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ANSWERS TO POST-HEARING QUESTIONS
Responses by Dr. James F. Decker, Acting Director of the Office of Science, U.S. Department of Energy
REPUBLICAN MEMBER QUESTIONS:
Office of Science's Role in the Administration's Energy Task Force
Q1. What has been DOE's role in the work of Vice President Cheney's Energy Task Force? In particular, have you worked with the Vice President and his staff to ensure that a robust energy R&D program—both near-term and long-term—is included in the Task Force recommendations?
A1. DOE provided significant input in planning, drafting, and reviewing the President's National Energy Policy (NEP), Report of the National Energy Policy Development Group. Over 80 DOE staff and contractors were involved in providing technical analysis, background information, and draft policy options. DOE had direct responsibility for drafting five chapters, and was fully engaged in reviewing all chapters. One of our primary roles was to assure a robust energy R&D program that is consistent with the Administration's energy policy goals. R&D experts from across the Department (FE, EE, NE and other DOE offices) significantly contributed to the (NEP).
Office of Science's Role in the Administration Climate Change Policy Review
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Q2. What is DOE's role in the climate change policy review that is reportedly underway by the Administration?
A2. On June 11, 2001, the President issued an Interim Report of its Cabinet Level Review of U.S. Climate Change Policy. The report included a Presidential directive to the Secretaries of Energy and Commerce, and the Administrator of the Environmental Protection Agency to develop a National Climate Change Technology Initiative (NCCTI). President Bush's accompanying remarks, spoken from the White House Rose Garden, provide additional guidance on goals and expectations. The Department of Energy is coordinating the NCCTI. The NCCTI teams include OMB, CEA, OSTP, DOE, State, NASA, EPA, USDA, and Commerce.
The NCCTI will develop innovative approaches in accordance with several basic principles, as outlined by the President. The approaches will: (1) be consistent with the long-term goal of stabilizing greenhouse gas concentrations in the atmosphere; (2) be measured, as we learn more from science, and build on it; (3) be flexible to adjust to new information and take advantage of new technology; (4) ensure continued economic growth and prosperity; and (5) pursue market-based incentives and spur technological innovation.
The technology review and subsequent report to the President, which is scheduled to be completed in January, 2002 will: (1) evaluate the current state of U.S. climate change technology R&D and make recommendations for improvements; (2) develop opportunities to enhance private-public partnerships in applied R&D to expedite innovative and cost-effective approaches to reduce greenhouse gas emissions and global warming potential; and (3) make recommendations for funding demonstration projects for cutting-edge technologies. In addition, the report will: (4) provide guidance on strengthening basic research at universities and national laboratories, including the development of the advanced mitigation technologies that offer the greatest promise for low-cost reductions of greenhouse gas emissions and global warming potential; and (5) make recommendations to enhance coordination across Federal agencies, and among the Federal government, universities, and the private sector. Finally, the report will (6) make recommendations for developing improved technologies for measuring and monitoring gross and net greenhouse gas emissions.
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Coordination of Research Programs Within DOE
Q3. It appears that several DOE Offices are funding similar programs—fuel cells and turbines, for example. Please explain how you coordinate your research efforts to avoid duplication of effort.
A3. The Fossil Energy (FE) and Energy Efficiency and Renewable Energy (EE&RE) Programs for fuel cells are coordinated in several ways. There are only two large, fuel cell-specific R&D programs in the DOE; DOE FE Distributed Generation (DG) Systems, which is focused on stationary applications and the DOE EE&RE Office of Transportation Technology (OTT), which is focused on transportation applications. Work with a renewables focus is ongoing in the EE&RE Office of Power Technology's (OPT) Hydrogen Program and the Buildings Program where some fuel cell R&D activities are funded, but on a much smaller scale.
The EE OTT and FE DG programs are coordinated in several ways:
1. Through Joint EE/FE Fuel Cell Program Reviews.
2. By co-chairing of major meetings such as the 2002 Fuel Cell Seminar.
3. By joint funding of projects important to both programs at the national laboratories, such as the National Energy Technology Laboratory (NETL) and Los Alamos National Laboratory (LANL).
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4. By working together to present a unified DOE Fuel Cells Program presence at major meetings—such as the 2001 House Exposition in the Cannon Office Building.
5. By mutually participating in laboratory and other important meetings sponsored by each office.
On a broader level, the Offices of Fossil Energy (FE), Energy Efficiency and Renewable Energy (EERE), and Science (SC) use several techniques to coordinate their research programs to avoid duplication. One technique is to make presentations at each others' meetings. For example, both the FE and EERE, as well as the Office of Nuclear Energy (NE), made presentations to the Office of Science's Basic Energy Advisory Committee meeting (August 3, 2001). Each office outlined their missions, goals, and programs of major importance. This approach helps to inform the basic research programs about the Department's applied research programs, and to encourage relevant basic research to support the applied programs, where appropriate.
Joint meetings between the different offices are another approach. For example, also last August, FE and EERE each hosted a workshop on Natural Gas/Renewable Energy Hybrids. The FE hosted meeting was held at the National Energy Technology Laboratory, in Morgantown, West Virginia, and the EERE hosted workshop was held at the National Renewable Energy Laboratory, in Golden. Colorado. The laboratory directors and top management of FE and EERE participated in both workshops, and the panel and informal discussions allowed for a good understanding of each organization's interests and roles.
A third avenue for coordination is the Institutional Planning Process that the Office of Science oversees for the DOE Science laboratories. All of the DOE program offices, including FE, EERE, and NE are given the opportunity to review and comment on drafts of each of the SC laboratory's five year institutional plans, and to attend the on-site laboratory reviews that take place once a year. This helps the applied research programs understand the scope and content of the basic research sponsored by the Office of Science, and to make the best use possible of these basic R&D efforts.
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HOUSE SCIENCE COMMITTEE QUESTIONS:
Declining Pool of Physical Science Students
Q4. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the expected impact on Energy R&D and what suggestions do you have to address this growing problem?
A4. The number of U.S. citizen students entering the physical sciences is consistently low and is masked by the large numbers of foreign nationals studying at our prestigious research universities. In some of the fields, like materials sciences and computer programming, an alarming number of graduate schools, at excellent research universities, are made up of large numbers of ''foreign nationals,'' sometimes far exceeding half of the students. The desire and request by corporations to increase the number of H–1B visas (non-immigrant visas issued to persons in a specialty occupation which requires theoretical and practical application of a body of highly specialized knowledge) mirrors this situation. It is then a logical consequence that the paucity of American born students and the relative plethora of foreign nationals in what are areas of technology and science critical to the Nations' security, raise serious issues for the DOE and the nation at large. Of further concern is the low representation of women and minorities in the sciences. With community colleges holding greater than 50% of our undergraduate students, these institutions have become a focus of the DOE and the National Science Foundation to increase the numbers of U.S. students entering the sciences, which play a central role in maintaining the leading edge we presently have in technology, medicine and defense. The Office of Science undergraduate laboratory research programs introduce students to the unique intellectual and physical resources present at the DOE laboratories.
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Office of Science Labs and Facilities Budget
Q5. What is the impact of the FY budget request on the operations of the Office of Science's large scientific facilities and laboratories?
A5. The High Energy Physics (HEP) program has chosen to focus on providing a high level of operation of its facilities in order to capitalize on the potential for exciting new discoveries at Stanford Linear Accelerator Center (SLAC), and Fermilab. Other parts of the program, including those at universities and the smaller high energy physics laboratories, were reduced in order to allow Fermilab and SLAC to operate their colliders at near optimal levels of 39 weeks and 35 weeks, respectively, and to provide for facility upgrades to increase the luminosity of these machines. However, funding for the universities was reduced by approximately 5.6% and for the small labs by 4.5% to 5%. To fully exploit the discovery potential of the programs at Fermilab and SLAC requires a continuing program of upgrades to the colliders, and to the detectors, to increase the luminosity, to record and analyze the resulting data and to replace/upgrade components of the detectors as they suffer radiation damage. The FY 2002 budget request would provide $18,000,000 at Fermilab and $11,500,000 at SLAC to support these upgrades.
The Nuclear Physics program has increased funding for facilities operation in FY 2002 by about 1% compared with FY 2001 by reducing capital equipment funding. Funding for university research groups is constant and for Laboratory groups increases approximately 0.5% for in-house research to maintain sufficient manpower involved in the high priority activities at the user facilities. Staff will be reduced by about 5% at both the National Laboratories and the universities. The Nuclear Physics supported facilities will operate at approximately 60% maximum utilization in FY 2002. In order to maintain an overall effective program with these constrained budgets, a review process will be undertaken requesting community guidance for the three Low-Energy facilities (88-Inch Cyclotron at Lawrence Berkeley National Laboratory (LBNL), Argonne Tandem-Linear Accelerator System (ATLAS) at Argonne National Laboratory (ANL), and the Holifield Radioactive Ion Beam Facility at Oak Ridge National Laboratory (ORNL).
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The Basic Energy Sciences program has provided a level of funding equal to that in FY 2001 for its major user facilities with the following exceptions: the Advanced Light Source, the Intense Pulsed Neutron Source, and the High-Flux Isotope Reactor received increases for capital equipment and/or operations based on external peer reviews and advice provided by the Basic Energy Sciences Advisory Committee (BESAC) following extensive reviews. We anticipate that the facilities will provide the same hours of operation as they did in FY 2001 except for the Intense Pulsed Neutron Source (IPNS), which will operate more hours as a result of the increase in budget. Also, the High Flux Isotope Reactor (HFIR) will return to full operation in FY 2002 following the outage for the replacement of the beryllium reflector, and its increased budget reflects that situation. The constant level of funding will have consequences elsewhere at the facilities.
Salary increases of 4–5% will mean that reductions must be made in several areas. For example, facilities may lose staff through attrition, may provide less service to users, and/or may have to defer routine maintenance, purchase of spares, or fabrication of equipment to serve users (e.g., undulators or beamline front ends). Some of these actions may, in fact, reduce the hours of operation of some of the facilities.
The Fusion Energy Sciences program will see the following reductions in the number of weeks of operation for its major facilities:
DIII–D Reduction is 3 weeks from 17 in FY 2001 to 14 in FY 2002
C–Mod Reduction is 4 weeks from 12 in FY 2001 to 8 in FY 2002
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NSTX Reduction is 4 weeks from 15 in FY 2001 to 11 in FY 2002
The Biological and Environmental Research program FY 2002 funding level is sufficient to operate the Environmental Molecular Sciences Laboratory and to upgrade the Molecular Science Computing Facility to the terascale (current expectation is for a 2–3 Teraflops computer).
Office of Science Energy Costs
Q6. How have increased energy costs impacted the Office of Science's operations of its laboratories and its large scientific facilities?
A6. The High Energy Physics and Basic Energy Sciences programs operate facilities in California at Lawrence Berkeley National Laboratory (LBNL) and Stanford Linear Accelerator Center (SLAC). Recent cost increases for energy have not yet materially affected the operations of these accelerator facilities; however, they are vulnerable to the California power crisis. These facilities obtain power from the Western Area Power Administration (WAPA). Pacific Gas and Electric has filed before the Federal Energy Regulatory Commission seeking an increase in rates for power provided to WAPA. WAPA is opposing this action. This situation, which is not settled, could lead to substantially increased power rates. Facility operations may also be affected by power interruptions in the future, if California is subjected to ''rolling blackouts.'' For example, if rolling blackouts are imposed, SLAC would be without power every other day. It would be impossible to operate the B-factory under these conditions. This would significantly delay the PEP–II B–Factory physics program.
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The impact of increased energy cost on the Fusion Energy Sciences program is difficult to estimate because the cost is fluctuating rapidly. The energy cost at fusion facilities is typically less than 10% of the total operating cost and is mainly associated with electric power to operate the research facility. Also, some consumables depend heavily on the cost of electrical energy, particularly liquid nitrogen. The facility managers will try their best to minimize the impact of increased energy costs, such as operating double shifts per day during those times of the year when the energy cost is expected to be lower than average. Attempting to quantify this answer is very difficult because many assumptions of uncertain quality that would have to be made. The uncertain energy costs, power interruptions, and unexpected blackouts have resulted in substantial difficulties and costs to the operation of DIII–D in San Diego. Drastic changes have been made in operating schedules (14 hour shifts, and no experimental operations when rolling blackouts exist) that have imposed hardships to the limited staff operating these facilities. The maintenance schedules have been altered to accommodate the long operating hours. The program has been forced to buy or rent backup diesel generators to avoid serious damage to cryogenic and computer systems during blackouts.
The Biological and Environmental Research program estimates that increased energy costs at the Environmental Molecular Sciences Laboratory will consume an additional $500,000 in FY 2002.
Status of the Spallation Neutron Source
Q7. What is the status of the Spallation Neutron Source, which is under construction at Oak Ridge National Laboratory?
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A7. Now almost 25 percent complete, the Spallation Neutron Source project is still on track for completion by June 2006 within its budgeted Total Project Cost of $1,411,700,000. Technical progress at all six partner laboratories has been satisfactory, with about three-fourths of the planned R&D and two-thirds of overall technical systems design complete. The R&D and prototyping efforts have been quite successful and adequately support the technical designs—there are no ''show stoppers.'' In fact, the results from teas of the ion source at Berkeley and liquid mercury target technology at Oak Ridge have exceeded expectations. Furthermore, a substantial amount of technical hardware is on order and the first units of production equipment have already begun to arrive in Oak Ridge. At the construction site, all major earthmoving operations have been completed and excavation is underway for the linac and ring tunnels. In May 2001, concrete work for the first structures (front end building and linac tunnel) commenced on schedule. The project will reach its peak staffing level of about 700 personnel (at all six laboratories) later this year.
NIH Funding at DOE Laboratories
Q8. What is the current level of support of DOE's scientific facilities by the NIH?
A8. NIH provides no direct support for facility operations of DOE scientific user facilities. However, NIH is providing one-half of the cost of the SPEAR3 upgrade at the Stanford Synchrotron Radiation Laboratory (SSRL) ($29,000,000 over three Fiscal Years, 1999 through 2001), funds for beamline and accelerator improvements at the National Synchrotron Light Source (NSLS) at Brookhaven National Laboratory (BNL) ($4,000,000 in Fiscal Year 1999) and one-half of the cost of the construction of a lab-office module to support labs and offices for four structural biology beamlines at the Advanced Photon Source (APS) at Argonne National Laboratory ($3,000,000 in Fiscal Year 2000).
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NIH provides support for development as well as user support and staffing of structural biology beamlines at the DOE synchrotrons [the APS, NSLS, SSRL, and the Advanced Light Source at the Lawrence Berkeley National Laboratory (LBNL)] ($21,000,000 in Fiscal Year 2001) and for development and operation of experiments at other DOE facilities, including the Scanning Transmission Electron Microscopy Resource at BNL, the Flow Cytometry Resource and the Stable Isotope Center at the Los Alamos National Laboratory, the Center for Accelerator Mass Spectrometry at the Lawrence Livermore National Laboratory and the Tritium Labeling Facility at LBNL ($4,000,000 in Fiscal Year 2001).
Total NIH funding for these activities was $37,400,000 in Fiscal Year 1999 and $33,900,000 million in Fiscal Year 2000. Total NIH funding for these activities is expected to be $35,500,000 in Fiscal Year 2001 and is currently estimated to be $28,000,000 in Fiscal Year 2002.
Office of Science Research at NNSA National Laboratories
Q9. In FY 2001, the Office of Science is funding almost $155 million in research at the three National Nuclear Security Administration (NNSA) National Laboratories—Lawrence Livermore, Los Alamos, and Sandia—and the FY 2002 request includes nearly $153 million. By statute, these labs report directly the NNSA. In addition, by statute, a NNSA contractor employee ''shall not be responsible to, or subject to the authority, direction, or control of, any officer, employee, or agent of the Department of Energy who is not an employee of the Administration, except for the Secretary of Energy.'' How does the Office of Science maintain programmatic control over this research under this arrangement?
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A9. The Administrator of NNSA has pledged not to create barriers to the Office of Science carrying out research at the NINA laboratories in its traditional manner. The program managers continue to provide funding guidance to the laboratory through the contracting officer at the cognizant NNSA Operations Office. The SC programs use both prospective and retrospective merit or peer review in evaluating proposals for new science and in managing ongoing research programs at all of the Department's laboratories, including the NNSA laboratories. The programs take into consideration the results of these reviews in making decisions on what future research to fund and whether to continue ongoing meritorious projects. Recent SC–1 reviews of the science programs at the NNSA laboratories have concluded that the current process is working well and no barriers to effective SC management of its science programs have arisen under this arrangement.
Q10. The Office of Science FY 2002 request for Basic Energy Sciences includes $4.0 million for Project Engineering Design related to the establishment of six user centers for nanoscale science, engineering, and technology research, with a total estimated cost ranging between $220 and $330 million. Two of these proposed centers are located at Los Alamos and Sandia National Laboratories, which are under the National Nuclear Security Administration (NNSA), not the Office of Science. Given the difficulty the Office of Science has in maintaining its laboratories, what is the rationale for funding NNSA labs?
A10. The goal of the Nanoscale Science Research Centers (NSRCs) is to leverage the investments and capabilities of the major Basic Energy Sciences (BES) user facilities and to build upon the infrastructure and culture already in place at the institutions housing the BES user facilities to advance understanding of materials at the nanoscale. In particular, NSRCs will provide facilities for advanced synthesis, processing, and fabrication at the nanoscale in the same location as the existing BES user facilities and will make this combination available to the scientific community in the same way as are the BES user facilities. All DOE laboratories housing one or more major BES user facilities were invited to propose a center for nanoscale science research. BES has user facilities at Los Alamos National Laboratory (LANL) and Sandia National Laboratories (SNL), and, therefore, these laboratories were eligible to submit a proposal.
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The NSRC proposal referred to in the question has been submitted jointly by SNL and LANL. The proposed NSRC will be a single, distributed facility and not individual NSRCs. LANL and SNL have unique facilities not available elsewhere in the DOE complex. The major facilities supported by BES include the Los Alamos Neutron Science Center (LANSCE) at LANL and the Combustion Research Facility at SNL. BES also supports work at the LANL National High Magnetic Field Lab (NHMFL), which has primary funding from the National Science Foundation. SNL has other unique facilities, e.g., the Microelectronic Development Lab and the Compound Semiconductor Research Lab.
The five proposals that were received were reviewed by experts in April 2001. Three proposals were recommended for funding by the peer reviewers. The SNL/LANL NSRC was among the three recommended for funding. Based on this recommendation, the SNL/LANL NSRC was authorized to proceed with preparation of Conceptual Design in June 2001. The Basic Energy Sciences Advisory Committee reviewed the status of the SNL/LANL NSRC on August 2, 2001. The Basic Energy Sciences Advisory Committee (BESAC) endorsed the SNL/LANL proposal, along with others received, and encouraged BES to pursue this NSRC concept.
Office of Safeguards and Security Budget
Q11. The Office of Safeguards and Security request for FY 2002 is $50.5 million, an increase of nearly $14.1 million, or 38.6 percent, above the FY 2001 estimate of $36.4 million. What is the rationale for such a large increase, and how are those funds being used?
A11. The original $36,447,000 for FY 2001 is inadequate for existing programs and needs. FY 2001 is the first year in transitioning from indirect funding to direct funding and the estimates were flawed. The FY 2001 program requirements are higher and will be addressed in a reprogramming request to cover the shortfalls. The FY 2001 existing shortfall accounts for about 50 percent of the increase.
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Cyber security is a high priority program need. Threats and actual intrusions to government cyber systems are growing. A significant part of the increase ($3,222,000) is to enhance our cyber security posture.
A substantial portion of the increase ($2,179,000) is for protective forces, primarily at the Oak Ridge National Laboratory. These protective forces are needed to provide containment and response capability for significant quantities of special nuclear materials (e.g., uranium-233).
