Hearing of the Energy and Water Dvlpmnt. Subcom. of the House Approp. Comm.-Fiscal Year 2005 DOE Budget Request

March 11, 2004 Thursday

HEADLINE: HEARING OF THE ENERGY AND WATER DEVELOPMENT SUBCOMMITTEE OF THE HOUSE APPROPRIATIONS COMMITTEE

SUBJECT: FISCAL YEAR 2005 DEPARTMENT OF ENERGY BUDGET REQUEST

CHAIRED BY: REPRESENTATIVE DAVID L. HOBSON (R-OH)

WITNESS: SPENCER ABRAHAM, SECRETARY, DEPARTMENT OF ENERGY

LOCATION: 2362 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

REP. DAVID L. HOBSON (R-OH): Mr. Visclosky is on his way. Why don't we do this? Why don't I start with my opening statement and we'll get that out of the way and by that time I think he'll probably will be here. The committee will come to order.

This subcommittee meets this morning to hear testimony from the Secretary of Energy on the budget request of the Department of Energy for Fiscal Year 2005. I welcome the Secretary before the subcommittee and, without objection, your prepared statement will be entered into the hearing record. During my first year as chairman of this subcommittee, I made it a point to visit a number of DOE sites around the country. My very first trip was to Yucca Mountain and those who have been there will recognize the picture now hanging on the walls of our hearing room.

Along with some of my colleagues, I also visited a number of DOE labs, plants and current sites in the U.S. And I've even inspected some of the nonproliferation assistance that DOE provides to Russia to help secure its nuclear materials. I came away from those visits both impressed and troubled. I am impressed frankly by the breadth of DOE's missions from cutting edge science and energy research to environmental remediation to stewardship of our nuclear stockpile. I'm also impressed by the quality of many of the people working at the DOE labs, plants and sites. I think they're doing their best to make this country a safer place today and a better place for tomorrow.

(Hearing room audio break.)

I find it really hard to conceive of any circumstances under which this country would even use a nuclear weapon again whether or not the weapon is low-yield, whether or not it is a more robust version of an existing weapon and whether or not it would be used against a hard and buried target. Despite those constraints, DOE seems to think they should spend another half a billion dollars of taxpayers' dollars to explore and test the concept of Robust Nuclear Earth Penetrator.

This kind of, quote, "Money is no object," unquote thinking might have been the norm for the nuclear weapons complex during the Cold War years, but I think it's completely out of touch with the political and fiscal realities that we face today. Unfortunately, the Department of Defense contributes to this mentality by requiring DOE to maintain a stockpile of nuclear weapons that is essentially unchanged from what we had at the end of the Cold War. And I'm really frustrated about this, but until we receive a revised stockpile plan from DOD that shows real change in the size and the composition of the stockpile, and until DOE re-calibrates its planning, workforce facilities and budget to support the smaller stockpile I do not believe that we should spend our limited budget resources on expansion of NNSA's nuclear weapons activities.

The other aspect of DOE's budget request that troubles me is the proposal for the Yucca Mountain Repository system. The total request for Yucca Mountain appears inadequate, considering where we are in the effort to get this repository licensed, designed, built and operational by the year 2010. However, DOE proposes to reclassify 749 million of mandatory fees, paid into the nuclear waste fund, so this amount can offset discretionary spending on the program.

Frankly, it isn't a bad proposal. But it's a very risky proposal if the proposal is not passed by both the House and the Senate and signed into law by the president then the budget submitted by the administration for Yucca Mountain will be short by nearly three- quarters of a billion dollars. If the proposed legislation is not enacted this subcommittee will not be able to make up that shortfall by borrowing from other accounts in our bill.

I think this strikes me as a dangerous gamble to take with a program of vital importance to the nation and I intend to explore this further in today's hearing. I might also refer some to an article that's in the paper with some comments that Senator Domenici has said about this proposal. At last year's hearing, I announced that one of my priority issues we needed to address was the set of DOE lab contracts that have never been competed at the initial award back-since in the '40s. We haven't done anything about it.

I am pleased to report that that situation has changed and our Fiscal Year 2004 conference report included bill language requiring the secretary to compete the five contracts that have not been competed in the last 50 years. Contract competition continues to be a priority issue for this subcommittee. And I look forward to hearing from you, Mr. Secretary, about the department's specific plans to compete these five laboratory contracts.

For the first round of questions for the secretary when I finish, I'm going to ask members to limit their questions of five minutes and we're going to use the clock. Then we'll do a second round if there is interest and if the secretary can hold up. I understand he's got-he's walking pneumonia today. I think he got that on purpose because he knew he was coming here today. But I think there are better ways to avoid us than that, to be frank with you. Pete is not here. There's a couple of things going on in the Caucus. But I'm sure he will be here this morning.

