thank you, Mr. Chairman.
I have a couple questions. And it is interesting, I think
most of them will probably be directed at you, Dr. Danielson,
as it relates to renewables.
And so my district in southwest Washington runs along the
Columbia River out to the Pacific, so you can guess my
interest. The Columbia River Basin generates, according to
PNNL, about 30 gigawatts of power and over 40 percent of U.S.
hydroelectric generation. And I think our future challenge is
going to be improve the current system, as we are having to
renew the generation capacity in our dams, and still protect
our wild salmon runs, still make sure our tribal treaty
obligations are met--which we are doing well right now, by the
way.
Our salmon runs are at record numbers. Now we are trying to
deal with the sea lions that are eating these amazing salmon
that we as ratepayers in the region worked very hard to make
sure are there. So it is an interesting dynamic. Nonetheless,
it is a good problem to have.
And I appreciate your ongoing support of hydroelectric
technologies. I am concerned that--I am not sure, and hopefully
you can speak to this, that the Department has put enough
emphasis on next-gen hydro technologies.
Because, you know, we hear all this talk about solar and
wind, and Dr. Orr spoke to the need for firming our grid. And
we have a lot of wind in our area, we have a lot of different
renewables, but here is an amazing carbonless source of energy
that--you know, we have a lot of lofty goals on the West Coast
of people driving electric cars up and down I-5. We are going
to need that--unless you only want to drive when the wind
blows, we are going to need this firming power. And it is
carbonless.
So I guess what I would like to hear is the plan for next-
gen hydro and what you see 30 years from now. Why are we
picking 30 years?
Mr. Danielson. Thanks for that question.
The hydropower part of our portfolio is becoming an
increasingly important part of the portfolio for the reasons
that you mentioned. And our work in looking at where we could
take hydro for the Nation has really focused, first and
foremost, in the last couple years on determining how much
resource is out there in the next-gen opportunities.
We have about 78 gigawatts, including a lot on the Columbia
River Gorge. And we have done resource assessments that show
that, if you look at existing unpowered dams around the country
that don't have any power being generated from them, we could
get another 12 gigawatts or so.
We did a very comprehensive study on what we call new
stream reach development that would be very low-impact,
smaller, not-large-impoundment kind of development. And when
you exclude a number of resources for various reasons, it gets
you to about 65 gigawatts.
And those are reasonably conservative estimates. We think
that, with the right technology, the right new technologies and
approaches, that we could double hydropower. And we have a
vision to potentially do that around 2030.
The big technology challenges that we see are, with these
large impoundments, you make these very large generators that
are one-off. They are actually designed for the application.
And so you actually get an economy of scale from how big the
equipment is. But when you start looking at these smaller
opportunities, we need to develop modular technologies that can
benefit from manufacturing economies of scale.
And so that is a big focus for us, developing common
platforms, modular new technologies that will be cost-
effective, in addition to developing new approaches to the
civil works of redirecting the water that are much more cost-
effective, as well.
Ms. Herrera Beutler. Very good. I appreciate that.
I think we may stay with you, although it might jump over.
So we have talked about an abundance of different types of
technology. And I missed the first part; I assume we talked
about fossil fuels. I wanted to switch a little bit to timber.
Timber is prevalent in my district. In fact, the woody
biomass from our forest--and I am not talking about clear-
cutting. Let's go on record. I am not talking about clear-
cutting. I am not talking about chipping whole Douglas firs. I
am not talking about cutting down old growth. The amount of
foliage and dead and dying timber that hits the floor that
creates fuel for catastrophic wildfires, I am talking about
that stuff, the woody biomass that we could--really, it is a
twofer. You could keep our forests cleaner and more healthy and
possibly generate energy.
And I know that there are small-scale projects, but I
wanted to see if there were any--we have had some challenges in
the D.C. Area with explaining, kind of, the lifecycle of a tree
to some folks who work in cubicles. I have invited a lot of
people out to come tour our region, tour our forests. We love
it. We don't want to get rid of our forests. We want to help
take care of them, have them take care of the families, and, in
turn, utilize and conserve and do the best job we possibly can
in using some of this woody biomass, as a great example.
I wanted to see if there were any projects or anything
taking place at your level in this area.
Mr. Danielson. Yeah. One exciting project I would point to
is, through a partnership with the Department of Defense under
the Defense Production Act, we are funding a pioneering project
to turn waste wood into jet fuel, hydrocarbon jet fuel, using
gasification technology.
And with the DOD and the commercial aviation sector having
interest in the off-take, these projects actually have off-take
agreements with companies like Southwest Airlines and other
companies.
That is a 10-million-gallon-per-year plant----
Ms. Herrera Beutler. So----
Mr. Danielson. Yes, go ahead.
Ms. Herrera Beutler. So can I add to that? Because this is
one of the things I wanted to bring up.
Is it true that they are prohibited from using the woody
biomass off the Federal floors in Washington State and that has
to be poplar-grown biomass? Or someone is growing plantations
to meet that--because I love the idea, and when I first heard
about this, I was ecstatic. Because, hey, we could reduce our
catastrophic forest fires. And then I was told it is
specifically prohibiting the use of the woody mass, the biomass
on our Federal floors.
Mr. Danielson. I am not familiar with that specific issue,
but I ould like to take the question for the record to follow
up.
Ms. Herrera Beutler. I would love to.
Mr. Danielson. Our national laboratories bid a pretty
definitive study on how much biomass could be sustainably
harvested while not affecting food or other industries. And it
was about a billion tons a year of biomass, which could
displace about a third of our oil usage.
Within that report, we would have a number on biomass from
sustainable forestry, and I would like to take that for the
record and follow up and get you the right number.
Ms. Herrera Beutler. I would like to. Because I was
thrilled when I heard about this. So let's run that one down.
Mr. Danielson. We will.
Ms. Herrera Beutler. And that, Mr. Chairman--I guess, just
in parting, I wanted to make sure that, as we are talking about
modernization, keep those of us in the Northwest in your
conversations and relationship as you move forward.
Mr. Orr. Indeed.
Ms. Herrera Beutler. That was, I guess, my parting shot.
Thank you.
Mr. Simpson. Thank you.
Dr. Orr and Mr. Kotek, this year's request eliminates
funding for the Integrated University Program, which supports
nuclear energy engineering students with fellowships and
scholarships and proposes a new account, the Nuclear Energy
Traineeship, which supports students in the radiochemistry
field of nuclear science.
This subcommittee has tried to broaden this focus over the
years by supporting programs to ensure the next generation of
nuclear scientists and engineers across all fields of nuclear
science. Why does the request specifically target students in
radiochemistry instead of what the committee has been trying to
do?
And what other fields of study within the nuclear science
are there that face a growing demand and an aging workforce?
And can you assess the current state of nuclear science at the
university level and where else support can occur?
Mr. Orr. I will ask John to take that.
Mr. Kotek. Yeah. Thank you, Mr. Chairman.
So, specifically on the traineeships first, so we have
identified radiochemistry as one of those areas where there
aren't a lot of programs, there aren't a lot of students coming
in. It is something we need in the laboratories as we look at
separations technology, for example. So we are trying to focus
on that.
Looking forward for other traineeships, there are other
areas. For example, some folks in the industry point to the
need for seismic experts as another area that might be ripe for
a traineeship-type program. So we are working internally right
now to identify are there other specific areas where it would
be important for us to bring a proposal for a traineeship
program forward.
Looking more broadly at the university support piece, one
of the things that our office does in the nuclear energy
program is we involve universities very heavily in each of the
research areas that we have going. So, in this budget and in
past budgets, we have had $50-million-plus going for
university-based nuclear research programs. So we have an
opportunity there for people who are pursuing whether it is
bachelor's, master's, Ph.D. To work on challenges that are
directly relevant to our program.
So that has been the way that we have been supporting
university-based nuclear engineering science education over the
last couple of years.
Mr. Simpson. I was--well, let me ask you, how close do you
work with the NRC on this?
Because several years ago--and I was asking Taunja when it
was, because she has been here about as long as I have. I think
it was when Mr. Hobson was chairman. I was wondering if it was
when Visclosky was chairman. But we were a little PO'd at the
Department and their lack of moving forward on a nuclear
education and training program. We took it all and gave it to
the NRC because they wanted it and they said they would do a
good job, and apparently they are doing a good job.
How closely do you work with them on this issue? Because
having the workforce in the future is going to be a big issue.
I mean, not only in radiochemistry and other things, but just
having nuclear-trained welders is a big issue.
Mr. Kotek. Do you want me to take that one?
Mr. Orr. Go ahead.
Mr. Kotek. Thank you, Mr. Chairman.
So we are working with the NRC. For example, I believe it
was this committee asked for a report looking at workforce
issues next year and asked the NRC to take the lead on that. So
my staff is working with the NRC now to be responsive to that
request. I have to say I am not familiar with the details of
those discussions thus far, so----
Mr. Simpson. Okay.
Mr. Kotek [continuing]. We will be in a position to follow
up with you on that.
Mr. Simpson. As long as you are aware of it----
Mr. Kotek. I am aware.
Mr. Simpson [continuing]. And this committee's desire to
make sure that we have the trained nuclear experts in the
future when that time comes.
Mr. Kotek. Thank you.
Mr. Simpson. Mr. Kotek, the request for the Advanced
Reactor Concepts program decreases funding from last year's
level of $23 million to account--or decreases it by $23 million
to account for a transfer made from the Nuclear Energy Enabling
Technologies program. The transfer concerns studies on hybrid
energy systems performed in concert with EERE.
It is difficult to view the difference in funding with the
transfer, and I wanted to dig a little deeper. Can you explain
why these funds were moved and describe the work your office
performed with Secretary Danielson?
And the transfer placed funds within the crosscutting
technologies account of the Nuclear Energy Enabling
Technologies program. Do you have plans to collaborate with
EERE on future studies?
Mr. Kotek. Yeah, certainly. I think there are several of us
who can talk about the--certainly, the supercritical
CO2 project. And that involves the----
Mr. Simpson. Right.
Mr. Kotek [continuing]. Fossil Energy Office, as well. But
that----
Mr. Simpson. You were the lead agency on that previously,
but under this budget it is proposed to be----
Mr. Kotek. Yeah. Now it is in the Fossil Energy----
Mr. Orr. Maybe I could just say a word, and then maybe
Chris will chime in, as well.
The good news about that technology option is that, if we
can solve all the issues that have to be solved, it has
application across a variety of areas. The nuclear area is one,
but geothermal is another, and coal and even potentially
natural gas all could be the thermal energy resource that gets
turned into electric power.
The judgment in looking at where the potential for earliest
applications might be, it seemed likeliest to us that the coal
applications had the greatest potential for early application.
But the problems that we have to solve are really common across
all of those areas, so it made sense to move that program over
but to keep the nuclear energy group connected to it so that we
work on the problems that they are interested in at the same
time.
Mr. Simpson. Okay.
Mr. Smith. I will just add very briefly that the fiscal
year 2015 omnibus bill specifically pointed out that cycles
above 500 degrees was the area in which you get the greatest
benefit from supercritical CO2. Those primarily lie
in fossil applications, and so that is one of the drivers
behind some of the observations that Dr. Orr has made.
So this shift is consistent with the language that we saw
in the 2015 omnibus bill.
Mr. Simpson. Okay.
Any others?
Mr. Danielson. On the specific issue of the collaboration
between nuclear and EERE on hybrid energy systems, in fiscal
year 2015 we got $2 million at EERE that we are going to be
investing into analysis to identify and develop a multiyear
research agenda that next year we would be putting forward the
best ideas that have come out of our analysis and roadmapping.
The vision being thinking of nuclear heat and renewable heat or
electricity in also a refinery context. What is the best use of
that primary energy? Do you build an industrial park that can
make hydrogen or use the heat for industrial processes?
We are in the, kind of, ideation and discovery phase of
that this year. And in 2016 and then in 2017, I would expect we
would come forward with a research agenda.
Mr. Simpson. Okay.
Mr. Kotek. And then, Mr. Chairman, just specifically on the
nuclear energy applications, back looking at the supercritical
CO2 question, we have some funds in our request for
a collaborative effort across our offices. And then we have I
think it is $3.3 million in the request to look at specific
issues associated with coupling one of those energy systems to
the back end of a nuclear reactor. So we are making sure we
keep active in both areas.
Mr. Simpson. I will never criticize you for working across
and between different offices. In fact, I have said we need
more of that in the future.
Mr. Orr. Yeah. The good news is that I have a very good
team of colleagues here interested in doing exactly that.
Mr. Simpson. Good.
Mr. Kotek, the Advanced Test Reactor at the Idaho National
Lab serves as an important role for the health of our nuclear
Navy as well as for civilian nuclear energy research and
development. The ATR is an old reactor but is still going
strong day-in and day-out.