We also need to proceed with physical security upgrades, which have been deferred for several years. We can no longer obtain replacement parts for the intrusion detection and alarm system components, and further delays will place at high-risk significant quantities of special nuclear material. These upgrades account for $1,409,000.
The Genomes to Life Program
Q12. The FY 2002 budget includes funds for a ''Genomes to Life'' research program. Please describe this program. What funding is being requested?
A12. The FY 2002 funding for Genomes to Life is $19,470,000. Genomes to Life will focus on proteins, the action molecules of living systems. Proteins are the motors, pumps, chemical catalysts, detectors, signals and signalers, structural units, gatekeepers, dismantlers, assemblers and garbage handlers of living systems.
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Proteins rarely work alone. They assemble in larger multi-protein complexes often referred to as molecular machines. Understanding these molecular machines is a major goal of Genomes to Life.
Similarly, microbes of potential importance for DOE's energy and cleanup missions rarely work alone in nature. Microbes are often found as part of complex, and poorly understood consortia of many different types of microbes.
The scientific goals of Genomes to Life are:
to identify life's molecular machines, the multi-protein complexes that carry out the functions of living systems.
to characterize the gene regulatory networks and processes that control these multi-protein molecular machines.
to characterize the functional repertoire of complex microbial communities in their natural environments.
to develop computers and other computational capabilities needed to model the complexity of biological systems.
These scientific goals, and the broader context for Genomes to Life, are described in detail in the recently completed Genomes to Life ''roadmap.'' This document is available in hard copy (attached) and at http://www.doegenomestolife.org/.
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The Genomes to Life roadmap describes a very broad outline for 10 years of research to address the fundamental scientific goals outlined above. It includes estimates of time for broad program goals.
The Genomes to Life roadmap was prepared in response to a report of the Biological and Environmental Research Advisory Committee (BERAC). The report recommended the development of this 10-year program at a level of $200,000,000 per year for a total of $2,000,000,000 over 10 years. The implementation of Genomes to Life will include (1) the conduct of numerous workshops with experts from the range of disciplines represented in Genomes to Life, (2) solicitation for peer-reviewed research from scientists at universities, national laboratories and research institutes and (3) continued review and feedback from BERAC.
Security at Office of Science Facilities
Q13. How has DOE's increased emphasis on security impacted the Office of Science's laboratories?
A13. The increased emphasis has provided some positive benefits; however, we have also had adverse impacts. The increased requirements for advance notification for foreign visits has impacted our ability to have spontaneous visits and exchanges by international scientists that happen to be in the vicinity of one of our laboratories. We have experienced a marked decrease in the number of foreign visits of less than 30 days at the laboratories. The number of assignments involving a stay of 30 days or more has remained about the same.
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The increased attention and confusion about ''sensitive subjects'' and ''deemed exports'' has resulted in some laboratories turning down fundamental science work proposals rather than thrust themselves and their scientists into the complexities of national security controls. Some scientists have opted to terminate their security clearances and chosen to only work in the unclassified environments.
Recruitment and retention of scientists have been more difficult, especially within the Asian community. Additionally, there have been situations where laboratory human resource management staff have had difficulty in being allowed to participate in some university career and job fairs.
Debates and concerns about polygraph testing, e-mail monitoring, and reporting of foreign contacts have distracted and demoralized the laboratory employees. It has had a chilling effect on creativity and openness.
Status of Office of Fusion Energy Sciences Programs
Q14. The National Research Council (NRC) recently published an assessment of DOE's Office of Fusion Energy Sciences Program. The Council's panel found that the program's science was of high quality, but that there were ''some serious demographic and sociological problems'' that ''must be addressed.'' What is the Office of Science's reaction to this report, and how are you addressing these recommendations?
A14. The Office of Science (SC) and its Fusion Energy Sciences Advisory Committee (FESAC) has examined the recommendations contained in the National Research Council (NRC) report in some detail. SC is in broad agreement with the principal findings and recommendations of the NRC report. These findings and recommendations are thoughtful, perceptive, and deserving of serious attention and respect. In addition, these recommendations are compatible with our sense of the program's priorities, and in agreement with recent programmatic recommendations made by FESAC and, thus, we are moving to implement these recommendations as we plan the program for FY 2002 and beyond.
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SC agrees with the NRC finding that efforts are needed to reduce the scientific isolation of the fusion research. community from the rest of the scientific community. In general, we believe that this recommendation can be implemented by involving more funding agencies in the support of fusion research; by broadening the base of institutions involved in fusion research; and by efforts of individual fusion researchers, as they interact with their scientific colleagues in other fields, present their scientific findings publicly, and participate in the affairs of the scientific community.
SC endorses the NRC recommended goal of broadening the program's institutional base to include the wider scientific community. Open, well-advertised solicitations of proposals for competitive, peer review will encourage such broadening and has been embraced by SC for funding of University research. The recent competition conducted by SC for the Scientific Discovery through Advanced Computing initiative is an example of such a process. Because institutional broadening is likely to require increased funding, it requires careful consideration of program balance.
Fusion Research Facilities Funding
Q15. I am told that because of inadequate funding, existing fusion facilities are unable to accommodate many of the researchers that need to use them for their research. Is this true, and if so, how much additional funding would be necessary to fully utilize the nation's major fusion experiment?
A15. The major fusion science facilities are underutilized. This is due to the need to maintain overall balance among the various parts of the fusion program within the recommended total funding for the program.
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The optimal number of days possible provides for operation of each facility 8 hours per day for the indicated number of days. Maintenance and minor modifications, such as installation of new diagnostic instruments, would occur during the remaining number of days in the year. The operating days for FY 2002 are for the $248.5M request.
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Construction of New Fusion Energy Research Experiments
Q16. When is the last time that a major fusion experiment of the class of the TFTR at Princeton or the present experiment at General Atomics has been constructed in the U.S.?
A16. The two facilities cited are in the investment class of greater than $500,000,000 each in today's dollars. Construction funds for TFTR and the experiment at General Atomics were first provided in FY 1976. Since 1986, when the facility at General Atomics, now called DIII–D, completed its major upgrade, no facilities in this class have been constructed in the U.S fusion program.
ANSWERS TO POST-HEARING QUESTIONS
Responses by John Sullivan, Acting Deputy Assistant Secretary, Office of Energy Efficiency and Renewable Energy, Office of Planning, Budget, and Management, U.S. Department of Energy
REPUBLICAN MEMBER QUESTIONS:
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EERE's Role in the Administration's Energy Task Force
Q1. What has been your office role in the work of Vice President Cheney's Energy Task Force? In particular, have you worked with the Vice President and his staff to ensure that a robust energy R&D program—both near-term and long-term—is included in the Task Force recommendations?
A1. The Office of Energy Efficiency and Renewable Energy (EERE) played an active role in the work of Vice President Cheney's Energy Task Force, providing substantial data and other information to ensure that a robust energy R&D program was included in Task Force recommendations. For example, EERE provided substantial input for the development of much of Chapters One, Four, and Six of the National Energy Policy (NEP). It is noteworthy that 54 of 105 NEP recommendations to address the energy challenges facing the United States fall within the mission and responsibilities of EERE. Specifically, the NEP contains 15 recommendations that relate to improving energy conservation and efficiency technologies.
EERE's Role in the Administration's Climate Change Policy Review
Q2. What is DOE's role on climate change policy review that is reportedly underway by the Administration?
A2. On June 11, 2001, the President issued an Interim Report of its Cabinet Level Review of U.S. Climate Change Policy. The report included a Presidential directive to the Secretaries of Energy and Commerce, and the Administrator of the Environmental Protection Agency to develop a National Climate Change Technology Initiative (NCCTI). President Bush's accompanying remarks, spoken from the White House Rose Garden, provide additional guidance on goals and expectations. The Department of Energy is coordinating the NCCTI. The NCCTI teams include OMB, CEA, OSTP, DOE, State, NASA, EPA, USDA, and Commerce.
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The NCCTI will develop innovative approaches in accordance with several basic principles, as outlined by the President. The approaches will: (1) be consistent with the long-term goal of stabilizing greenhouse gas concentrations in the atmosphere; (2) be measured, as we learn more from science, and build on it; (3) be flexible to adjust to new information and take advantage of new technology; (4) ensure continued economic growth and prosperity; and (5) pursue market-based incentives and spur technological innovation.
The technology review and subsequent report to the President, which is scheduled to be completed in January, 2002 will: (1) evaluate the current state of U.S. climate change technology R&D and make recommendations for improvements; (2) develop opportunities to enhance private-public partnerships in applied R&D to expedite innovative and cost-effective approaches to reduce greenhouse gas emissions and global warning potential; and (3) make recommendations for funding demonstration projects for cutting-edge technologies. In addition, the report will: (4) provide guidance on strengthening basic research at universities and national laboratories, including the development of the advanced mitigation technologies that offer the greatest promise for low-cost reductions of greenhouse gas emissions and global warming potential; and (5) make recommendations to enhance coordination across Federal agencies, and among the Federal government, universities, and the private sector. Finally, the report will (6) make recommendations for developing improved technologies for measuring and monitoring gross and net greenhouse gas emissions.
MAJORITY MEMBER QUESTIONS:
Coordination of Research Programs Within DOE
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Q3. It appears that several DOE Offices are funding similar programs—fuel cells and turbines, for example. Please explain how you coordinate your research efforts to avoid duplication of effort.
A3. The Fossil Energy (FE) and Energy Efficiency and Renewable Energy (EE&RE) Programs for fuel cells are coordinated in several ways. There are only two large, fuel cell-specific R&D programs in the DOE; DOE FE Distributed Generation (DG) Systems, which is focused on stationary applications and the DOE EE&RE Office of Transportation Technology (OTT), which is focused on transportation applications. Work with a renewables focus is ongoing in the EE&RE Office of Power Technology's (OPT) Hydrogen Program and the Buildings Program where some fuel cell R&D activities are funded, but on a much smaller scale.
The EE OTT and FE DG programs are coordinated in several ways:
1. Through Joint EE/FE Fuel Cell Program Reviews.
2. By co-chairing of major meetings such as the 2002 Fuel Cell Seminar.
3. By joint funding of projects important to both programs at the national laboratories, such as the National Energy Technology Laboratory (NETL) and Los Alamos National Laboratory (LANL).
4. By working together to present a unified DOE Fuel Cells Program presence at major meetings—such as the 2001 House Exposition in the Cannon Office Building.
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5. By mutually participating in laboratory and other important meetings sponsored by each office.
On a broader level, the Offices of Fossil Energy (FE), Energy Efficiency and Renewable Energy (EERE), and Science (SC) use several techniques to coordinate their research programs to avoid duplication. One technique is to make presentations at each others' meetings. For example, both the FE and EERE, as well as the Office of Nuclear Energy (NE), made presentations to the Office of Science's Basic Energy Advisory Committee meeting (August 3, 2001). Each office outlined their missions, goals, and programs of major importance. This approach helps to inform the basic research programs about the Department's applied research programs, and to encourage relevant basic research to support the applied programs, where appropriate.
Joint meetings between the different offices are another approach. For example, also last August, FE and EERE each hosted a workshop on Natural Gas/Renewable Energy Hybrids. The FE hosted meeting was held at the National Energy Technology Laboratory, in Morgantown, West Virginia, and the EERE hosted workshop was held at the National Renewable Energy Laboratory, in Golden, Colorado. The laboratory directors and top management of FE and EERE participated in both workshops, and the panel and informal discussions allowed for a good understanding of each organization's interests and roles.
A third avenue for coordination is the Institutional Planning Process that the Office of Science oversees for the DOE Science laboratories. All of the DOE program offices, including FE, EERE, and NE are given the opportunity to review and comment on drafts of each of the SC laboratory's five year institutional plans, and to attend the on-site laboratory reviews that take place once a year. This helps the applied research programs understand the scope and content of the basic research sponsored by the Office of Science, and to make the best use possible of these basic R&D efforts.
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HOUSE SCIENCE COMMITTEE QUESTIONS:
Declining Pool of Physical Science Students
Q4. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the expected impact on Energy R&D and what suggestions do you have to address this growing problem?
A4. The number of U.S. citizen students entering the physical sciences is consistently low and is masked by the large numbers of foreign nationals studying at our prestigious research universities. In some of the fields, like materials sciences and computer programming, an alarming number of graduate schools, at excellent research universities, are made up of large numbers of ''foreign nationals,'' sometimes far exceeding half of the students. The desire and request by corporations to increase the number of H–1B visas (non-immigrant visas issued to persons in a specialty occupation which requires theoretical and practical application of a body of highly specialized knowledge) mirrors this situation. It is then a logical consequence that the paucity of American born students and the relative plethora of foreign nationals in what are areas of technology and science critical to the Nations' security, raise serious issues for the DOE and the nation at large. Of further concern is the low representation of women and minorities in the sciences. With community colleges holding greater than 50% of our undergraduate students, these institutions have become a focus of the DOE and the National Science Foundation to increase the numbers of U.S. students entering the sciences, which play a central role in maintaining the leading edge we presently have in technology, medicine and defense. The Office of Science undergraduate laboratory research programs introduce students to the unique intellectual and physical resources present at the DOE laboratories.
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REPUBLICAN MEMBER QUESTIONS:
Reduced PNGV Funding
Q5. Your testimony states that the Administration plans to send a FY 2002 budget amendment to the Congress that reduces funding of $39.176 million from the Partnership for a New Generation of Vehicles (PNGV) program and increases funding for several renewable activities. What is the impact of this cut on the PNGV program?
A5. Although less than FY 2001 enacted, the funding level is sufficient to maintain research targets and milestones in important areas such as fuel cells. In other research topics, especially those associated with relatively near-term technologies such as combustion engines, the effect will depend on whether the auto industry funds a grater share of the costs, as it should. In addition, since approximately 54 percent of our PNGV funding supports research at the National Laboratories, and these efforts are also the ones that can most easily be refocused, funding can be directed to the highest priority and best performing programs. Some lower performing cooperative R&D projects with industry will be terminated; other projects envisioned in recently concluded solicitations will not be started.
Response to the National Academy of Public Administration Report
Q6. In the past, there has been criticism of the management of the Office of Energy Efficiency and Renewable Energy—many of which originated in this Committee as well as the Appropriations Committee-related to uncosted balances, lack of competition and cost-sharing, etc. Many of these issues were addressed by the National Academy of Public Administration in a report issued last March. How has your Office responded to these concerns and the Academy's report?
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A6. To address EERE's historical business performance problems, the organization has recently created the Strategic Management System (SMS). EERE continues to standardize, integrate, and improve business operations through a comprehensive business management system called the ''SMS Budget Hut.'' This dynamic system is the repository of much of the information required to support the SMS planning, formulation, execution, and evaluation cycles. Some parts of the SMS Budget Hut provide data, such as vendor, uncosted balances and cost share information, that are downloaded and reformatted from Departmental systems. Other parts of the SMS Budget Hut require routine data updates by each EERE organization.
The SMS Budget Hut (1) provides EERE with a uniform corporate information system to respond quickly to inquiries, (2) simplifies and integrates access to and use of information related to EERE resources, milestones, and results, and (3) improves EERE timeliness and business performance within EERE program and project management.
Biomass Research and Development Act of 2000
Q7. The Biomass Research and Development Act of 2000 was enacted on June 2, 2000. As you know, the Act mandates cooperation and coordination between the Secretaryof Agriculture and the Secretary of Energy with respect to policies and procedures that promote R&D leading to the production of biobased industrial products. What is the implementation of this Act by the U.S. Department of Energy (DOE) and by the U.S. Department of Agriculture (USDA)?
A7. The Department is cooperating and integrating activities with other agencies at several levels. The Biomass Research and Development Act of 2000 established the Biomass Research and Development Board. The Board, co-chaired by DOE and USDA, coordinates programs within and among departments and agencies to promote the use of biobased industrial products. Supporting the Board is the National Biobased Products and Bioenergy Coordination Office, co-directed by DOE and USDA. This office implements the Board's strategy, chairs working groups, and coordinates crosscutting research and development, outreach, and analysis. In addition, the Act also established the Biomass Research and Development Technical Advisory Committee. The Committee advises the Secretaries of Energy and Agriculture concerning the technical focus and direction of the Initiative.
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The Department is coordinating its research and development in biobased products with other federal agencies. For example, in feedstock development and handling, there exists close cooperation and partnership between DOE and numerous USDA programs including the Agricultural Research Service, Natural Resource Conservation Service, Economic Research Service, Resource Conservation and Development Districts, and Forest Service. In co-firing of biomass with coal, DOE is working in partnership with the Environmental Protection Agency (EPA). The Initiative has promoted integration in research and development at our laboratories. As an example, on April 11–12, 2001, DOE hosted, with USDA and EPA participation, a Strategic Partnerships Workshop. This event brought together the federal researchers from across the federal government to learn about current biobased research at the various labs, identify gaps in that research portfolio, list key challenges, and explore how to work in partnership among facilities. In addition, through the Initiative, the Board developed an interagency strategic plan and is investigating the development of a biomass curricula for K–12, and college level.
Reduced NREL Funding
Q8. What is the impact of the FY2002 budget request for the Office of National Renewable Energy Laboratory?
A8. The proposed funding reductions for Renewable Energy Resources may result in reducing staffing at NREL, particularly in the technology areas of Solar and Wind technologies.
The Department is looking at taking actions that could help mitigate the number of staff reductions. For example, the Solar and Wind programs will be studied to see if any consolidation of activities at NREL is feasible rather than implementing the program across Departmental locations. The amount of subcontracting by NREL and other laboratories will also be reviewed to determine additional in-house research and development activity which could be undertaken at NREL.
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Addressing Aging Electricity Distribution Infrastructure
Q9. What is your office doing to address this country's aging electricity distribution infrastructure?
A9. The transmission and distribution systems in the United States are regulated by the Federal and State governments, respectively. The U.S. transmission system was not designed to support the sale of energy and ancillary services that are becoming available through competitive markets, which is causing heavy power flows and stress on the grid. This subsequently causes congestion points on the grid that, to date, are relieved by redispatching generation, and overriding energy purchase decisions under competitive markets.
The Department has initiated a National Transmission Grid Study, to be completed shortly, which examines the benefits of a grid that supports full competition, and identifies bottlenecks and measures to remove them.
Current programs within the Department's Office of Power Technologies are aimed at upgrading the capacity of existing transmission corridors without building new lines. These are listed in the following table:
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These programs will allow the industry to upgrade the transmission system by integrating alternative generation, energy storage, and demand control options, along with new transmission technologies into an energy services delivery infrastructure that facilitates full competition and provides service choices down to the individual customer.
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Distribution systems are under State regulation where public service commissions can provide rate oversight and regulatory pressure to ensure adequate maintenance and operation. The Department is drafting a report that responds to a recommendation from the Power Outage Study Team to support the sharing of utility ''best practices'' for maintaining and operating distribution systems. The Department intends to work with the electric power industry to facilitate the collection and sharing of information on ''best practices,'' and promote the use of uniform definitions and measurements for reliability-related events. DOE is also responding to other recommendations of the Team, including: removing the barriers to the use of distributed generation and storage; developing ways to allow customer participation in competitive electricity markets; and, public interest reliability related research and development consistent with the needs of a restructuring electricity industry.
ANSWERS TO POST-HEARING QUESTIONS
Responses by Robert S. Kripowicz, Acting Assistant Secretary, Office of Fossil Energy, U.S. Department of Energy
REPUBLICAN MEMBER QUESTIONS:
Office of Fossil Energy's Role in the Administration's Energy Task Force
Q1. What has been DOE's role in the work of Vice President Cheney's Energy Task Force? In particular, have you worked with the Vice President and his staff to ensure that a robust energy R&D program—both near-term and longterm—is included in the Task Force recommendations?