So we're going to let you give your comments, Mr. Secretary, I must say that I appreciate your taking my phone calls when nobody else was working. The secretary is always working and he is always there. Everybody else has me on their speed dial. He doesn't, and they can avoid me but he, he always takes my call. I appreciate that very much. So we're going to let you do that and then we go back and let members as they arrive ask some questions. We're going to have a dialogue, sir
REP. HOBSON: Mr. Clyburn.
MR. SPENCER ABRAHAM: First, thank you, Mr. Chairman. I would say that we look forward to this discussion today. I appreciate the chance to be here to discuss our budget proposal for '05. I'll make a brief opening statement because you have a lengthy one which you've admitted into the record. I suspect questions will be preferable to hearing a lot more about this budget than an opening statement. I just would make a couple of quick comments.

This budget of $24.3 billion represents nearly a 4 percent increase over last year's submission and it's the largest in the history of the department. And those figures, I think, reflect the president's confidence in the work which we do and this department's work which, as you mentioned in your opening statement, is very complicated and very diverse. And this budget builds on a number of those successes which we've achieved over the last three years. I am very proud of what we have accomplished in terms of working to provide for the nation's national energy and economic security.

I am also very proud-and you acknowledged this in your statement-of the outstanding people who work with the Department of Energy throughout this country.

Their dedication and hard work make the success that we achieve possible. And I think a testament to that dedication and hard work is a recent announcement by the Office of Management and Budget that the Department of Energy ranked first among Cabinet level agencies in the implementation of the president's management agenda.

OMB, as I think you all know, issued a score card that evaluates agency performances in a variety of areas such as financial management and it recognized our department as the Cabinet level agency, quote, "leading the pack with regard to management improvement." As you might imagine, all of us are very proud of that recognition as well and, as I said, is a testament of the hard work of people who, throughout this country, are part of the department.

Since the written statement covers really the entire range of issues, I'll just mention a couple of areas of focus that I think are specially important. First, our 2005 budget fully funds our security and safeguards efforts. It fully addresses the requirements identified in the revised Design Basis Threat, the post-9/11 analysis of potential threats against which we must protect departmental sites and materials across the country. The world changed on 9/11, as we all know, and a number of the actions which, I think, have been taken at the Department of Energy since then recognize this basic fact.

For instance, we have increased the budget for security and safeguards by about 35 percent since Fiscal Year 2002. We have made significant managerial changes in the security leadership at our facilities and we currently have a high level review of security procedures being conducted by some of the nation's top military and civilian experts.

Our budget request also supports the department's various efforts to develop cutting edge technologies to address our nation's energy challenges. In particular, we are strongly pursuing 21st century hydrogen fuel technologies to transform the way Americans drive and to reduce our nation's growing dependence on foreign sources of energy. As you'll recall, President Bush unveiled his ambitious hydrogen vision in last year's State of the Union address and since that announcement, we've engaged partners in the energy as well as the automotive industries at the state and local government levels as well in this effort.

We've moved forward with critical hydrogen fuel cell research and development and, perhaps most importantly, at this stage, we have brought together all of the major nations interested in hydrogen to work in a formal partnership on hydrogen issues. By working together in these early stages, we think this partnership will lay the necessary initial ground work to facilitate a worldwide transition to hydrogen. But that question, this work, I think, will speed the coming of the hydrogen revolution by many years, if not decades.

Another promising technology we're pursuing centers on fusion energy, the physical process that powers the sun. Unlocking the mysteries of fusion to fundamentally transform the way we produce electricity. Last year, the president committed the United States either the International Thermonuclear Experimental Reactor project, the global fusion research effort really and we are now working with our international partners on selecting a site for this critical $5 billion scientific experiment. Combined with our own independent domestic program, we believe it is possible to bring about the advent of fusion as a major energy source for the second half of the 21st century.

Mr. Chairman, the budget also requests the highest funding level for environmental management in the history of that program, consistent with our department's accelerated cleanup plan of action. The department's accelerated cleanup strategy has led to the creation of two new organizations outside of environmental management, the Office of Legacy Management and the Office of Future Liabilities. Transferring responsibilities to these new offices is enabling the environmental management program to complete its current cleanup scope and it allows other departmental programs to focus on their primary missions as well.

The chairman mentioned the Yucca Mountain project in his opening comments and I wish to just reinforce that, in our judgment, one of the most significant and long-standing commitments addressed in this budget is funding to establish a permanent nuclear waste repository at Yucca Mountain. This request enables us to finalize work that we're already doing, moving forward on a timetable which we have laid out. We plan to submit a license application to the Nuclear Regulatory Commission by December of this year.

Mr. Chairman, every one of the department's programs and activities is backed up by the world-class scientific capabilities of our national laboratories. In fact, I like to say that when Congress created the Department of Energy, it should have named it the Department of Energy and Science. To ensure that our ability to carry out existing programs as well as new ones is on track, in November of last year, we outlined a 20-year roadmap for future scientific facilities. I think this plan is crucial to our efforts to extend the frontiers of science, to pursue opportunities of enormous importance and to maintain U.S. science primacy in the world. This budget reflects the first steps in that direction as we begin the funding of some of the highest priority projects on that new facilities list.