What is the general health of the reactor, and has it been
adequately funded to provide maintenance and upgrade necessary
for it to last? And what projects and upgrades to the ATR are
still outstanding that were not funded in this year's budget
request?
Mr. Kotek. Thank you, Mr. Chairman. I can answer that.
Generally, right now, the ATR is an essential piece of
equipment for us. And, of course, when I was at DOE Idaho, we
spent a lot of time focused on maintaining the safe long-term
operation of that facility. And let's face it, machines like
that are not cheap to replace and may not be replaceable, and
so we are really committed to ensuring the long-term safe
operation of that facility.
What we have done is we have asked the contractor to start
by looking at just that question: What are those investments we
need to make to ensure the long-term health of the facility?
They have created a report that has been submitted to my office
and the Office of Naval Reactors.
The Office of Naval Reactors and my staff are going to sit
down here, I think next month, to talk through, okay, how do we
ensure that these funding requirements are met going forward.
So that is something that is going to be----
Mr. Simpson. So you will discuss the share of----
Mr. Kotek. Yeah, how we do that going forward.
Mr. Simpson [continuing]. How much Naval Reactors pays for
it and how much civilian pays for it----
Mr. Kotek. Yeah.
Mr. Simpson [continuing]. And so forth?
Mr. Kotek. Right.
Mr. Simpson. Okay.
Mr. Kotek. And we have been making investments, for
example, in the uninterruptible power supply system out there.
So there are things we have been trying to do each year through
the budget to ensure the long-term safe operation of the
facility, and that will remain a focus of ours.
Mr. Simpson. This year's budget request includes an
additional $22 million for the Idaho safeguards and securities,
which provides critical security operations for the Idaho
National Lab. I understand those additional funds will finally
allow you to support protective forces staffing levels
consistent with the approved site protection plan and also to
address the backlog of physical security systems.
Can you discuss how this request supports the Idaho
National Lab? And what will be the biggest cost drivers of the
Idaho National Lab security infrastructure moving forward?
Mr. Kotek. Yes, Mr. Chairman. And you correctly point out
that part of it is manpower-driven. So we are adding staff in
2015, and so we will have a full year of costs for those people
in 2016. So that is part of the reason for the increase.
We also need to make some improvements at the Materials and
Fuels Complex to the PIDAS, the intrusion detection system, and
to the central alarm system there. So that is a part of it.
And then there is another piece that is tied to
cybersecurity.
So those are the big drivers for the increases here.
Mr. Simpson. Okay. Thank you.
And, Ms. Hoffman, we talked about this a little bit
yesterday, and so I would like to just have it for the record.
I have been reading several books, or maybe not several, but a
few books on the threat to our grid and the infrastructure of
our grid from EMPs and solar flares, those kind of things. And
maybe that is dangerous to read those books, I don't know, but
it is a potential risk out there.
And we discussed this yesterday and what are we doing as a
Federal Government and why aren't the private utilities that
own this infrastructure more concerned about it. And do you
want to get into that discussion a little bit?
Ms. Hoffman. Sure. Thank you very much.
You have brought up a set of emerging challenges that are
facing the electric grid. EMP, as we have discussed, is an
emerging challenge. We know that threat actors are getting more
sophisticated on the cybersecurity side as well as on the
physical security side.
And what we really need to do, as we look at grid
modernization and evolution in securing the grid, is put into
perspective what are some of the near-term challenges that we
have to address now within the electric infrastructure--
hardening, mitigation, continuous monitoring--and then provide
some joint public-private partnership in some of the riskier
areas, some of the things that are a little bit beyond the
ability of the utilities to truly understand the impact and
consequences and the magnitude of the threat in those areas.
The public-private partnership with utilities, I think,
will be one that will help address some of those advancing
threats.
Mr. Simpson. Thank you.
I have one more question I will ask before I let the others
go.
Dr. Danielson, as someone who came from ARPA-E, you are
well aware of the successes that an active project management
approach has created within the program. EERE has had its share
of management difficulties in the past, and I want to give you
an opportunity to explain how you have changed some of EERE's
management problems and implemented a strategic plan for EERE's
future successes. Can you talk us through the effort you have
made to improve the office and why you felt you needed to make
these changes?
In order of implementing an active project management
approach to programs, there must be mechanisms in place to
track progress and terminate projects that are underperforming.
What mechanisms are you using so that you can cancel
underperforming projects and reclaim unspent funds? And what
have been the results of your project management
implementations?
Mr. Danielson. Thank you, Mr. Chairman.
You know, we have put in place a number of important new
mechanisms under the active project management banner.
One thing we are doing across the whole portfolio is every
2 years we get an external set of experts to provide peer
review, commentary, and scoring on our whole portfolio to give
us a feel for which projects are having the greatest impact and
which are potentially not providing the impact for the
taxpayer.
And then we put in place this active project management
approach. We are no longer doing grants. We are only doing
cooperative agreements, which allows us to have a much more
substantial interaction with our performers.
And we are also putting in place annual go/no-go
milestones, where when performers are not able to hit those and
don't show promise to deliver value on the taxpayer investment,
we terminate or redirect those projects. And since we have
implemented this over the last year and a half or so, more than
68 projects and more than $100 million has been redirected from
projects that we thought weren't performing to the standard
that we would expect into more high-impact projects.
Those are the kind of things we are putting in place in
order to make sure that our performers are delivering as much
value for the taxpayer investment as possible.
Mr. Simpson. Thank you.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Secretary Hoffman, I wanted to ask you, do you maintain a
ranking at the Department relative to States and their
leadership in grid modernization?
You mentioned Vermont earlier in your testimony. If I were
to ask you, where does Ohio rank in terms of grid
modernization, where would it rank compared to Vermont, for
example?
Ms. Hoffman. So I don't have a ranking with respect to
States in comparison of grid modernization. Each State is
developing differently with respect to how the grid is
evolving, based on whether they participate in a market like
PJM's market or whether they are in a vertically integrated
area.
But I will tell you that the basic principles of what we
are trying to drive is better situational awareness through the
deployment of sensors on the system and the ability of the grid
to integrate distributed energy resources but provide improved
reliability.
I don't have a ranking that I could give for one State to
another State with respect to how well they are doing because
each State has its own goals and objectives.
Ms. Kaptur. Hmm. Does that serve the national interest?
Ms. Hoffman. It is part of, unfortunately, the
infrastructure of the United States where the grid has evolved
differently and whether you are in a competitive market region
in the United States or in a noncompetitive market, you know, a
bilateral-agreement part of the United States grid. It is part
of a structure we have that is making grid modernization very
challenging, and it is making the urgency of having the
conversation at a national level even more important so we can
make sure that States such as Ohio interface very well with
Pennsylvania, and we look at the seams issues that are
occurring between grid operators.
So it is imperative that we look at grid modernization
holistically as a national effort. And then, as the States make
decisions--New York is doing their revitalization of the
energy, a vision in New York, how all those pieces fit
together.
Ms. Kaptur. Well, I would think--I can't make you do
anything, but I would urge you to think about how one would
measure State performance so we could make a judgment as
Members. That would be very helpful to Members like myself.
Mr. Chairman, you concur there?
Mr. Simpson. You can make them do that, yeah.
Ms. Kaptur. All right. I like that idea. It gives us policy
direction, and that is very helpful to us.
So I thank you. I thank you for answering that question.
I had another question on weatherization money, and that
is--perhaps, Dr. Danielson, you can answer this. Do you know if
all that money is disbursed to the States? Or is a percentage
of it able to be awarded to consortia eligible to
operationalize the funding? Is it all to the States?
Mr. Danielson. Yes, we have about 56 State-like entities
that then distribute it to about 8,000 sub-entities all around
the country that are already well defined today.
Ms. Kaptur. All right.
I was going to move to Under Secretary Orr next.
On March 4, the Department issued a $12.5 million funding
opportunity announcement for a new technical track under the
U.S.-China Clean Energy Research Center and to promote
collaborative efforts to help ensure energy, water, and
environmental security.
My question really is, if that whole effort exists with
China but I wanted a similar effort for Europe, Ukraine, would
new legislative authority be required for that, to get the
Department to put as heavy a focus on Europe and Ukraine as it
is currently on China? Do you know if new legislative authority
is required for that, or do you have it under existing
authority?
Mr. Orr. I do not know the answer to that question, and I
will be happy to take it for the record and get back to you.
Ms. Kaptur. All right. I thank you very much.
I wanted to ask follow-on questions on solar manufacturing.
Dr. Danielson, you could tell us how we are doing in the
area of solar? And what led manufacturing of solar to shift so
dramatically overseas? And what is your plan for increasing
manufacturing efforts here in the United States?
Mr. Danielson. Thank you for that question.
As you know, I think it was maybe 20 years ago, when the
solar market was relatively small, we had the majority of the
cell and module manufacturing here in the United States, but
over the last 5 or 6 years, especially a couple years ago,
significant government investments in China, both from the
Federal level and from the regional level, provided subsidies
for the industry to scale there. That drove a lot of cost
reduction, but it also made for a difficult environment for
U.S. manufacturers. There have been trade cases that Commerce
has put forward that were informed by some of our analysis
around the basic cost structure of U.S. manufacturing versus
Chinese manufacturing.
In addition to that, the growth of the market here which
has occurred in recent years has begun to drive--that in
addition to the advanced technologies we have been funding over
the last 10, 15 years is resulting in a solar comeback that I
mentioned earlier, with a doubling of capacity expected by
2017. That is cell and module capacity.
That includes First Solar expanding in Ohio, a company that
we funded the basic technology at the National Renewable Energy
Lab decades ago----
Ms. Kaptur. 1987 forward.
Mr. Danielson. That is right.
Ms. Kaptur. I was here--I was there.
Mr. Danielson. It is a truly differentiated technology and
a great American success story.
And then, in upstate New York, SolarCity has acquired a
company that had advanced silicon solar high-efficiency
technology called Silevo that we had supported in its early
days of research and development to put a gigawatt-scale
factory.
And we are also seeing--I mentioned the expansion of
Suniva, which is a high-efficiency solar company that spun out
of a lot of our early R&D at Georgia Tech, is now expanding its
new plant, 250 megawatts, in Michigan, creating more than 300
jobs.
And then SolarWorld in Oregon is expanding its production,
as well.
One thing I want to point out is that just looking at the
cell and module manufacturing market share doesn't show the
whole picture. And so what you find is that, even when a very
large fracture of modules are being made in--cell and modules--
in China, oftentimes the really high-value component materials
like films that can prevent water from getting in or other
high-value components like micro-inverters are being
manufactured in the United States. And so, if you look at the
full value chain, which is something we are beginning to track
much more carefully, the United States has been doing a lot
better than the cell and module numbers would indicate.
And so I would say that we are seeing a strong comeback in
the United States because of advanced technology innovation and
growing market demand here in the United States.
Ms. Kaptur. I wanted to say to the chairman, I don't know
if you represent one of these companies, but it is so
unbelievable to, in one's lifetime, see a technology come
forward and to be a part of the founding, meeting the founders
and scientists that are involved locally, who are reaching for
something that is--they can't see exactly where it is going.
And to actually be part of the invention process and then to
see a company created and then, all of a sudden, hundreds of
jobs and then thousands of jobs, it is unbelievable. I am
just--I feel very fortunate--and to see a new technology.
And I want to do everything I can as a Member to continue
helping them grow. Obviously, I support the budget in this
regard. It doesn't seem like enough, with all the trade
problems and the counterfeiting and the intellectual property
and all the others pieces. But I just--it is unbelievable what
this is providing the world with. So, obviously, I support your
efforts here and always look for ideas for how to be more
supportive. And I thank you for your leadership.
Just to put on the record, one of the companies that Dr.
Danielson mentioned is hiring several hundred more people in
the State of Ohio, where, of course, we need more jobs, but
they are hiring three times that many in Malaysia. And I am
glad--I am glad that they are expanding globally, but I say to
myself, how do I get more of those jobs in Ohio? If you were
elected by constituents in Ohio, you would ask yourself the
same question. And I see this happening, and I want more of
that production to be in the United States.
How is it, Doctor, that Buffalo--I guess they are getting a
utility-size field built in the State of New York? Is that
true?
Mr. Danielson. They are actually building a gigawatt-scale-
per-year manufacturing facility.
Ms. Kaptur. Oh, a manufacturing facility.
Mr. Danielson. It is about the number of solar modules that
will be produced a year.
Ms. Kaptur. Okay. So that is manufacturing. All right.
I want to completely change direction here for a second. On
coal, I was very happy to see the President's budget include
investing in coal communities. And those that are heavily
impacted by what is happening in that industry--I know the
chairman of our full committee in interested in this.