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A1. DOE provided significant input in planning, drafting, and reviewing the President's National Energy Policy (NEP), Report of the National Energy Policy Development Group. Over 80 DOE staff and contractors were involved in providing technical analysis, background information, and draft policy options. DOE had direct responsibility for drafting five chapters, and was fully engaged in reviewing all chapters. One of our primary roles was to assure a robust energy R&D program that is consistent with the Administration's energy policy goals. R&D experts from across the Department (FE, EE, NE and other DOE offices) significantly contributed to the (NEP).
Office of Fossil Energy's Role in the Administration's Climate Change Policy Review
Q2. What is DOE's role on climate change policy review that is reportedly underway by the Administration?
A2. On June 11, 2001, the President issued an Interim Report of its Cabinet Level Review of U.S. Climate Change Policy. The report included a Presidential directive to the Secretaries of Energy and Commerce, and the Administrator of the Environmental Protection Agency to develop a National Climate Change Technology Initiative (NCCTI). President Bush's accompanying remarks, spoken from the White Douse Rose Garden, provide additional guidance on goals and expectations. The Department of Energy is coordinating the NCCTI. The NCCTI teams include OMB, CEA, OSTP, DOE, State, NASA, EPA, USDA, and Commerce.
The NCCTI will develop innovative approaches in accordance with several basic principles, as outlined by the President. The approaches will: (I) be consistent with the long-term goal of stabilizing greenhouse gas concentrations in the atmosphere; (2) be measured, as we learn more from science, and build on it; (3) be flexible to adjust to new information and take advantage of new technology; (4) ensure continued economic growth and prosperity; and (5) pursue market-based incentives and spur technological innovation.
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The technology review and subsequent report to the President, which is scheduled to be completed in January, 2002 will: (1) evaluate the current state of U.S. climate change technology R&D and make recommendations for improvements; (2) develop opportunities to enhance private-public partnerships in applied R&D to expedite innovative and cast-effective approaches to reduce greenhouse gas emissions and global warming potential; and (3) make recommendations for funding demonstration projects far cutting-edge technologies. In addition, the report will: (4) provide guidance on strengthening basic research at universities and national laboratories, including the development of the advanced mitigation technologies that offer the greatest promise for low-cost reductions of greenhouse gas emissions and global warming potential; and (5) make recommendations to enhance coordination across Federal agencies, and among the Federal government, universities, and the private sector. Finally, the report will (6) make recommendations for developing improved technologies for measuring and monitoring gross and net greenhouse gas emissions.
Coordination of Research Programs Within DOE
Q3. It appears that several DOE Offices are funding similar programs—fuel cells and turbines, for example. Please explain how you coordinate your research efforts to avoid duplication of effort.
A3. The Fossil Energy (FE) and Energy Efficiency and Renewable Energy (EE&RE) Programs for fuel cells are coordinated in several ways. There are only two large, fuel cell-specific R&D programs in the DOE; DOE FE Distributed Generation (DG) Systems, which is focused on stationary applications and the DOE EE&RE Office of Transportation Technology (OTT), which is focused on transportation applications. Work with a renewables focus is ongoing in the EE&RE Office of Power Technology's (OPT) Hydrogen Program and the Buildings Program where some fuel cell R&D activities are funded, but on a much smaller scale.
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The EE OTT and FE DG programs are coordinated in several ways:
1. Through Joint EE/FE Fuel Cell Program Reviews.
2. By co-chairing of major meetings such as the 2002 Fuel Cell Seminar.
3. By joint funding of projects important to both programs at the national laboratories, such as the National Energy Technology Laboratory (NETL) and Los Alamos National Laboratory (LANL).
4. By working together to present a unified DOE Fuel Cells Program presence at major meetings—such as the 2001 House Exposition in the Cannon Office Building.
5. By mutually participating in laboratory and other important meetings sponsored by each office.
On a broader level, the Offices of Fossil Energy (FE), Energy Efficiency and Renewable Energy (EERE), and Science (SC) use several techniques to coordinate their research programs to avoid duplication. One technique is to make presentations at each others' meetings. For example, both the FE and EERE, as well as the Office of Nuclear Energy (NE), made presentations to the Office of Science's Basic Energy Advisory Committee meeting (August 3, 2001). Each office outlined their missions, goals, and programs of major importance. This approach helps to inform the basic research programs about the Department's applied research programs, and to encourage relevant basic research to support the applied programs, where appropriate.
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Joint meetings between the different offices are another approach. For example, also last August, FE and EERE each hosted a workshop on Natural Gas/Renewable Energy Hybrids. The FE hosted meeting was held at the National Energy Technology Laboratory, in Morgantown, West Virginia, and the EERE hosted workshop was held at the National Renewable Energy Laboratory, in Golden. Colorado. The laboratory directors and top management of FE and EERE participated in both workshops, and the panel and informal discussions allowed for a good understanding of each organization's interests and roles.
A third avenue for coordination is the Institutional Planning Process that the Office of Science oversees for the DOE Science laboratories. All of the DOE program offices, including FE, EERE, and NE are given the opportunity to review and comment on drafts of each of the SC laboratory's five year institutional plans, and to attend the on-site laboratory reviews that take place once a year. This helps the applied research programs understand the scope and content of the basic research sponsored by the Office of Science, and to make the best use possible of these basic R&D efforts.
HOUSE SCIENCE COMMITTEE QUESTIONS:
Declining Pool of Physical Science Students
Q4. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the expected impact on Energy R&D and what suggestions do you have to address this growing problem?
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A4. The number of U.S. citizen students entering the physical sciences is consistently low and is masked by the large numbers of foreign nationals studying at our prestigious research universities. In some of the fields, like materials sciences and computer programming, an alarming number of graduate schools, at excellent research universities, are made up of large numbers of ''foreign nationals,'' sometimes far exceeding half of the students. The desire and request by corporations to increase the number of H–1B visas (non-immigrant visas issued to persons in a specialty occupation which requires theoretical and practical application of a body of highly specialized knowledge) mirrors this situation. It is then a logical consequence that the paucity of American born students and the relative plethora of foreign nationals in what are areas of technology and science critical to the Nations' security, raise serious issues for the DOE and the nation at large. Of further concern is the low representation of women and minorities in the sciences. With community colleges holding greater than 50% of our undergraduate students, these institutions have become a focus of the DOE and the National Science Foundation to increase the numbers of U.S. students entering the sciences, which play a central role in maintaining the leading edge we presently have in technology, medicine and defense. The Office of Science undergraduate laboratory research programs introduce students to the unique intellectual and physical resources present at the DOE laboratories.
Methane Research and Development Act of 2000
Q5. The Methane Research and Development Act of 2000 was signed into law on May 2, 2000. As you know, the Act mandated that DOE commence a methane hydrate R&D program, in consultation with the Departments of Commerce, Defense, and the Interior to promote cooperation among agencies that are developing technologies that may hold promise for methane hydrate resource development. What is the status of implementation of this Act by DOE and, in particular, how are the agencies cooperating?
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A5. The Department of Energy (DOE) initiated research and development (R&D) as authorized by this legislation with a budget of $3 million in FY 2000 and expanded the program to $10 million in FY 2001. Current work includes competitively selected research on resource characterization, safety and seafloor stability, production, and global climate change conducted by industry, universities and National Labs.
Research coordination among agencies is excellent. Gas Hydrates research at the U.S. Geological Survey (USGS) and Naval Research Laboratory (NRL) is jointly funded by DOE. In addition, DOE has participated in multi-agency funded subsea studies of hydrates with the National Oceanic and Atmospheric Administration (NOAA) and Minerals Management Service (MMS) and is funding development of hydrate sampling devices with the National Science Foundation (NSF) Ocean Drilling Program. Interagency coordination is assured by representatives of the DOE and the Departments of Commerce (NOAA), Defense (NRL) and the Interior (USGS and MMS) and the National Science Foundation that meet approximately every 120 days to discuss and coordinate current and planned R&D activities.
In addition, a multi-agency Gas Hydrates R&D Coordination Plan, that will define the process and benefits of multi-agency cooperation, is being drafted by all the participating agencies, led by DOE. This report should be completed in early FY 2002.
Finally, the Methane Hydrate Advisory Committee, called for in the Act, was established in November 2000. It met in May 2001, for a review of the program progress and discussion of future research directions. The panel, including experts representing industry, academia and National Labs, plan to deliver a report to Congress by May 2002, on the impacts of hydrates on global climate change.
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Clean Coal Power Initiative
Q6. What are the specific differences between the ''new'' Clean Coal Power Initiative proposed in the FY 2002 budget and ''old'' Clean Coal Technology Program?
A6. The original incentive for the ''old'' Clean Coal Technology Program was to develop technology options that would help eliminate ''acid rain'' and avoid transboundary pollution from the U.S. into Canada—this was one of the key energy issues of the time.
The new Clean Coal Power Initiative (CCPI) as proposed in the FY 2002 budget is the first ''installment'' of President Bush's $2 billion commitment over 10 years to clean coal technology development and responds to the strategic energy directions identified in the National Energy Plan (which is important to both energy security and the U.S. economy) to strengthen electricity reliability and assure a diverse domestic energy supply. CCPI builds on the technology from the original Clean Coal Technology (CCT) Program and includes the research and technology advancements made after the last rounds of projects selected under CCT. These advances could include technology that addresses low-cost emission controls that will meet the new and pending regulations (e.g., mercury, PM2.5, lower NOX and sulfur dioxide emissions); improving generation efficiency that will also facilitate carbon emission reductions; making coal more competitive through reductions in capital and operating costs and enhanced plant performance as a result of lessons learned; fuel flexibility; and improving reliability.
Carbon Sequestration Research
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Q7. The FY 2002 budget request proposes to increase funding for carbon sequestration research to nearly $20.7 million—more than a 10 percent increase. What are some of the specific approaches being funded?
A7. The Federal government, in partnership with industry, academia, and other interested entities, has initiated a strong carbon sequestration research and development program to show the technical, economic, and environmental feasibility of carbon sequestration as an option to address climate issues related to emissions of greenhouse gases. Industry has indicated the national importance of technological approaches to mitigating the effects of greenhouse gas emissions by offering substantial cost-share for federal-industry partnerships on developing carbon sequestration technologies. Some of the specific government/industry approaches which we are supporting include:
Large-scale testing of CO storage in unmineable coal seams, including monitoring and verification,
Continued development of advanced greenhouse gas capture and separation approaches that are significantly more cost-effective,
Verifying the effectiveness of storing CO in depleted oil reservoirs,
Increasing sequestration of CO in soils and vegetation as part of improving existing and abandoned minelands,
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Significant advances in research on energy conversion systems that produce highly concentrated streams of CO suitable for sequestration, and
International partnerships for geologic sequestration as part of enhanced oil recovery operations.
Another approach is to increase the research capabilities of the sequestration focus area at the National Energy Technology Laboratory.
Role of Small Petroleum Producers
Q8. In your testimony, you said that smaller companies now account for 40 percent of the oil produced in the U.S., almost two-thirds of the natural gas, and 85 percent of new domestic drilling. You also said that the ''Department will continue to fund efforts that will encourage these small producers to adopt optimum technologies that can find and produce oil and natural gas that might otherwise be left in the ground.'' Can you please elaborate?
A8. Many oilfields retain one-half to two-thirds of their original oil, as the resources are beyond the reach of conventional technologies. The high capital cost of drilling wells and the difficulty of restoring production makes it unlikely that abandoned fields will ever be reopened, unless future oil and gas prices increase significantly. Abandonment of wells, in effect, cuts off access to valuable oil and gas. By encouraging advances in oil and gas recovery technologies and by facilitating their transfer to producers, many marginal wells, almost exclusively operated by smaller independents, will remain on production.
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Fossil Energy's Natural Gas and Petroleum Technology Office's Reservoir Life Extension and Management Program supports the development of innovative and cost-effective advanced technologies that can recover oil and gas from hard-to-produce resources and extend the productive life span of domestic reservoirs. Within this Program, the Technology Development with Independents program has been developed to specifically help small producers by providing cooperative financial support to try unfamiliar technologies or novel, unproven approaches to extend economic production, improve productive capacity, and increase ultimate recovery from domestic oil and gas fields.
The goals of the program are to (1) increase production from marginal wells and from independent producer properties; (2) expand the successful technology research and development program to accelerate field test; (3) expand the use of effective technologies in areas dominated by the independent producers; and (4) evaluate the success and failure of these projects for dissemination of lessons learned.
With respect to natural gas, the Stripper Well Consortium (SWC) has been established to provide a cost-efficient vehicle for developing, transferring, and deploying new technologies into the private sector. This industry-driven consortium will focus on improving the production performance of domestic stripper wells, both natural gas and oil, but focusing on gas stripper wells. In an effort to keep this production as a viable resource, the DOE is soliciting ideas, technologies, or methodologies which would benefit the stripper gas industry, particularly those that are predominately owned and operated by small independent producers. There are currently over 190,000 gas stripper wells and 419,000 oil stripper wells operated in the lower 48 states.
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Technologies to Extend Oilfield Life
Q9. Would you please provide examples of oil field projects where DOE's involvement helped U.S. producers recover oil that might otherwise have been left in the ground? Also, could you please explain DOE's role in these projects and how the Department contributed to their success?
A9. An excellent example of an oilfield demonstration project where the Department of Energy's (DOE) involvement helped U.S. producers recover oil that might otherwise have been left in the ground is the Pru Fee lease project in the Midway-Sunset field in Kern County, California. In this project an abandoned oil lease was brought back to life by a joint government-industry experimental project, resulting in production of more than a million barrels of oil and leading to nearly 100 new privately-funded wells in the immediate area. Federal support from DOE, in coordination with the University of Utah and Aera Energy LLC, made testing of improved technologies possible when normal commercial practices were no longer effective.
By the late 1960s, oil output from the Pru Fee lease had dropped off greatly, and despite implementing a steam injection program, by 1985 production had dropped to less than 10 barrels of oil per day and the lease was abandoned. Yet, there was evidence that as much as 90% of the property's oil remained trapped in the Monarch Sand reservoir beneath the Pru lease. Seismic data, detailed information on reservoir properties, and analyses of cores and outcrops were used to create a geologic profile of the oil-bearing reservoir in unprecedented detail. New computer simulations predicted how the reservoir would respond to various production strategies and helped pinpoint the optimal patterns where new wells should be drilled to inject steam and recover oil. Continuous steam injection, sending a steady steam flow down one set of wells and recovering oil from other wells, and innovative placement of steam in the formation was employed. Sustained production was achieved, eventually reaching more than 1,500 BOPD.
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Project sponsors predict that ultimately, more than 4 million barrels of oil will be produced—all from a lease once thought to be dead from an oil producer's perspective. And more importantly, the technologies employed are applicable to other abandoned or marginally productive heavy oil reservoirs. Currently, 54 new wells have been placed into production outside the Pru lease. If the new methods were applied to only half of the 26 currently shut-in Midway-Sunset properties, another 80 million barrels of oil could be produced.
Another good example is in the area of stimulation technology where St. James Oil Corporation, with financial assistance from DOE, utilized a new acid treatment approach to treat producing wells in the Los Angeles Downtown Oil Field in Los Angeles County, California. These marginal wells have strong scale-forming tendencies that gradually clog their production. To obtain longer lasting treatment effectiveness and to sustain production, St. James employed phosphoric acid treatment, in conjunction with a conventional hydrochloric acid treatment, for more effective cleaning and inhibition of calcium carbonate scale to improve well performance.
The production following initial treatment was 160 BOPD, settling within a month to 122 BOPD, a 220 percent increase over pre-treatment rates. Preliminary review of the well production data indicates initial response to the treatments was very good and that post-treatment decline rates are significantly lower, thus production remains considerably higher than pre-treatment rates. The treatment also avoids the potential long-term damage to the formation that is common to other acid treatment methods. This technique is now being made available to other producers facing similar production obstacles.
DOE provides financial assistance through matching funds to small companies that do not have the ability to fund the research themselves, allowing higher-risk technologies to be tried and allowing many marginal wells to remain on production. By encouraging advances in oil and gas recovery technologies and facilitating their transfer to producers, DOE can help increase production from U.S. oil and gas resources, help to slow the rate of premature abandonment, and reduce our reliance on energy imports.
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Molten Carbonate Fuel Cell Research
Q10. What is the status of the Department's molten carbonate fuel cell work?
A10. The goal of the DOE's Molten Carbonate Fuel Cell (MCFC) Program is to develop and commercialize low-cost, packaged, simple, and modular fuel cell power generation systems. DOE funds one developer B Fuel Cell Energy (FCE).
FCE is developing an externally manifolded, internally reformed MCFC. The company has constructed a 50 MW-per year MCFC manufacturing plant. FCE also has a 400 kW test facility in Danbury, Connecticut, where it has scaled up to a 8-square foot (0.74 square meter) area stack. Tall stack testing has been successfully completed in integrated test facilities (at FCE and utility sites), that simulated final product operating conditions.
FCE reports it is able to offer a product ranging in size from 250 kW to 3 MW. Cross licensing arrangements with Daimler-Chrysler of Germany has given FCE access to Daimler-Chrysler's 250 kW product in the United States. FCE will also offer a 1.5 MW design. The conceptual and preliminary designs of FCE's market-entry, 3 MW direct fuel cell power plant have been completed.
Performance characteristics and early production units (EPU's) have been identified. FCE has estimated operation and maintenance power plant costs at 1.5 cents/kilowatt-hour (kWh), including 1 cent/kW stack replacement cost. Projected capital costs are under $1,300/kW (1995 dollars).
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Through the third quarter of 2001, FCE continued to demonstrate impressive technical accomplishments, the most noteworthy being the following:
11,800 hours on a grid connected 250 kW stack
17,000 hours on a 10 kW endurance stack
7,000 on a 250 kW MTU test in Germany
Funding for the FCE contract ends after FY 2003. FCE has plans for 12,250 kW to 2 MW demonstrations in the next few years.
ANSWERS TO POST-HEARING QUESTIONS
Responses by Gail H. Marcus, Principal Deputy Director, Office of Nuclear Energy, Science and Technology, U.S. Department of Energy
REPUBLICAN MEMBER QUESTIONS:
Office of Nuclear Energy's Role in the Administration's Energy Task Force
Q1. What has been DOE's role in the work of Vice President Cheney's Energy Task Force? In particular, have you worked with the Vice President and his staff to ensure that a robust energy R&D program—both near-term and longterm—is included in the Task Force recommendations?
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A1. DOE provided significant input in planning, drafting, and reviewing the President's National Energy Policy (NEP), Report of the National Energy Policy Development Group. Over 80 DOE staff and contractors were involved in providing technical analysis, background information, and draft policy options. DOE had direct responsibility for drafting five chapters, and was fully engaged in reviewing all chapters. One of our primary roles was to assure a robust energy R&D program that is consistent with the Administration's energy policy goals. R&D experts from across the Department (FE, EE, NE and other DOE offices) significantly contributed to the (NEP).
Office of Nuclear Energy's Role in the Administration's Climate Change Policy Review
Q2. What is DOE's role on climate change policy review that is reportedly underway by the Administration?
A2. On June 11, 2001, the President issued an Interim Report of its Cabinet Level Review of U.S. Climate Change Policy. The report included a Presidential directive to the Secretaries of Energy and Commerce, and the Administrator of the Environmental Protection Agency to develop a National Climate Change Technology Initiative (NCCTI). President Bush's accompanying remarks, spoken from the White House Rose Garden, provide additional guidance on goals and expectations. The Department of Energy is coordinating the NCCTI. The NCCTI teams include OMB, CEA, OSTP, DOE, State, NASA, EPA, USDA, and Commerce.
The NCCTI will develop innovative approaches in accordance with several basic principles, as outlined by the President. The approaches will: (1) be consistent with the long-term goal of stabilizing greenhouse gas concentrations in the atmosphere; (2) be measured, as we learn more from science, and build on it; (3) be flexible to adjust to new information and take advantage of new technology; (4) ensure continued economic growth and prosperity; and (5) pursue market-based incentives and spur technological innovation.