I'd also like to just mention our ongoing nonproliferation work with Russia which you had the opportunity to recently inspect on a first-hand basis. We have been working very closely with our counterparts there to secure dangerous nuclear materials and I think we've been enjoying excellent success. By the end of the Fiscal Year 2005, our material and protection program will have secured 41 out of 64 identified nuclear warhead sites and we will have secured 37 percent of the approximately 600 metric tons of weapons-usable nuclear material in the former Soviet Union.

And meanwhile, we are working with the Russian government in shutting down the last remaining plutonium production plants in Russia and replacing their electricity production with coal burning power plants and so end the annual production of 1.2 metric tons of weapons grade plutonium, a nonproliferation triumph, I think, by any measure.

Finally, I want to say that we have taken great steps in modernizing and rebuilding our defense weapons complex which I found to be in appalling shape, when I took office. We've launched, as you know, a large scale capital improvement program to rebuild decaying infrastructure and, at the same time, we are working to restore our capabilities there. For example, as you well know on this committee, we are on schedule to have a new fully certified plutonium pit to enter the stockpile for the first time in many years by Fiscal Year 2007. We are also continuing our major investments in projects designed to maintain the reliability of the nations nuclear stockpile.

Thank you, Mr. Chairman, I have covered a lot of ground, more even maybe than I thought what I started but it gives you at least the sense of some of the priorities that we've established. We work very hard at the department obviously to improve our efforts in each of these areas and we appreciate the opportunity to work with this subcommittee to make sure that support for the priorities we've established is provided. We appreciate that support. Thank you.

BREAK IN TRANSCRIPT

REP. JAMES E. CLYBURN (D-SC): Thank you, Mr. Chairman.

Mr. Secretary, thank you so much for the tremendous energy you bring to your program and to your position-and that's an intended pun. (Laughs.) I want to ask you about a number of things and I hope we'll have more than one round here. I want to ask a little bit about the Massie Chairs of Excellence, that program that I have a lot of interest in as well as DOE's funding for HPCUs as well as Hispanic serving institutions. But, in this round, I would like to focus on the Savannah River plant. That's no surprise to you, I'm sure.

I am very interested in the fact that the department seems to be holding up funding for high level waste budget. I think it's about $190 million earmarked for (SRS ?), $350 million that's been allocated. I want to know what progress is being made on that and why that's being held.

MR. ABRAHAM: Well, this is an issue that affects Savannah River and affects Hanford and it affects INEEL up in Idaho. And the budget submission segregated monies related to the cleanup of high level waste from tanks at each of those facilities because after we had entered into the accelerated cleanup agreements, these states that had been jointly entered into, that is the states' approval and ours, the department was-a lawsuit was brought by an outside organization. The states, regrettably I thought, joined as amicus in this lawsuit. The District Court in Idaho ruled in a fashion that I think puts into very serious question what steps we can take moving forward at this time.

I am not going to come to the Congress and ask to have money spent if it turns out that a subsequent court injunction might be ordered or a court might determine that actions which we would take are deemed to be in contravention of the law, which would mean we'd end up, having spent the money and then to go back and do it all other again or remediate what we had done. And so what we decided makes sense-and we're working at it to the heart of your questions to see if we could sit down with each of the states involved and come up with a solution that could be legislatively enacted so as to give us the ability to go forward confident the money spent wouldn't be misspent or end up being enjoined before we moved through the process.

And we've had very positive discussions with South Carolina. We've had, I think, increasingly positive discussions with the other states as well. So we're working very hard to get agreements in place and hope we could pass whatever legislative remedy was needed quickly so that money could be released and spent in the 05 Fiscal Year. We're very committed to getting it done. We think we can find a way that satisfies the states' concerns and our own and would be possible for Congress to act on.

REP. CLYBURN: Well, thank you very much. I hope to be kept posted on that.

MR. ABRAHAM: We will be happy to.

REP. CLYBURN: I will stay in touch with you on that. Let me ask a little bit about the new-I want to congratulate you and the administration for the work you're doing in trying to develop some new alternative energy sources. Of course, I'm particularly interested in the fact that down there, at SRS, you've got about 80 scientists and engineers doing work in the hydrogen field and the University of South Carolina and South Carolina State University have a joint nuclear program going. And I am interested in the possibilities of the national lab designation down there because I think there's so much work going on at the university. I think they got some recent designation in this field. What are those possibilities?

MR. ABRAHAM: The designation of a facility as a national laboratory is one we obviously take very seriously and I know the interest at SRS and the community there are for us to do that and we're looking at that issue now that it's been raised.

I don't want to prejudge it because that process is a formal one that the department would go through but I would certainly echo your comments about the Savannah River Tech Center's capabilities in the hydrogen area. They, for many years, have had a lot of experience because of the work the tritium that is a hydrogen isotope that is, you know, very important in the kinds of development that we'll be working on. And so, there is a lot of expertise there and obviously when we work on the hydrogen initiative, we are taking advantage of the best talent all over the country and there is a lot of it there.

REP. CLYBURN: Thank you very much. I see my time is up and I hope that I will be able to get back to these other issues. Let me just say, I hope you feel better but if that Western Mexican remedy does not work, try a southern remedy. Put some Jack Daniels in the rest of that tequila. I think you'll be all right.