Does this also include a focus on communities and places
where coal-fired utilities have closed down, or just where coal
is mined?
Because I have to believe Ohio would be at the top of the
list of States where coal-fired utilities have shut down. And
in my own area, for example, the loss of coal-fired utility
production has borne down very heavily on school systems that
can't adjust that quickly.
And I am wondering if the program will include technical
assistance to help these kinds of communities adjust more
quickly to new energy production or if you will just let them
languish out at sea.
Mr. Smith. Well, thank you for the question. So you are
referring to the POWER Plus plan----
Ms. Kaptur. Yes.
Mr. Smith [continuing]. Which, actually, is not part of the
Office of Fossil Energy. It is not----
Ms. Kaptur. Oh.
Mr. Smith [continuing]. A plan that is managed by our
department, but it is part of this budget that was released by
the President. That does have a focus on both communities in
which coal is produced and also communities where coal is being
utilized in power plants.
So there is a number of factors to that program. I would be
happy to answer for the record or provide more information on
the POWER Plus plan, but that isn't part of my research and
development budget.
Ms. Kaptur. Do you think you have nothing to offer them,
then? I notice they have the Appalachian Regional Commission as
a part of it, the Department of Labor. But, technically
speaking, your division doesn't really have anything to
contribute to that?
Mr. Smith. We don't manage the budget. We certainly have a
lot to contribute in terms of understanding the playing field,
understanding what technologies are being developed,
understanding the future of ensuring that all parts of
domestically produced energy are part of the clean energy
economy of the future.
So we do work with all those agencies that are working at
rolling out those plans, but, again, that is not part of our
appropriated budget.
Ms. Kaptur. Does anyone else on the panel wish to comment
on this? No?
Okay. Let me switch to biofuels for a second from algae.
Dr. Danielson, a new focus was charged to the Algae and
Advanced Feedstocks Program after major barriers to algal
biofuel commercialization were identified in public workshops
held by your office in 2014. Can you briefly explain what those
barriers are and how this affected the program's focus? And,
also, what is the future viability of algal biofuel
commercialization?
I come from Lake Erie, where algal blooms were the reason
for the shutdown of a major water system at Toledo for 3 days
to people. Over a half a million people were impacted. Algal
blooms, lots of algae is a problem for us. Can we turn it into
a opportunity?
Mr. Danielson. Algae is an important part of our long-term
biofuels roadmap. Our research, development, and demonstration
focus in our biofuels program is on converting sustainably
produced biomass into drop-in hydrocarbons--bio gasoline, bio
jet, biodiesel, actual diesel fuel. And we are looking at a
number of different pathways today. Some of them will work;
some of them ultimately won't get to market.
However, because of the variety of feedstocks we have in
the country, we also are going to need a number of pathways in
the end, regardless, to get to the kind of production goals
that will make a difference. We have biochemical, using biology
or organisms to convert material into fuels. And we also have
thermochemical approaches, which basically borrow from the oil
and gas industry and the gasification industry to burn and then
break down and reconstitute fuels.
The 2017-to-2022 timeframe is when we expect those fuels to
begin to be cost-competitive. But we see algae as potentially
being a much greater scale, because you can grow algae in a lot
of different places.
Ms. Kaptur. Well, Lake Erie knows how to do that real well.
Mr. Danielson. Right. It is a longer-term pathway, but it
could scale much larger in terms of its volume. 2025-plus is
the timeframe.
The big challenge we have seen is it is costly to grow the
algae in ponds or in photobioreactors, and so there is a lot of
research being put into making that more productive, increasing
the amount of the conversion efficiency of algae, essentially,
of sunlight and CO2 into oil in their bodies.
Secondly, you have to actually dry them, which costs you
energy. And then you have to basically cut open the algae body
and get the oil out, and you have to process the oil.
We have been, over the last few years, tackling many of
those challenges. One thing I am excited to let you know about
is that the Pacific Northwest National Laboratory has developed
a new approach called hydrothermal liquefaction, just in the
last couple of years, where you use catalysts to take the whole
wet algae soup or bodies and convert that into hydrocarbon-like
material, which could be much more cost-effective much more
quickly. That is being commercialized by a company called
Genifuel at the pilot scale today.
And so I think we are making a lot of progress on algae,
and we have had some recent breakthroughs that might even pull
that roadmap up a little bit.
Ms. Kaptur. How do I get some of that expertise or at least
have a briefing of what is happening in the algal markets and
focus it on the Great Lakes and all of our challenges with
algae, which are significant? How do we find the experts to
kind of home in on what is happening there?
Mr. Danielson. Within my office and within the national
laboratories, we have a tremendous set of expertise. And we
would be happy to come and brief you at any time.
Ms. Kaptur. All right.
Thank you, Mr. Chairman. Thank you.
Mr. Simpson. If we could, Mr. Valadao has arrived, and I
would like to give him a chance.
Mr. Valadao.
Mr. Valadao. Thank you, Mr. Chairman.
And I apologize for being a little late. They like to
schedule all these committees at the same time. Appreciate all
of you taking some time for me today, or for us today.
But I wanted to touch a little bit on cybersecurity, and my
question is for Ms. Hoffman.
The energy sector's critical infrastructure has been
subjected to a dramatic increase in focused cyber attacks in
recent years. Your office has the responsibility of protecting
the electricity grid and other energy infrastructure against
the ever-present threats of a cyber attack.
Can you talk us through the state of the energy sector's
cybersecurity? What are the existing capabilities? Who are the
bad actors? And how do energy control systems differ from
normal IT systems in the event of a cyber incident?
I have some more questions after that, so----
Ms. Hoffman. Thank you. There were a lot of questions
involved in that. I appreciate it. Cybersecurity is an
important topic, and I think we all need to engage in that
topic in a very transparent way.
For cybersecurity, we have developed a strategy with
industry that includes, first of all, engagement with the CEOs.
We know we need to make a change and a difference, whether we
are talking grid modernization or cybersecurity, but it takes
leadership within the industry to make that change. So we have
been engaging directly with the CEOs to understand, number one,
where the cybersecurity issues are, where the threats are, and
where the opportunities are for mitigation and response.
In our strategy, we have been working with the Electricity
Sector Information Sharing and Analysis Center we created in
partnership with NERC, an information-sharing center, because,
first of all, you need to figure out what is happening on the
system and to be able to share that information with the grid
operators. So they have over 1,900 NERC members of that system,
of that information-sharing collaboration, and now they are
also bringing forth other entities that participate in the
electric grid as part of that information-sharing and analysis
center.
What we have also been doing is developing tools. These
tools identify where some of the vulnerabilities are on the
system but also what is actually happening on the system.
Everybody said, oh, I am concerned about cybersecurity. But the
unknown was really driving some frustration, I would say, from
Congress and from other folks on exactly how secure are we. So
now what we have developed is a set of tools where the grid
operators are taking a harder look at their system and being
able to understand in greater detail what is happening from
that perspective.
With respect to the actors, they are all over the place.
Utility operators get probes every day. They get probes on
their IT and their OT systems. And, really, the difference is
information technology is what runs your business systems. It
is what is in your computer as you look at your computer that
is sitting on your desktop. The operational, or OT systems are
really looking at controls of devices within the electric grid.
So things that take action are what OT system are.
And there is a greater concern over a bad actor being able
to get into the operational technology system and being able to
have it take action. Our research program, which is $52
million, is really focused on how do we develop technologies to
protect the operational environment within the electric grid.
Mr. Valadao. Is our infrastructure currently capable of
surviving a major cyber incident while sustaining critical
functions?
And, again, I know this is back to that same question of
who are the bad actors, but what are the tools that we see bad
actors using here in the future to come after our
infrastructure?
Ms. Hoffman. Our goal is to have the electric grid survive
an attack while it is going on within this sector. The tools
and most of the common technologies or capabilities that the
bad actors are using are malware that is for sale on the
Internet. They are looking at spear phishing and whale
phishing, going after passwords and codes.
And so it is everything that you are seeing in other
sectors, you are seeing the same thing that is occurring in the
electric sector. And so we need to continue to develop solution
sets to mitigate that.
Mr. Valadao. As far as developing technology at speed of
computers--I mean, we are always talking about the next fastest
computer--how much of a role does the speed of a computer play
on a person's ability to hack our system?
Ms. Hoffman. I think it is the networking and speed of the
computer, its accessibility, that is in addition to how fast.
So, from a speed-of-a-computer point of view, the electric
grid has fixed communication, so in some ways there is an
advantage within the electric grid compared to other sectors,
because we actually can look at what is being asked from one
point to another point, what action is being taken, so we
understand that a little better.
But timeliness of sharing of the information, for machine-
to-machine sharing of information, is absolutely critical if we
are going to stay ahead of the bad actors.
Mr. Valadao. All right.
And how can this committee be helpful in providing you the
resources you need to develop and implement new technologies to
keep our energy infrastructure secure?
Ms. Hoffman. Support of the 2016 request would be first and
foremost what I would ask, but also to continue to support the
strategy which we are developing.
And the strategy really has several components to it. It is
understanding what is happening on the system. It is building
the information-sharing capabilities, the ability to protect
the information but be able to share the information between
the Federal Government and grid operators; then the ability to
develop mitigating solutions, new technologies.
And what we are requesting in the 2016 budget includes
forensics capabilities, where as a new piece of malware is
discovered--and there is always some new, attack vector that is
coming out--we want to be able to analyze it quickly, have the
industry be the first to be able to say, this is how we are
going to respond to it.
Mr. Valadao. All right. Well, thank you.
Thank you, Mr. Chair.
Mr. Simpson. Thank you.
Ms. Kaptur, did you have anything else?
Ms. Kaptur. I do.
Mr. Simpson. Okay. Go ahead.
Ms. Kaptur. Thank you, Mr. Chairman.
I wanted to ask Under Secretary Orr or Dr. Danielson, the
national labs are a tremendous asset, particularly to those
regions of the country lucky enough to have one. How do we
leverage the labs to provide benefit to those areas of our
country where that expertise is not on site, particularly those
areas like my own where over half of the manufacturing jobs
have been lost for various reasons--to outsourcing, to
technology--and they have no labs on site?
What can be done to adjust and identify those regions that
have had serious economic dislocation?
Mr. Orr. Well, it is obviously an important question. The
labs are national labs because their focus is national. So, for
example, you are not so far from Argonne National Lab, which
has very wide-ranging capabilities across the energy space and
has expertise that applies every bit as much in Ohio as it does
in Illinois. And our goal really is to try to make sure that we
make available the expertise that exists in the national labs,
really to work on problems across the whole country.
The Secretary has taken action in recent times to build a
much more strategic relationship amongst the national labs. At
a meeting recently of the national labs' directors commission,
there was a long discussion of how do we take the abilities of
these national labs to do emergency response in their own areas
and surrounding States and make that capability available to
folks that might need it, that it is really an opportunity to
use that expertise across the area.
In the technology transition, technology transfer area, all
of these labs work with companies that can be anywhere in the
country. So we try very hard not to make them only be of
parochial interest in a particular area but to supply their
expertise to the Nation as a whole.
Ms. Kaptur. I am glad to hear that, Under Secretary.
I am going to send you a map of where in our country we
have had this job washout. Maybe it already exists at the
Department of Energy. And then I think it would be very
interesting for you then to see where the labs are located and
to think about connectivity----
Mr. Orr. Uh-huh.
Ms. Kaptur [continuing]. In a more direct way.
I wanted to ask a question. Mr. Smith, in the last several
budget requests, the administration has reduced funding for
technologies that increase the efficiency of coal-powered
plants. Could you please tell us what your office is doing to
increase coal utilization and the efficiency of our existing
power plants?
Mr. Smith. Thank you very much for the question.
So, indeed, as we have looked at prioritization for the
budget for the Office of Clean Coal, we prioritized on two
lines, which has been R&D on capture technologies to capture
CO2 and technologies for long-term safe storage,
either in saline aquifers or in enhanced oil recovery
applications. So those are the two areas in which we have
focused in terms of our budget request.
We do still have requests in the areas of efficiency, of
control systems, of materials for supercritical processes. So
we do still do research and development, and we still have, as
part of this request, lines that look at efficiencies of
plants, using less fuel in plants, which also has the benefit
of making them more efficient, more effective, more cost-
effective, and reducing emissions.
But, again, you know, as we look at our prioritization, we
have focused most of our efforts on the challenge of reducing
the cost of capturing CO2 and understanding issues around long-
term storage, either in saline aquifers or in enhanced oil
recovery applications.
Ms. Kaptur. Thank you.
I will look forward to your reply, also, on the letter I
requested on three energy options for Europe and Ukraine and
the role of coal in all of that.
Mr. Smith. Indeed, we will have some thoughts on that.
Ms. Kaptur. Thank you.