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The technology review and subsequent report to the President, which is scheduled to be completed in January, 2002 will: (1) evaluate the current state of U.S. climate change technology R&D and make recommendations for improvements; (2) develop opportunities to enhance private-public partnerships in applied R&D to expedite innovative and cost-effective approaches to reduce greenhouse gas emissions and global warming potential; and (3) make recommendations for funding demonstration projects for cutting-edge technologies. In addition, the report will: (4) provide guidance on strengthening basic research at universities and national laboratories, including the development of the advanced mitigation technologies that offer the greatest promise for low-cost reductions of greenhouse gas emissions and global warming potential; and (5) make recommendations to enhance coordination across Federal agencies, and among the Federal government, universities, and the private sector. Finally, the report will (6) make recommendations for developing improved technologies for measuring and monitoring gross and net greenhouse gas emissions.
MAJORITY MEMBER QUESTIONS:
Coordination of Research Programs Within DOE
Q3. It appears that several DOE Offices are funding similar programs—fuel cells and turbines, for example. Please explain how you coordinate your research efforts to avoid duplication of effort.
A3. The Fossil Energy (FE) and Energy Efficiency and Renewable Energy (EE&RE) Programs for fuel cells are coordinated in several ways. There are only two large, fuel cell-specific R&D programs in the DOE; DOE FE Distributed Generation (DG) Systems, which is focused on stationary applications and the DOE EE&RE Office of Transportation Technology (OTT), which is focused on transportation applications. Work with a renewables focus is ongoing in the EE&RE Office of Power Technology's (OPT) Hydrogen Program and the Buildings Program where some fuel cell R&D activities are funded, but on a much smaller scale.
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The EE OTT and FE DG programs are coordinated in several ways:
1. Through Joint EE/FE Fuel Cell Program Reviews.
2. By co-chairing of major meetings such as the 2002 Fuel Cell Seminar.
3. By joint funding of projects important to both programs at the national laboratories, such as the National Energy Technology Laboratory (NETL) and Los Alamos National Laboratory (LANL).
4. By working together to present a unified DOE Fuel Cells Program presence at major meetings—such as the 2001 House Exposition in the Cannon Office Building.
5. By mutually participating in laboratory and other important meetings sponsored by each office.
On a broader level, the Offices of Fossil Energy (FE), Energy Efficiency and Renewable Energy (EERE), and Science (SC) use several techniques to coordinate their research programs to avoid duplication. One technique is to make presentations at each others' meetings. For example, both the FE and EERE, as well as the Office of Nuclear Energy (NE), made presentations to the Office of Science's Basic Energy Advisory Committee meeting (August 3, 2001). Each office outlined their missions, goals, and programs of major importance. This approach helps to inform the basic research programs about the Department's applied research programs, and to encourage relevant basic research to support the applied programs, where appropriate.
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Joint meetings between the different offices are another approach. For example, also last August, FE and EERE each hosted a workshop on Natural Gas/Renewable Energy Hybrids. The FE hosted meeting was held at the National Energy Technology Laboratory, in Morgantown, West Virginia, and the EERE hosted workshop was held at the National Renewable Energy Laboratory, in Golden, Colorado. The laboratory directors and top management of FE and EERE participated in both workshops, and the panel and informal discussions allowed for a good understanding of each organization's interests and roles.
A third avenue for coordination is the Institutional Planning Process that the Office of Science oversees for the DOE Science laboratories. All of the DOE program offices, including FE, EERE, and NE are given the opportunity to review and comment on drafts of each of the SC laboratory's five year institutional plans, and to attend the on-site laboratory reviews that take place once a year. This helps the applied research programs understand the scope and content of the basic research sponsored by the Office of Science, and to make the best use possible of these basic R&D efforts.
HOUSE SCIENCE COMMITTEE QUESTIONS:
Declining Pool of Physical Science Students
Q4. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the expected impact on Energy R&D and what suggestions do you have to address this growing problem?
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A4. The number of U.S. citizen students entering the physical sciences is consistently low and is masked by the large numbers of foreign nationals studying at our prestigious research universities. In some of the fields, like materials sciences and computer programming, an alarming number of graduate schools, at excellent research universities, are made up of large numbers of ''foreign nationals,'' sometimes far exceeding half of the students. The desire and request by corporations to increase the number of H–1B visas (non-immigrant visas issued to persons in a specialty occupation which requires theoretical and practical application of a body of highly specialized knowledge) mirrors this situation. It is then a logical consequence that the paucity of American born students and the relative plethora of foreign nationals in what are areas of technology and science critical to the Nations' security, raise serious issues for the DOE and the nation at large. Of further concern is the low representation of women and minorities in the sciences. With community colleges holding greater than 50% of our undergraduate students, these institutions have become a focus of the DOE and the National Science Foundation to increase the numbers of U.S. students entering the sciences, which play a central role in maintaining the leading edge we presently have in technology, medicine and defense. The Office of Science undergraduate laboratory research programs introduce students to the unique intellectual and physical resources present at the DOE laboratories.
REPUBLICAN MEMBER QUESTIONS:
Domestic Reserves of Uranium
Q5. Would you comment on the security of supply of nuclear fuel in this country, specifically domestic reserves of uranium, conversion capability and DOE plans to proceed with gas centrifuge technology?
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A5. The Department has extensively studied the many varied and complex issues surrounding the maintenance of viable domestic uranium, conversion and enrichment industries. The findings from our studies have highlighted some issues regarding the stability, reliability, and security of enrichment supply to U.S. power plants. To that end, we have taken steps to ensure that this Nation maintains the ability to enrich uranium for nuclear fuel both economically and competitively.
Specifically, Secretary of Energy Abraham in March 2001 announced several actions to respond to the closure of the Portsmouth gaseous diffusion plant. Included among the Secretary's actions was the placement of the Portsmouth gaseous diffusion plant in cold standby, a protected condition that would enable its restart within 18–24 months if needed to supply fuel to domestic power reactors and certain strategic allies.
In addition, the National Security Council (NSC) has been leading an interagency review of the energy and national security implications of the challenges facing the U.S. enrichment industry. The NSC review is nearing completion and we would be glad to provide you with the results once the review is completed.
Gas Turbine Modular Helium Reactor
Q6. Right now, the DOE is funding work in Russia and in the U.S. to complete the design of the Gas Turbine Modular Helium Reactor for the purpose of eliminating surplus Russian weapons plutonium. What are the power production advantages of a civilian reactor type and what is the status of DOE's efforts to support R&D for the Gas Turbine Modular Helium Reactor (GT–MHR) Gen-4 design?
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A6. The Gas Turbine Modular Helium Reactor (GT–MHR) is a modular advanced gas cooled reactor designed to be constructed in modules with an electrical output of 285 megawatts. In the GT–MHR concept, these modules can be built as individual units or as multiple units, thereby matching the electrical output of a plant to an owner's specific present and future production requirements. The commercial version of the GT–MHR would provide utilities and power generating companies with flexibility in their strategy for deployment of new generation assets.
The GT–MHR is being designed to operate at significantly higher efficiency levels as compared to that available with light water reactors. The potential for higher efficiencies is a result of the higher operating temperatures attainable with gas reactors. At these higher efficiency levels, the GT–MHR should provide electrical output at a lower cost per kilowatt. In addition, the higher efficiency provides the environmental benefits on reduced thermal discharge and waste volumes.
In June 2001, the Department placed a contract with General Atomics to initiate GT–MHR commercialization activities including commercial fuel development and testing, licensing interaction with the Nuclear Regulatory Commission, plant cost evaluations, and waste disposal assessment.
Projections for Nuclear Power Generation
Q7. In projecting nuclear energy's contribution to energy supply, the Energy Information Administration of the DOE assumes that (1) some nuclear power plants will be closed before the end of their initial 40-year operating licenses; (2) others will not renew their licenses for an additional 20 years; and (3) no new nuclear power plants will be built in the United States. Yet, Nuclear Regulatory Commission (NRC) has indicated publicly that the agency has received informal notification that 85 of the 103 nuclear units in the United States intend to renew their licenses. Your testimony verified this trend and the private sector has already begun discussions with the NRC to build new nuclear plants.
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Q7.1. Given this, what is the DOE's opinion of EIA's projections for nuclear power in the U.S.?
A7.1. The Energy Information Administration's (EIA) Annual Energy Outlook projection of future energy prices and consumption patterns up to the year 2020, have predicted a diminished role for nuclear energy in the United States. However, much has changed over the last three years. The Nation's nuclear power plants continue to achieve high levels of performance and virtually all U.S. plants are expected to apply for renewal of their operating licenses. Additionally, for the first time in years, industry is developing the business cases for new nuclear plant construction, such that new nuclear capacity could be in place before the end of the decade. Given these changes, we expect that EIA will reflect the current, improved status of U.S. nuclear plants in its future projections.
Q7.2. Do you think that the EIA model correctly reflects changes in the marketplace for nuclear energy?
A7.2. We understand that EIA has updated their model and some of their assumptions to take into account the significant changes in the electricity generating marketplace and the nuclear industry that have occurred over the last several years. For example, we understand the current model has been updated to consider the investments made in the plants during their initial license periods as opposed to the prior model which assumed significant future costs incurred for aging effects. These changes represent significant improvements to past models and expect that additional improvements will be made for future projections. We have not yet seen the revised EIA model in its final form.
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Q7.3. What might be done to ''correct'' EIA forecasts for nuclear energy?
A7.3. The EIA recently had its National Energy Modeling System (NEMS) independently reviewed by industry experts to identify possible bias and outdated assumptions. NEMS is the primary midterm forecasting tool of EIA, used for the projections contained in the Annual Energy Outlook and numerous special studies for Congress and the Administration. This analysis should include a projection scenario with lower capital cost for new nuclear capacity. Based on our discussions with industry, we believe that consideration should be given to scenarios involving new plant orders placed as a group of units as opposed to a single reactor. For example, a coordinated order for as many as eight units is one possibility that will bring the cost of new plants down because developmental and other generic costs could be spread over many units. We believe that these types of changes would be helpful to more realistically predict the future of nuclear power in this country.
Generation IV Nuclear Energy System
Q8. Your testimony referred to the Generation IV—''Gen-4''—nuclear energy system. Since Gen-3 designs have already been certified by the Nuclear Regulatory Commission and are ready to be built, what is the likely timeframe in which a Gen-4 plant might be designed and built?
A8. The Generation IV Nuclear Energy Systems initiative is focused on identifying promising new, innovative reactor system designs that could be commercially available after 2010, but no later than 2030. Generation IV systems are not intended to be near-term alternatives to the existing Generation III advanced designs which have been certified by the Nuclear Regulatory Commission. It is expected that Generation IV systems will require a substantial period of research and development in order to meet the safety, waste minimization, proliferation resistance, and economic objectives which have been established for these innovative systems.
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As part of our Nuclear Energy Technologies program, the Department has created a separate development track for near-term deployment of new nuclear power plants called Nuclear Power 2010. This effort builds directly on the excellent Generation III designs and includes some additional designs such as the pebble bed modular reactor. The Nuclear Power 2010 effort is focused on identifying and addressing the regulatory, institutional, and technical barriers to deploying one or more new reactors by the end of the decade.
NRC-Certified Advanced Reactors
Q9. Your testimony stated that your office strives to ''removing unnecessary barriers'' to the construction of NRC-certified advanced reactors. What are those barriers and what is the Department doing to remove them?
Q9.1. Will you work aggressively with other nations to ensure additional international funding for this work?
A9.1. Barriers to the near-term construction of the Nuclear Regulatory Commission (NRC) certified advanced reactors involve regulatory and financial risks. The nuclear industry has identified three relatively new and untested regulatory processes in the new NRC licensing requirements of 10CFR Part 52 that represent significant regulatory risks. These include the Early Site Permit (ESP), combined Construction and Operating License (COL), and the Inspection, Tests, Analyses and Acceptance Criteria (ITAAC) processes.
In light of the uncertainties in implementing these untested regulations and the attendant schedule and cost implications, the Department has initiated efforts to evaluate the new, untested ESP regulatory process on a cost-shared basis with the nuclear industry. We plan to conduct a study of the activities, cost and schedule for an ESP application which will be followed in mid-FY 2002 with the implementation of one or more ESP demonstration projects. These efforts will be cost-shared with industry. In subsequent years, the Department may plan to work in conjunction with the industry to demonstrate the COL and ITAAC processes.
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For the longer term, the Department is conducting scientific research and technology development through our Nuclear Energy Research Initiative (NERI) program to address the major issues affecting expanded use of nuclear energy: economics, nuclear material proliferation, minimization of waste, and enhanced safety. Areas of research include proliferation resistant reactor concepts and fuel cycles, advanced reactor concepts with higher efficiency and lower costs, advanced nuclear fuels, and fundamental nuclear science in areas such as high temperature materials. In FY 2001, the International Nuclear Energy Research Initiative (I–NERI) was initiated to conduct collaborative cost-shaped research with other countries on the issues affecting expanded use of nuclear energy. To date I–NERI agreements have been established with France and South Korea, and research awards were made under the French Agreement in September 2001. Awards under the South Korean I–NERI Agreement will be made in October 2001. Discussions on potential I–NERI agreements are continuing with other countries and organizations including Japan, South Africa and the Nuclear Energy Agency (NEA).
The Generation IV Nuclear Energy Systems Initiative was initiated in FY 2001 to work on an international basis to identify, assess, and develop innovative nuclear energy technologies for the future. The goal is to develop new nuclear technologies that are economically competitive in all markets while further enhancing nuclear safety, minimizing the generation of nuclear waste, and further reducing the risk of proliferation. As part of the Generation IV initiative, we are working with our international partners to develop a Generation IV Technology Roadmap that will be completed in early FY 2003. The Roadmap is evaluating numerous, innovative nuclear energy concepts, selecting the most promising concepts for further development and defining the research and development needed to bring these concepts to maturity for potential commercialization. The Roadmap will be used to establish a research, development, and demonstration plan to achieve the Generation IV objectives.
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The Department, in cooperation with seven other countries, has established the Generation IV International Forum, to provide government policy and technical guidance to the Generation IV effort. Generation IV International Forum charter membership includes Argentina, Brazil, Canada, France, Japan, the Republic of Korea, the United Kingdom, and the United States. The Generation IV International Forum will provide the organizational vehicle for establishing international cost-shared collaboration for Generation IV research and development.
Cooperation With South Africa on Pebble Bed Modular Reactor (PBMR)
Q10. What is the status of DOE's cooperation with the South African government in the pebble bed modular reactor R&D and construction project and what has been the level of funding for that cooperation?
A10. The Department does not currently have any cooperative research and development projects with the Republic of South Africa. The Department has twice led interagency teams—one in February 2000 and one in February 2001 to review the status and progress of South Africa's PBMR program and recommend areas where we could work together. Only recently have we received South Africa's response to our 2000 recommendations. This response indicates interest in cooperating with the United States in the areas of fuel testing and development of a regulatory regime for the PBMR, as well as negotiating an International Nuclear Energy Research Initiative (I–NERI) agreement to facilitate cooperative research. The Department is now in the process of creating the legal framework under which this cooperation can occur.
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South Africa was one of nine original members of the U.S.-led Generation IV International Forum (GIF) and participates in the Department's Generation IV Technology Roadmap development effort, which is evaluating the PBMR and several other innovative reactor designs. Beyond this, there has been no direct cooperation with South Africa, and there has been no funding for the development of the South Africa PBMR.
Status of the Fast Flux Test Facility
Q11. The permanent deactivation of the Fast Flux Test Facility (FFTF) was directed in a Record of Decision issued by the Department in January 2001. However, I understand that Secretary Abraham has been asked to reconsider this decision. Can you please provide a status report?
A11. Secretary Abraham suspended the deactivation of FFTF in April 2001 to permit a 90-day review of the factors that went into the deactivation decision. Because the Record of Decision issued in January 2001 indicated a concern over a lack of financial commitments by potential users, the 90-day review included an open, public process to solicit expressions of interest in the use of the facility. These expressions had not been previously solicited. On July 27, 2001, the Secretary received and accepted the final report of this 90-day review. As a result of its findings, he ordered a review of one expression of interest the DOE received that contemplates restart of the facility by the private sector, primarily for commercial production of medical and industrial isotopes.
A working group of procurement and real property experts, as well as legal counsel, has been established to evaluate the viability of this concept. With the completion of that evaluation this fall, the Secretary will decide in the near future whether to pursue restarting FFTF for commercial use or to initiate facility deactivation.
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ANSWERS TO POST-HEARING QUESTIONS
Responses by Steven V. Cary, Acting Assistant Secretary, Office of Environment, Safety and Health, U.S. Department of Energy
REPUBLICAN MEMBER QUESTIONS:
Office of Environment, Safety and Health's Role in the Administration's Energy Task Force
Q1. What has been your office's role in the work of Vice President Cheney's Energy Task Force? In particular, have you worked with the Vice President and his staff to ensure that a robust energy R&D program—both near-term and long-term—is included in the Task Force recommendations?
A1. The Office of Environment, Safety and Health has not been involved in Vice President Cheney's Energy Task Force.
Office of Environment, Safety and Health's Role in the Administration's Climate Change Policy Review
Q2. What is DOE's Role on climate change policy review that is reportedly underway by the Administration?
A2. On June 11, 2001, the President issued an Interim Report of its Cabinet Level Review of U.S. Climate Change Policy. The report included a Presidential directive to the Secretaries of Energy and Commerce, and the Administrator of the Environmental Protection Agency to develop a National Climate Change Technology Initiative (NCCTI). President Bush's accompanying remarks, spoken from the White House Rose Garden, provide additional guidance on goals and expectations. The Department of Energy is coordinating the NCCTI. The NCCTI teams include OMB, CEA, OSTP, DOE, State, NASA, EPA, USDA, and Commerce.
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The NCCTI will develop innovative approaches in accordance with several basic principles, as outlined by the President. The approaches will: (1) be consistent with the long-term goal of stabilizing greenhouse gas concentrations in the atmosphere; (2) be measured, as we learn more from science, and build on it; (3) be flexible to adjust to new information and take advantage of new technology; (4) ensure continued economic growth and prosperity; and (5) pursue market-based incentives and spur technological innovation.
The technology review and subsequent report to the President, which is scheduled to be completed in January, 2002 will: (1) evaluate the current state of U.S. climate change technology R&D and make recommendations for improvements; (2) develop opportunities to enhance private-public partnerships in applied R&D to expedite innovative and cost-effective approaches to reduce greenhouse gas emissions and global warming potential; and (3) make recommendations for funding demonstration projects for cutting-edge technologies. In addition, the report will: (4) provide guidance on strengthening basic research at universities and national laboratories, including the development of the advanced mitigation technologies that offer the greatest promise for low-cost reductions of greenhouse gas emissions and global warming potential; and (5) make recommendations to enhance coordination across Federal agencies, and among the Federal government, universities, and the private sector. Finally, the report will (6) make recommendations for developing improved technologies for measuring and monitoring gross and net greenhouse gas emissions.
Coordination of Research Programs Within DOE
Q3. It appears that several DOE Offices are finding similar programs—fuel cells and turbines, for example. Please explain how you coordinate your research efforts to avoid duplication of effort.
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A3. The Fossil Energy (FE) and Energy Efficiency and Renewable Energy (EE&RE) Programs for fuel cells are coordinated in several ways. There are only two large, fuel cell-specific R&D programs in the DOE; DOE FE Distributed Generation (DG) Systems, which is focused on stationary applications and the DOE EE&RE Office of Transportation Technology (OTT), which is focused on transportation applications. Work with a renewables focus is ongoing in the EE&RE Office of Power Technology's (OPT) Hydrogen Program and the Buildings Program where some fuel cell R&D activities are funded, but on a much smaller scale.
