STATEMENT OF HON. FRANK H. MURKOWSKI, U.S. SENATOR FROM ALASKA

Senator MURKOWSKI. Thank you very much, Senator Bingaman. I want to thank you for holding the hearing today. We both have been long time supporters of energy research and development, whether it be fossil or nuclear, renewable or energy efficiency, and through the development of advanced energy technologies, I think we both agree we can avoid the false choices between energy and the environment. We want to make our decisions on sound science. I've said that time and time again, but I think it is most appropriate to reflect on this. So often, you know, we are expected to have the knowledge and background to make a decision. We have to make decisions. We vote yes or no. We can't vote maybe, so we have to depend on people who are willing to put their reputations as experts behind their recommendations. Otherwise, you're going to get what you would expect from pretty much a public forum. You can get expressions and motions but not sound science. In any event, what we are looking for today, through the development of advanced energy technologies, is to try and avoid those false choices. A choice that radical environmentalists from time to time seem very eager to force upon the American people-again without the science.

Nowhere is the value of advanced energy technology more on display certainly in exploration than my State of Alaska, where one only needs to contemplate the rigors of 70, 80, 100, 120 below zero working conditions in areas of permafrost where we have been able to maintain footprints that are extraordinarily compact. Ice roads, 3D seismic, all new technologies that reduce the disturbance on the tundra. Directional drilling, it has been indicated by the engineers that they could drill in this room and come out at Gate 8 at Reagan Airport. They have that degree of accuracy. R&D funded by the Department of Energy and industry has made it all possible and this will yield more benefits in the future. Energy R&D will give us the technologies of tomorrow that will provide a clean, safe and affordable energy supply. Cleaner fossil fuels, safe next-generation nuclear power, affordable renewable energy technology, energy efficient technologies that will allow us to do more with less.

We have to keep in mind that we just can't throw money at it. Money alone is not the answer. We must ensure that our R&D programs are oriented in the right direction with concrete goals and objectives and checks and balances. We can all justify more expenditure, but we have got to have measurements and successes. We must fund a portfolio of priority options just as you would invest in a portfolio of stocks to hedge your bets. And, most importantly, we must be ready to take on some risks-some high risks, high reward for breakthrough technologies. That is how they come about. An R&D program without some failure is not pushing the envelope hard enough, in my opinion. I know the National Academy of Science will have much to say about their recent review of Department of Energy energy R&D programs and I look forward to their suggestions as to what changes they would suggest to help energy R&D along.

One of the frustrating problems that's been before this committee for as long as I have been a member, and that's over 20 years, is

what to do with our high level waste-spent nuclear fuel. Our spent waste, I should say. Reprocessing is one alternative, and I gather that we're going to have a third panel today of witnesses that will address the issue of reprocessing of spent nuclear fuel. I'm going to have to go down to the floor a little after 10 o'clock on energy and water but I hope to get back to participate in the third panel. Clearly, one of the issues with nuclear power is the storage of the high level radioactive waste. According to some in this Senate, Yucca Mountain is dead. That is pretty hard to take if you are a taxpayer and consider that we've spent over $8 billion so far on Yucca Mountain. I don't think it's dead. Even with Yucca, it makes sense to make as little waste as possible, and that is the advantage of the advanced technology.

Reprocessing does offer a way to use more of the energy stored in the fuel to reduce the waste volume. Of course, there are risks involved, nuclear materials and proliferation, but there are large benefits to be gained if we can develop new technologies to reduce and reuse nuclear spent fuel.

And finally, we must recognize that R&D funding alone is not a sufficient substitute for a comprehensive national energy policy when you look at what other countries are doing, France particularly and Japan in this area of high level nuclear waste reprocessing. In any event, while R&D can help us develop the technologies of tomorrow, it cannot solve the problems of today with the current energy crisis. We still need an increase in supply of conventional fuels, expanded energy efficiency, more renewables. And we need to invest heavily in the infrastructures needed to move the energy from the wellhead or powerplants to the consumers in both pipelines and electric transmission lines. Energy R&D does have a central role to play and I look forward to hearing from our witnesses on how we can better invest in our energy future. Thank you, Mr. Chairman.

The CHAIRMAN. Senator Burns.

STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR

FROM MONTANA

Senator BURNS. Thank you for holding this hearing. You know, today's attendance to this hearing is pretty indicative on how sexy an issue this is. If we were talking about the sucker fish, I'll guarantee you couldn't get another person in this place with a shoehorn. But R&D is important for our work over on the Commerce Committee when we worked with the NSF, being involved in EPSCOR, and the R&D that is going on in communications in our universities and even in our energy. No other committee and no other department has more to do with climate change in our high energy physics, our superconductivity, high performance computing. This is where it happens in this country in the high tech field. Now, we can talk about what's happening in the technology of communications, but as far as our every day life, this is where it's at. And yet, you know, we won't get now what is there over at the press table, a half a dozen over there that will write about this hearing today. And yet it's probably one of the most important hearings that we will hold in this committee, Mr. Chairman, and

I appreciate your interest in this. I appreciate your holding this hearing.

We have seen great things happening in wireless communications. I will tell you fuel cells is to the energy industry what wireless was to communications. And we have to look at these kind of different things to complete our work. Thank you, Mr. Chairman. If I can put my statement in, I would sure appreciate that.

The CHAIRMAN. Senator Carper, would you like to make any statement?

STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM DELAWARE

Senator CARPER. I feel inspired by the comments of Senator Burns and Senator Murkowski. I would make a very brief comment. I received a memo, I think yesterday, from Robert Simon, our staff director on the Democratic side and Bryan Hannegan, staff scientist, and this goes back to a point that Senator Murkowski was making about not being able to throw money at problems, even though on the R&D side, and I was just reading this last night. It says studies of the areas supported by Department of Energy R&D funding suggest significant payoffs from the research funded according to Department of Energy and validated by a GAO study. Efficiency R&D programs have returned over $100 billion to the U.S. economy for Federal investment of less than $13 billion since 1978. It goes on to mention a new report from the National Academy of Sciences. It reviews the Department of Energy's funding of DOE and fossil and energy efficiency areas and it looked at, I think, 17 R&D programs on energy efficiency that go back to 1978 and concluded that the Department of Energy's investment of $1.6 billion resulted in a return of about $30 billion. So, we're not just throwing money at these problems and issues but actually making some sound accomplishments. I would just want to put that on the record.

The CHAIRMAN. Thank you very much. Why don't we go ahead then with Francis Blake who is Deputy Secretary of Energy. Thank you for being back here with us.

STATEMENT OF FRANCIS BLAKE, DEPUTY SECRETARY,

DEPARTMENT OF ENERGY

Mr. BLAKE. Mr. Chairman and members of the committee. Thank you very much for inviting me this morning and also, thank you for moving on the nomination of Dan Brouillette. We are very much looking forward to getting him on board the team. As you know, all major energy legislation has been bipartisan in nature and we look forward to working with this committee under your leadership and moving forward on a number of the legislative proposals you are now considering. For today's topic on research and development, as you all have mentioned, there is an important role for the Government and for the Department of Energy to play on research and development.

There are public benefits that exist that the private sector simply cannot capture and there is an important role for the Department in those areas. And in fact we are looking at technology to address some of the key challenges that we face. However, we can continue

to improve our standard of living and also address the environmental and other concerns that we have.

I would like to just submit my written testimony for the record and then briefly summarize the areas where I think we have agreement and then open my comments up for questions. I think the areas that are addressed in your legislation actually mirror fairly well the areas that the Department is spending research and development monies. You target renewables, hydropower, solar, wind, and we have activity in all of those areas. You have some legislation with recommendations on nuclear energy, particularly in the area of reprocessing. That is part of the President's national energy plan and we are supportive of that although we would note that even as we make progress there, that does not undermine the need for a deep geological repository for nuclear waste.

We also support focused carbon-based fuels research and development. It is particularly important in the environmental area and in improving efficiencies for our installed base and then more basic research on technologies as Senator Murkowski was referencing in the areas of hydrogen, fusion and other varied significant new potential areas. We are at an interesting point as well because as was mentioned, the National Academy has come out with its study that has looked at some of the results from prior Department of Energy R&D efforts, and I think has concluded that the public has received a good payback from that investment. They also have made some suggestions. I haven't read the report but I have seen the executive summary. They have made some suggestions that are very much in line with the administration's own thinking on how we need to be approaching our research and development efforts. We need to have good performance measures and metrics so that the money we spend is wisely spent. And we understand what we are expecting and what the appropriate off-ramps are for our investments.