Dr. Orr and Dr. Danielson, I wanted to ask you about clean
energy manufacturing. And as part of the White House's
initiative on manufacturing, there were the first CEMI
institutes funded in 2012, and I am wondering if you have had
time to assess their progress.
How has the program enhanced U.S. competitiveness in clean
energy? And do you think that their goal of being self-
sustaining within 5 years is realistic?
Mr. Orr. So let me say a word, too, and then Dave can
follow up.
But there is always a bit of an induction period as you get
these things going. And so the earliest ones have only been in
action for a pretty short time, so I think it is too early to
have a quantitative, you know, impact kind of assessment.
But we can already see that there is substantial potential
for impact. The additive manufacturing work that we talked
about, the--Dave will say more in a moment about the new Wide
Band Gap Semiconductor Institute. All of those have potential
for really very large impact. And we are committed to making
sure that they are managed well to do exactly that.
Dave.
Mr. Danielson. Yes.
As Under Secretary Orr said earlier, we have done a few
experiments in these new consortium models in recent years, and
I think we have learned a lot as an organization. And Under
Secretary Orr pointed out some of the key things around a very
strong, well-qualified leader, very well-defined goals, active
project management with empowerment. Those kinds of principles
have really permeated into the way we are structuring our
consortia going forward.
And in terms of the manufacturing innovation institutes,
the first one that we funded directly out of appropriations on
our own is led by North Carolina State University on next-
generation power electronics. It just got up and running at the
very beginning of the year. We have a great leader in place,
General Nick Justice, who was the head of Army Research,
Development, and Engineering Command prior to joining us in
this leadership role.
But what gives me confidence that these are going to be
successful is what I have seen with our prototype manufacturing
innovation institutes the Manufacturing Demonstration Facility
at Oak Ridge National Lab and, in some sense, the Critical
Materials Institute out of Ames, Iowa. And we have seen great
results in both of those consortia.
In the Manufacturing Demonstration Facility, we mentioned
that we saw partnership between Cincinnati Inc. in Ohio, an
equipment manufacturer, and Local Motors, an innovative company
in Arizona, resulting in within 6 months start to finish the
first-ever 3D-printed car, so a pioneering innovation result.
And, at the same time, we are seeing that Manufacturing
Demonstration Facility around 3D printing is a magnet for new
manufacturing and jobs. A Canadian company called CVMR that
produces advanced metal powders moved its headquarters--they
announced just last week they are moving their headquarters
from Toronto to Oak Ridge, Tennessee, where they are investing
more than $300 million in manufacturing, and they are going to
create more than 600 jobs.
We have seen similar commercially relevant innovation in
the Critical Materials Institute, as well, with three
technologies already in the first year and a half getting into
the hands of industry for testing.
I think that we have learned a lot about how to run these
things and how to structure them. Although we are just
beginning with the manufacturing innovation institutes, I think
if we are going to achieve what we have done with the MDF and
with the Critical Materials Institute, we are going to see some
tremendous impacts for the Nation.
Ms. Kaptur. Do those critical materials include strategic
metals?
Mr. Danielson. Absolutely.
The major issue with the Critical Materials Institute,
which is one of the energy innovation hubs, is to diversify
supply of critical materials to replace or eliminate the need
for them, and to recycle them better. We have already developed
a new technology that can separate out rare earths from each
other twice as efficiently as has been done historically, which
could reduce the size and cost of a separations plant by more
than a factor of two.
We have also seen major innovations in efficient lighting
phosphors that have rare earths in them. We have developed
technologies through the institute that virtually eliminate
those rare earths while providing the same performance. And
those are in the hands of industry, going through rigorous
testing, just a year and a half into that institute.
Ms. Kaptur. My last questions relate to vehicle
technologies, especially natural gas and the potential for
natural gas vehicles. Are there major barriers to deployment,
Dr. Danielson?
And then the SuperTruck program, any update you can provide
us on that?
And then, in terms of offshore wind, your sense of the
technological landscape of offshore wind projects in the
country? How do we stack up compared to our global competition?
Mr. Danielson. Thank you for those questions.
On the natural gas vehicles front, we are putting forward
in fiscal year 2015, dual-fuel engine research, including
heavy-duty vehicles that could be powered by both diesel and
natural gas, and the innovation that is required to make those
more cost-competitive.
There is a lot of interest in the industry to move to
natural gas because of the cost benefits, of course. But this
year, for the first time, we are putting forward a research
agenda topic on natural gas storage, which is one of the major
long poles in the tent in terms of making compressed natural
gas vehicles directly cost-competitive.
That is an area where RPE had made some pioneering
investments about 3 years ago. And we are putting forward a $10
million program to try to take some of those technologies to
the point where they can be put out into the market.
SuperTruck, as you know, is a very successful program. It
was actually a $130 million program that invested in four
integrated teams with the goal of developing Class 8
demonstration semi trucks that would achieve 50 percent
improvements in fuel economy, through engine innovation,
aerodynamics and all kinds of different innovations. And one of
our teams has already achieved a more than 70 percent
improvement in efficiency through the SuperTruck program.
Because of the success of the program, we are putting
forward in this budget a $40 million SuperTruck 2 program that
would be able to fund two integrated teams to go to a 100
percent or a doubling of efficiency versus the 2009 baseline.
And on offshore wind, one thing that is very interesting
about the United States is we have a very different resource
base than they have in Europe, where most of the deployment has
been to date, in addition to Japan and other countries. We have
quite a bit of deepwater. So we actually have about 4,000
gigawatts of resource within 50 miles of the coast, which is
four times the peak power utilization of the country. About 60
percent of that is in deepwater, however, where you can't
actually fix the offshore wind to the bottom, so you have to do
floating wind turbine technologies.
Also, on the East Coast, where you are faced with hurricane
conditions that aren't present in Europe and other places, we
need innovation to allow us to have stronger, more robust
technology.
And, as you know, in the Great Lakes, which present another
interesting resource base for offshore wind, we have unique
issues around ice formation, and we need technologies that can
break the ice and can shed ice from the blades and also deal
with ice creeping into the base of the technology.
And so we have a huge resource base, a great opportunity,
but there are some unique technology challenges that we are
addressing and that need to be overcome in order to establish a
cost-competitive U.S.-based offshore wind industry.
Ms. Kaptur. Thank you all very much. A tremendous panel
this morning.
Thank you, Mr. Chairman.
Mr. Simpson. Thank you.
And thank you all for the work you do. Thank you for being
here today.
We will see you, I guess, this afternoon, Dr. Orr.
Mr. Orr. You will.
Mr. Simpson. But thank you for your testimony. And the
offices that you run are very, very important to the future of
this country, so I appreciate it. Thank you.
Hearing adjourned.
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Tuesday, March 17, 2015.
DEPARTMENT OF ENERGY, OFFICE OF SCIENCE
WITNESSES
FRANKLIN ORR, UNDER SECRETARY, SCIENCE AND ENERGY, DEPARTMENT OF ENERGY
PATRICIA H. DEHMER, ACTING DIRECTOR, OFFICE OF SCIENCE, DEPARTMENT OF
ENERGY
Mr. Simpson. The hearing will come to order. I would like
to welcome our witnesses, Dr. Franklin Orr, Under Secretary for
Science and Energy.
Welcome back this afternoon.
And Dr. Pat Dehmer, the Acting Director for the Department
of Energy's Office of Science.
Dr. Orr and Dr. Dehmer, the budget request provides $5.3
billion for the Office of Science, a 5 percent increase over
last year's level. The Office of Science is the single largest
supporter of basic research in the United States and its
activities have resulted in some of the important scientific
breakthroughs of the 20th century. In the past, these
breakthroughs occurred almost entirely at facilities in the
United States. However, as the scale and complexity of the
experiments increased, so did the costs of building new
facilities.
Cutting-edge science, now more than ever, is reliant on
multibillion-dollar facilities that few, if any, countries are
willing to support alone. Ensuring that our taxpayer dollars
are contributed to the breakthroughs that enhance American
competitiveness within this international context is just one
of the challenges you need to address. The balance between
optimal operation of our current facilities and constructing
new ones is another.
While the budget request avoids choosing between these
activities by providing increases for both, the reality is that
the current fiscal climate does require some tough decisions. I
look forward to discussing with you both how the Office of
Science will make these hard choices and continue to ensure our
country's leadership in the scientific community.
Dr. Dehmer, please ensure that the hearing record,
questions for the record and any supporting information
requested by the subcommittee are delivered in final form to us
no later than 4 weeks from the time you receive them.
Mr. Simpson. Members who have additional questions for the
record will have until close of business tomorrow to provide
them to the subcommittee's office.
Mr. Simpson. With that, I will turn to my ranking member,
Ms. Kaptur, for her opening statement.
Ms. Kaptur. Thank you, Mr. Chairman very much.
Good afternoon again, Dr. Orr and Dr. Dehmer. Thank you so
much for being here today. Your work represents America's
intelligence at work and inventing a better future for us all.
The budget that you manage represents the largest federal
sponsor of research in the physical sciences. That is an
incredible responsibility.
The United States is known and respected around the world
as a leader in innovation, and scientific research continues to
yield important discoveries that change the way we live and
work, from cell phones to high-yield crops to biotech
medicines. We look forward to your thoughts today on some of
the discoveries that you see on the horizon, as well as how we
can support innovation in the public sphere. How can America
harness the work of our best and brightest to drive domestic
growth and make American energy science the best in the world,
including assuring our high-productivity manufacturing sector
remains globally competitive?
While the value of funding scientific and other research is
well established, federal resources remain limited and the
return to sequestration levels will limit budgets even further.
Research especially in science can provide enormous value, but
it is a long-term and sometimes indirect investment, just like
raising a child, that is too easily sacrificed for short-term
concerns.
It would also be helpful to hear from you about the long-
term consequences of this kind of underinvesting in science and
research. The American people should understand the tradeoffs
that our Nation is faced with in the name of budgetary
scarcity. Scientific exploration can sometimes provide
opportunities for immediate benefit. In certain cases, tools
and equipment designed for research can be applied to
manufacturing processes to increase efficiency or improve
product quality. Advanced devices and computers can help
advance our understanding of basic science and can help
companies find solutions to challenging technological hurdles
when they are locked in fierce competition with global
competitors.
With this in mind, I want to touch briefly on the national
labs, which are rightly viewed as a national asset. Coming from
an area without a national lab, as most members do, I continue
to wrestle with how the labs can play a transformational role
for organizations beyond their boundaries and help jump-start
innovation and opportunity in several sectors of our economy,
including American manufacturing. Please share your thoughts on
this and other topics. And I look forward to your insight, as
do we all.
Thank you so much for the time, Mr. Chairman.
Mr. Simpson. Thank you.
Dr. Orr, I believe you are going to give the opening
statement, right?
Mr. Orr. I am, and then Dr. Dehmer will follow with some
more details.
Mr. Simpson. Okay.
Mr. Orr. So I would like to thank you, Mr. Chairman, and
Ranking Member Kaptur and members of the subcommittee. It is a
pleasure to be back with you today. I would like to compliment
the committee on its energy efficiency with requiring only one
trip over here all the way from DOE, so I saved some fuel
there.
It is good to have the opportunity to appear here today to
talk about the Office of Science budget request for Fiscal Year
2016. As you heard me say earlier this morning, DOE is charged
with advancing an all-of-the-above energy strategy to enable
the transition to a low-carbon economy, and the fundamental
science effort that we will talk about today underpins every
aspect of that. It permeates all of what we do.
As Under Secretary for Science and Energy, my job is to
coordinate the Department of Energy's scientific research
efforts with the applied energy research and development
efforts and to work on enhancing the productive links among the
various programs, recognizing that they each bring something to
the party that is unique to them and we need to support both
the links and the fundamental parts as well.
The Office of Science delivers important scientific
discoveries and tools that transform our understanding of
nature and advance the energy, economic, and national security
of the United States, and it does this through two principal
thrusts. One is the direct support for scientific research, and
then there is also direct support for the development,
construction, and operation of unique open-access scientific
user facilities.
I will give you a brief overview of the budget, and then
the person with real knowledge, sitting to my left, will
provide more details, and then together we will try to answer
your questions.
The Department's total science and energy budget request
for fiscal year 2016 is $10.7 billion. That is $1.4 billion
above the fiscal year 2015 enacted level. And this includes
$5.34 billion for the Office of Science, and that is $272
million above the fiscal year 2015 enacted level. And it is
aimed at continuing to lead basic research in the physical
sciences and to develop and operate cutting-edge scientific
user facilities, while strengthening the connection between
advances in fundamental science and technology innovation.
In addition to maintaining the operation of 10 national
labs, the request includes increased funding for our Advanced
Scientific Computing Research program, the operation of the
Department's user facilities and support to design and build
new facilities, and additional funds to create new Energy
Frontier Research Centers, while continuing to support the 32
centers funded last June.