The EE OTT and FE DG programs are coordinated in several ways:
1. Through Joint EE/FE Fuel Cell Program Reviews.
2. By co-chairing of major meetings such as the 2002 Fuel Cell Seminar.
3. By joint funding of projects important to both programs at the national laboratories, such as the National Energy Technology Laboratory (NETL) and Los Alamos National Laboratory (LANL).
4. By working together to present a unified DOE Fuel Cells Program presence at major meetings—such as the 2001 House Exposition in the Cannon Office Building.
5. By mutually participating in laboratory and other important meetings sponsored by each office.
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On a broader level, the Offices of Fossil Energy (FE), Energy Efficiency and Renewable Energy (EERE), and Science (SC) use several techniques to coordinate their research programs to avoid duplication. One technique is to make presentations at each others' meetings. For example, both the FE and EERE, as well as the Office of Nuclear Energy (NE), made presentations to the Office of Science's Basic Energy Advisory Committee meeting (August 3, 2001). Each office outlined their missions, goals, and programs of major importance. This approach helps to inform the basic research programs about the Department's applied research programs, and to encourage relevant basic research to support the applied programs, where appropriate.
Joint meetings between the different offices are another approach. For example, also last August, FE and EERE each hosted a workshop on Natural Gas/Renewable Energy Hybrids. The FE hosted meeting was held at the National Energy Technology Laboratory, in Morgantown, West Virginia, and the EERE hosted workshop was held at the National Renewable Energy Laboratory, in Golden, Colorado. The laboratory directors and top management of FE and EERE participated in both workshops, and the panel and informal discussions allowed for a good understanding of each organization's interests and roles.
A third avenue for coordination is the Institutional Planning Process that the Office of Science oversees for the DOE Science laboratories. All of the DOE program offices, including FE, EERE, and NE are given the opportunity to review and comment on drafts of each of the SC laboratory's five year institutional plans, and to attend the on-site laboratory reviews that take place once a year. This helps the applied research programs understand the scope and content of the basic research sponsored by the Office of Science, and to make the best use possible of these basic R&D efforts.
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HOUSE SCIENCE COMMITTEE QUESTIONS:
Declining Pool of Physical Science Students
Q4. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the expected impact on Energy R&D and what suggestions do you have to address this growing problem?
A4. The number of U.S. citizen students entering the physical sciences is consistently low and is masked by the large numbers of foreign nationals studying at our prestigious research universities. In some of the fields, like materials sciences and computer programming, an alarming number of graduate schools, at excellent research universities, are made up of large numbers of ''foreign nationals,'' sometimes far exceeding half of the students. The desire and request by corporations to increase the number of H–1B visas (non-immigrant visas issued to persons in a specialty occupation which requires theoretical and practical application of a body of highly specialized knowledge) mirrors this situation. It is then a logical consequence that the paucity of American born students and the relative plethora of foreign nationals in what are areas of technology and science critical to the Nations' security, raise serious issues for the DOE and the nation at large. Of further concern is the low representation of women and minorities in the sciences. With community colleges holding greater than 50% of our undergraduate students, these institutions have become a focus of the DOE and the National Science Foundation to increase the numbers of U.S. students entering the sciences, which play a central role in maintaining the leading edge we presently have in technology, medicine and defense. The Office of Science undergraduate laboratory research programs introduce students to the unique intellectual and physical resources present at the DOE laboratories.
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External Regulation of DOE Facilities
Q5. What is the current status of the issue of external regulation of DOE facilities?
A5. Conference Reports language that accompanied FY 2002 Energy and Water Appropriations included a requirement that DOE develop a plan by May 2002 for the transition of laboratories managed by the Office of Science to external regulation by the Nuclear Regulator Commission. The Department will prepare such a report. In the 1990's, the Department of Energy considered external regulation and completed several joint studies with other federal agencies, state and local governments. These pilot studies did not review safety and security associated with weapons production, as both the Congress and the Department have agreed that external oversight provided by the Defense Nuclear Facilities Safety Board and internal, independent oversight by the Office of Environment, Safety and Health are adequate to address safety of these defense activities.
The pilot studies specifically evaluated a variety of DOE facilities, that were generally one-of-a-kind and complex, dealing with unique hazards. Based on these pilots, DOE determined there was no clear benefit to external regulation.
In particular, DOE concluded that the pilot studies did not demonstrate that external regulation would result in substantial improvement to the protection of workers, the public or the environment. Also, the pilot studies found that the hazards in DOE's aging facilities could be compared with those in the commercial nuclear industry or private industry, and that regulations developed for the commercial nuclear or private industry did not easily fit DOE one-of-a-kind activities. The studies also noted that to retrofit these regulations and their implementation would require significant resources and take years to implement.
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National Nuclear Security Administration
Q6. What is the role of the Office of Environment, Safety and Health with respect to the National Security Administration (NNSA)?
A6. The statute creating the National Nuclear Security Agency requires only that federal employees of DOE not directly guide or direct the actions of NNSA employees. The Office of Environment, Safety and Health (EH) has a number of roles with the DOE. In its role as a policy advisor on matters related to environment, safety and health, EH has direct input into decisions made by the Under Secretary, Deputy Secretary, and Secretary of Energy, who oversee both NNSA and DOE, and the Under Secretary for Environment, Safety and Health. In addition, NNSA staff will often request assistance from EH on matters of implementation of Integrated Safety Management, assistance which is provided. The Price Anderson Enforcement Program applies to both NNSA and non-NNSA elements of DOE, except that NNSA Enforcement actions are issued by the director of the NNSA upon the advice of the Assistant Secretary for Environment, Safety and Health. This is spelled out in an agreement that has been formalized in a Memorandum of Understanding. Finally, ES&H oversight functions have been transferred to an office that reports directly to the Secretary and oversees all DOE and NNSA ES&H activities.
Office of Environment, Safety and Health Budget
Q7. Will the Office be able to carry out its mandates within this budget?
A7. The Fiscal Year 2002 budget request for the base programs of the Office of Environment, Safety and Health remains constant. The apparent reduction in funding results from the completion of the Gaseous Diffusion Plant Initiative and the use of prior year funds. The Office of Environment, Safety and Health will not reduce staffing or contracts, nor be otherwise impaired in carrying out its mission.
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Wildland Fire Management Policies for DOE Facilities
Q8. Has your Office developed wildland fire management policies for new DOE facilities, and if so, which ones?
A8. DOE has not yet established a wildland fire management policy. It has conducted related activities to support the development of a DOE-wide wildland fire management policy and implementing guidance including:
Issued a Secretarial Memorandum, Fire Management Program Direction (May 11, 2001), allowing Field Office Managers to approve prescribed fires based on a documented review of relevant criteria set forth in the memorandum.
Participated as a member of the Interagency Federal Wildland Fire Policy Review Working Group to recommend changes to the 1995 Federal Wildland Management Policy.
Established a DOE Prescribed Fire Working Group to review lessons learned from the Cerro Grande fire, DOE programs and practices for prescribed fires and wildland fire management plans, and to recommend policy and guidance.
Conducted an initial review of wildland fire safety at DOE sites to support upcoming recommendations by the external DOE Fire Safety Committee established by the Secretary.
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These activities will support the development of any future Departmental wildland fire management policy and guidance.
ANSWERS TO POST-HEARING QUESTIONS
Responses by James M. Owendoff, Deputy Assistant Secretary, Office of Environmental Management, U.S. Department of Energy
REPUBLICAN MEMBER QUESTIONS:
Office of Environmental Management's Role in the Administration's Energy Task Force
Q1. What has been DOE's role in the work of Vice President Cheney's Energy Task Force? In particular, have you worked with the Vice President and his staff to ensure that a robust energy R&D program—both near-term and long-term—is included in the Task Force recommendations?
A1. DOE provided significant input in planning, drafting, and reviewing the President's National Energy Policy (NEP), Report of the National Energy Policy Development Group. Over 80 DOE staff and contractors were involved in providing technical analysis, background information, and draft policy options. DOE had direct responsibility for drafting five chapters, and was fully engaged in reviewing all chapters. One of our primary roles was to assure a robust energy R&D program that is consistent with the Administration's energy policy goals. R&D experts from across the Department (FE, EE, NE and other DOE offices) significantly contributed to the (NEP).
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Office of Environmental Management's Role in the Administration's Climate Change Policy Review
Q2. What is DOE's role on climate change policy review that is reportedly underway by the Administration?
A2. On June 11, 2001, the President issued an Interim Report of its Cabinet Level Review of U.S. Climate Change Policy. The report included a Presidential directive to the Secretaries of Energy and Commerce, and the Administrator of the Environmental Protection Agency to develop a National Climate Change Technology Initiative (NCCTI). President Bush's accompanying remarks, spoken from the White House Rose Garden, provide additional guidance on goals and expectations. The Department of Energy is coordinating the NCCTI. The NCCTI teams include OMB, CEA, OSTP, DOE, State, NASA, EPA, USDA, and Commerce.
The NCCTI will develop innovative approaches in accordance with several basic principles, as outlined by the President. The approaches will: (1) be consistent with the long-term goal of stabilizing greenhouse gas concentrations in the atmosphere; (2) be measured, as we learn more from science, and build on it; (3) be flexible to adjust to new information and take advantage of new technology; (4) ensure continued economic growth and prosperity; and (5) pursue market-based incentives and spur technological innovation.
The technology review and subsequent report to the President, which is scheduled to be completed in January, 2002 will: (1) evaluate the current state of U.S. climate change technology R&D and make recommendations for improvements; (2) develop opportunities to enhance private-public partnerships in applied R&D to expedite innovative and cost-effective approaches to reduce greenhouse gas emissions and global warming potential; and (3) make recommendations for funding demonstration projects for cutting-edge technologies. In addition, the report will: (4) provide guidance on strengthening basic research at universities and national laboratories, including the development of the advanced mitigation technologies that offer the greatest promise for low-cost reductions of greenhouse gas emissions and global warming potential; and (5) make recommendations to enhance coordination across Federal agencies, and among the Federal government, universities, and the private sector. Finally, the report will (6) make recommendations for developing improved technologies for measuring and monitoring gross and net greenhouse gas emissions.
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Coordination of Research Programs Within DOE
Q3. It appears that several DOE Offices are funding similar programs—fuel cells and turbines, for example. Please explain how you coordinate your research efforts to avoid duplication of effort.
A3. The Fossil Energy (FE) and Energy Efficiency and Renewable Energy (EE&RE) Programs for fuel cells are coordinated in several ways. There are only two large, fuel cell-specific R&D programs in the DOE; DOE FE Distributed Generation (DG) Systems, which is focused on stationary applications and the DOE EE&RE Office of Transportation Technology (OTT), which is focused on transportation applications. Work with a renewables focus is ongoing, in the EE&RE Office of Power Technology's (OPT) Hydrogen Program and the Buildings Program where some fuel cell R&D activities are funded, but on a much smaller scale.
The EE OTT and FE DG programs are coordinated in several ways:
1. Through Joint EE/FE Fuel Cell Program Reviews.
2. By co-chairing of major meetings such as the 2002 Fuel Cell Seminar.
3. By joint funding of projects important to both programs at the national laboratories, such as the National Energy Technology Laboratory (NETL) and Los Alamos National Laboratory (LANL).
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4. By working together to present a unified DOE Fuel Cells Program presence at major meetings—such as the 2001 House Exposition in the Cannon Office Building.
5. By mutually participating in laboratory and other important meetings sponsored by each office.
On a broader level, the Offices of Fossil Energy (FE), Energy Efficiency and Renewable Energy (EERE), and Science (SC) use several techniques to coordinate their research programs to avoid duplication. One technique is to make presentations at each others' meetings. For example, both the FE and EERE, as well as the Office of Nuclear Energy (NE), made presentations to the Office of Science's Basic Energy Advisory Committee meeting (August 3, 2001). Each office outlined their missions, goals, and programs of major importance. This approach helps to inform the basic research programs about the Department's applied research programs, and to encourage relevant basic research to support the applied programs, where appropriate.
Joint meetings between the different offices are another approach. For example, also last August, FE and EERE each hosted a workshop on Natural Gas/Renewable Energy Hybrids. The FE hosted meeting was held at the National Energy Technology Laboratory, in Morgantown, West Virginia, and the EERE hosted workshop was held at the National Renewable Energy Laboratory, in Golden, Colorado. The laboratory directors and top management of FE and EERE participated in both workshops, and the panel and informal discussions allowed for a good understanding of each organization's interests and roles.
A third avenue for coordination is the Institutional Planning Process that the Office of Science oversees for the DOE Science laboratories. All of the DOE program offices, including FE, EERE, and NE are given the opportunity to review and comment on drafts of each of the SC laboratory's five year institutional plans, and to attend the on-site laboratory reviews that take place once a year. This helps the applied research programs understand the scope and content of the basic research sponsored by the Office of Science, and to make the best use possible of these basic R&D efforts.
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HOUSE SCIENCE COMMITTEE QUESTIONS:
Declining Pool of Physical Science Students
Q4. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the expected impact on Energy R&D and what suggestions do you have to address this growing problem?
A4. The number of U.S. citizen students entering the physical sciences is consistently low and is masked by the large numbers of foreign nationals studying at our prestigious research universities. In some of the fields, like materials sciences and computer programming, an alarming number of graduate schools, at excellent research universities, are made up of large numbers of ''foreign nationals,'' sometimes far exceeding half of the students. The desire and request by corporations to increase the number of H–1B visas (non-immigrant visas issued to persons in a specialty occupation which requires theoretical and practical application of a body of highly specialized knowledge) mirrors this situation. It is then a logical consequence that the paucity of American born students and the relative plethora of foreign nationals in what are areas of technology and science critical to the Nations' security, raise serious issues for the DOE and the nation at large. Of further concern is the low representation of women and minorities in the sciences. With community colleges holding greater than 50% of our undergraduate students, these institutions have become a focus of the DOE and the National Science Foundation to increase the numbers of U.S. students entering the sciences, which play a central role in maintaining the leading edge we presently have in technology, medicine and defense. The Office of Science undergraduate laboratory research programs introduce students to the unique intellectual and physical resources present at the DOE laboratories.
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Status of the West Valley Negotiations
Q5. Your testimony stated that West Valley ''negotiations between New York and DOE concluded in January 2001 without an agreement.''
Q5.1. What is meant by ''concluded''? Are there any plans at this time to resume negotiations?
A5.1. Department of Energy staff negotiated with New York State representatives for over a year-and-a-half regarding various responsibility issues at the site. DOE presented a specific offer to New York in December 2000. That offer was rejected by New York in January 2001. DOE staff recognized that no further progress on its offer could be made at the time; therefore, the offer was withdrawn and negotiations were temporarily suspended. DOE and New York have since agreed to review alternative options and resume discussions, and the first meeting was held on October 10, 2001.
Q5.2. Your testimony further stated, ''Should DOE and the State ultimately be unable to reach consensus on a preferred alternative, DOE will proceed with the Decommissioning EIS on its own.'' How long will DOE wait before proceeding on its own?
A5.2. Because the State of New York owns the site, it is DOE's goal to achieve consensus with the State on a preferred alternative for decommissioning of the West Valley facilities. As previously indicated, negotiations with New York State were suspended in January 2001 without agreement. Discussions regarding site completion have resumed, with the first meeting held on October 10, 2001.
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DOE intends to continue to comply with Congress' directive in the West Valley Demonstration Project Act to decontaminate and decommission the site facilities. Technical analysis to support the decommissioning Environmental Impact Statement (EIS) is ongoing, despite lack of agreement with New York on a preferred alternative. Should discussions with New York State fail to result in an agreement, DOE is prepared to include its own preferred alternative in the draft EIS for decommissioning. New York State in turn would need to determine whether it would wish to continue as a lead agency with DOE in the process. The present lack of agreement on final closure decisions is not impacting on-going, necessary decontamination and waste disposition work planned through Fiscal Year 2004. Current DOE plans are to proceed with discussions with New York State for at least the next six months. After that period, the Department will decide whether to proceed with an analysis of its preferred alternative in the decommissioning EIS.
West Valley's Cleanup Costs
Q6. Your testimony stated that characterization of West Valley Demonstration Project tank radiation levels revealed higher than expected levels of radionuclides that will require continued vitrification in FY 2002. What is the cost of this unanticipated work and the impact on the project's completion timeline?
A6. The additional West Valley Demonstration Project tank cleaning efforts and processing will cost no more than $10 million total in FY 2001 and FY 2002. The additional costs are due to procurement of equipment and extension of vitrification operations that supported the additional tank cleaning efforts. Based on recent analysis of tank cleaning efforts, it was decided in September 2001 that it is possible to complete vitrification facility deactivation and melter shutdown by the end of FY 2002, consistent with the original plan, and we are proceeding accordingly.
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Metal Recycling at the K–25 Site
Q7. Regarding the recycling of metal from the Oak Ridge K–25 site, your testimony stated that ''impacts to the contract [BNFL, Inc.] have been minimized in that metals destined for recycling are being purchased by the Department and stored for possible future release.''
Q7.1. What was the technical basis for the Clinton Administration's moratorium on the sale of this recycled metal?
A7.1. Two separate prohibitions were placed in 2000 on the free release of metals into commerce. The first, in January 2000, was a moratorium on the release of volumetrically contaminated metals. The second, in July 2000, suspended release of scrap metals from radiation areas. The first action blocked the anticipated sale of nickel recovered from decommissioning. The latter action was broader and affected the release of scrap metal generated by various activities in radiological areas at DOE sites. In both cases, these were policy decisions addressing issues of public perception and concerns expressed by the steel and scrap industry and members of Congress. In particular, public concern focused on the lack of specific numeric release criteria for volumetrically contaminated metals, and whether numeric criteria established for other scrap metal were protective enough. The Department, however, indicated, at the time that these decisions were not based on public health risk, the integrity of the Department's free release program, or other technical issues. The Department's existing release criteria for scrap metals limits potential for radiation exposure to the public to levels well below applicable requirements. The Department, however, decided that additional improvements to the release criteria might be beneficial and also has initiated an environmental impact statement to address scrap mental disposition options. The Nuclear Regulatory Commission also is reviewing standards for both categories of materials.
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Q7.2. To your knowledge, how have European countries dealt with recycling similarly used metals?
A7.2. Similar metals have been released for recycling in Germany, Britain, Belgium, Sweden, Spain, Italy, and Slovakia. At present, France, Japan, and Canada have not established levels for the release of potentially contaminated materials. France is evaluating the possibility of recycling metals within the nuclear industry, and Germany is practicing nuclear industry recycling in addition to unrestricted recycling. As one would expect, the issue of recycling metals from nuclear installations is a sensitive one in all countries that utilize nuclear power.
Q7.3. What is the cost to the Department to purchase this recycled metal as a result of the moratorium?
A7.3. The Department and the contractor, BNFL, at the East Tennessee Technology Park at the DOE's Oak Ridge Reservation are still working to modify the contract to accommodate the moratorium on volumetric recycling. The potential gross value of the nickel related to this particular project was in the range of $40 million. The Department and BNFL are currently negotiating a contract settlement dealing with this issue that will be substantially below the gross value of the nickel since most of the decontamination costs were not incurred. The Department's approach preserves flexibility for disposition of this valuable material; an evaluation of options, including internal reuse, is underway. If a recycle option is available in the future, the Department may be able to recoup some or all of the costs associated with the contract settlement and storage of this material. If a recycling option is not available or cost effective, DOE would then need to pay for appropriate disposal of the nickel.
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The Department is currently purchasing scrap metals that meet contract commitments that were in place prior to the Department's July suspension of recycling scrap metals. The Department has paid BNFL $339,000 for scrap metal through May 2001, and has spent an additional $1 million to process, verify, and store those metals. DOE has budgeted approximately $10 million to cover this activity, if needed, while the Department evaluates the environmental and cost impacts of recycling scrap metals. Again, if recycling in the future were available as an option, the Department could recover some of these costs. Similarly, disposal costs would be incurred if recycling of scrap metal is not possible.