We need to have a good understanding of the private public relationship, what the private sector will do better than the public sector, and how we can effectively join forces. And I think, as the NAS has emphasized, we do need a portfolio approach where we look at a number of different technologies that address different areas, a number of different stages of development, some basic research, some research and development, some demonstration, and also, different benefits that the research and development can address. Some environmental; some economic and some national security benefits. So, I think we are in large agreement with many of the recommendations that the NAS report is coming out with.

We look forward to working with this committee and just to echo Senator Burns' comment, if you look at the contribution that research and development has made in a number of areas, we view this as one of the critical functions of the department and very much appreciate your leadership and guidance in these areas. Thank you.

[The prepared statement of Mr. Blake follows:]

PREPARED STATEMENT OF FRANCIS BLAKE, DEPUTY SECRETARY,
DEPARTMENT OF ENERGY

Mr. Chairman and Members of the Committee, I welcome the opportunity to testify before you today on various legislative proposals pending before the Committee. These proposals include Senate bills, S. 388, S. 597, S. 90, S. 193, S. 242, S. 259,

S. 472, S. 636, S. 1130 and S. 1166, the provisions of which address various aspects of the Department's scientific research and technology development programs.

First, I would like to thank the Chairman and Members of the Committee for your leadership and commitment in addressing the Nation's energy issues. I applaud the Committee's efforts to craft comprehensive long-term energy legislation. This Committee has a long and proud tradition of developing bipartisan energy legislation, and the Administration recognizes that all major energy bills have been bipartisan in nature. I look forward to working with the Committee to find areas of common ground and interest between the Congress and President Bush's policy proposals, as outlined in the National Energy Policy.

Turning to the matter at hand, the general focus of today's hearing is research and development (R&D). The Administration welcomes the Committee's interest in and support of the Department's scientific and research programs. America's energy challenge begins with our expanding economy, growing population and rising standard of living. Our prosperity and way of life are sustained by energy use. To meet our energy challenges of the future-promoting energy conservation, repairing and modernizing our energy infrastructure, and increasing our energy supplies in ways that protect and improve our environment-will require sound science, innovative R&D, and collaborative partnerships among all of our research organizations, public and private.

The Department's R&D programs are an important part of this effort to address and meet many of the challenges facing our Nation's future. They have a long and proven track record of past scientific and technical contributions in this regard. On one timely note in this vein, just yesterday, the National Academy of Sciences released its study of the Department's twenty-year R&D programs in the technology areas of energy efficiency and fossil energy. The Academy reported that the benefits to the Nation of these R&D efforts are large and increasing over time.

The Administration strongly supports research into advanced technologies and their underlying foundation of basic research. As the Academy's study suggests, Federal leadership in partnership with others can have a strong and beneficial influence on the advancement of technical solutions to many of Nation's greatest challenges.

As part of my responsibilities as Deputy Secretary, it is my intention to ensure that the Department's scientific and research portfolio is both well focused on our nation's needs and efficiently managed. One of the Administration's_management priorities is for the Department to establish performance metrics for R&D expenditures so that we can look across our portfolio of activities and distinguish programs that are well-targeted and successful from those that are performing poorly or could be better undertaken by others. I look forward to working with this Committee on that effort.

SENATE BILLS

Mr. Chairman, the Senate bills and the particular titles and sections of these bills that are of interest to the Committee today cover a diverse mix of scientific interests, programs, enhancements to these programs, and related administrative actions. There are parts of ten bills, including eight mentioned in your letter of invitation and two bills added since then, of interest here today.

I want to assure the Committee that the Administration is interested in each provision of these bills. I can provide today some general comments on the salient aspects of some of these bills, but in other cases the Administration has not yet developed a full or formal position. We look forward to working with you on this in the weeks and months ahead.

With regard to S. 90 and S. 193, the Department has not yet taken any formal position. S. 90 would require the Secretary of Energy to support an R&D program in nanoscience and nanoengineering, and to establish similarly focused research centers, at authorizations totaling $1.36 billion over 5 years. S. 193 would require the Secretary to support a research program in advanced scientific computing, at authorizations totaling $1.15 billion over 4 years. Both bills are supportive of our ongoing programs in these areas, but the authorization levels are inconsistent with the Administration's budget requests and recent appropriations levels set by Congress.

S. 242 and S. 472 represent the first major nuclear energy legislation since the passage of the Energy Policy Act of 1992. At the outset, I would like to express the Administration's general support for legislation that sets a direction to implement the nuclear components of the Administration's National Energy Policy. S. 242 would require the Secretary to support a program to maintain the Nation's human resource investment and infrastructure in the nuclear sciences and engineering, in