So those of you who were here this morning heard me say
that a key way of increasing productive links amongst the
various programs is through budget crosscuts. So the science
programs are very much involved in these crosscuts as well. You
may recall that the crosscut request is $1.2 billion across six
initiatives, and four of those are ones in which the Office of
Science participates actively. So let me talk a little bit
about those in this setting.
I will start with the exascale computing crosscut.
Investments in exascale computing are critical to maintain U.S.
competitiveness and leadership in science, national defense,
and energy innovation. The Exascale Initiative puts us on a
path to achieve computing speeds 100 to 1,000 times faster than
today's leading supercomputers. But it is much more than just
speed, and I am almost certain we will come back to this in the
discussion period afterwards, because it really is an
absolutely fundamental underpinning to what we want to
accomplish in almost every area.
Second is the cybersecurity crosscut, for which DOE
requests $306 million. We talked about that a fair amount in
the previous discussion and we will again, because it is
absolutely important. It is increasingly important in today's
modern age, and DOE is working to protect its cyber assets, and
in particular Science's laboratory infrastructure. The national
labs are crown jewels, and we want them to be safe and secure,
even as they carry on the good science for which they are so
well known.
The subsurface technology and engineering crosscut is
focused on a fundamental objective, mastery of the subsurface
through adaptive control technologies, and Science supports
this effort through its fundamental research and expertise in
areas such as subsurface chemistry and complex fluid flows.
And finally, I will mention the energy-water nexus
crosscut, again a topic of discussion this morning. This is new
in the fiscal year 2016 budget request. Water use is
fundamental to electric power generation, and the Office of
Science provides the key underpinning for this crosscut through
an $11.8 million investment in data modeling and analysis of
complex energy-water system dynamics. Coupled with targeted
technology development by the energy programs, this new
initiative positions DOE to support the Nation's transition to
more resilient energy-water systems.
And before I close and turn things over to Dr. Dehmer, I
will say a word about one more initiative, and that is the
Quadrennial Technology Review, which involves the Applied
Programs as well as the Office of Science. The urpose of that
review is to inform the future of our science and applied
research, at least as far as it deals with energy applications.
It examines the state of existing and emerging energy
technologies and identifies the most promising research and
development opportunities across those technologies. And the
science of course is a fundamental enabling activity across
that, so it is an important component of the report. It is due
this summer, and I will look forward to coming back to talk
about that when the opportunity arises.
So as several have observed, DOE's science program is the
largest federal sponsor of basic research in the physical
sciences, and therefore it plays a key role in advancing our
understanding of nature and advancing the energy, economic, and
national security of the United States. And it is something
that I can say that, as a relative newcomer, that we should all
be very proud of what has been accomplished in the past and
what we can do in the future.
And I would be pleased to answer your questions when the
turn for that comes. So thank you very much.
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Mr. Simpson. Dr. Dehmer.
Mr. Dehmer. Thank you. Thank you, Chairman Simpson, Ranking
Member Kaptur and members of the committee. I am very pleased
to be here today to talk about the Office of Science budget for
2016. I first want to thank you for your continued support and
for your support in 2015.
Our 2016 budget request will support about 22,000 people at
more than 300 U.S. academic institutions and all 17 of our DOE
laboratories. Our 30 user facilities will support about 31,000
researchers from all around the country. We actually touch more
people at our scientific user facilities than we do by direct
support.
I think you well know our six programs that support
research in high energy nuclear and plasma physics, materials
and chemistry, biology and environmental sciences, and
mathematics and computing. Our request invests in discovery
science in all of those, and also supports a portfolio of basic
research that addresses unresolved questions in energy
production, conversion, efficiency, and use.
This morning I would like to have my opening remarks do
something a little different than I have done in the past. I
would like to tell you a personal story that has affected the
way I view investments in the Office of Science today.
Only infrequently in a science career does one see advances
that are transformational, that drive a change in the way we
think about the world around us. I was fortunate to be working
in atomic and molecular physics in the 1970s and the 1980s when
that field was transformed, it was revolutionized really, by
the discovery and widespread application of infrared and
invisible light lasers. These lasers certainly allowed us to do
ongoing research better, and in fact that is how we started
using them. But soon, and more importantly, entire new worlds
of science exploration were opened because of the power and
coherence of the laser beam. We could study phenomena that were
inconceivable and sometimes unknowable before the laser was
developed. Multiple Nobel Prizes came from such studies,
including one to our former Secretary of Energy, Steve Chu.
Today we are living through two transformations of this
magnitude. Among our highest priorities is the robust support
of investment in these research areas. The first area is high-
performance computing. We are well along the path to developing
a capable exascale computer by early the next decade. For a
decade now, computational science using terascale and petascale
computers was recognized as a partner, first a small partner
and now an ever-growing partner to theory and experiment. More
recently, big data has emerged, tempting us with the promise of
insights from previously unimagined volumes of data produced by
experiment and computation.
The potential impact of the next generation of computing,
that is exascale computing, coupled with aggressive analyses of
massive amounts of data cannot be overstated. From materials
discovery without synthesis to engineering without prototyping,
we will gain new awareness of the world around us and we will
see transformational, not merely incremental improvements in
our understanding and our predictive capabilities.
The second example that I want to talk to you about is the
X-ray laser, the first of which worldwide was the Linac
Coherent Light Source at SLAC National Accelerator Laboratory.
In the late 1990s, by the time I was here already, and in the
early 2000s initiating construction of the LCLS was viewed as
bold and quite risky. But in less than a decade the LCLS was
lasing and it was a stunning success. Immediately after the
demonstration of X-ray lasing in April of 2009--and, by the
way, even that morning there were some people who said it
wouldn't work, but it did, on the first try----
Mr. Orr. Including one of my colleagues from my university.
Mr. Dehmer. Including one of your colleagues, yes.
Immediately after that demonstration the world raced to
catch up.
Just as visible light lasers revolutionized atomic and
molecular physics 30 to 40 years ago, the LCLS X-ray laser
promises similar revolutions. The ability to watch, actually
watch in real time molecular mechanisms of photosynthesis,
biological transformations and catalysis will change how we
think about chemistry, biology, and material sciences. Just as
we didn't appreciate the impact of lasers in the 1970s and
1980s, I don't think we have yet begun to imagine the potential
of this new tool.
If history is a guide, when we look back in 5 to 10 years
at the impacts of high-performance computing and X-ray lasers,
we will be embarrassed to admit how little we predicted. With
apologies to ``Star Trek'' and grammarians everywhere, the
history of the Office of Science is one in which we boldly go
into new territories.
The two examples I discussed today are those with the
greatest budget increases in 2016 and therefore I highlighted
them, but there are other equally exciting stories in our six
research programs.
In summary, I believe that this budget will propel science,
will deliver remarkable new 21st century tools, and will make
the U.S. the leader in key areas of science important to
competitiveness. I thank you, and I look forward to your
questions.
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Mr. Simpson. I thank you for your testimony. And we are
going to be, unfortunately, having votes before too long. In
fact, I think they started, but would like to get on with a
couple of questions here before we do that and have to have you
sit around for a little bit while we go over and do those
votes.
I am going to turn first to my colleague from New Jersey,
the former chairman of this committee, Mr. Frelinghuysen.
Mr. Frelinghuysen. Mr. Chairman, thank you for yielding me
just a couple of minutes.
Mr. Secretary, in your prepared comments you say, ``As
Under Secretary, my job is to coordinate our scientific
research efforts with the applied energy research and
development that will lead the Nation to a low carbon future.''
I have served on this committee for 20 years, I have had a
chance to read your statement, and I can't believe that we have
such an inherently political statement put into the record.
This is a very bipartisan committee, not a political committee,
and I think it is unfortunate that I am reading this here,
``with an end to mindless austerity and manufactured crises.''
I mean, I think the federal debt does represent a crisis. I
work--and you mentioned the Joint Chiefs of Staff--I work with
the Joint Chiefs of Staff every day, and our best military
minds and leaders never invoke the fact that Congress is
mindless and manufacturing crises. So I would just attribute
this to the fact that maybe somebody gave you this statement to
read. I should hope, coming from your position at Stanford,
that you wouldn't be associated with such a political
statement.
Would you like to explain the origin of this statement?
Mr. Orr. I think that the statement deals with the budget
issues that we have going forward, and the attempt is to argue
that the science and energy investments that we are proposing
are in the national interest and ones that----
Mr. Frelinghuysen. Well, you should know this committee
works in a nonpartisan, bipartisan way to make those
investments. We always have. I would just say I think in my 20
years I have never read such a statement given to a committee.
It is a matter of public record. I think it is unfortunate. And
I don't think it reflects the purpose of the Department or the
sector which you are responsible for. I just want to register
my strong feelings.
Mr. Chairman, thank you very much.
Mr. Simpson. Thank you.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
And thank you, Mr. Secretary and Dr. Dehmer, for your
testimony today.
I wonder if, in terms of the priorities that you have
outlined for additional research and are seeking additional
funding, could you give us a bigger frame about the global
context in which we are pursuing these objectives? Who are our
major competitors for the science in those fields? And what are
you seeing internationally? And why is this so important to our
country?
Mr. Orr. Well, let me start, and then Pat can add the tail.
For a long time the United States had more of a, monopoly
is not the right word, but we had a strong concentration of
scientific leadership. But as the rest of the world has
developed and as they have put their own efforts into it, there
are lots more competitors out there. In many of the science
arenas this is a perfectly good result. There are so many
fundamental and important questions about understanding nature
that we need all the players we can get on the field and should
take advantage of them. And as was noted, there are
international endeavors that really bring countries together to
work on some of the most important fundamental questions.
Ms. Kaptur. Who are the chief competitors, Doctor?
Mr. Orr. Well, Europe is a place of great strength. China
is building hard and working to develop its capabilities. And
then there are other smaller efforts around the world.
I don't know what you would say, Pat, in terms of the
competitors?
Mr. Dehmer. So I think about two areas. I think about high-
performance computing, and for years we were the undisputed
leader. China now has the number one computer in terms of speed
and has had for a couple of years. We have 4 in the Department
of Energy in the top 10, in the top 500 list, but Japan and
Europe and China are coming on strong. That is one area where I
don't think we want to cede leadership.
Another area where I don't think we want to cede leadership
is in characterization at the atomic level, and I think
typically of the light sources. For years we were the
undisputed leader in light sources, and now many, many
countries have capabilities that equal or rival ours.
As Dr. Orr said, there are areas where we do want to
cooperate. For example, in particle physics, in accelerators,
where you will find only one mega-facility in the world. But
there are also areas where we want to be the leader or among
the leaders and we don't want to cede leadership, and I think
sometimes in those areas I am worried.
Ms. Kaptur. Do you have hacking of any of your sensitive
information?
Mr. Dehmer. Not that I am aware of.
Mr. Orr. But constant attempts.
Mr. Dehmer. Constant attempts, constant, constant attempts.
Ms. Kaptur. Would Russia be one of the countries that is
doing that or not?
Mr. Orr. I don't have any direct knowledge to answer the
question, but I would be surprised if there is not an element
of that in there.
Ms. Kaptur. I wanted to ask, following on that line of
questioning, where does the United States rank worldwide in
terms of investment in science, high science? What would your
guess be?
Mr. Dehmer. In terms of dollars or GDP?
Mr. Orr. We are discussing how to frame the question.
So the truth is that I don't know either the dollars or
GDP, fraction of GDP number, off the top of my head, but we
would be happy to go figure that out and get back to you on
that.
Ms. Kaptur. I want to allow my colleagues to ask questions.
Mr. Dehmer. I know that in terms of GDP we are not number
one and we are far from number one. In terms of dollar amount,
because we are so big, we may be very high there.
Ms. Kaptur. That would be most interesting to look at and
provide to the record. Thank you.
[The information follows:]
Mr. Dehmer.K. In terms of overall R&D spending, which includes both
industry and government, the United States ranked first in the world,
at $492 billion, in 2011, the most recent year for which international
comparative data is available. However, the U.S. share of global R&D
has been steadily declining, from 37 percent of total global R&D
spending in 2001 to 30 percent in 2011. China is the second-ranked
performer and by far the single biggest competitor, with $208 billion
in R&D expenditures in 2011. China's annual growth rate in R&D averaged
over 20 percent during the last decade, while the U.S. growth rate was
just over 4 percent. Largely as a result, the Organization for Economic
Cooperation and Development (OECD) has projected that China will
surpass the U.S. in R&D spending by the end of the decade. In terms of
R&D spending as a percentage of GDP, in 2011 the United States ranked
tenth worldwide, at 2.8 percent, behind such nations as Israel, South
Korea, Finland, Japan, Sweden, Denmark, Germany, and Switzerland, all
of which devote a larger portion at their GDP to R&D investments.
Ms. Kaptur. And I will allow the others to ask questions,
Mr. Chairman.
Mr. Simpson. Dr. Dehmer, the ITER project is an incredibly
complex endeavor involving seven international partners
contributing the equivalent of roughly $20 billion. A recent
internal report of ITER's project management team found this
group to be overly bureaucratic, inefficiently run, and
unacceptably slow, and made a series of recommendations to fix
these problems. This committee took steps to ensure that these
management reforms were implemented before the U.S. made
further cash contributions to the ITER organization.
Can you provide us with an update on how implementation of
those management reforms is going? Is the organization making
the necessary management reforms to your satisfaction? And is
there anything this committee can do to be constructive in our
approach to support ITER while ensuring that our tax dollars
are wisely spent?
Mr. Dehmer. I think the top management recommendation in
that report, the Management Assessment report of 2013, was to
change the top management of the ITER organization quickly. And
as you know, that has just been done. At the March 5 council
meeting they installed a new director-general, Bernard Bigot.
We are very pleased with that switch and we are looking forward
to seeing what Director-General Bigot will do in the coming
months and year.
Mr. Simpson. Because there are going to be efforts to
defund it essentially in this appropriations cycle, I am pretty
sure. Would that be a mistake?
Mr. Dehmer. Right now I am just going to speak to the 2016
budget. We are investing what we think is the appropriate
amount.
Lynn, you want to talk?
Mr. Orr. As you know, the United States has made
commitments to participate in the project. Most of those
commitments are actually construction of magnets and other
elements of facilities. So the spending that will take place as
part of the ITER project is actually devoted to at least
partially to supporting the fusion energy enterprise in the
United States, even as we contribute to the broader project.
The pace of that has been set to provide balanced funding
with the domestic programs and the international effort, and
each of those complements the other. So we believe that it is
in our interest to continue to participate, but we recognize
the concerns that you mentioned in your initial question.
Dr. Bigot, as he has taken charge, he was just confirmed in
the position as of March 5, so he has put together an
aggressive 200-day plan to take a hard look at every aspect of
how they are operating. And we think the right thing to do is
to watch that carefully and pay close attention and make that
judgment as we go forward and see how they perform.
Mr. Simpson. I guess one of my concerns is last year during
the budget negotiation or the appropriation negotiations on
this bill my argument was now is not the time to drop out of
this and withdraw our funding from it and we need to see how
these reforms come about. Is that going to have to be my same
argument again this year?
Mr. Orr. Well, I think it is the right argument, that it is
in process. The changes that we and others thought were
required in order to get the project on track have started.
They have a very capable and respected new leader with more
authority, I think, to do what needs to be done. But there is a
lot to do and it will require the cooperation of all the
participants.
Mr. Simpson. If the United States somehow decided not to
participate in the ITER project any further, how would that
affect the fusion research that is done at our universities
now?
Mr. Orr. Well, Pat can respond as well, but I would say
that partially it would remove support for some of the design
and equipment activities. So because all of the people that are
involved in this participate in those, it would remove part of
the support for those activities in our own research program.
So I think to do it in the short term would have a negative
impact on those programs.
Mr. Simpson. Same thing.
Mr. Dehmer. We are in the process right now of looking at a
strategic plan for the domestic fusion program. It is actually
going to turn out to be a very robust plan, with half a dozen
elements or so. I think if something as you described would
happen to the ITER project we would immediately revisit that to
see how we could strengthen the domestic program.
Mr. Frelinghuysen. Would the chairman yield?
Mr. Simpson. Sure.
Mr. Frelinghuysen. So I get some degree of equivocation
here? I mean, when the administration first took a look at ITER
and domestic side you were highly supportive. Is there some
equivocation here? I mean, this is sort of like stranded
investments here. We have been making investments in this
committee in the ITER project, sort of like the Joint Strike
Fighter if we are talking about the military. We back off, what
does that mean?
Mr. Orr. Well, then----
Mr. Frelinghuysen. Are you agreeing with the contention
that we shouldn't be supporting this international endeavor
which we have been supporting for how many years now?
Mr. Orr. No, I am sorry if I gave that impression. I think
that we should support it, and that is with the budget
requests.
Mr. Frelinghuysen. Ultimately it is the science that we
would benefit from.
Mr. Orr. Indeed, yeah, absolutely.
Mr. Frelinghuysen. Isn't that what your purpose in life, is
to provide for that?
Mr. Orr. Yes, indeed. On the other hand, we also understand
that it is a complicated project that has had some management
challenges that need to be addressed.
Mr. Frelinghuysen. Okay. Thank you, Mr. Chairman.
Mr. Simpson. There are only 2 minutes left during this
vote, so I would suggest that we recess the hearing and go
vote. And we will be back. We have got a series of 3 votes,
shouldn't take more than 6 hours. Not really. It won't take
that long. We will be right back.
Mr. Orr. We will be here.
[Recess].
Mr. Simpson. Hearing will be back in order.
Mr. Honda.
Mr. Honda. Thank you, Mr. Chairman.
And I want to welcome both Dr. Orr and Dr. Dehmer. We were
talking a little bit about light sources. And I have had
pleasure on several occasions to tour the great light sources
at Berkeley Lab and at SLAC, and I always leave impressed at
the power of these amazing scientific user facilities. In fact,
when I started to understand light sources it shed a different
light, I guess, on everything that I understood in terms of how
precise some of the photos that before it was very difficult to
produce images.
Unfortunately, other countries are catching up or passing
us up on light source capabilities and capacity. So I was
wondering if this worries you and if we are doing enough across
the full X-ray spectrum to stay competitive and ensure that the
U.S. doesn't fall behind in light source technology. Could you
describe what more we should be doing?
Mr. Dehmer. I think the roadmap for light sources was
produced by the Basic Energy Sciences Advisory Committee in
mid-2013, and the recommendations that came out of that report
were very aggressive. Basically it said that the U.S. will not
be number one if we don't take certain actions.
And those actions include the completion of the National
Synchrotron Light Source II at Brookhaven, and that was just
completed in December. Upgrade of the Linac Coherent Light
Source at SLAC, which we are doing, and upgrade of the storage
ring light sources, and that is the Advanced Photon Source at
Argonne and the Advanced Light Source at Berkeley.
We are already going forward with the Advanced Photon
Source Upgrade, and we are talking with Berkeley Lab now about
possibilities for going forward with the upgrade of the
Advanced Light Source.
Mr. Honda. Okay, great. So I sense that since we are on
task than the concern is minimal.
Mr. Dehmer. I think my concern would have been much greater
if we hadn't impaneled the Basic Energy Sciences Advisory
Committee to do this study, come up with some very aggressive
recommendations, and we followed those recommendations.
Mr. Honda. Thank you.
Mr. Orr. But if I could just add to that, that the hard
work that Pat and her team have done to keep us in the
forefront here is very important, but there is no reason to be
complacent. We will need to continue to make investments in the
science user facilities over time. And, fortunately, Pat and
her colleagues have put together a very disciplined process for
evaluating the needs and then figuring out how to do it in an
efficient way.
Mr. Honda. In terms of investments, in the area of
nanotechnology, I remember in 2003 I was one of the lead
coauthors of the National Technology Research and Development
Act that paved the way for the Federal Government's increased
investments in nanotech, and had the pleasure of attending the
groundbreaking and the dedication of the Molecular Foundry at
Berkeley Lab. That was a lot of fun. I just didn't understand
how that building stayed stable, it had a slope.
But it looks like nano research centers have made pretty
good progress in producing world-leading science. I was just
wondering if you could describe the benefits of these national
scientific user facilities and what the future looks like for
these centers and for nanoscale science at the DOE generally.
Mr. Dehmer. Thank you for the question. I am happy to do
that. You were the distinguished speaker at the groundbreaking
for the Molecular Foundry. I was there too. And I remember that
day well. They were worried that it was going to be inclement
weather and so the groundbreaking was inside, in a giant kitty
litter box with dirt in it.
All five of our nanoscale science research centers,
including the Molecular Foundry, are now done and operating.
And basically they have exceeded expectations. We expected
maybe 250 to 300 users a year. There are more than 500 or 600
users a year. The science is magnificent. The permanent staff
at those institutions have really embraced the idea of working
with the users to get the most out of the facilities. We are
very, very pleased with that program.
Mr. Honda. With the $3.7 billion initial grant that was
signed out by President Bush in 2003.
Mr. Simpson. That was hard coming out, wasn't it? President
Bush.
Mr. Honda. I couldn't remember whether it was Reagan or
Bush. I had to start thinking about my age.
Mr. Simpson. I am just kidding.
Mr. Honda. The need for another infusion, could you talk a
little bit about the necessity of a continuous infusion of
grants for research?
Mr. Dehmer. Yes, I am happy to do that. The National
Nanotechnology Initiative and the bill that you referred to I
think are the most dramatic basic research investments that I
can remember. The National Nanotechnology Initiative (NNI) and
all of the things that surrounded it made an enormous
difference in research in this country. The NNI, as it is
called, has continued, continues today, with new and vital
directions.
But I definitely agree with your statement that we need to
continue to invest in material sciences, nanoscale science,
mesoscale, which continues at slightly larger dimensions. And
we need to use the knowledge that we have learned over the last
decade of the NNI to begin to design material from first
principles and synthesize materials to exactly the
specifications that we want.
This was not a onetime thing. Material sciences is
incredibly important to this country. In fact, the Department
of Energy is the largest investor in material science in the
government because of the needs in energy.
Mr. Orr. Well, I was going to add, but Pat stole my thunder
on the very last line there, that this is an example where the
fundamental science of nanostructured materials is now finding
its way through a whole variety of energy applications, many of
which we didn't exactly foresee when we started that out. So it
just illustrates the idea that good fundamentals will find
applications and that we can use research needs on the
application side to pick out good science problems to do.
And an example of that would be in the fundamental area of
catalysis. Catalysts are used everywhere across industry. But
we would love to be able to say, gosh, we need a catalyst that
can do this. Once you have a really fundamental understanding
of the properties of the materials you can come back and
answer, here is a material that might actually do the job that
you want by so-called materials by design. So there is a
crosstalk there that is absolutely essential to our energy
future.
Mr. Honda. If I may, Mr. Chairman, last question.
Regarding health and health concerns at the nanoscale
level, any activities or thoughts or comments you want to make
in that area?
Mr. Dehmer. Well, we have actually taken a hard look at
that right from the beginning, and our philosophy has been, if
the material is uncharacterized, if we don't know the health
effects, we treat it as though it could be dangerous. And so we
are very, very conservative with nanoparticles that are
uncharacterized, and, in fact, over the years the Department
has put out secretarial directives to that effect.
Mr. Honda. Thank you, Mr. Chairman.
Mr. Simpson. Mr. Fleischmann.
Mr. Fleischmann. Thank you, Mr. Chairman.
And to Dr. Orr and Dr. Dehmer, thank you for your patience.
We had our votes and we are back now.
I would like to start my comments by thanking both Dr. Orr
and Dr. Dehmer for their support of the nuclear facilities
operating funds at Oak Ridge National Lab in the Fiscal Year
2016 budget. I appreciate the Office of Science and the Office
of Nuclear Energy for understanding the investment needed to
maintain these facilities that support the various Department
of Energy missions.
I would like now, though, to switch over to high-
performance computing. I know we have discussed some of these
things. But this is another one of the hallmarks of the Oak
Ridge National Laboratory.
For a long time now I have been a supporter of the Advanced
Scientific Computing Research program. I was very pleased to
see the Fiscal Year 2016 budget request for this program and
specifically the new investments to advanced exascale
computing.
Mr. Chairman, I am pleased to support DOE's request in this
area, but I wanted to raise one issue within the ASCR budget
that I hope we can address, and that is Leadership Computing
Facilities funding is down from fiscal 2015.
Dr. Orr and Dr. Dehmer, I think you would agree that to
have a successful exascale program we need to continue our
investment in our Leadership Computing Facilities.
I have got a four-part question. I asked the Secretary, but
I would like to ask you also to speak to the value of the LCF
program and how it relates to the broader exascale program.
Mr. Dehmer. The Leadership Computing Facility Program was
begun in about 2007 in response to international competition in
computing. It has catapulted the U.S. into a leadership
position in high-performance computing. The two leadership
computing facilities at Oak Ridge and Argonne are stunning
examples of what can be done when you combine leading-edge
hardware with a large investment in software capabilities.
Mr. Fleischmann. Dr. Dehmer, can you explain how exascale
differs from how today's supercomputers function?
Mr. Dehmer. Well, first, it is faster, but I think there is
more to it than that. I think in going from where we are now at
tens of petaflops, to exaflop computing, or exascale computing,
it is no longer a linear transition. We have to invest in
hardware that is far more energy efficient, and that requires
significant investments in component technology. We have to
invest in software, everything from the operating systems for
these computers to middle-ware to disciplinary software, and
that requires an enormous investment in talent and people.
And there are things about computing at the exascale that
are different than computing at the petascale. There can be
more errors in the output, and we have to figure out how to
know when there are errors and correct for them. Because you
can have not thousands or tens of thousands, but hundreds of
thousands and a billion computers operating simultaneously.
So in moving from where we are now, from where Oak Ridge is
now, from the next generation at Oak Ridge to the exascale
requires a step function change in how we do business.
Mr. Fleischmann. I think you have addressed the major
technical hurdles and I appreciate that.
Dr. Orr, what does the Nation gain from a large investment
in exascale computing? And what will we be able to do that we
can't do now as a Nation?
Mr. Orr. Well, I said earlier and I will say it again now
because it is so important that the ability to do this very
large-scale computing underlies almost everything we do in the
energy space. I will give you one example. We are entering a
world with the grid where we will have many, many more sensors
to tell us what is going on in the grid. We will have
microgrids connected, we will have the ability to control which
way power goes, and we will have a much more capable grid
system to allow us to go forward.
But that also means we will have much more data, we will
need to be able to compute the state of that system in real
time, we can't quite do that today, and then we will need to be
able to make management and operating decisions on a time scale
that will require both intelligent operators, but intelligent
tools around them. Those kinds of challenges are ones that will
demand computing power that this approach will allow.
In other areas, we talked a few minutes ago about the idea
of materials by design, but the ability to compute the
properties of materials from the very most fundamental
descriptions of how they work, those are very demanding
calculations. And if you are going to do them in the kind of
design space that you would like to use, that will require them
as well. And as I said before, well, even interpreting the
experiments that come from something like the detectors at CERN
in Europe or the Long-Baseline Neutrino Facility, those are big
computational tasks as well.
So the ability to do absolutely high-performance computing
is enabling across the entire space in which we they work.
Mr. Honda. Would my friend yield for just a real quick
comment?
Mr. Fleischmann. Absolutely.
Mr. Honda. This subcommittee has worked on this issue of
increasing the size of wafers from 300 to 450 millimeters. And
that kind of technology, is that the kind of technology that
you are also talking about when you said hardware, increasing
research in chip design and making them smaller, faster, more
efficient, more efficient in terms of not creating heat, but
being able to produce the heat consumptions, is that the kind
of technology that you are looking at, that would be
piggybacking on my friend's question?
Mr. Dehmer. Chip design is absolutely part of it. I don't
know if wafer size is. I just don't know the answer to the
wafer size question.
Mr. Honda. Wafer size would be more competition, I guess.
Mr. Orr. But it is true that the energy-efficiency aspect
is very important, as Dr. Dehmer said. If you just went to
linear increases in power consumption, then it is untenable. We
really have to redesign how we think about these massively,
massively, massively parallel machines that use energy more
efficiently. And then of course what gets developed there will
find its way into all kinds of other stuff, you can be
absolutely guaranteed.
Mr. Honda. Thank you.
Mr. Fleischmann. Thank you.
I have one final question that I would like to address to
both of you. Dr. Orr and Dr. Dehmer, how do the major science
facilities, such as the light and neutron sources, support
American manufacturing, and how can we increase support for
industry when building such projects? As a follow-up to that,
the construction of large science facilities has often driven
cutting-edge manufacturing. What science projects will require
major construction, such as ITER or SNS, and will they help
develop American manufacturing, either now or in the future?
Mr. Orr. So let me start in a general way and then Pat can
fill in some specific examples.
While I was waiting for the Senate to vote on my
confirmation I went to visit, well, as it happened, all 17 of
the national labs. I had lots of time. And in doing that, I
went to all the user facilities, and I was surprised to learn
how many of the experimental stations were actually funded by
industry or actually used by energy industries or other
industries because it gave them the capability to do
measurements that were applicable to their business.
So I realized in that process that there is actually quite
a lot of industry interaction at the light sources and that we
can expect that to continue. There are two models. If it is all
published information, then they can compete for time for
machines like anybody else, any other scientist, but if they
want to do proprietary stuff then they pay the full freight.
So there is already a good mechanism for including them,
and I think we have seen lots of benefits from those
relationships already.
If you want to then correct any lies and distortions in
what I just said, it would be good to do that.
Mr. Dehmer. No. I will add, though, that I was involved in
a lot of construction when I was heading the Basic Energy
Sciences program, and that construction definitely uses U.S.
labor and U.S. industry, conventional construction very
significantly, but also high tech, magnets, superconducting
cavities, and so forth. So there is a sizable involvement of
industry.
The Leadership Computing Facilities have deliberately
reached out to industry and are working very closely with them
in all areas, in turbines, airplanes, combustion, and so forth.
So I think we recognize the responsibility to reach out to
industry and we are doing it.
Can I just get back to your original statement about the
funding for the Leadership Computing Facilities in 2015 and
2016?
Mr. Fleischmann. Please.
Mr. Dehmer. The reason for the decrease is that we invested
heavily in 2015 to prepare those facilities to receive the next
generation of computers. And so that funding was finished in
2015 to upgrade the facilities so they could receive the next
computers.
Mr. Fleischmann. Thank you, thank you.
Mr. Chairman, I yield back.
Mr. Simpson. Ms. Roybal-Allard.
Ms. Roybal-Allard. I would like to go back to a topic that
we were discussing just before we had votes, and that has to do
with ITER. In your comments you mentioned that Dr. Bigot had an
action plan and that that action plan was endorsed by the ITER
council.
My question is if you could elaborate on how the director-
general's action plan addresses the ITER Management Plan
recommendations and what specific improvements will you be
looking for in 2015 and 2016? Also, if you could also comment
if you share the concern that has been expressed by some U.S.
policymakers and fusion research of the impact of ITER's
funding on the availability of DOE resources for the domestic
fusion program.
Mr. Orr. I imagine that both of us can respond to various
parts of this question.
The plan that is in place so far that was proposed by Dr.
Bigot lays out a series of additional steps to alter the way
they do the management of the project and to work on sort of
reconstituting the time line of the construction and taking a
hard look at all the budget questions. That takes place over
time, so the remainder of this year, those pieces come into
place as they really assemble a team that takes a very hard
look at kind of every aspect of managing this extremely
complicated construction project. And so the kinds of things
that we will pay attention to are exactly those that were
raised in the external review of the management issues there
and of course all these timing and budget issues going forward.
Now, with regard to the balance of the program, Pat and her
troops have done a very careful job of figuring out how to
allocate resources across the various research areas and
projects. And the budget we are recommending this year we think
is a balanced approach to meeting both the international
objectives and the domestic program.
And I would note also that there is not a hard distinction
between the international and the domestic, because 80 percent
of the contribution toward ITER is actually design and
construction of components of the reactor that are done here in
the United States, using the United States fusion teams. So
there is sort of synergy amongst those and contributions
across, and we think the budget recommendation this year is a
good balance of those.
Mr. Dehmer. I don't have anything more to add.
Ms. Roybal-Allard. The President's budget, Director Dehmer,
requests a funding increase of 5.1 percent for Workforce
Development for Teachers and Scientists. As you know, in recent
budget cycles there have been several changes to the federal
science, technology, engineering, and mathematics education
effort. What role can we expect the Department of Energy to
play in STEM education and workforce development in future
years, and how will the Department of Energy uniquely
contribute to the federal STEM education portfolio?
Mr. Orr. Well, so I have to admit that I am too new to have
a really detailed knowledge of that, so I can either take that
for the record or perhaps Pat can comment in a way that can
help us along that path.
Ms. Roybal-Allard. And any additional information you can
submit for the record.
Mr. Dehmer. Okay. I am happy to talk a little bit about
this, because about 4 years ago, when the director of the
Workforce Development for Teachers and Scientists program left
to take a different job I actually took the program over, so I
have been managing it for 4 years.
We have structured that program in a way that is actually
quite unique in the Federal Government. We put about 1,000
people a year at the DOE laboratories for summers, for
semesters, or for longer. We have undergraduates who go to the
laboratories as interns. We have graduate students at
universities who spend from 3 to 12 months at the laboratory
doing part of their thesis research. We have visiting faculty
come to the laboratories for summers or for longer periods of
time, many of whom come from minority-serving institutions.
And we believe that the Department of Energy laboratories
are a unique way to increase the workforce for Department of
Energy missions by bringing these people to the laboratories
and introducing them to DOE labs and DOE science.
Ms. Roybal-Allard. Mr. Chairman, I have no further
questions.
Mr. Simpson. Thank you.
I am always kind of fascinated by the Office of Science
because it is a lot of stuff I don't understand.
Mr. Orr. Me too.
Mr. Simpson. Yeah. It is kind of baffling, isn't it?
I am going to ask you just a general question because I get
asked this question all the time, and I will guarantee there
will be amendments that are offered on the floor and all this
kind of stuff. And it is not just what we do in the Office of
Science, it is also you could say NIH, the National Science
Foundation, all this other kind of stuff. And that is, why do
we do it? Why does the government need to do it? Why isn't
private industry doing it? Isn't this corporate cronyism or
whatever you want to call it and all that kind of stuff? I
mean, I have my answer.
I would like to hear your answer why we invest in these
things. And if you talk to some of these people they will say,
well, of course, if the government is going to do it why would
private industry invest in it? But if we don't do it, then they
will have to do it, because that is how they advance. Edison
didn't need the Federal Government to invent the light bulb.
Mr. Orr. Yeah. So let me take a crack, with your permission
of course.
Mr. Simpson. Sure.
Mr. Orr. And then I will ask Pat to chime in.
So the science and energy enterprise for the Nation should
be based on a portfolio. And that portfolio certainly involves
industrial applications. We have very capable energy industries
that will do that. But it also should have the full spectrum
that goes from the fundamental science, which we know from long
history that investments in fundamental science will pay off
eventually down the road a ways. But as you are doing the
individual things you don't know which bits of the portfolio
yet will be the ones that turn out to be most important. And in
fact they will get woven together in interesting ways that it
is very hard to foresee.
What is appropriate for the Federal Government is the
fundamental research, the early stage investments in ideas that
then eventually will find their way, compete their way into the
energy marketplaces. So we really need all the players. We need
the support that the Federal Government provides, but we also
are going to need all the commercial and industrial actors at
the other end. They typically have a focus, a time focus that
sort of might be in the next 5 to perhaps 10 years, sometimes
longer. But we really tend to focus on the things that will get
applied over a spectrum of time.
Mr. Orr. So I think that you really need all those parts.
Mr. Simpson. So we are not trying to pick winners and
losers?
Mr. Orr. No, in fact, we are trying to--you can kind of
think about this is a--I don't know----
Mr. Simpson. You are trying to pick winners and losers in
terms of technology?
Mr. Orr. Well, you can think of it as a--it may be a funnel
is the right----
Mr. Simpson. Yeah.
Mr. Orr. [continuing]. That at the wide end of the funnel,
you want as many ideas as competing as possible. And even as
you transition into potential technologies, they will develop
at different rates. So sometimes, you know, something might be
ready now for a big explosion in application, but others need
some more development that involves--maybe you need another
piece of invention that hasn't quite gotten there yet to put it
all together, and then those will march through.
So this is anything but a linear process. It involves lots
of looping and iteration and designers and thinking, but
eventually, through that complicated process, we will get
things that make it into the marketplace and contribute in a
very big way. So, taken together, that portfolio aspect of it
is important to a diverse and successful, stable energy system
going forward.
Mr. Dehmer. Part of the portfolio aspect that was just
described, has to do with the time horizon.
When I started, many of the industries had very robust
basic research programs. Those are largely gone, save for a
short term, and that means 5-ish years, maybe a little bit
more. We have seen the demise of Bell laboratories, we have
seen pharmaceutical companies change over their research so
that they are investing in things that may come to fruition
relatively soon.
So, the portfolio also has a time component to it. And
industry just simply doesn't invest in things with very long-
time horizons. And there is another component to the Office of
Science, high-energy physics, nuclear physics, fusion energy
sciences. There would be no one that would invest in that if it
weren't for the Federal Government.
Mr. Simpson. And thank you for that answer.
How do I explain to--I mean, you are talking to people in
this room that agree with what we are doing and know that we
need to do more and that research and development is very
important and what the Federal Government does is very
important and so forth. Well, let's say I am an auto mechanic
out in Idaho, or better yet, I am a dentist out in Idaho, since
I was one of those, and I go to work and every morning and I
drill and fill and bill and I pay my Federal taxes and
everything. Why does it matter to me whether we have exascale
computing? How do I explain that to your everyday taxpayer that
is paying for all of this?
What does it mean to me? What do I get from this?
Mr. Orr. I would love to have a simple, straightforward
answer for your question, but I don't. But I think we can say
that we live in a complicated modern society, with energy woven
through every aspect of it. The fact that we take it sort of
for granted is partially the success of the enterprise that has
taken the fundamentals of electricity and magnetism and turned
it into a grid and motors and transportation and all those
kinds of things. All of those are built on scientific
underpinnings that were done, in those examples, sort of in as
early as 20th century.
Mr. Simpson. Before there was a Department of Energy.
Mr. Orr. Before there was a Department of Energy, but with
a world that was much smaller scale and much less
sophisticated. And what we are doing now is preparing for all
the kinds of advances that will make life still better and more
secure and economically productive in the future. And that
needs to be built on the science that we will do now and we
will continue to do in the future.
Mr. Simpson. What do you say to those people who say that
we ought to do away with the Department of Education, the
Department of Energy, and the other one I can't think of?
Whoever that is.
Mr. Orr. I would say that, I do not think that would be in
the national interest, that we will be better off if we can
apply the science that we do for the betterment of mankind.
Mr. Simpson. Okay. Dr. Dehmer, the nuclear physics program
in your office will likely face some difficult tradeoffs
between major facilities in the near future. There are
currently two construction projects within this program, the
upgrades for the accelerator facility at Thomas Jefferson Lab
in Virginia, and the construction of the facility for rare
isotope beams at Michigan State University.
While these two construction projects continue, operations
continue at Brookhaven National Lab to run Relativistic Heavy
Ion Collider (RHIC). A flat or shrinking budget within the
nuclear physics program simply may not be able to support all
of the activities at their desired levels. While this year's
request increases the nuclear physics program by $29 million,
we have to think about priorities under a flat scenario.
Previous long-range plans have identified the upgrades at
Jefferson Lab and the construction of the facilities for rare
isotope beams as the highest priorities within nuclear physics.
Under a flat-budget scenario, the long-range plans recommended
shutting down RHIC. In a flat-budget scenario, does this
prioritization remain the same?
Mr. Dehmer. No, I don't think so. This is absolutely the
wrong time to close the RHIC. It is producing world-leading
results. And, you know, I talked in my opening remarks about
surprises; RHIC is producing surprises that we had never
anticipated before. The quark-gluon plasma is a perfect fluid.
And we never anticipated that we would see that. So no, this is
the wrong time to close RHIC.
I am fighting very hard to dispel the recommendations of
the previous NSAC report. In fact, we have another NSAC, long-
range plan coming out in the fall of this year, and that will
speak again to priorities in different budget scenarios. But
the answer is, is it the right time to close RHIC? It is
absolutely not the right time to close RHIC.
Mr. Simpson. Well, if you have to live within existing or
shrinking budgets for nuclear physics, what do you think
strikes the right balance in order to fund the priorities
within the program?
Mr. Dehmer. So at this point we put in a request for the
2016 budget that we believe is the right request.
Mr. Simpson. But it is not a flat priority.
Mr. Dehmer. No.
Mr. Simpson. So you are saying you have no alternative if
it ends up being flat?
Mr. Dehmer. I am saying, I am going to support that budget
for nuclear physics.
Mr. Simpson. You support the President's budget, right?
Mr. Dehmer. I do.
Mr. Simpson. Oh, okay. I have heard that before. Thank you.
Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
I am going to take a little different tack here just for a
second. We all look at life through prisms; sometimes they are
from heredity, sometimes from geography, sometimes from
opportunity, education, and our employment experiences. So we
don't come here without these prisms that we look through.
When I was on the NSF Committee, I was amazed coming from
my part of the country looking at the top ten universities
around the country, over my entire career that have always
gotten the bulk of money from the Federal Government. And so
the prism I come from is one that--and a perspective I come
from is that over the years, the Federal Government has made
certain decisions and they kind of keep going the way that they
started, for whatever reason, the history.
Recently, a Harvard scholar named Robert Putnam has written
another book called ``Our Kids.'' And his last book, ``Bowling
Alone,'' he became very famous. But his perspective is that,
America really is dividing much more than in prior years, by
class. But he defines class in a little bit of a different way:
Those who have been highly educated and are able to manage in
this very difficult economy; and those who simply have no hope,
they just simply won't get there. And that divide is growing.
And the reason I mention that is, that the prospects of
those of the majority of children being born will never have
the opportunity to do what we are doing here today. I worry
about that. It is one of the reasons that motivates me to
office because I think this is a country created for all not
just for some.
So as I look at the geographic location of the labs, I
think to myself, what divide does that create and how do I get
some of those resources to be directed to the places that are
part of the other America? And I believe, and I have
experienced living in our part of the country, you know, no
labs--not that if they had been present we wouldn't have gone
through what we have, but the tremendous loss of manufacturing
jobs in the industrial heartland, to a point that our
productivity has been seriously harmed and the average income
of citizens going down about $7,000 over the last 15 to 20
years. That is a huge hit. And some have had a more severe hit.
So, my prism is, if I view the world that way, then I want
to use every single asset I have to help lift the places that
have endured the most harm. And how do I get the special
preserves that exist in our country, to find those places and
begin to ask the question how can we apply some of what we
know, to help lift those places?
So one of my questions is, someone mentioned earlier today,
and it might have been the other panel, but when this car was
made by 3D manufacturing, additive manufacturing, where was
that done?
Mr. Orr. Well, one of the companies, I believe, was
actually located in Ohio, in Youngstown, although I might be
mixing it up with the other--there is another advance
composites outfit that I might not have that straight. But I
know that there was an Ohio connection in one of those, and I
think it was the 3D printing car.
Ms. Kaptur. There is a Youngstown 3D additive manufacturing
center.
Mr. Orr. Yeah, a manufacturing one yeah.
Ms. Kaptur. I know that. But I am very interested in how
the labs look at the universities that are out there in this
sea of places that stretch all the way from Gary, Indiana, up
to Buffalo, through the industrial heartland corridor that have
been through--I just talked to the member from Rochester--hell.
And how do we as a country provide more balance to the ship?
And so I am asking you, how does your budget advance the
cause of these places, particularly those that have endured
two-thirds of job loss, two-thirds, in the manufacturing
sector? And I guarantee you, most of the universities that
exist in that corridor probably aren't in receipt of big
dollars from the Department of Energy nor from the NSF. I think
there is a real opportunity for a prism to look through here
and to use the rigor, the intellectual rigor you have to figure
out ways to begin to reconnect and identify platforms for
innovation in those places because they are so needed.
And I will say this also, if you look at those places, they
are not centers of government. If you look in most of our
States now, the places that are growing are the capital cities.
The capital cities to me, just like Washington, are false
creations. They are just there because of the productivity of
the rest of the country. And so they are lucky. And you can
sort of take comfort by fleeing there and living there, but
really the productive wealth of the country is in these other
places and we have to pay more attention there.
And so I am just asking you, in your budget, think about
what kinds of effort you could make to better connect and
thread through those places. It is hard for you, because you
are segmented in so many different research centers, but there
are nodes of opportunity there, but they don't have the sunk
investment of these incredible minds and assets.
And it is likely, if you look at your budget, you are still
building what is already there. You are not necessarily
ferrying out to a new region that so desperately needs to be
lifted economically, where you could really--you could make a
major difference.
Mr. Orr. Well, I have a couple of reactions. Though I grant
you that these are complicated problems and that it is unlikely
that we will fix them entirely. One is that when we talk about
things like the user facilities, those serve, I don't know,
well it depends on who you count, but typically 22,000 science
researchers and then maybe 31,000 including all the other
actors, so those folks come from everywhere.
The reason we have these big-user facilities is so that not
every university will ever afford them--you know, some of
these--not any university will afford them, but they provide
access to these machines. That is all done through proposal
competitions. And Pat, I am sure, can give you plenty of
statistics that these folks come from every kind of university.
So, access and the ability to compete for time on those
machines is one thing that we can and do provide.
Second of all, if we do our jobs correctly, then in the
longer term, energy will be less expensive and everybody's--
they will have an opportunity to use what resources they have
in ways that can provide at least more of the access to the
benefits that so many of us enjoy. And so the work that we do,
even if not everybody can participate in doing the science
work, we can provide benefits that do apply to everybody in the
society.
And then we should work hard to make the communities in
which we work much more inclusive, that is the educational side
is something that Pat just addressed. And, you know, we have an
assortment of programs that we hope will increase participation
of minorities in energy work. And so here again, we need a
portfolio of things that can help work on these problems.
Ms. Kaptur. Doctor, you know, I just want to tell a story,
okay. This is my moment to vent, but we learn by doing this. We
mentioned earlier that for solar, the leading solar firm in our
country was birthed in, of all places, Toledo, Ohio, at the
University of Toledo. Not a major NSF grant recipient, nor a
major DOE grant recipient. That is an amazing story. It is two
Chinese companies and then first solar.
So I am out at Berkeley and visiting the lab, and as I am
leaving the campus somebody says, see that site there? I said,
yeah. They said, well, we are going to build $100 million solar
facility there. I said, oh, what leading company comes out of
here that even comes close to the one that I represent? And
nobody answered. And I sort of left the campus saying, hmm,
well, they have a lot here. And I am not against what they
have, but I live in a place where we have had great innovation
without the recognition of that kind of investment in a place
that really needs it, the Detroit, Gary, Toledo, Cleveland,
Pittsburgh, all the way to Buffalo, Rochester corridor.
I look at that and I go, what is wrong with us? Why doesn't
the Federal Government see us? Why--you know, why do we have to
go to California when, in fact, the innovation happened here
and the manufacturing happened here?
So, I am interested in a more specific answer to the
question on 3D manufacturing, even though Youngstown was
involved, because I defy any Member of Congress to represent as
many automotive companies as I do. There might be one
somewhere.
But I say to myself: This matters, the manufacturing
sector. I don't live in a capital city. I don't live where, you
know, I don't have Harvard or Berkeley in my district, but I
have got the Cruze, I have got the Jeep Wrangler. I mean all
this stuff is happening in our region. I have got the Ford
EcoBoost engine in our district. I look at all this and I am
going, what is wrong with us? Why don't we get this kind of
attention? What do we have to do to the Federal Government to
say, hey, pay more attention here?
Because as you see those jobs come online, if we just had a
little bit more help, do you realize what would happen for this
country, with the manufacturing capability and the private
sector, I call it the free enterprise zones of America, with
just a little more attention? In regions that are not water
short. But we don't somehow have the patina of some of these
other places. And I am not jealous of the other places, but I
am saying pay attention.
So, that is my message today to the Department of Energy.
And I support your budget. I fight for your budget. I do it for
the country. But then I say, what is wrong with us? We have
tried hard. We matter. Our people matter in this corridor. But
we don't get the attention.
I can put on the record we have the smallest NASA center in
the country. This isn't your fault. Right? But we have John
Glenn and Neil Armstrong. Shouldn't we have the largest? We
have the smallest. But we gave the country--they gave the
country their lives. And I say to myself, what is going on
here?
So the playing field is tipped, and I am just trying to
make a very vivid point for you. Take your needle and start
threading it through these places. I will send you a map and
you can take a look at it and just think about it in terms of
where latent productivity could happen based on the assets that
are there, but we don't have some of your academic fire power.
And there is a way to do that and make it more easily
available, and you will get more--you will get more bang for
the buck there, if you just figure out a way to engage it. So
that is my--you know, and I support the labs. Don't take this
message the wrong way. But let's look at some of the places
that can help solve the class divide that Dr. Putnam so ably
describes in his book. And this is one way to do so it. Thank
you.
Mr. Simpson. Thank you.
Thank you both for being here today. Some interesting stuff
you guys work on. It is very important to the country. And I
didn't mean by my questions to say I don't support it or
anything. I just like to be able to answer the questions that
come to me all the time. And you will see some of them on the
floor during debate and during amendment debate. But thank you
for what you do.
Thank you, Pat, for coming out to Idaho earlier.
Mr. Dehmer. My pleasure.
Mr. Simpson. Enjoyed our tour out there. And look forward
to seeing you back out there. Thank you. Hearing adjourned.
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W I T N E S S E S
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Page
Baran, Jeff...................................................... 101
Burns, Stephen................................................... 101
Danielson, David................................................. 153
Dehmer, P. H..................................................... 300
Hoffman, Patricia................................................ 153
Klaus, David..................................................... 1
Kotek, John...................................................... 153
Orr, Franklin..................................................153, 300
Ostendorff, William.............................................. 101
Smith, Christopher............................................... 153
Svinicki, Kristine............................................... 101
Whitney, Mark.................................................... 1
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