Status of DUF6 Cylinders
Q8. Regarding the surveillance and maintenance of the inventory of 4,700 cylinders of depleted UF6 and the 2,500 cylinders of surplus uranium at Oak Ridge, what is the general condition of those cylinders, how long have these cylinders been under ''surveillance and maintenance'' and what has been the cumulative cost?
A8. The condition of the Department's inventory of DUF6 cylinders and other surplus uranium cylinders varies from site to site. At the East Tennessee Technology Park (ETTP) (the former Oak Ridge K–25 Gaseous Diffusion Plant), there are 4,700 DUF6 cylinders and 2,500 surplus uranium cylinders under surveillance and maintenance. This is a small portion of the Department's cylinder surveillance and maintenance responsibility. Overall, there is a legacy of approximately 700,000 metric tons of DUF6 that was generated as a by-product of the enrichment process and is currently stored at three Departmental sites. Approximately 37,000 cylinders are stored at the Paducah, KY site; 16,000 at the Portsmouth, OH site; and the remainder at the ETTP, TN site.
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With respect to the cylinder inventory at ETTP, the advanced age of many of the steel cylinders and the way in which they were originally arranged, which did not permit full inspection of the cylinders, created a potential environmental and safety hazard. Many of these cylinders exhibit advanced degrees of corrosion, and many need to be re-coated to minimize future corrosion. The physical condition of the ETTP cylinders is considered to be the worst in the DOE inventory. The DUF6 material in these cylinders does not present a significant radiological hazard, but it is a potential chemical hazard if not properly managed.
Surveillance and maintenance efforts have been ongoing for over 40 years. In FY 1996, the Department established a comprehensive cylinder management program to minimize risks to workers, the public, and the environment until the DUF6 material can be dispositioned. The DUF6 cylinder management program includes conducting annual storage cylinder inspections; moving cylinders to properly spaced storage locations in upgraded, concrete storage yards; painting cylinders to inhibit corrosion; and developing and implementing options to repair cylinders exhibiting accelerated corrosion. If leaks are detected, steps are taken immediately to correct the problem.
For much of the last 40 years, the cylinder surveillance and maintenance expense was part of a much larger facility operating budget. Cost data are not available at a sufficient level of detail to identify historical, cumulative costs for cylinder surveillance and maintenance. However, costs since FY 1998 at ETTP have ranged from $1.2 million to $3.5 million per year for critical cylinder inspections and cylinder re-stacking efforts. Funding in FY 2001 and the FY 2002 request also support a corrosion-inhibitor painting campaign on the oldest cylinders, storage yard upgrades, increased inspection of cylinders, and disposition of empty cylinders. The FY 2002 request includes $7 million for cylinder management activities.
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Conversion of DUF6
Q9. Your testimony stated that $10 million is requested in the Oak Ridge Account to chemically convert depleted UF6 into a ''more stable form that would make it acceptable for reuse, if applications for the material are found.'' What are the possible applications for reuse of depleted UF6 and if they are not known, why is UF6 being chemically converted?
A9. The Draft Programmatic Environmental Impact Statement (PEIS) for Alternative Strategies for the Long-Term Management and Use of Depleted Uranium Hexafluoride, published in December 1997, discussed several alternatives for the long-term management of the depleted uranium hexafluoride (DUF6) stockpile. These included long-term storage as DUF6 at a consolidated site or sites; conversion of the DUF6 and long-term storage as an oxide; conversion of the DUF6 to an oxide for use as radiation shielding; conversion of the DUF6 to uranium metal for use as radiation shielding; and conversion of the DUF6 to an oxide for disposal. The preferred alternative presented in that Draft PEIS centered on continued safe storage of the cylinders while investigations into alternative uses for the depleted uranium continued. However, based on the over 600 comments received and other discussions with stakeholders, the preference of the public, stakeholders, and involved industry was not to wait for uses to be developed, but rather to begin conversion of the DUF6 promptly.
The Department's final PEIS was issued April 16, 1999, which identified the preferred alternative to begin conversion of the DUF6 inventory as soon as possible. A Record of Decision (ROD) selecting this alternative was issued in August 1999.
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As a parallel effort to DUF6 conversion, the Department is evaluating possible beneficial uses for the depleted uranium created from the DUF6 conversion effort. This evaluation is focusing on various applications of depleted uranium products for use as components of the high level waste and spent nuclear fuel repository packages; electromagnetic radiation shielding material; basic research such as uses of depleted uranium oxides for industrial chemical catalysts and as a thermoelectric material; and international collaboration to leverage foreign knowledge relative to DOE conversion of the DUF6 inventory and use of conversion plant products.
On-Site Waste Disposal at Paducah
Q10. Your testimony regarding waste remediation at Paducah described consideration for an on-site disposal facility for low-level, hazardous and TSCA [Toxic Substances Control Act] waste, and mixed waste. Is the State aware of this consideration and is consideration for hazardous and TSCA waste on-site disposal underway at any other DOE site?
A10. Yes, the State of Kentucky is aware that an on-site disposal facility is being considered as part of the strategy for accelerated cleanup. This proposed disposal facility is in the early planning stages, currently undergoing the Remedial Investigation/Feasibility Study phase. The Feasibility Study will consider various options for site-wide waste disposal, including the construction of an on-site disposal facility for remediation waste similar to the one already under construction at Oak Ridge, Tennessee. A comparable on-site disposal facility is being constructed at the Fernald, Ohio site, and another is in the preliminary planning stage at the Portsmouth Gaseous Diffusion Plant in Ohio. The State of Kentucky, Federal Facility Agreement (Tri-Party) Senior Managers and Project Managers Core Team, and local advisory boards are active participants in the planning phase. The final determination for disposal of waste generated from on-site cleanup will be made in a Record of Decision.
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ANSWERS TO POST-HEARING QUESTIONS
Responses by Dr. George H. Trilling, President, American Physical Scoeity
REPUBLICAN MEMBER QUESTIONS:
Imbalances in Federal R&D Funding
Q1. In your testimony you indicated your concerns about the relative imbalance between biomedical research and other areas of Federal R&D. Funding for NIH is scheduled to double. The planned doubling of the National Science Foundation budget is being delayed. In a zero-sum budget, where would you look for cuts to fund programs in non life science areas?
A1. Under current law the federal budget represents a unified spending plan. It does not distinguish between operating and capital expenditures, nor does it distinguish between operating costs and investments. From a policy perspective, however, such distinctions must be considered. They are central to science budgeting.
Scientific research is a rewarding intellectual activity; it is also the underpinning of medicine and national security. But from a budgetary perspective, it provides the federal government with one of the best investments available. Economists estimate that the annual return on the dollar ranges from 25 to 67 percent. And as Federal Reserve Director Alan Greenspan has noted, technology, which is the primary output of research, is the biggest driver of productivity gains.
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For high-tech business, ignoring R&D investment is a prescription for future bankruptcy. For the federal government, ignoring investment in long-term research is a prescription for anemic economic growth in the years to come. Budgeting is a matter of setting priorities. In my view, scientific research should rank near the top of the list.
I do not have the breadth of knowledge to know where cuts in the federal budget should be made—nor, indeed, even whether they should be made—to fund the long-term research activities upon which the fixture of our nation depends. But I do know, that by shortchanging science, we will shortchange the next generation of Americans.
Contributions of R&D to Economic Growth
Q2. In your testimony you said that ''Since the mid-1960s, during an era when our economy has become increasingly dependent on technology, our federal R&D investment has slowly dropped as a fraction of the Gross Domestic Product, so that today it is only half of what it was in 1965.'' And yet you also said, ''For much of the last decade, our nation has been fortunate to experience a period of unprecedented economic growth and improvement in quality of life.'' Is there a contradiction here? Please explain.
A2. The economic growth that our nation experienced during most of the last decade drew heavily on the fruits of scientific investments made more than twenty years ago. To illustrate the point, I am appending a number of Physics Success Stories (http://www.aip.org/success/) containing time lines that show how long it takes to turn scientific discovery into marketable products.
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The laser is but one of many examples. Its modern history dates to optical pumping theory, a subject widely explored half a century ago. Even after the first demonstration of the ruby laser in the 1950's, it took more than a decade to develop the first commercial lasers suitable for the consumer market. Lasers are now ubiquitous: in fiber-optics communications, supermarket scanners, CDs and DVDs, surgical tools and industrial production.
Almost everywhere we look today, we see the benefits of yesterday's science. In an economy that is increasingly dependent on technology as its stimulus for growth, I believe that R&D investments should be measured relative to the Gross Domestic Product. As I noted in my testimony, the federal portion, which represents about 90 percent of the investment in long-term research has been declining slowly for more than thirty years. Industry, with its focus measured in months rather than years, cannot make up the difference.
The time lag between discovery and the market accounts for the disparity in my two statements: that our economy has grown and that our investment in science has declined. It is the next generation that will not be so fortunate, if we do not reverse the decline.
Stature of Office of Science Within DOE
Q3. Please elaborate on the reasons why it is felt by some that the Office of Science and the critical role it plays in the physical science arena receives far too little attention from policy makers.
A3. According to the DOE organization chart, the Director of the Office of Science reports to an Under Secretary, often a lawyer, who has responsibilities for Environmental Restoration and Waste Management, in addition to Science and Energy Research. The ERWM budget is almost twice the size of the budget for Science, and its problems are far more contentious. Its needs are also often more immediate and command the attention of the Under Secretary more easily than do science issues.
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Within this administrative structure, the Office of Science could still receive proper consideration if it functioned as a quasi-independent agency, similar to the National Institutes of Health, which resides in the Department of Health and Human Services. Unfortunately, it does not operate in such a manner. Its Director does not have the decision-making and budgeting autonomy that the NIH Director has. The Director of the Office of Science functions just as the organization charts suggests: fourth level down, below the Secretary of Energy, the Deputy Secretary and one of the Department's two Under Secretaries.
Security leaks, chemical and radiation leaks and nuclear waste disposal and regulatory issues dominate the DOE agenda. Science, without a high-level advocate all too often barely appears on the Secretary's radar screen. This is a serious problem, because among federal agencies, DOE is responsible for almost half of the research in the physical sciences. By adding one Under Secretary to DOE's management structure, one who would have Science and Energy Research as the sole responsibility, the policies and budgets for these activities would receive the attention they deserve.
U.S. and International Fusion Programs
Q4. In terms of funding, how does the U.S. fusion program compare to the European and Japanese programs?
A4. It is somewhat difficult to compare the U.S., Japanese, and European fusion programs, because Europe and Japan do their accounting in somewhat different ways from the United States. In recent years the DOE Office of Fusion Energy Science attempted to estimate European and Japanese funding in U.S. terms and concluded that the European budget (including both funds provided by the European Commission and member states) is approximately 2.5 times the comparable U.S. budget. The Japanese budget (including personnel), which comprises funding at both Monbusho and JAERI, is approximately 1.5 times the comparable U.S. budget.
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The most recent data show that for FY 2000 approximately $1.5 billion was spent on magnetic fusion research worldwide, with the Europe accounting for roughly 50 percent, Japan 30 percent and the U.S. 15 percent. Small efforts also exist in Russia and other countries, amounting in all to less than 10 percent of the world effort.
Next Phase in Fusion Research
Q5. Presumably the next step towards magnetic fusion energy is a so-called ''burning plasma experiment'' where the fusion fuel is burning on it's own without the need for outside energy. Is fusion ready for this step? What are the scientific and energy virtues of such an experiment?
A5. It is widely agreed that fusion energy science is ready to take the step to a ''burning plasma experiment.'' Such a step will allow the study of plasmas in parameter regimes very close to those of a fusion power system. It will permit critical scientific questions in four areas to be addressed: plasma stability, thermal confinement, wave-particle interactions and plasma-material interactions.
Plasma Stability
What is the maximum plasma pressure achievable in the regime of a ''burning plasma?'' How much fusion power can therefore be produced for a given magnetic field strength, device cost and device size?
Thermal Confinement
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How does the turbulence in a hot plasma scale with system size—do the heat transport rates actually fall with increasing size as predicted theoretically and seen in many experiments? How large a system therefore is required for a fusion plasma to be self-sustaining?
Wave-Particle Interactions
How do fast alpha particles generated in the fusion process interact with a ''thermal plasma,'' and how can externally generated waves be used to sustain the current in a ''thermal plasma?'' Can these particles and waves therefore be used to sustain the plasma thermally and magnetically for use as a steady power source?
Plasma-Material Interactions
How can an extremely hot plasma, even if magnetically confined, be made to coexist with material surfaces? Therefore, how long can the surfaces that intercept the heat flow from a plasma last?
The answers to these scientific questions will provide important direct benefits for fusion energy. The answers will also provide increased insight into general plasma behavior, valuable for understanding systems as diverse as astrophysical accretion disks, the Earth's magnetosphere and plasma etching devices for semiconductors. If the ''burning plasma'' experiment provides capabilities for the very long pulses and high duty factors contained in the present ITER design, then additional energy benefits will accrue. These include the assessment of (1) large-scale super-conducting coils in a fusion environment; (2) the performance of materials in a high neutron fluence; (3) fusion blanket systems for the regeneration of tritium; (4) high-power, long-pulse systems for plasma heating and control; (5) long-pulse, high-duty-factor components for handling plasma heat and particle fluxes; and (6) safety management.
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Such a device, constituting an engineering test facility as well as a ''burning plasma'' experiment, would provide very valuable practical engineering and safety experience for future fusion systems. Such information is required before a demonstration power plant can be constructed. For the U.S. to take advantage of ''burning plasma'' experimental results, however, the ongoing university-based scientific programs must be strengthened. Only by combining the science and innovation in the ongoing program with results from a ''burning plasma'' experiment and engineering test facility will the U.S. be able to develop an attractive fusion demonstration power plant.
Fusion Research Funding
Q6. Advocates for increased spending on fusion energy science have said that funding for fusion has in recent years fared worse than virtually any other area of DOE science. Is this true? If so, in constant dollars, what is today's fusion budget compared to the fusion budget of 5 and 10 years ago? How does this compare to other areas of DOE science?
A6. The Office of Fusion Energy Sciences has seen its budget decline substantially in recent years. In current dollars, according to the American Association for the Advancement of Science, Fusion Energy Sciences' R&D program has suffered a decline of 26 percent from its peak funding in FY 1995 to present. Assuming a 3 percent deflator, the constant dollar decline is 38 percent.
The accompanying chart and table illustrate the performance of a variety of DOE R&D activities in current dollars from FY 1990 to FY 2002 (Request).(see footnote 16) The spike in the High-Energy Physics program in the early 1990's reflects the construction budget of the aborted Super Conducting Supercollider (SSC). The jump in the Basic Energy Sciences program at the end of the last decade reflects the start of Spallation Neutron Source (SNS) construction. If adjustments are made for the budgets of these two major projects, all programs, except for Biological and Environmental Research (the recipient of significant earmarks in recent years), are currently below their ten-year highs, even when measured in current dollars. Fusion, however, has fared worst of all. Overall, the health of DOE Science is quite poor and should be of great concern to policy makers.
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ANSWERS TO POST-HEARING QUESTIONS
Responses by Dr. Scott W. Tinker, Director, Bureau of Economic Geology, University of Texas at Austin
REPUBLICAN MEMBER QUESTIONS:
Technologies for Enhanced Oil and Gas Recovery
Q1. It has been said that the last drop of oil or gas will never be extracted. At some point the cost of production becomes greater than the selling price. This has already happened in a number of places, including Texas, as the Committee understands it. Please discuss how new technologies have extended well life in the past, and what, if any, technologies are on the horizon to further extend the life or more efficiently tap mature oil and gas wells.
A1. I agree with the statement ''the last drop of oil will never be extracted.'' This is true for several reasons. Some oil will always be left in the ground no matter what technologies we employ, because, save for mining every cubic meter of rock and chemically scrubbing it at the surface, it is physically impossible to extract all of the oil from rock. In terms of economics, a high price of oil and a stable forecast for the price of oil allow for advanced enhanced production technologies. If the price forecast is unstable, as it has been for the past two decades, then companies are not as willing to risk the cost of infrastructure required to employ secondary and tertiary recovery technologies, and oil is left in the ground. Finally, there is a long-term and very predictable trend of ''decarbonization'' in which U.S. energy consumption has evolved from solid energy (wood, coal) to liquid energy (oil) to gas energy (natural gas and hydrogen). Much oil will be left in the ground as the United States continues to evolve to a gas economy, away from an oil economy.
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In the past, well and field life have been extended by improved reservoir characterization, which involves integrating all data types to describe the reservoir better than it has been described before. The improved description allows for better reservoir management practices to be employed. Improved oil recovery programs used successfully in the past include, but are certainly not limited to, such things as the following:
Strategically targeted infill drilling, where new wells are drilled between existing wells to access bypassed oil reserves
Horizontal wells targeted for reservoir compartments that have been underproduced
New or redesigned waterfloods based on a better understanding of reservoir distribution
Chemical floods designed to alter the physical properties of the rock/oil system
CO injection designed to ''scrub'' oil from the rocks
3–D and 4–D seismic data acquisition designed to improve understanding of reservoir distribution
Seismic tomography (seismic data between wellbores) to improve detailed understanding of the reservoir distribution
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New wireline logging tools to measure rock properties more accurately
Logging tools that measure rock properties while drilling (MWD)
These and other technologies have extended well and field life and are called ''reserve growth.'' It is not that oil in the ground is growing—it most certainly is not—but rather that improved understanding, along with the ability to employ advanced technology economically, allows for recovery of reserves that were once thought to be unrecoverable under prevalent economic conditions. Reserve growth results from technology application and plays an extremely important role in total U.S. energy supply.
It is very important to understand that once a well is deemed to be producing less revenue (oil * price of oil) than it costs to operate, it will be shut in and then plugged with cement and abandoned. Once this happens, even if price goes up, it is uneconomic to redrill that well, so those reserves are lost forever. Thousands of wells are plugged and abandoned every year in the United States.
Future technologies to extend oil field life include many of those mentioned above, because many fields have not yet had these technologies applied. Other future technologies to extend oil field life are given below:
integrated research and technology in rock physics
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high-frequency sequence stratigraphy
three-dimensional (3–D), four-component 3–D (4C/3D), nine-component 3–D (9C/3D), and four-dimensional (4–D) time series seismic acquisition, processing, and analysis
3–D matrix and fracture modeling and simulation
advanced well technology including drilling and logging
In terms of natural gas, technologies that help describe, quantify, and predict fractures and cementation related to fractures are critical, including physical and numerical modeling, geomechanical modeling, and new direct-observation approaches such as cathodoluminescent scanning electron microscopy, will assist in extending gas reserves. Understanding the origin, mechanics, and geometry of salt, and the relationship of ductile salt and shale to deepwater sedimentation processes is vital. Necessary research and technology include air- and land-based remote sensing, four-component three-dimensional (4C/3D) seismic data acquisition and interpretation, and continued research into seismic inversion, seismic attributes, and amplitude versus offset (AVO) analysis.
Unconventional Natural Gas Resources
Q2. Can you elaborate on your discussion of unconventional gas supply? What are tight gas, shale gas and coalbed methane? How significant will they be in our future gas supply and how effectively can they be exploited?
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A2. To address the question of future significance of unconventional natural gas, I must look broadly. Before the Arab Oil Embargo in 1973, efficiency drove U.S. energy consumption trends from solids (wood and coal), to liquids (oil), to gas (natural gas, hydrogen gas, and nuclear). Since then, U.S. energy consumption trends were relatively ''frozen'' by economics, policy, and advanced technology. Efficiency of natural gas and hydrogen relative to oil and coal, as well as economic instability related to dependence upon oil and oil price fluctuation, will most likely drive future U.S. energy consumption trends toward natural gas and hydrogen, so that future U.S. consumption of energy will be satisfied more and more by some mix of natural gas and hydrogen, and less and less by oil and coal.
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Natural gas production in the United States was able to keep pace with consumption until the mid-1980's. Natural gas imports have risen from around 4% in the mid-1980's to more than 15% today. More than 3 Tcf of gas was imported in 2000, and that number is not anticipated to decrease. A large percentage of the U.S. imported pipeline natural gas comes from Canada. Liquefied natural gas (LNG), largely from Algeria and Trinidad, accounts for most of the remaining natural gas imports.
Forecasts for annual U.S. natural gas production indicate natural gas supply will grow from 21 Tcf in 2001 to around 27 Tcf by 2015. U.S. demand is projected to exceed 30 Tcf by 2015. Whereas most of the U.S. natural gas to date has come from associated, high-permeability, and shallow offshore sources, around 50% of the produced natural gas in 2015 is forecast to come from deepwater, subsalt, and unconventional gases.
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Unconventional gases are those that must be produced using ''unconventional technology.'' The three major unconventional gases today are tight gas, shale gas, and coalbed methane. Tight gas is natural gas produced from low-permeability rocks; shale gas is natural gas produced from shale; and coalbed methane is natural gas produced from coal beds. Each of these sources has it own production challenges. These unconventional gases account today for around 25% of U.S. natural gas production, and combined with future sources of unconventional gas, they will account for nearly half of U.S. natural gas production in the next 15 years.
Analysis of historical Federal and State exploration incentive programs and Federal and private investment in unconventional natural gas research indicates that the supply curves benefited greatly from natural gas research and the successful application of technology. The tight gas production curve shows a large positive increase in slope in 1985 following $165 million of combined investment in research by the U.S. Department of Energy (DOE) and Gas Research Institute (GRI). Studies were focused on advanced stimulation technology, the greater Green River Basin, and the Piceance Basin. Combined with Federal and State tight gas production incentives, and investments in exploration and production by private sector operators, these investments in research have produced 11 Tcf of incremental natural gas to date.
The shale gas production curve shows a large positive increase in slope also in 1985 following more than $90 million of investment in research by the DOE in the prior decade. Another surge in production from shale gas followed $6 million of additional investment by GRI beginning in 1990. Studies were focused on the Antrim shales and the Appalachian Basin shales. Combined with investments in exploration and production by private sector operators, these investments in research have produced more than 2 Tcf of incremental natural gas to date.
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The coalbed methane production curve shows a large positive increase in slope in the late 1980's following $82 million of combined investment in research by the DOE and GRI in the preceding decade. Combined with Federal and State production incentives, and investments in exploration and production by private sector operators, these investments in research have produced nearly 5 Tcf of incremental natural gas to date and show no evidence of slowing.
Future sources of ''unconventional'' natural gas will include onshore deep gas (>5,000 meters), subsalt gas, offshore deepwater gas, methane hydrates, and natural gases disseminated in low concentrations in saline aquifers. The successful exploitation of these natural gases will depend upon Federal exploration and drilling incentives, a well-designed and implemented Federal and private sector research partnership, and a stable price for natural gas.
Environmentally Sensitive Drilling Technologies
Q3. Would you please discuss how new drilling technologies may be used in environmentally sensitive areas to minimize damage in those areas?
A3. I am not an expert in this area but am a strong proponent of environmentally sensitive exploration and production. I refer the panel to a recent DOE CD titled Environmental Benefits of Advanced Oil and Gas Exploration and Production Technology.
The air will benefit by the increased proportion of natural gas and hydrogen over oil and coal in our energy consumption mix. Drilling sites on land are ever smaller, and offshore platform and transportation technologies have a remarkable safety and environmental record. Horizontal well technology is allowing production of oil and gas from fewer surface locations. Improved geophysical and petrophysical data are increasing the exploration success rates, thereby allowing for the drilling of fewer wells. Site remediation is becoming more and more advanced and common practice, and the ability to identify contamination problems using remote sensing tools such as airborne electromagnetism and radar will improve site cleanup.
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Value of Oil Research
Q4. Most people would say that the oil industry is a mature industry. Therefore, what is the value of oil research?
A4. The oil industry in the United States is mature, but it is a long-lived industry, so maturity will certainly include several more decades of healthy life. The natural gas industry in the United States is probably not yet mature. More importantly, there are places in the world where the oil and gas industry is in the early stages of the life cycle. I think we must think globally, because U.S. energy consumption is satisfied by global supply (57% oil imports, 15% natural gas imports, both rising). Research is important at all stages of the industry life cycle, perhaps even more so in a mature industry, where cost margins are critical and there is less margin for error.
Research is critical in a technical industry. The oil and gas industry is, and always will be, a technical one. The ''product line'' is very narrow. The market sets the price of oil and gas, so the guts of the business is essentially minimizing exploration and development risk and costs while maximizing exploration and development success. These are all technical issues. The only other major aspect of the business that is not technical is global access to land for exploration, and that is largely political.
The technologies that I described in Question 1 result from research, and they have all added economic value to the private sector in terms of improved exploration and production of oil and gas. They have also added value to Federal and State governments in terms of royalties and taxes collected. Finally, the importance of the availability of inexpensive oil and gas to the U.S. economy cannot be overstated. This issue is made very clear by recognizing that each of the four major recessions that the U.S. has faced in the past 30 years, including the recession we are in today, has been preceded by a spike in oil price and restriction in supply. Research leads to technology application that results in the inexpensive production of oil and gas. The U.S. economy and the U.S. people have been the beneficiaries of that effort.
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Oil Company Profits
Q5. Given rising prices of most fuels, the public assumption seems to be that big oil companies are raking in profits after having benefited from massive corporate welfare. Would you comment on oil companies' typical return on equity or other profitability measures?
A5. I do not wish to appear to beat up on the oil industry, but it has certainly not been a great investment through the years for the average investor. I have seen EIA data that report on the FRS data that compare return on investment (ROI) for 24 oil companies (now 14 owing to acquisitions and mergers) against the S&P Industrial companies. In the past three decades, the oil industry has only outperformed the S&P's in 8 years, and with the exception of 1996, and perhaps 2000 (I have not yet seen those data), all of these ''glory years'' happened before 1983. The average ROI for oil companies in the past 30 years was 10%. Unfortunately, the reputation of the early oil industry, both in terms of environmental impact and profitability, seems to be carried in the minds of the public today, and propagated by the media who report to that public.
In terms of corporate welfare, I am not sure of the total Federal investment in the oil industry, but I am reasonably comfortable saying that it will represent a fraction of a percentage point of the private investment. More important is the Federal return on investment through royalties and taxes. I am confident that returns far exceed the Federal investment, and ''we the people'' benefit from the returns both in terms of dollars and energy. Corporate welfare as applied to the oil industry seems to be a myth that has survived far too long.
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Prediction of Energy Reserves
Q6. Your testimony seemed to indicate that reserves are large enough to meet your projections. Do you know of the work of Dr. Hubbert concerning reserves? If you know of it, would you comment?
A6. I believe some combination of natural gas reserves, natural gas imports, and hydrogen gas will meet U.S. demand. These are the only known sources of energy that are sufficient to do so in the long-term. I know of the work of M. King Hubbert. Reserve growth, driven by advanced technology, economics, and policy, has shown Hubbert's time-domain curve analysis to be lacking in sufficient predictive detail. Hubbert's analysis assumes that we can know the quantity of resource available and that all of that resource will be used. However, historical data have shown that assessments of the total quantity of resource available change over time and the production cycle of a resource can be completed without depletion of all the resource. The production history of a resource is driven by the interaction of supply and demand and is therefore not fully predictable through mathematical models.
ANSWERS TO POST-HEARING QUESTIONS
Responses by Dr. James A. Lake, President, American Nuclear Society
REPUBLICAN MEMBER QUESTIONS:
These questions where submitted to the witness. No response was received at time of publication.
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Q1. What is your view of when an advanced boiling water reactor—plants whose designs are already certified by the Nuclear Regulatory Commission and are ''ready to be built''—will be ordered in the US since Japan has already built one of our own NRC certified designs?
Q2. What is your view on completing partly finished plants?
qQ3. In your opinion, what would be the effect of no new NERI projects for one year, as would take place if the FY 2002 budget stays as is?
Q3.1. If the University Research support is not increased, what effect do you believe this will have?
Q4. In your testimony you spoke of the need to improve safety at nuclear plants to ''satisfy the very demanding expectations of the American public.'' Could you please clarify that statement? It may leave the impression that U.S. nuclear plants are operated in an unsafe manner. What is the relative safety record of nuclear plants versus competing technologies, such as coal, natural gas and renewables.
Q5. It has been learned that the decline in students studying the physical sciences threatens our near-term labor pool for the DOE labs and other Federal science and technical programs. What is the case in the nuclear industry—both Federal and private sector?
ANSWERS TO POST-HEARING QUESTIONS
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Responses by Mr. Michael L. Marvin, President, Business Council for Sustainable Energy
REPUBLICAN MEMBER QUESTIONS:
These questions where submitted to the witness. No response was received at time of publication.
Q1. Your testimony has a comprehensive list of funding recommendations that is likely to exceed the amount that will be available. Please prioritize your recommendations. In other words, if Congress were somehow able to come up with half the additional funds you recommend, where should they be applied?
Q2. Do you have any recommendations about currently funded DOE programs that you think could be reduced or eliminated in order to provide more funds for those programs that you are advocating?
Q3. Your testimony seemed to imply that the U.S. electricity grid is fixed in capacity. Are you aware of the technologies that have been developed for load management of the grid that extend grid capacity for many years?
Appendix 2:
Additional Material for the Record
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PREPARED STATEMENT OF JOHN E. KANE
On behalf of the Nuclear Energy Institute, I would like to commend you, Mr. Chairman and the members of this subcommittee, for focusing your attention on the value of nuclear technology-related programs in the Energy Department for fiscal year 2002.
The Nuclear Energy Institute (NEI) coordinates public policy for the U.S. nuclear industry. We represent 270 members with a broad spectrum of interests, including every U.S. electric company that operates a nuclear power plant. NEI's membership also includes nuclear fuel cycle companies, suppliers, engineering and consulting firms, national research laboratories, manufacturers of radiopharmaceuticals, universities, labor unions and law firms.
Today, America's 103 nuclear power plants are the safest, and most efficient and reliable in the world. Nuclear energy is the largest source of emission-free electricity generation in the United States—producing two-thirds of all emission-free electricity. In 2000, the industry operated nuclear power plants at record levels for safety, efficiency and electricity production.
Status of U.S. Nuclear Energy: Power for Today and Tomorrow
The United States has the largest commercial nuclear power industry in the world. The 103 nuclear power reactors generate enough electricity to serve 67 million Americans, or the equivalent of the nuclear electricity production of France and Japan combined. The industry's safety record is unparalleled among the world's energy providers, and nuclear power plant efficiency and production have improved steadily during the last decade, and today are at record levels. In 2000, nuclear power plants in 31 states produced a record 754 billion kilowatt-hours of electricity.
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The increase in electricity generation at U.S. nuclear power plants during the 1990s was equivalent to adding twenty-three 1,000-megawatt power plants to our nation's electricity grid. That's enough to meet 30 percent of all new electricity demand during that time. This dramatic increase in electricity production by nuclear power plants is one the most successful energy efficiency programs of the last decade. Safe, outstanding performance at nuclear power plants, especially during the transition to competitive electricity markets, is one reason why a growing number of policymakers, financial analysts and the public are rediscovering the benefits of nuclear energy.
Outstanding nuclear plant performance is also a major reason why energy companies are extending the operating licenses at existing reactors for an additional 20 years. In 1997, some energy forecasters predicted that dozens of nuclear power plants would shut down prematurely and that many more would shut down at the end of their 40-year licenses, issued by the Nuclear Regulatory Commission. Today, many of those same analysts have reassessed the situation and predict only a handful of plants may close prior to the expiration of their licenses. They now recognize that the vast majority of plants will extend their operating licenses beyond the initial 40-year period.
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And, it is also why the industry is looking at innovative partnerships for building new nuclear power plants—based on advanced reactor technology—that will be necessary to meet the future demands of a power-hungry digital economy and improve our air quality. The Energy Information Administration, in its 2001 annual energy outlook, forecasts higher nuclear power production.
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''In 2020, nuclear generation is projected to be 34 percent higher than forecast last year, due to lower estimated costs for extending the life of current reactors and higher projected natural gas prices.''
Energy Information Administration
Energy Outlook, 2001
Even with this two-fold production and environmental advantage, nuclear power plants are the lowest cost electricity generators. In 2000, the average production cost of electricity generated by nuclear power plants was 1.83 cents per kilowatt-hour, making nuclear power the most affordable, expandable electricity option in the United States—cheaper than coal and natural gas electric plants.
Nuclear Energy's Long History of Protecting Our Air Quality
The environmental value of nuclear energy was recognized early by policymakers. In Shippingport, Pa., more than 50 years ago, nuclear energy's clean air value tipped the scales in favor of construction of the first demonstration nuclear power plant.
Pittsburgh began instituting strict smoke control programs as part of urban redevelopment plans beginning in the 1940s—well ahead of the rest of the nation. At the time, Duquesne Light Company was petitioning to build a coal-fired power plant on the Allegheny River. The company was encountering a great deal of resistance from area citizens, who were concerned about air pollution from the plant. The main reason that Duquesne Light Company chose to bid on a nuclear power plant was because it offered power without pollution.
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That benefit is being rediscovered today, and will be important in the future. Energy and the environment are increasingly linked both locally and globally.. Yet, nuclear energy's clean air benefits—its ability to avoid the emission of harmful air pollutants while producing vast amounts of electricity—is still undervalued.
In the process of generating electricity, nuclear plants produce no carbon dioxide, sulfur oxide, nitrogen oxides or particulates. Between 1970 and 1990, the increased use of nuclear energy alone eliminated more nitrogen oxide emissions than direct industry action taken to comply with the Clean Air Act. Nuclear energy, by avoiding additional emissions as electricity output grows, acts as a vital partner in Clean Air Act compliance.
To meet more stringent Clean Air Act requirements and effectively manage carbon risk in the future, the United States must increase its percentage of non-emitting sources of electricity—such as nuclear energy, solar, hydro and wind—above the current baseline of 30 percent. Of these electricity production technologies, nuclear energy generates two-thirds of all emission-free electricity today, and is the only expandable, large-scale electricity source that avoids emissions and can meet the baseload energy demands of a growing, modern economy.
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Industry Planning is Already Underway for New Nuclear Energy Plants
Although the average age of U.S. nuclear plants is only 18 years, we must begin planning now to enhance these services through increases in production capacity, improved efficiency, and license renewal. That's why the industry is working now to set the stage for construction of new nuclear plants, based on new technology that has more automatic safety systems and will be even more reliable and economical.
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The industry is working together to lay the groundwork for new plants. Three advanced reactor designs have already achieved certification by the Nuclear Regulatory Commission as a result of extensive, multi-year safety reviews. Of the three designs, one has been built and is setting world-class performance records in Japan, while others are being built in Korea and Taiwan.
Additionally, two more advanced designs soon may be reviewed by the NRC. One involves a review of changes to an existing approved design, increasing its production from 600 megawatts to 1,000 megawatts. The other is a new reactor design known as the Pebble Bed Modular Reactor that is being explored in a joint venture between U.S. and South African researchers.
The NRC's licensing process for new nuclear plants will ensure that safety, design and site-related issues are resolved before large capital investments are made. A new licensing process will allow the NRC to issue a single license to construct and operate a new nuclear plant.
Electric companies are working together to develop a plan that will establish a clear path for new nuclear plant orders. This future plan considers safety standards and objectives; NRC licensing requirements; policy and legislative implications; capital investment needs, public participation and changing business conditions.
Nuclear Energy: Balancing the Nation's Diverse Energy Needs
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Efficiency and conservation measures are important energy programs, but our nation cannot meet the demands of our growing population and high-tech economy without the construction of new power plants. As part of a diverse energy production portfolio, we need to increase the proportion of non-emitting baseload capacity through the construction of new emission-free power plants. This will maintain both a diverse energy supply portfolio and the price stability that nuclear energy offers. In order to do this, comprehensive national energy policy must:
Encourage investment in new power plant construction.
Continue regulatory modernization, including stable regulations for operating today's nuclear plants and for licensing of new nuclear plants.
Ensure sufficient funding for research, development and swift market application of new nuclear energy technologies is consistent with nuclear energy's future role in meeting U.S. energy needs.
Ensure nuclear energy receives the same treatment as other electricity generating technologies in the marketplace.
Educate consumers about the excellent safety record of nuclear energy and inject sound science and intellectual honesty into the national energy debate so that consumers may make informed energy choices.
Maintain U.S. leadership and infrastructure to train the next generation of scientists, engineers and technicians required to design, build and operate nuclear power plants.
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In a competitive marketplace, the industry has the primary responsibility for ensuring the viability of nuclear energy technology. However, the industry values the important role that can be played by the federal government in preparing the way for new nuclear power plants.
Nuclear Energy Research & Development
For the United States to remain the world leader in nuclear safety and technology, it is crucial that industry and government continue to invest in nuclear technology research and development.
U.S. electricity demand grew by 2.2 percent a year on average during the 1990s, and by 2.6 percent in 2000. Even if electricity demand grows by a modest 1.8 percent annually over the next two decades, the nation will need nearly 400,000 megawatts of new electric generating capacity, including replacement of retired capacity, according to the U.S. Energy Information Administration. This capacity is the equivalent of building about 40 new mid-size (500-megawatt) power plants—20,000 megawatts—every year for the next 20 years.
The industry is disappointed that DOE has requested less funding for its FY 2002 nuclear energy research and development programs than last year, and urges the committee to approve $433 million in FY 2002 for DOE's Office of Nuclear Energy, Science and Technology—twice the current budget.
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This funding level is consistent with recommendations in legislation recently introduced authorizing increases in nuclear energy R&D programs. Funding increases also have been suggested in recent years by the President's Committee of Advisors on Science and Technology (PCAST), the Secretary of Energy's Nuclear Energy Research Advisory Committee and DOE's Near-Term Deployment Group.
The Nuclear Energy Research Initiative (NERI)—which seeks to expand America's nuclear energy program in the 21st century—fills a vital need identified in a 1997 PCAST report. PCAST recommended an R&D program to address potential barriers to the long-term use of nuclear energy and to maintain America's nuclear science and technology leadership. The President's science advisors also recommended another R&D initiative—the Nuclear Energy Plant Optimization (NEPO) program—to generate more low-cost energy from America's nuclear power plants.
A blue ribbon panel of seven experts appointed by the Nuclear Energy Research Advisory Committee has offered recommendations on how DOE can support university nuclear engineering programs, help to maintain university research and training reactors and promote collaboration between universities and DOE laboratories. DOE's Near-Term Deployment Group is developing recommendations on agency actions needed in FY 2002 and FY 2003 to facilitate the NRC review of early site permit applications for new nuclear power plants.
Also, authorizing legislation introduced this year in the U.S. Senate and House of Representatives would expand funding in these areas as well as provide incentives to increase electricity generation at nuclear power plants.
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The nuclear energy industry urges the committee to approve $60 million in FY 2002 for the NERI program, which is paving the way for the expanded use of nuclear energy and maintaining U.S. leadership in nuclear plant technology and safety. In FY 2001, NERI received $22.5 million—less than one-half of the $50 million annual appropriation recommended by PCAST in its 1997 report. Beginning in FY 2002, PCAST recommended NERI funding be increased to $100 million a year. Although current funding has been sufficient to continue projects initiated in previous fiscal years, it leaves little funding for new R&D projects.
The nuclear energy industry also encourages the committee to allocate $15 million for the NEPO program, which improves efficiency and, reliability while maintaining outstanding safety at U.S. nuclear power plants. This public-private partnership is helping to facilitate America's economic growth and prosperity—and improving our nation's air quality. NEPO received $5 million in FY 2000 and FY 2001—half the annual funding recommended by PCAST.
DOE has launched a project to prepare a technology roadmap for developing and deploying ''next generation'' nuclear plants, called Generation IV. As a part of this effort, DOE is preparing a report on near-term deployment activities needed to have new nuclear plants in operation by 2010 or sooner, while longer term technologies are being developed.
DOE is coordinating its efforts with NEI's Executive Task Force on New Nuclear Plants. In the interim, DOE is preparing recommendations on activities requiring immediate attention and is expected to released them in the near future. To support completion of the DOE technology roadmapping effort and to begin implementation of these near term recommendations, NEI urges the Committee to approve $42 million in FY 2002 for the Nuclear Energy Technology Development program.
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The industry also requests $34.2 million for DOE's University Support Program, which enhances vital research and educational programs in nuclear science at the nation's colleges and universities. The number of college programs in nuclear engineering and science is dwindling. To maintain our nation's position as the international leader in nuclear technology, it is vital that this trend be reversed and that our nation's best and brightest technical minds be attracted to the nuclear technologies. We urge Congress to adequately fund student recruitment, teaching facilities, fuel and other reactor equipment, and instructors to educate a new generation of American nuclear specialists.
Finally, the industry supports the new initiatives included in authorization legislation introduced this year. One such initiative is the Production Incentive Programs, which the industry believes should be funded at $15 million.
Other programs supported by the industry include:
Nuclear Nonproliferation: The industry supports the disposal of excess weapons grade nuclear materials through the use of mixed-oxide fuel in reactors in the United States and Russia.
Low-Dose Radiation Research: The industry strongly supports continued funding for the DOE's low-dose radiation research program. This program will produce a better understanding of low-dose radiation effects to ensure that public and private resources are applied in a manner that protects public health and safety without imposing unacceptable risks or unreasonable costs on society.
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Nuclear Research Facilities: The industry is concerned with the declining number of nuclear research facilities. We urge the committee to request that DOE provide it with a long-term plan for using existing nuclear research facilities as well as for development of new research facilities.
Uranium Facility Decontamination and Decommissioning: The industry fully supports cleanup of the gaseous diffusion plants at Paducah, Ky., Portsmouth, Ohio; and Oak Ridge, Tenn. Each year, commercial nuclear power plants contribute more than $150 million to the government-managed uranium enrichment plant Decontamination and Decommissioning Fund. NEI urges the committee to ensure that these monies are spent on decontamination and decommissioning activities at these facilities. Other important environmental, safety and/or health activities at these facilities should be paid for out of the general fund.
International Nuclear Safety Program & Nuclear Energy Agency: NEI supports the funding requested for the international nuclear safety programs of both the DOE and NRC. They are programs aimed at the safe commercial use of nuclear energy.
Medical Isotopes: The nuclear industry supports the administration's program for the production of medical and research isotopes. We support continued funding for the Advanced Nuclear Medicine Initiative to fill the gap where other funding sources, such as the National Institutes of Health, have been either unable or unwilling to provide support for radioisotope production.
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PREPARED STATEMENT OF MARVIN S. FERTEL
Senior Vice President, Business Operations, Nuclear Energy Institute, U.S. House of Representatives, Appropriations Subcommittee for Interior and Related Agencies
Summary. The Administration has requested appropriations of $75.5 million in FY 2002 for the Energy Information Administration (EIA), an independent agency within the U.S. Department of Energy. This request includes $8.5 million for EIA's Office of Integrated Analysis and Forecasting. The Nuclear Energy Institute (NEI)(see footnote 17) believes that EIA's forecasting, at least as it pertains to nuclear energy, is based on flawed modeling and methodology and erroneous assumptions, and urges Congress to require, as a condition of providing the appropriations requested, independent peer review of EIA's forecasting.
Need for Accurate Analysis and Forecasting. There is increasing evidence that the United States faces serious energy supply and delivery problems. Even assuming successful conservation and efficiency programs, U.S. dependence on imported oil is at a historic high. Natural gas prices across the country have increased dramatically. Several regions of the country face significant shortages of electric generating capacity. The transportation infrastructure for delivery of oil and natural gas requires significant expansion. The transmission infrastructure necessary to move electricity within and between states and regions is seriously overloaded, placing reliability at risk.
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The imminent threat to reliable supplies of energy at stable, predictable prices is leading to new interest in national energy policy. The appropriate authorizing committees in both Senate and House are holding hearings on U.S. energy policy, and the Bush Administration intends to offer its proposals shortly. At times like these, policy-makers in the Administration and the Congress must have access to the most accurate analysis and forecasting possible. In the case of nuclear energy, the EIA's forecasts are inaccurate, appear to be based on hypothetical speculation, and at least to date do not proceed from well-informed analysis of the current status of nuclear energy in the United States.
EIA's Forecast for Nuclear Energy. EIA's Office of Integrated Analysis and Forecasting publishes an annual forecast of U.S. energy supply and demand called the Annual Energy Outlook (AEO). AEO 2001 provides projections of energy supply and demand in all consuming sectors and for all fuels through 2020. AEO 2001 forecasts that U.S. nuclear generating capability in 2020 will be 71,600 megawatts (MW), a 25 percent reduction from today's 97,400 MW.
This EIA projection is achieved in three ways: EIA assumes that (1) some nuclear power plants will be closed before the end of their initial 40-year operating licenses because they are no longer economical to operate; (2) others will not renew their licenses for an additional 20 years because they are no longer economical to operate; and (3) no new nuclear power plants are built in the United States because they are too costly to compete with other forms of generation.
The Nuclear Energy Industry Assessment. NEI believes that this outlook is incorrect and does not proceed from a factual understanding of the current status of nuclear energy in the United States.
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U.S. nuclear power plants are well positioned for a competitive electricity market. The cost of operations, maintenance and fuel has been declining for more than a decade, and additional efficiencies can still be gained. U.S. nuclear power plants are not subject to the volatility in fuel prices that has caused the dramatic increase in electricity prices in many parts of the nation. And nuclear power plants are not affected by the escalating clean air compliance requirements that will increase the cost of electricity from coal-fired and gas-fired generating plants in the years ahead. In fact, non-emitting technology like nuclear energy will become even more essential for providing electricity in areas that aren't in compliance with Clean Air Act standards.
The steady reduction in the cost of nuclear electricity during the 1990s is partly explained by the significant increase in plant reliability, and in the amount of electricity plants produce. In 2000, U.S. nuclear plants produced approximately 755 billion kilowatt-hours (the second record year in a row), and operated at an average capacity factor of 89.6 percent, also a record.
On average, a U.S. nuclear power plant produces electricity for 2.0–2.5 cents per kilowatt-hour, with the cost decreasing over the past few years. This includes all costs such as fuel, operations, maintenance, ongoing capital requirements, property tax, federal and state taxes, funds for decommissioning the plant at the end of its useful life, and the one-mill-per-kilowatt-hour fee for used fuel management paid to the federal government. This is the so-called ''going forward'' cost; it does not include recovery of the original capital investment, but is the sole determinant of whether or not the unit will be dispatched.
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The 2.0–2.5 cent electricity from the average nuclear unit is significantly lower than the cost of electricity from new gas-fired combined cycle power plants. At expected future gas prices to generating plants ($4–5 per million Btu), NEI's analysis indicates that a new gas-fired plant will produce electricity for between 4.5 cents and 5.2 cents per kilowatt-hour. Given that new gas-fired electricity is twice as costly as existing nuclear electricity, no rational economic model would shut down a nuclear unit and replace it with gas-fired capacity, as the EIA's forecasts suggest, unless that model were being supplied with incorrect economic data and assumptions. (Note: existing nuclear units are also more economical than gas-fired plants supplied with fuel at the low natural gas prices prevailing several years ago. A gas-fired plant using $2.50-per-million-Btu gas would produce electricity for 3.0–3.5 cents per kilowatt-hour, still above the 2.0–2.5 cents range for electricity from an existing nuclear unit.)
As for license renewal, five nuclear units have already renewed their operating licenses to run for 20 years beyond their initial 40-year license. Five other units have filed their renewal applications, which are now being reviewed by the Nuclear Regulatory Commission (NRC). Thirty-three other units have formally notified the NRC that they intend to renew their licenses, and NRC officials have indicated publicly that the agency has received informal notification that 85 of the 103 nuclear units in the United States intend to renew their licenses. The industry expects that nearly all 103 U.S. nuclear units will extend their licenses because operating these plants for an additional 20 years represents the lowest-cost, most reliable source of electricity available from any source.
The Differences Between the EIA and Industry Assessments. Given the significant differences between the EIA's forecast for nuclear energy and the future suggested by today's business realities, NEI has analyzed the basis for the agency's forecasts in order to understand the assumptions and methodology behind them. NEI completed a detailed assessment of the 1999 edition of the Annual Energy Outlook, for example, and discovered a number of mistakes, suspect assumptions, and the use of cost and performance data that were several years out of date. NEI staff briefed EIA staff fully on the results of our assessment
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In general terms, for the 103 existing nuclear units, the EIA obtains its forecasting results by assuming an ''aging effect''—i.e., that the plants will cost more to operate as they age, and operate less reliably. The EIA forecast burdens the nuclear units with increasingly, and unrealistically, high operating and capital costs.
There is no factual basis for these assumptions. NEI has evaluated the historical data for the 103 nuclear units now operating, which include a number of units well into the second half of their original 40-year licenses. NEI sees: (1) no statistically significant evidence that operating costs increase as plants age (in fact, for the fleet as a whole, they are declining); (2) no evidence that capital costs will or can increase to levels so high that the plant becomes uneconomic; and (3) no evidence that capacity factors deteriorate as plants age (in fact, for the fleet as a whole, capacity factors are increasing).
Consider one specific example: the three unit Oconee station (2,538 MW) owned by Duke Power Co., which received approval from NRC last year to operate for an additional 20 years beyond the original 40-year license. From 1999 through 2006, Duke Power will invest close to $1 billion in the Oconee station—approximately $450 million in new steam generators for all three units, and another $400 million in one-time improvements and replacements designed (1) to assure another 20 years of operating life, (2) to maintain plant reliability during that period, and (3) reduce operating and maintenance costs in the future. Even with this significant investment, the Oconee station remains easily competitive with other sources of electricity, and significantly less costly than building new generating capacity of any kind. The Oconee case study is broadly representative of nuclear units across the nation.
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The Outlook for New Nuclear Units. The 2001 Annual Energy Outlook assumes no new nuclear power plants will be built before 2020 in the United States. As with the EIA outlook for the existing nuclear units, the nuclear energy industry does not believe this forecast reflects what is really happening in the marketplace.
The NEMS (National Energy Modeling System) model reaches this conclusion because EIA analysts have assigned an unrealistically high, and unreasonably inflated, capital cost to new nuclear generating capacity. The EIA assumes new nuclear plants would have an overnight capital cost of $2,188 per kilowatt of capacity. The nuclear energy industry estimates an overnight capital cost of $1,450–1,500 per kilowatt for the AP–600 advanced light water reactor. Unlike the EIA estimate, which is purely theoretical and lacks any substantive factual basis, the industry estimate is a robust, well-founded cost estimate based on over $400 million invested in detailed design and testing for the AP–600 and other ALWRs. Although the industry is taking actions that will reduce the capital cost of new nuclear generating capacity further, the current cost estimates for the AP–600, other advanced light water reactors, and new high temperature gas reactors, coupled with the low cost for operating nuclear plants, will make new nuclear capacity competitive over the period from now through 2020 and beyond.
Conclusion. Given the potential importance attached to the Energy Information Administration's forecasts, NEI believes it is important that these forecasts have a sound factual and analytical basis. At a minimum, NEI urges that any additional appropriations for EIA's forecasting function should require (1) rigorous peer review of all EIA's nuclear-related assumptions and methodologies, and (2) peer-reviewed development of new economic models better able to simulate the dynamics of competitive electricity markets, the performance of existing nuclear power plants, and the timing for construction of new nuclear units.
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Introduction
The role of science and technology in maintaining the well being of our nation is growing and changing rapidly. Because of the extent and speed of these changes, it is essential to reexamine the ways in which support for scientific research is organized within the U.S. government. The advent of a new Administration and Congress provides an opportunity to address emerging problems in ways that may not be possible at other times.
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We, the authors of this discussion paper, are especially concerned about the future of the scientific research supported by the Department of Energy. The DOE is the federal government's third largest sponsor of basic research, and the largest sponsor of research in the physical sciences.
The DOE Office of Science oversees outstanding national laboratories whose capabilities for solving complex interdisciplinary problems are not easily matched elsewhere. It also builds and operates large-scale user facilities of importance to all areas of science. In large part, it has been enormously successful in these efforts. Thus, the vitality of the U.S. scientific enterprise is strongly dependent upon DOE support.
For about a decade, however, DOE Science budgets have been declining in purchasing power, and have fared significantly less well than those of other agencies. These difficulties have been exacerbated by weakness in overall federal support for the physical sciences (as compared to biology and medicine) and by the perception of management and security problems throughout the Department.
The decline in funding for DOE Science implies that our nation has seriously under-invested in the research that it will need to sustain its health, security, and economic prosperity in the 21st Century.
We believe that this situation has reached crisis proportions, and that future U.S. leadership in many essential areas of science is in jeopardy. Our purpose in these remarks is to suggest actions to strengthen DOE Science that might be taken jointly by the new Administration and Congress.
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We have considered alternatives ranging from keeping the status quo to major rearrangements of the existing science agencies. Of these various alternatives, we believe that two kinds of solutions to these problems—depending upon circumstances—may be feasible and effective.
The Problems of Science at DOE
The DOE Science budget has stagnated and declined, in part, because the DOE roles in civilian basic research and in the support of university faculty and students are neither adequately understood in Washington nor appreciated by the public at large.
DOE as a whole has four main missions: national security, environmental restoration, science and technology, and energy. Its role in national security is to maintain our nuclear deterrent. The environmental role is to correct problems left behind under the pressures of the Cold War. The mission in science and technology uncovers new knowledge and propels the growth of our economy. The energy mission is to secure some degree of independence from fluctuations in the fossil fuel supply, and to develop environmentally sound energy technologies for sustainable development. In principle, the four missions can support each other.
It is inevitable in a complex national-security program as large as that of the DOE that there will be problems from time to time. It is also inevitable that new environmental problems will be uncovered. These problems in the DOE weapons and environmental programs have given the overall agency a negative image that, in practice, has proved damaging to all of DOE, including its missions in science and energy. In particular, DOE Science has not received the support that it badly needs.
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The question of leadership is an essential part of the problem. The Director of the DOE Office of Science has responsibilities comparable to those of the director of the NSF and not very different from those of the directors of NIH and NASA; but he or she does not have comparable authority or visibility. Without that authority, it has become very difficult for DOE Science to make its case for necessary long-term investments in research.
In considering responses to this situation, we have agreed upon the following guidelines:
The DOE missions in national security, environmental clean-up, science and energy are each important in their own ways. Any solution to present problems within DOE should tailor management, facilities, and budgets so as to optimize the performance of each of these missions rather than applying ''one-size'' solutions to all.
Science and technology in the United States has prospered greatly from diversity of funding sources and modes of support. For example, the fact that the NSF differs from the mission agencies in both purpose and style has made it possible for U.S. scientists to take risks and tackle challenging and important problems. Similarly, the DOE has developed great expertise in building and operating large facilities, and in overseeing important interdisciplinary national laboratories. That expertise has been extremely valuable throughout all of the U.S. scientific and technological community—in government, industry, and universities. The diversity of funding sources should be maintained.
The primary responsibility of the DOE's science and energy programs should be to provide the new knowledge needed for ensuring the scientific and technological base of our nation's economic prosperity in the 21st Century. The mode in which those programs assume this responsibility should take advantage of the DOE's experience with large facilities and multi-disciplinary research efforts.
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Alternative Strategies
Starting from these guidelines, we propose two alternative kinds of solutions, without indicating a preference for one over the other. Alternative A is a restructuring of the DOE based on the assumption that the Department will remain essentially intact in the next Administration. Alternative B is based on the assumption that it may become feasible or inevitable that some or all of the present responsibilities of DOE be shifted to other agencies. After discussing both of these alternatives, we mention, for the sake of completeness, two other strategies that we believe are highly undesirable.
Alternative A
Enhance the leadership and visibility of DOE science and energy by revising the management structure within the Department.
One way to accomplish this goal would be to elevate the Director of the DOE Office of Science to the rank of Under Secretary for Science and Energy, with additional responsibilities as Science Adviser to the Secretary. This scheme would improve the visibility and influence of science in DOE, and would place the person in charge of science at a level above the large number of staff offices that are inevitable in such a complex agency. A primary objective would be to have a widely respected and influential scientist in a position where he or she can be an effective leader and spokesperson for DOE science and energy.
A variant of this scheme, which goes part of the way toward our more ambitious Alternative B described below, would be to remove some administrative and regulatory responsibilities from DOE and convert it into a subcabinet agency. The director of this agency, like the directors of NSF and NASA, would be chosen for scientific and technical leadership, and would have clear responsibility for guiding the agency in directions consistent with long-term national goals.
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Alternative B
Combine DOE science and energy programs with NIST, NOAA, and possibly USGS to form the major part of a new 21st Century Department of Commerce.
The idea here is to create a ''National Institutes of Science and Advanced Technology'' (NISAT) within a cabinet-level department in analogy to the National Institutes of Health within HHS. An alternative would be to combine these same entities; that is, ''NISAT,'' into an independent sub-cabinet agency analogous to NASA in structure and governmental status.
The major feature of Alternative B is that it would simultaneously reorganize both DOE and DOC in a way that would be consistent with the scientific and technological challenges of the next decades. The new agency would be a visible recognition by the US government that long-term research drives economic progress. Its primary mission would be the initiation and management of large-scale and/or multidisciplinary research.
While many of the specific responsibilities of this agency would be closely related to national needs, its style of operation would reflect our modern understanding of the essential connections between applications and fundamental new knowledge; thus this agency would support both basic and applied research. The existence of such an agency might provide a sharpened focus on the needs of the physical sciences in federal budgeting processes. As before, scientific leadership at the highest level would be necessary for the success of this new agency.
Finally, we mention two alternatives that have been suggested by others that we consider to be highly UNDESIRABLE.
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Move DOE Science into NSF
Merging DOE Science and the NSF would double the size and complexity of the NSF. There would be a serious mismatch between the science and management activities, and it might be difficult to establish a culture that would maintain the strength of the national laboratories and that would allow both single-investigator ''small science'' and multidisciplinary, multi-investigator ''big science'' to thrive.
Whether this merger could happen without degrading what works very well in DOE or NSF is highly questionable. Diversity of funding sources for research would be substantially reduced. Many scientific fields would be limited to one possible federal funding source, and innovative scientists whose research projects did not fit into NSF programs would have no other sponsors to whom to appeal.
Most importantly, the NSF is the only federal agency whose sole responsibility is the support of science, unconstrained by specific missions. In its fifty years of existence, the NSF has served this nation extraordinarily well. We believe that it is essential to maintain the unique quality of this agency.
Create a Department of Science, including all Federal R&D programs.
The creation of a federal Department of Science has been proposed several times in recent years as a means for concentrating federally funded research and development and making it easier to track and manage. Presumably, a Department of Science would be a civilian agency, perhaps including the 6.1, 6.2. and 6.3 programs of the Department of Defense. This consolidation would have the very major disadvantage of completely eliminating the diversity of funding sources as well as destroying the unique nature of the NSF. Other serious disadvantages have been discussed in previous analyses of this proposal.
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(Footnote 16 return)
See pp. 327–329 in Appendix 2: Additional Material for the Record.
(Footnote 17 return)
The Nuclear Energy Institute (NEI) is the organization responsible for establishing nuclear industry policy on matters affecting the nuclear energy industry. NEI's members include all companies licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect-engineering firms, fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry.