[Senate Hearing 111-14]
[From the U.S. Government Publishing Office]
S. Hrg. 111-14
PROPOSALS ON ENERGY RESEARCH
AND DEVELOPMENT
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
TO
RECEIVE TESTIMONY REGARDING DRAFT LEGISLATIVE PROPOSALS ON ENERGY
RESEARCH AND DEVELOPMENT
__________
MARCH 5, 2009
0Printed for the use of the
Committee on Energy and Natural Resources
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
BYRON L. DORGAN, North Dakota LISA MURKOWSKI, Alaska
RON WYDEN, Oregon RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont JIM BUNNING, Kentucky
EVAN BAYH, Indiana JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
----------
STATEMENTS
Page
Bartis, James T., Senior Policy Researcher, Rand Corporation,
Arlington, VA.................................................. 32
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Chu, Hon. Steven, Secretary, Department of Energy................ 3
Corradini, Michael L., Chair, Nuclear Engineering and
EngineeringPhysics, University of Wisconsin Madison, WI........ 46
Crabtree, George W., Senior Scientist, Associate Division
Director and Distinguished Fellow, Materials Science Division,
Argonne National Laboratory, Argonne, IL....................... 24
Fri, Robert M., Visiting Scholar, Resources for the Future....... 29
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 2
Wince-Smith, Deborah L., President, Council on Competitiveness... 39
APPENDIXES
Appendix I
Responses to additional questions................................ 57
Appendix II
Additional material submitted for the record..................... 83
PROPOSALS ON ENERGY RESEARCH AND DEVELOPMENT
----------
THURSDAY, MARCH 5, 2009
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 9:38 a.m. in room
SH-216, Hart Senate Office Building, Hon. Jeff Bingaman,
chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. Why don't we go ahead and get started. I know
Senator Murkowski is on her way. There she is right there.
Let me thank everyone for coming. This is an oversight
hearing to review future directions of energy research and
development to identify key scientific and technological
hurdles that need to be overcome in order to pursue some of
these new directions. We particularly thank Secretary Chu for
being here to testify at this hearing on research and
development within the Department of Energy. Of course the
second panel as well.
The purpose of the hearing, as I stated is to find out what
is happening with regard to research and development. Also to
get comments to the extent that witnesses have comments on the
draft legislation that the Committee has posted on its website.
This is legislation that the staff has developed to address
some of these issues.
Last year I was fortunate to travel to both Japan and Korea
to understand some of the initiatives being pursued there to
advance energy research and development programs. In Japan we
were given a copy of this cool Earth 50 program that we've
given copies of to, at least the front page of the brochure
that was provided to us, where they are trying to coordinate
their energy industries to produce technologies that will
enable Japan to reduce its greenhouse emissions by at least 50
percent by the year 2050. Obviously an additional benefit of
this program as they see it would be the payback of being a
leader in world markets in energy technologies that have
minimal carbon emissions associated with them.
I hope we can benefit from learning from what others,
including Japan are doing in this regard. Let me again thank
the witnesses, and call on Senator Murkowski for any statement
she has before hearing from Secretary Chu.
[The prepared statement of Senator Udall follows:]
Prepared Statement of Hon. Mark Udall, U.S. Senator From Colorado
Mr. Chairman, thank you for holding today's hearing on energy
research and development (R&D).
Energy R&D is the future of our energy industry, but is also
critical to our national security, our environment, and our economy.
This work will help us address climate change, lessen our dependence on
foreign oil, and help make energy m ore affordable and efficient.
These R&D issues are important for our nation, but also for
Colorado. Colorado is home to some of the nation's top universities and
several federal laboratories. This includes the National Renewable
Energy Laboratory (NREL), our nation's premiere renewable energy R&D
facility.
NREL has lead the way on research into making wind power safer and
more efficient, lowering the cost of solar energy production, and
advancing hydrogen energy production from renewable sources, as well as
storage of hydrogen energy.
This is not a mew subject to me. During my ten years in the House,
I was a member of the Science and Technology Committee, which oversaw
several of DOE's science offices, including the Office of Science and
Office of Energy Efficiency and Renewable Energy. I helped fight for
funding for these offices and encouraged them to succeed.
for example, the 2007 energy bill included a provision that I
pushed in the U.S. House of Representatives to expand and improve the
Department of Energy's carbon capture and storage (CCS) research and
demonstration program. CCS will be critical to helping us continue to
use our vast domestic sources of coal while also working to address
rising greenhouse gas emissions.
I should add that the development side of R&D is critically
important, though sometimes lost in our efforts to find the next big
discovery. Development is the first step towards commercializing a
product and getting new technology int the hands of Americans, both in
our homes and businesses. I believe development includes creating a
workforce capable of managing these technologies.
There is much more we can do to move this effort forward.
Recently, NREL joined with our state's research universities--
University of Colorado, Colorado State University, and Colorado School
of Mines--to form the Colorado Renewable Energy Collaboratory. This
partnership has already combined the best from universities and the
national labs to work with the state government and private businesses
on furthering research, development, and commercialization on new
renewable energy technology.
I believe Colorado's Collaboratory provides a example of the
partnerships we need to encourage to move our energy economy forward.
I am looking forward to hearing from today's witnesses about the
future of energy R&D and what we in Congress can do to help advance
that work.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman, and I
appreciate the hearing this morning. I also want to welcome
you, Dr. Chu, Secretary Chu.
This is the first time you've been before us since the
confirmation hearing. I've had a couple opportunities to
discuss issues with you, and I appreciate your openness and
your being here this morning.
I've got lots of questions over a variety of issues
including questions about the Administration's view on the
renewable electrical standard. If we have some time I'd like to
get into those. But very hopeful that this Committee will have
the opportunity perhaps at another hearing with Administrative
witnesses to talk about those issues and perhaps some others.
The legislative proposal that we're considering today, not
only reauthorizes the research and development components of
the Energy Policy Act of 1905. But it doubles the authorization
funding from 2009 to 2013, hopefully countering the drop in
government funding for energy research and development efforts
that we've seen since the 1970s. This increase in my mind
anyway, is a necessary one.
All of our goals to become a more energy efficient nation
and to be less dependent on unstable, foreign sources of energy
rely on advances in technology advances in the know how. If
we're going to be the leader in energy technology investment,
in R and D, is a must. The two are certainly not mutually
exclusive.
On another front as we get into the details of energy
efficiency, alternative fuels and other specifics of energy
policy, it can be easy to overlook the people power that are
needed to make this work. It's an issue that we recognize that
we can't neglect. Half of electric utility workers and oil and
gas workers are eligible and likely to retire in the next 2 to
5 years. The subsurface geotechnical work force faces a similar
challenge. Our challenge then is to figure out how we attract,
how we retain new workers in those fields.
The legislative proposal we're looking at seeks to support
programs that provide this training from secondary schools and
trade schools on up to graduate programs. So what we're trying
to do is figure out how we grow the work force. We know that
the workers are going to be needed. The jobs certainly in this
economy are needed. So hopefully with the support of this
proposal we'll be able to bring the two together to meet our
future energy work force needs.
I've expressed my support for reauthorization of the R and
D programs and expansion of the work force development pieces.
I have been looking at the proposal. I've got some level of
concern about the Grand Challenges Research Initiative.
Not because I don't support the idea or the concept. But
because of the funding mechanism that is to be used. So I just
throw that out there as a concern for discussion. But I think
the proposal that we have before us is a very good starting
point, not yet a final product but I look forward to hearing
from the witnesses from our second panel on their perspectives,
ways to improve the product.
Again, Secretary Chu, welcome to the committee.
The Chairman. Secretary Chu, go right ahead. We're glad to
have you testify today. Please give us any thoughts you have.
STATEMENT OF HON. STEVEN CHU, SECRETARY, DEPARTMENT OF ENERGY
Secretary Chu. Chairman Bingaman, Ranking Member Murkowski
and members of the Committee, thank you for the opportunity to
appear before you today. During his address to the joint
session of Congress last week, President Obama reiterated his
commitment to reducing our dependence on oil and sharply
cutting greenhouse gas emissions. I'm looking forward to
working with others in the Administration, this Committee and
the Congress to meet the President's goal of legislation that
places a market based cap on carbon pollution and drives the
production of more renewable energy in America.
Such legislation will provide the framework for
transforming our energy system, making our economy less carbon
intensive and America less dependent on foreign oil. In the
near term President Obama and this Congress have already taken
a key step in passing the American Recovery and Reinvestment
Act of 2009. This legislation will put Americans back to work
while laying the groundwork for a clean energy economy.
I'd like to highlight a few of the energy investments in
that law.
First, the Recovery Act will put people to work making our
homes and offices more energy efficient. It includes $5 billion
to weatherize the homes of low income families. A $1,500 tax
credit to help homeowners invest in efficiency upgrades. $4.5
billion to green Federal buildings including reducing their
energy consumption and $6.3 billion to implement state and
local efficiency and renewable programs.
The Recovery Act also includes $6 billion for loan
guarantees and more than $13 billion in tax credits to finance
assistance instruments that may leverage tens of billions in
the private sector investment in clean energy and job creation.
This will help clean energy businesses and projects get off the
ground in these difficult economic times. The investments in
key industries such as $2 billion in advanced battery
manufacturing and the $4.5 billion to jump start our efforts to
modernize the electrical grid.
Getting this money into the economy quickly, carefully and
transparently is the top priority for me. I know that your
constituent States, cities and businesses are eager to move
forward and are seeking more information on how to access this
funding. I've met with many of them already and we will have
much more detailed information in the coming weeks.
With that, I would like to turn to a topic that's near and
dear to my heart. How can we better nurture and harness science
to solve our energy and climate change problems? I strongly
believe that the key to our prosperity in the 21st century will
lie in our ability to nurture our intellectual capital in
science and technology.
Our previous investments in science led to the birth of the
semiconductor, computer and biotechnology industries that add
greatly to our economic prosperity. Now we need similar
breakthroughs on energy. We're already taking steps in the
right direction, but we need to do more.
First we need to increase funding. It's part of the
President's plan to double Federal investments in the basic
sciences. The 2010 budget provides substantially increased
support for the Office of Science, building on the $1.6 billion
provided in the Recovery Act for the Department of Energy's
basic science programs.
We also need to refocus our scarce research dollars. In
April a more detailed FY 2010 budget will be transmitted to
Congress. This budget will improve science research development
and deployment at the DOE by developing science and engineering
talent, by focusing on transformational research, by pursuing
broader, more effective collaborations and by improving
connections between DOE research and the private sector energy
companies.
Several years ago I had the honor and privilege of working
on ``Rising Above the Gathering Storm'', a report commissioned
by Chairman Bingaman and Senator Alexander. One of the key
recommendations was to step up efforts to educate the next
generation of scientists and engineers. The FY 2010 budget
supports graduate fellowship programs that will train students
in energy related fields. I will also seek to build on DOE's
existing research strengths by attracting and retaining the
most talented scientists.
The next area that I want to discuss is the need to support
research on transformational technology. What do I mean by
transformational technology? I mean technology that's game
changing as opposed to being incremental.
For example, in the 1920s and 1930s when AT & T Bell
Laboratories was focused on extending the life of vacuum tubes,
another much smaller research program was started to
investigate a completely new device. This device was based on
revolutionary advances in the understanding of the quantum
world, quantum mechanics. The result of this transformational
research was the transistor which transformed communications,
allowed the commuter industry to blossom and changed the world
forever.
DOE must strive to be the modern version of the old Bell
Labs in energy research. Because of the payoffs in
transformational research are both higher risk and longer term,
government investment is critical and appropriate. As this
committee knows we have funded three bioenergy research
centers. One at Oak Ridge National Laboratory, one led by the
University of Wisconsin in close collaboration with Michigan
State University and one led by the Lawrence Berkeley National
Lab. Each of these centers is targeting breakthroughs in
biofuel technology development that will be needed to make
abundant, affordable, low carbon biofuels a reality.
We need to do more transformational research at the DOE to
bring a range of clean energy technologies to the point where
the private sector can pick them up.
This includes gasoline and diesel like biofuels generated
from lumber and crop waste and non food crops.
Automobile batteries with two or three times the energy
density that can survive 15 years of deep discharges.
Photovoltaic solar power that is five times cheaper than
today's technology.
Computer design tools for commercial and residential
buildings that will enable reductions in energy consumption of
up to 80 percent with investments that will pay for themselves
in less than 10 years.
Large scale energy storage systems so that variable,
renewable energy resources such as wind and solar power can
become base load power generators.
This is not a definitive list or a hard set of technology
goals. But it gives a sense of the types of technologies and
bench marks I think we should be aiming for.
DOE also needs to foster better research collaborations
both internally and externally. My goal is to build research
networks within the Department, across the Government,
throughout the Nation and around the globe. We will better
integrate national, lab, university and industry research. We
will seek partnerships with other nations. For example,
increased international cooperation on carbon capture and
storage technology could reduce both the cost and time of
developing the range of pre and post combustion approaches that
will be needed for cost effective carbon capture and
sequestration.
While we work on transformational technologies the DOE must
improve its efforts to help deploy demonstrated, clean,
technologies at scale. The Loan Guarantee Program will be
critical in these efforts by helping to commercialize
technologies. The Recovery Act funding for weatherization and
energy efficiency block grant programs will accelerate the
deployment of energy efficient technologies.
I'm excited about the prospect of improving DOE's clean
energy research development and deployment efforts. I thank you
and would be glad to answer your questions at this time.
[The prepared statement of Secretary Chu follows:]
Prepared Statement of Hon. Steven Chu, Secretary, Department
of Energy
Chairman Bingaman, Ranking Member Murkowski and Members of the
Committee, thank you for the opportunity to appear before you today to
continue the conversation we began at my confirmation hearing.
During that hearing, I touched on the enormous challenges and
threats we face--to our economy, our security, and our climate. In the
20th century, America's economic engine was powered by relatively
inexpensive domestic fossil fuels. Today, we import roughly 60 percent
of our oil, draining resources from our economy and leaving it
vulnerable to volatility in oil prices. Additionally, the potentially
adverse effects of global greenhouse gas emissions and their cost to
the world economy were not widely realized until the end of the past
century but are well-established today.
If we, our children, and our grandchildren are to prosper in the
21st century, we must decrease our dependence on oil, use energy in the
most efficient ways possible, and decrease our carbon emissions.
Meeting these challenges will require both a sustained commitment for
the long-term and swift action in the near-term.
During his address to the Joint Session of Congress last week,
President Obama reiterated his commitment to reducing our dependence on
oil and sharply cutting greenhouse gas emissions. I look forward to
working with others in the Administration, this Committee, and the
Congress to meet the President's goal of legislation that places a
market-based cap on carbon pollution and drives the production of more
renewable energy in America. Such legislation will provide the
framework for transforming our energy system to make our economy less
carbon-intensive, and less dependent on foreign oil.
In the near term, President Obama and this Congress have already
taken a key step by passing the American Recovery and Reinvestment Act
of 2009. This legislation will put Americans back to work while laying
the groundwork for a clean energy economy.
american recovery and reinvestment act
I would like to highlight a few of the energy investments in that
law.
First, the Recovery Act will put people to work making our homes
and offices more energy efficient. It includes $5 billion to weatherize
the homes of low-income families; a $1,500 tax credit to help
homeowners invest in efficiency upgrades; $4.5 billion to ``green''
federal buildings, including reducing their energy consumption; and
$6.3 billion to implement state and local efficiency and renewable
programs.
The Recovery Act also includes $6 billion for loan guarantees and
more than $13 billion in tax credits and financial assistance
instruments (grants and cooperative agreements) that may leverage tens
of billions in private sector investment in clean energy and job
creation. This will help clean energy businesses and projects to get
off the ground, even in these difficult economic times. The bill also
makes investments in key technologies, such as $2 billion in advanced
battery manufacturing, and $4.5 billion to jumpstart our efforts to
modernize the electric grid.
Getting this money into the economy quickly, carefully, and
transparently is a top priority for me. I know that your constituent
States, cities, and businesses are eager to move forward, and are
seeking more information about how to access this funding. I have met
with many of them already, and we will have much more detail in the
coming weeks.
I know the Title XVII loan guarantee program is of great interest
and concern to this committee. We are already in the process of making
improvements to this important program that I believe will satisfy many
of these concerns.
reshaping energy research, development, and deployment
With that, I would like to turn to a topic that is near and dear to
my heart: how we can better nurture and harness science to solve our
energy and climate change problems. I have spent most of my career in
research labs--as a student, as a researcher, and as a faculty member.
I took the challenge of being Secretary of Energy in part for the
chance to ensure that the Department of Energy Laboratories and our
country's universities will generate ideas that will help us address
our energy challenges. I also strongly believe that the key to our
prosperity in the 21st century lies in our ability to nurture our
intellectual capital in science and engineering. Our previous
investments in science led to the birth of the semiconductor, computer,
and bio-technology industries that have added greatly to our economic
prosperity. Now, we need similar breakthroughs on energy.
We're already taking steps in the right direction, but we need to
do more.
First, we need to increase funding. Dan Kammen of U.C. Berkeley has
conducted studies showing that while overall investment in research and
development is roughly three percent of gross domestic product on
average, it is roughly one-tenth of that average in the energy sector.
As part of the President's plan to double federal investment in the
basic sciences, the 2010 Budget provides substantially increased
support for the Office of Science, building on the $1.6 billion
provided in the Recovery Act for the Department of Energy's basic
sciences programs.
We also need to refocus our scarce research dollars. In April, a
more detailed FY 2010 budget will be transmitted to Congress. This
budget will improve energy research, development, and deployment at
DOE: by developing science and engineering talent; by focusing on
transformational research; by pursuing broader, more effective
collaborations; and by improving connections between DOE research and
private sector energy companies.
Developing Science and Engineering Talent: Several years ago, I had
the honor and privilege of working on the ``Rising Above the Gathering
Storm'' report commissioned by Chairman Bingaman and Senator Alexander.
One of the key recommendations was to step up efforts to educate the
next generation of scientists and engineers. The FY 2010 budget
supports graduate fellowship programs that will train students in
energy-related fields. I will also seek to build on DOE's existing
research strengths by attracting and retaining the most talented
scientists.
Focusing on Transformational Research. The second area that I want
to discuss is the need to support transformational technology research.
What do I mean by transformational technology? I mean technology that
is game-changing, as opposed to merely incremental. For example, in the
1920's and 1930's, when AT&T Bell Laboratories was focused on extending
the life of vacuum tubes, another much smaller research program was
started to investigate a completely new device based on a revolutionary
new advance in the understanding of the microscopic world: quantum
physics. The result of this transformational research was the
transistor, which transformed communications, allowed the computer
industry to blossom, and changed the world forever.
DOE must strive to be the modern version of the old Bell Labs in
energy research. Because the payoffs from research in transformational
technologies are both higher risk and longer term, government
investment is critical and appropriate.
Here is an example of current DOE transformational research. As
this Committee knows, we have funded three BioEnergy Research Centers--
one at the Oak Ridge National Laboratory in Oak Ridge, Tennessee; one
led by the University of Wisconsin in Madison, Wisconsin, in close
collaboration with Michigan State University in East Lansing, Michigan;
and one led by the Lawrence Berkeley National Laboratory. Each of these
centers is targeting breakthroughs in biofuel technology development
that will be needed to make abundant, affordable, low-carbon biofuels a
reality. While these efforts are still relatively new, they are already
yielding results, such as the bioengineering of yeasts that can produce
gasoline-like fuels, and the development of improved ways to generate
simple sugars from grasses and waste biomass.
We need to do more transformational research at DOE to bring a
range of clean energy technologies to the point where the private
sector can pick them up, including:
1. Gasoline and diesel-like biofuels generated from lumber waste,
crop wastes, solid waste, and non-food crops;
2. Automobile batteries with two to three times the energy density
that can survive 15 years of deep discharges;
3. Photovoltaic solar power that is five times cheaper than today's
technology;
4. Computer design tools for commercial and residential buildings
that enable reductions in energy consumption of up to 80 percent with
investments that will pay for themselves in less than 10 years; and
5. Large scale energy storage systems so that variable renewable
energy sources such as wind or solar power can become base-load power
generators.
This is not a definitive list, or a hard set of technology goals,
but it gives a sense of the types of technologies and benchmarks I
think we should be aiming for. We will need transformational research
to attain these types of goals. To make it happen, we will need to re-
energize our national labs as centers of great science and innovation.
At the same time, we need to seek innovation wherever it can be found--
the new ARPA-E program will open up research funding to the best minds
in the country, wherever they may be. I pledge to you we will have this
program up and running as soon as possible.
Broader, More Effective Collaboration.--DOE also needs to foster
better research collaboration, both internally and externally. My goal
is nothing less than to build research networks within the Department,
across the government, throughout the nation, and around the globe.
We'll better integrate national lab, university, and industry research.
We will seek partnerships with other nations. For example, increased
international cooperation on carbon capture and storage technology
could reduce both the cost and time of developing the range of pre-and
post-combustion technologies needed to meet the climate challenge.
Speeding Demonstration and Deployment.--While we work on
transformational technologies, DOE must also improve its efforts to
demonstrate next-generation technologies and to help deploy
demonstrated clean energy technologies at scale. The loan guarantee
program will be critical to these efforts by helping to commercialize
technologies, and the Recovery Act funding for weatherization and
energy efficiency block grant programs will accelerate the deployment
of energy efficient technologies.
conclusion
I am excited about the prospect of improving DOE's clean energy
research, development, and deployment efforts. The Nation needs better
technologies to fully meet our climate and energy challenges, and DOE
can be a major contributor to this effort.
We already have ample technology to make significant, near-term
progress toward our energy and climate change goals. The most important
of these is energy efficiency, which will allow us to reduce costs and
conserve resources while still providing the same energy services. The
potential there is huge, as is the potential to increase the use of
existing technologies such as wind, solar, and nuclear. We will move
forward on all of these fronts and more, as we invest in the
transformational research to achieve breakthroughs that could
revolutionize our Nation's energy future.
Thank you. I would be glad to answer your questions at this time.
The Chairman. Thank you very much. Let me start with a
couple of questions. I know one of the issues that you have
been focused on and that we've also heard a lot about in this
committee is the gap between basic research and applied
research and development and how that can be bridged and more
effectively dealt with.
Sandia Livermore has a combustion research facility that
has tried to address this in something of an ad hoc fashion by
getting funding from the Office of Science also getting funding
from EER and E, the vehicles program there and also working
with industry. We've tried to figure out a way through
legislation to promote that kind of an effort in other
technology areas. That's this Grand Challenges Program that is
in the draft bill that we submitted.
I'd be interested in any thoughts you've got as to whether
this would be helpful or if there's a better way to do this or
is this something that can't be done legislatively and just has
to be done administratively? What's your thought about how we
bridge this gap between basic and applied R and D?
Secretary Chu. As I've said in the confirmation hearings
and in my discussions with you. I think that is a major focus
in how we can link the basic research that's done in the Office
of Science and in universities around the country. The Office
of Science supports both universities and national labs and how
we can better link that research with things that actually get
out into the marketplace, the more applied research that leads
to innovation.
We're completely aligned in terms of using, for example,
the bioenergy fuel centers as an example of a very successful
program. In the details of the FY2010 budget you will hear
about our plans to do that. So I do want to ask for some
flexibility in these programs, but the nature of where we're
going is very much in line like that.
I think from what I've already seen in the bioenergy
institutes that is a very good way of focusing attention and
really bringing together a cluster of scientists to work on
these problems. I do feel though it's best if it comes from the
Department of Energy. But you'll see that we're very, very
closely aligned, almost perfectly aligned.
The Chairman. Ok. Very good. Let me ask about ARPA-E.
I believe you were a part of the National Academy's panel
that recommended the establishment of ARPA-E. We authorized
that as part of the Competes Act in the last Congress. We
funded that at $400 million as part of the Stimulus bill. Could
you give us your thoughts as to how/what topics or what
objectives you see being pursued through ARPA-E and how that
would be managed?
Secretary Chu. The way it's going to be managed is we are
in the process of trying to identify a director. That director
will be reporting directly to me. There will be a very lean set
of contract people under that director.
The philosophy of ARPA-E is that if you look at what either
industry or venture capitalists are willing to pick up there is
a gap. There are innovative things that have too high a risk
for investors to be willing to put in. So just like the old
DARPA program invested in things that do have a risk of failure
but they also have a higher probability of bringing on those
transformational technologies.
So we will be investing in that very short time scale, 2 or
3 years and see what's going to happen. If it doesn't look
promising one pulls the plug and moves on. If it looks
promising there could be another tranche of money.
But ARPA-E will have a very similar philosophy to what
DARPA has been doing. In the end the success of this program
really depends on the success of the program managers and the
quality of the program managers. The good news is that if it's
a very lean organization that has a lot of freedom and
authority, I think we can attract those program managers to
this program because it's very exciting possibility to be
investing that kind of money to actually lead to something
truly transformational.
The Chairman. Ok. Let me ask one other question. We provide
in this draft bill that we've had put on the website funding
levels for energy research and development authorization
levels. It essentially calls for a doubling of that funding
over the 4-year period.
Are the levels we're talking about here consistent with
what you are going to try to accomplish in the Administration?
I mean we've got sort of three things that happen here. The
Administration gives us their proposals in the budget. Then we
try to, in some cases at least, authorize a certain level. Then
we try to appropriate a different level to the extent we can
I'd like to try to get those in sync.
Are what we have in this Authorization bill, proposed
Authorization bill consistent with what you think the
Administration would want to see?
Secretary Chu. I'm not going to--I applaud the
authorization levels. Let me be very frank about that. It
really depends on what Appropriations will actually
appropriate.
But I think I cannot overly impress upon this committee,
upon the Nation the critical need to do energy research. The
good news is that many of the most talented scientists in the
country are realizing our energy problem and all it facets.
It's one of the most important things that science and
technology has to solve.
Because of that we're beginning to see extraordinarily
talented people, mid-career people who are shifting their
fields. Say I've got to work on this problem. We're seeing a
lot of young people with an idealism, quite frankly, I haven't
seen since the 1960s and 1970s. They are saying I've got to
work on this problem. They want to enlist. So the increases in
funding that are being authorized are the instrument that will
allow us to open up recruiting stations and allow them to
volunteer for this task.
The Chairman. Senator Murkowski.
Senator Murkowski. Mr. Chairman, I'm going to defer to
Senator Barrasso who has got to get upstairs for a tribal
blessing in Indian Affairs.
The Chairman. Alright. Senator Barrasso.
Senator Barrasso. Thank you very much, Mr. Chairman. Thank
you, Senator Murkowski. Mr. Secretary, thank you for being here
with us today.
I have 3 questions. One has to do with small businesses. To
me, small businesses are the engine that drives our economy and
in these economic times they want to be involved in this. We
come from a number of different States, long distances away. I
believe that small businesses can also be very involved in the
innovation of the technologies where we're working on this.
You had said that you were going to be putting, in terms of
the stimulus funding, putting together a release of details for
allocating some of that money. Could you give us a little bit
of information about what competitive processes may be
available so that all of our States are able to be involved in
that competitive process, so our small businesses have an
opportunity?
Secretary Chu. Sure. I mean, we're planning on being very
transparent in requests for proposals and in the feedback of
the proposals. But really to get it out there, we will have
web-based information that anyone can look up and apply. We are
going to be setting up essentially help lines, if you will,
frequently answered questions to help people apply for that
money.
So we're in the process of changing the way we actually
solicit proposals to be much more transparent and much more
what I call, customer friendly. So if there are questions, and
this is not only is in the grants that we will be giving out in
contracts, but also in the Loan Guarantee Program. So we intend
to help everybody try to learn what it takes to make these
applications.
So I agree with you by the way. Small businesses in many
respects are really the engine of true innovation. That, you
know, results in some of the out of the left field approaches.
Senator Barrasso. Right. Let me get next to clean coal
technology. The Chairman and others of us met with former Prime
Minister Tony Blair the other morning to talk about what's
coming online in China in the next 10 years, coal fired power
plants equal to two and a half times the amount of coal fired
power plants that we have now in the United States.
So as you look forward, as we look forward to your research
and development and really the transformational technology that
you talk about. In your confirmation hearings you said you
wanted to work very hard to extensively develop clean coal
technology. You're hopeful and optimistic that we can figure
out how to use coal in a clean way.
I believe very much, we need to do that. Do you have some
thoughts on how you're going to work toward that goal?
Secretary Chu. Yes. First I'd like to thank Congress for
the Economic Recovery Act. We have $3.4 billion in that
stimulus package for piloting clean coal technologies another
essentially billion dollars for that.
So I've begun to look very seriously at how to best
allocate those funds. Once you start building pilot plans, the
costs build up. So I've already started engaging discussions
with foreign ministers, science ministers, energy ministers
abroad and have gotten a good response.
The European Union is thinking of 10 to 12 clean coal
demonstration experiments, if you will, or pilot projects.
China is thinking of them. What I would like to see, and we're
moving in this direction, is to have a truly international
alliance that we'd look at all these technologies.
We do not know currently what the best technology is. But
we do know that if we don't get this one, the environmental
risk is incredible. China, India and the United States will not
turn their back on coal. So we've got to get it right.
There's a realization internationally how important that
is. What that means is--think of this as a common goal, that
all countries around the world can really align themselves with
and collaborate. So that means intimate sharing of knowledge.
You know what needs to be done is to invest in this. Get
the pilot plants going. Really see what are the lessons that
are learned? What can work? As you go down this learning curve
and drop the price of this, all countries will benefit.
So it's a completely shared intellectual property. The good
news is you don't buy a coal plant like you buy a car or
refrigerator. Most of that investment is done locally.
It's like a building. So if we all develop these
technologies then each country as they apply this, the benefit
of that intellectual property, if you will, will go to
servicing that country. The entire effort will be going to
helping us conquer this problem.
Senator Barrasso. Thank you, and Mr. Secretary, just
finally there's a Department of Energy facility in Wyoming, the
Rocky Mountain Oil Field Testing Center. I was going to alert
you of that and maybe supply a question in writing because my
time is up.
But thank you, Mr. Chairman. Thank you, Senator Murkowski
for allowing me to get in front. Thank you.
The Chairman. Senator Udall.
Senator Udall. Thank you, Mr. Chairman. I want to
acknowledge the leadership you're providing to hold this
important hearing today. Secretary Chu, great to see you again.
I wanted to acknowledge that the last time you appeared
before the committee we had a short conversation about the
Rocky Flats Environmental Technology Site in my home state and
the Federal Government's obligation to address the health
impacts and needs of the former workers there at that nuclear
weapons complex. I look forward to continuing to work with you
on that important challenge. I want to thank you again for your
commitment to work with those of us in Colorado and frankly,
more broadly in the nuclear weapons complex.
I did also want to note the excitement I felt when you
mentioned that people are lining up to enlist in this important
work to create a new energy economy. There's a saying that's
been making the rounds over the last few years which is,
``Green is the new red, white and blue.'' In other words one of
the most patriotic things we can do is to develop this new
energy economy. Maybe we'll see you soon on a poster Uncle Sam
needs you because this is so important. There's such great
opportunity presenting itself to us.
Let me build if I could on Chairman Bingaman's question
about the opportunity that applied research presents to us. But
also the need for the longer term R and D investment in R and D
work in the context of the national labs. It's clear to me that
they will play an increasing role.
I wanted to ask you to think out loud with us a bit about
how do we ensure that we strike the right balance in the roles
and in the funding in this diverse group of national
laboratories. Between the science we require for the long term,
the applied science and the critical commercialization and
deployment of clean energy technology which we know that we
need today. Could you speak to that?
Secretary Chu. Sure. I think we really need a balanced
portfolio of things. There are a number of technologies we
already have today that we should be getting out there,
especially on the energy efficiency side. We know a lot about
energy efficiency. The Department of Energy will increase its
efforts to help grease the wheels to get that stuff deployed.
Then there's near term research and development where it
might be on the cusp of getting picked up by the private
sector. Those things, again, we will be working very hard. One
of the things to remember is that when you go from very basic,
out of the box, research to more applied research to
development and piloting, each time you go up the chain the
price increases sometimes by a factor of 5, sometimes by a
factor of 10.
So once you start piloting commercial scale, now you're
talking billions of dollars, hundreds of million dollars for
smaller pilot plans. So the portfolio that I really believe is
important is that on the more basic side, you should be trying
really new, innovative, essentially crazy stuff. It doesn't
cost much.
But you have to, on the flip side, on the development and
deployment side, you have to show that as you approach
commercial scale that when you're asking for the private sector
to invest billions of dollars they have to have some comfort
that they won't lose their shirt. So I think everywhere in
between there has to be this balanced approach. Yes, the
Department of Energy has to invest in some of these larger
pilot scale plants.
So, I feel very committed to this balanced portfolio. It is
absolutely essential. One of the weaknesses, previously in the
Department of Energy is that there was a gulf between the
really great science that the Department of Energy supports and
the development and transformation of that science into things
that look like they might fly.
So again, with the ARPA-E, we need the integration of the
applied science side with the basic side. We're setting up a
structure now where undersecretaries will have to share some
money. That they don't have total budget control and in order
to share a significant amount of that money they have to both
agree on it. They have to both say that this is worthy.
This is the only way I see one can really integrate this
gulf between the basic science and the applied science. So
those structures are being designed today.
Senator Udall. I also assume that there's even more work in
regards to the outreach to the private sector to the VC leaders
to the other private capital interest on the part of the DOE. I
hear more about it from lab directors. Those who know the
private sector will eventually, hopefully soon, lead the way
because that's where the great reservoirs of capital lie.
Would you care to comment on that as well?
Secretary Chu. I think, you know, in my history when I was
at Stanford I was the Scientific Advisor for one of the venture
capital firms and an incubator firm. When I became a lab
director, of course, I couldn't do that anymore. But I know a
lot of the people in these startup companies.
I have to say that these people work 70, 80 hours a week.
They are totally devoted to what they're trying to do. The
Department of Energy and the Federal Government should be
assisting.
ARPA-E is a mechanism for doing this. A lot of the sections
in the more applied areas can be a way of helping them. In
certain cases where they might be cash limited we could see
about helping them boot up and get there faster so that instead
of having 12 people working in a garage they can have 24 people
working in a garage.
But I think when I see this total dedication, living,
eating, breathing what they want to have happen. That is really
money well invested. So I'm a big fan of that.
Senator Udall. Thank you, Mr. Secretary.
The Chairman. Senator McCain.
Senator McCain. Thank you, Mr. Chairman. Thank you Doctor
for being here. We're all very impressed and appreciative of
your credentials and your willingness to serve in this very
important position.
Doctor, according to a report by the Department of Energy,
Report of Subcommittee, the Basic Energy Science Advisory
Committee, it says that as important as solar is that it would
still only provide approximately 5 percent of the carbon free
energy by the year 2015. Do you agree with that assessment?
Secretary Chu. By 2015.
Senator McCain. Yes. I've only got 5 minutes.
Secretary Chu. I'm a little bit more optimistic than that.
Senator McCain. A little bit more.
Secretary Chu. Yes.
Senator McCain. But it certainly wouldn't be nearly the
contribution that some envision, unfortunately. I come from a
State where it's very important.
Secretary Chu. The potential, it really depends on the
timeline that we're talking about.
Senator McCain. Is it not somewhere around 5 percent? Ten
percent? Let's say 15 percent.
Secretary Chu. By 2015.
Senator McCain. Ok.
Secretary Chu. Yes.
Senator McCain. That means that clean coal and nuclear
power, it seems to me then, are far more important than maybe
some people appreciate today, right?
Secretary Chu. I agree with that in the short term.
Senator McCain. Good. Then did you agree, is it true that
the Department of Energy's spokeswoman told Bloomberg that
President Obama and you, ``have been emphatic that nuclear
waste storage at Yucca Mountain is not an option, period.''
Secretary Chu. That's true.
Senator McCain. That's a true statement. So now we're going
to have spent nuclear fuel sitting around in pools all over
America. Also tell the nuclear power industry that we have no
way of either reprocessing or storing spent nuclear fuel around
America. We expect nuclear power to be an integral part of this
nation's energy future.
What's wrong with Yucca Mountain, Dr. Chu.
Secretary Chu. We have learned a lot more in the last 20,
25 years since Yucca Mountain.
Senator McCain. I know that. What is wrong with Yucca
Mountain, Dr. Chu.
Secretary Chu. I think we can do a better job.
Senator McCain. Where?
Secretary Chu. But going to your original question about
what to do with the spent fuel. The Nuclear Regulatory Agency
has said that we can solidify the waste at the current sites
and store it without substantial risk to the environment. So
while we do that we----
Senator McCain. Has any nuclear power plant made any plans
for solidification of the nuclear waste?
Secretary Chu. Yes. They have. There are solidification
plans going on today.
Senator McCain. There are plans going on? Also you don't
see any--is there any plans for reprocessing of spent nuclear
fuel?
Secretary Chu. There is--well, I support reprocessing
research. I think it's an important part of the nuclear----
Senator McCain. Why would we need research when we know the
Europeans and the Japanese are already doing it in a safe and
efficient fashion?
Secretary Chu. I believe the Europeans and the Japanese are
doing it, but they're doing it in a way that lends to risk of
proliferation, nuclear proliferation. The Japanese have already
said----
Senator McCain. You balance that risk of proliferation
verses spent nuclear fuel sitting around in pools in nuclear
power plants all over the country and telling industry that we
may do some research on reprocessing?
Secretary Chu. Let's separate the issues. First----
Senator McCain. I don't think they are separable. I think
they are inextricably tied because it's clear that industry
today is not interested in construction of nuclear power plants
because we have no place to store it and we have refused to
adopt what is already a proven technology of reprocessing.
Secretary Chu. The storage of waste, the interim storage of
waste, the solidification of that waste is something we can do
today. The NRC has said that it can be done safely. That buys
us time to formulate a comprehensive plan in how we deal with
the nuclear waste.
The recycling, which I think in the long term is very
beneficial. It has the potential for greatly reducing the
amount of waste is something that we have to press on. But the
time scale of the recycling development is different such that
we have a couple of decades, quite frankly in my opinion to
figure that one out.
Senator McCain. I couldn't disagree more strongly, Doctor.
But I certainly have the greatest respect and admiration for
your work and your knowledge and background. Nuclear power has
got to be an integral, vital part of America's energy future if
we're going to reduce greenhouse gas emissions. To say that
after 20 years and nine billion dollars spent on Yucca
Mountain, that there's not an option, period to me is
remarkable statement.
I'm running out of time here. But I just want to say
another great disappointment that I have is that we're going--
the President's budget assumes nearly $650 billion in revenue
from a cap and trade system for controlling greenhouse gas
emissions. I'm proud to have been one of the first to propose
cap and trade to support it. Be deeply concerned about the
issue of climate change.
So now I see cap and trade, not to be used to encourage
technology or development of other technologies, but or frankly
to be fundamentally a reason to reduce greenhouse gas
emissions. The budget submission now is for $650 billion in
revenue into general revenues. You're not going to get support
by a lot of us in that kind of proposal.
I deeply regret it. Because when business people all over
America who are struggling today who are going to see if they
engage in cap and trade, those revenues will just be another
tax source for the Federal Government. I think it's a
significant mistake.
I'd be glad to hear your views of using $650 billion in
revenue from a cap and trade system when we should be using it
not for revenues, but to developing technologies and
specifically devoted off budget to technologies that will
reduce greenhouse gas emissions. I know that my time is
expired. I thank you, Mr. Chairman.
The Chairman. Did you wish to respond to the latest
comment?
Secretary Chu. Very briefly.
The Chairman. Go ahead.
Secretary Chu. Very briefly the President's proposed budget
allocates $15 billion per year for research and development of
new green technologies. So that is putting back that money into
developing better solutions. The rest of it as you know is to
offset in the poorest sectors of the population some of the
consequences of that.
The Chairman. Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman. Welcome,
Secretary Chu. I have two questions for you. One is not exactly
on point for energy research and development, but since that
seems to be an option this morning I guess it's ok. It's a
little parochial.
The $5 billion that was included in the Economic Recovery
and Reinvestment Act for weatherization, I think is a very
important investment. Certainly agree with your comments about
the significance of energy efficiency. I met with some folks
from New Hampshire at one of our community technical colleges
where they actually have a degree in energy efficiency and
energy services. They were talking about their concerns that as
we're trying to do the weatherization and use the money
effectively that's in the bill, that we don't have the number
of people trained to do that that we really need to make the
most effective use of those dollars.
So what's DOE doing to help States as we're trying to
effectively spend those dollars in a way that makes the best
use of weatherizing homes for the future?
Secretary Chu. What we're doing is we're looking at the
inventory of people that can do proper energy audits that--so
with those energy auditors and looking at the training programs
and how you can get intense training programs going this spring
and early summer. With those energy auditors--and this is
replicating in many instances what is already on the ground
today, but in greater numbers. They can help specific
homeowners spend the dollars most wisely.
It's certainly very important to us that all those dollars
are spent not only to create green jobs, but actually reduce
the energy consumption and reduce the energy bills as much as
possible. So we are very keenly aware of the need for training
a larger corps of energy auditors. I've begun these
discussions.
Senator Shaheen. A related concern in talking to our
community action agencies which are the folks in New Hampshire
who are doing the low income housing weatherization. They
expressed a concern about the cap on the amount that can
currently be used to weatherize homes. We have a lot of old
housing stock in New Hampshire.
A $6,500 cap is a challenge for many of those homes. You
can't adequately do the work that you need to have done. Are
you willing to or have you given any thought to increasing that
cap to say $10,000 which is what they tell me would be most
effective in New Hampshire?
Secretary Chu. In all honesty I don't know what the
limitations of the statues that have been passed. I would
certainly look into that.
[The information referred to follows:]
The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) by
statute, changed the program's average state cost per unit from $2,500
to $6,500. DOE does not have the authority to grant waivers to
statutory changes made by Congress.
Senator Shaheen. Thank you. I think that's two questions.
But I actually have a third.
I want to follow up on Senator Udall's question about
venture capital and how do we better leverage the private
sector as--I appreciate your commitment to the research that
can be done through the Energy Department and through our own
government laboratories. But how can we better leverage private
capital to help with what the government is going to be
spending to encourage energy research.
Secretary Chu. I think there are a number of tools that
have been proposed by the Administration. I think renewable
energy standards is a way to draw on and to encourage the
investment because it creates a market. I think tax credits are
also a way to encourage the market.
The research and development is a way to essentially push
from below because you're inventing new things that could look
to be more promising than what we have today. So both the draws
and the pushes and the assistance in loan guarantees, all those
instruments are going to be used.
Senator Shaheen. Thank you.
The Chairman. Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. Secretary Chu I
wanted to follow up with Senator McCain's comments on nuclear
because when the budget blueprint, the FY2010 came out your DOE
press office put out a statement that said, the new
Administration is starting the process of finding a better
solution for management of our nuclear waste. I will certainly
share the concerns of my colleague that after decades and
millions and billions of dollars that have gone toward Yucca to
know that it is considered not an option. To know that where
we're starting the process is concerning.
We've got, as you know, we've got a good handful of
applications that are out there to move forward new projects
within the industry. But boy, if I were looking to advance a
new nuclear facility these comments from the Administration
that we're starting the process of finding a better solution
would be very disconcerting. I don't know what we have done to
our nuclear renaissance that Senator Domenici worked so hard to
advance by pulling the plug on Yucca.
Can you give me any kind of a timeline? Can you speak to
what you feel the Administration will be doing to advance this
so that we're not in this limbo so that you don't have an
industry that is absolutely necessary and essential? As you
have stated before this committee and the President has stated,
nuclear has got to be part of the solution as we work to reduce
our emissions.
Secretary Chu. First we are finalizing or certainly moving
as fast as we can on the $18.5 billion loan guarantee program
for nuclear reactors. That we'll get first.
As I said before as we know a lot more than we did 20, 25
years ago. There is now becoming a very strong possibility that
with fast neutron reactors, a small fraction being fast neutron
reactors, one can actually burn down the nuclear waste. So
based on what we know today I think it is prudent to step back
and say, let's develop a comprehensive policy toward how we
reduce the amount of nuclear waste, how we store it. It will
probably be a mixture of short term, interim waste followed by
essentially permanent storage.
Senator Murkowski. But we're already doing the short term.
It is happening. But we recognize that it is not the long term
solution that we will need that that permanent facility.
Secretary Chu. I was talking short term in a sense that
gives the option of taking that back as we get the recycling
and the ability to burn down some of that waste to split the
long lived actinide nuclei to make it very much shorter lived
to recover a lot of that energy. So short term in that sense.
Then after that one can think of repositories that are
essentially, you would say, we don't ever want to recover it.
Senator Murkowski. No.
Secretary Chu. So I would say the time scale I think would
be this year to get a really esteemed bunch of people to look
at this based on what we know today and to think of what is
going on. Other countries I think would participate in this
fresh look.
Senator Murkowski. I would urge a level of expediency and
absolute urgency. Because otherwise we will as a country by
shutting the door on nuclear which I think would be
irresponsible. It's one thing to convene smart people together
to look at the problem. It's another thing to make it a
commitment of the Administration that we need to resolve this
issue otherwise we will not be able to resolve, meaningfully,
the issue of our carbon emissions.
I wanted to ask one question to you about the renewable
electric standard. You've stated and I would agree with you
that we've got some challenges with meeting a 20 percent RPS
due to the intermittent nature of what we have with renewables.
I think you made a statement that during the snowstorm this
winter in the Pacific Northwest we had a situation where the
wind didn't blow for three straight weeks. So we recognize
we've got some issues there.
Can--and I'd ask you to address two things. First, the
transmission infrastructure and whether you acknowledge that
we're just woefully behind or the transmission infrastructure
right now is inadequate to allow us to achieve a 20 percent
standard by the 2021 requirement. Then how we deal with the
multiple States.
There's 29 States plus the District of Columbia that have
some kind of clean energy requirement right now. Each one of
these States has different targets. They've got different
definitions of resources. In fact every one of the States that
has a program has at least one eligible resource that wouldn't
qualify under this Federal RPS program definition.
How do you reconcile dealing with the different mandates
from 30 different areas?
Secretary Chu. First let me say that I agree with you that
the transmission system, as it is today, is not suitable for
getting the renewable energy to the parts of the population
centers in the United States. So this is something we have to
concurrently build up. The United States is blessed with
incredible renewable energy resources but they are localized in
certain areas in the upper Midwest and the Pacific Southwest
when solar becomes economically viable.
So we have to start building that. By 2020 I hope we would
be well along in getting the line sited, getting agreements in
local communities and States. We will be building up this
transmission system.
We will have to look at the financing mechanisms for the
transmission. Right now my understanding is that the
transmission lines are paid for by point of origin of energy
production. That was based on a time when we produced and used
energy very locally.
But now we recognize in order to take full advantage of
renewable energies which will take some time, we--this is a
national issue. So we need a comprehensive plan nationally to
port energy around and it does take time. So--and what was the
other part?
Senator Murkowski. The second one was how you deal with the
30 some odd States that have different mandates?
Secretary Chu. This is the way our country works that in
many times our States have their rights as States to have these
mandates. I look upon it as the States have been a good
laboratory in many instances for what eventually is done
federally. They can try what works or what doesn't work for
them.
In the end, yes, I think we need to develop more
comprehensive policies. But historically if I think of a lot of
issues that the country has dealt with like clean air, clean
water, those things; the States actually did take the lead and
develop things that then became national standards, appliance
standards similarly.
So it's essentially the way our country has been working
over the last century.
Senator Murkowski. Mr. Chairman, I'd have some follow up,
but I have well exceeded my time. So I will----
The Chairman. Senator Risch has not had a chance to ask
questions. Go ahead, please.
Senator Risch. Thank you, Mr. Chairman. Secretary Chu, I
know you're familiar with the Idaho National Laboratory and its
two missions of obviously research and of clean up. The
Department of Energy very wisely has separated those two over
the last decade or so.
We've--and you also know that the State has had some
difficulty with the Department. In fact we litigated the issue
of the clean up over at the laboratory. I'm wondering if you're
familiar with the agreement that was entered into and was court
approved that resolved the issue of clean up over at the INL
site in Eastern Idaho?
Secretary Chu. No, I'm not familiar with the details.
Senator Risch. Secretary let me--you're not going to be
able to answer my questions then. But I'm going to ask you to
follow up on it.
[The information referred to follows:]
At your request, I have followed up on the agreement entered into
with the State of Idaho that was court approved and resolved the issue
of cleanup of the buried waste at the INL site in Eastern Idaho. My
staff has provided me with detailed information which I will briefly
summarize here. On July 1, 2008, the United States Department of Energy
(DOE) and the State of Idaho announced their Agreement to implement the
United States District Court Order of May 25, 2006, in coordination
with the ongoing Superfund cleanup of the area. The Agreement marked
the end of 6 years of litigation related to interpretation of the 1995
Settlement (or Batt) Agreement. Implementation of this Agreement will
satisfy DOe's commitment to Idaho to remove waste containing
transuranic and other contaminants that was buried at Idaho National
Laboragtory (INL) several decades ago.
Under the 2008 Agreement, DOE and its contractor will continue
retrieving drums of radioactive waste and hazardous chemicals from the
burial ground. The transuranic waste is repackaged and sent to the
Waste Isolation Pilot Plant--DOE's deep geologic transuranic waste
repository in Carlsbad, New Mexico. The other targeted waste, which may
contain volatile organics and uranium, is being shipped out of Idaho to
other licensed or permitted disposal facilities. The Department intends
to excavate 5.69 acres and remove a minimum of 6,238 cubic meters of
targeted radioactive and hazardous waste over the life of the buried
waste cleanup.The Agreement requires that all targeted waste retrieved
by December 31, 2017 be shipped out of the state by December 31, 2018,
and all waste retrieved after that be shipped within one year of
retrieval. I also recognize that through February 2009, DOE has
excavated about 15% of the 5.69 acres, retrieved over 2,500 cubic
meters of targeted waste, and shipped in excess of 500 cubic meters of
the waste out of the State of Idaho. Our plans include continuation of
this significant progress to ensure we meet the obligations in the
Agreement to Implement with the State of Idaho.
Senator Risch. Let me tell you briefly after a considerable
amount of litigation the State and the DOE entered into an
agreement whereby the DOE would remove the--all of essentially
the nuclear waste that was left over from the cold war. The INL
played a role just as Rocky Flats and Hanford and all the other
sites did. We're the only one with an agreement.
The DOE agreed that they would remove the waste. They're
doing well. They're keeping up with the contract. The waste is
being removed to the wip site.
Unfortunately there's material that is not qualified for
the wip site and it was anticipated that that would go into
Yucca Mountain. Now I understand in answer to Senator McCain's
question you indicated that the United States has no plans to
activate Yucca Mountain. So the question I have for you which I
suppose you can't answer at this point is what are you going to
do about the contract that requires you to remove materials
that are of such a level that they can't go into the wip site?
Secretary Chu. This goes to the sense of urgency that
Senators McCain and Murkowski talk about in terms of developing
an approved approach to dealing with high level nuclear waste.
So it's certainly going to be--we'll be looking at this very
intensely over this next year.
Senator Risch. Secretary, with all due respect, I
appreciate that. But I can tell you that this contract is very
clear. It is in the form of a court order that it has to be
moved.
Do you have any thoughts right now as to where, if you're
not going to go to Yucca Mountain. This whole thing with Yucca
Mountain not going to be used is a relatively new thing.
Certainly when somebody made that decision, when the new
Administration made that decision, somebody must have had some
thoughts as to where--how you were going to keep your
agreements on removing the high level stuff from places like
Idaho where you are required to by court order.
Secretary Chu. In addition to that I should also add that
we have obligations to the utility companies for similar
disposition of their waste. So I hope----
Senator Risch. But with the utility companies all you have
to do is pay a fine. That's been going on for some time. Not so
with the Idaho contract. You've got to move it.
So what was going through people's mind when they said
we're not going to use Yucca? Where you thinking you're going
to go?
Secretary Chu. I think, as I said before, that there are
other options that we will have to look at. Quite frankly I
think there would be better options. But at this time I'm not
willing, again I would want to seek the advice of some deeply
knowledgeable people on this.
Senator Risch. Will these options you refer to--can you
tell us what these options are so that we can be thinking about
them too?
Secretary Chu. I think it would--first, it's going to be a
mixture of short term sites. There are several layers of short
term sites of longer term and then finally, final disposition.
I think it probably will have to be geographically distributed
in some way other that you know, one location, one site will
probably not work.
Senator Risch. But these are sites that you have not
located or identified or----
Secretary Chu. That's correct.
Senator Risch [continuing]. Gotten at this point.
Secretary Chu. That's correct.
Senator Risch. Ok. Have you got an idea of how long this is
going to take because you're under some real time constraints
in the Idaho agreement?
Secretary Chu. As I said that we will be assembling this
and getting a report sometime this year. I agree there are real
time constraints.
Senator Risch. Ok, thank you. Thank you, Mr. Chairman.
The Chairman. Thank you. Senator Risch, let me just ask. My
impression was that the obligation to move that waste under the
Idaho agreement was effective in 2035. Is that wrong?
Senator Risch. That is incorrect. There is a series of
deadlines that have to be met in that.
The Chairman. Ok. Alright. Let me ask another question then
I believe Senator Murkowski had another question or two and
maybe Senator Udall, I'm not sure.
I just wanted to ask one of the issues that you and I have
discussed before and you know is near and dear to my heart is
the whole issue of the role of our NNSA laboratories, Los
Alamos, Sandia and Lawrence Livermore in particular. The
involvement of those laboratories in the scientific work that
is pursued the basic scientific work that's pursued in the
Department of Energy. I'd appreciate it if you could just give
us a short statement as to your thoughts as to the
appropriateness of them being involved in that scientific work.
Secretary Chu. I think the--first their core function of
our National Nuclear Security intimately depends on having an
intimate coupling with science. The stockpiled stewardship is a
science based program. It is essential that the science
connection with our nuclear weapons be kept, maintained,
possibly even strengthened as you go into these, an aging
arsenal.
In addition to that the scientific expertise has become
quite useful in non proliferation work. It's been quite useful
in the interpretation of intelligence gathered by the United
States. So again anything that threatens the science component
of those NNSA laboratories I would be very much opposed to.
The science component of those laboratories actually was a
mechanism for attracting some of the best scientists into our
National Security programs. Again, I think that's a vital
component of particularly those 3 weapons laboratories. This is
as tradition goes way back to the very beginning with Robert
Oppenheimer. It has served the country well.
So any discussions about how those labs evolved should not
sever that intimate tie. The weapons labs are an important
national asset, not only to our nuclear security, but to our
science in general.
The Chairman. Thank you very much. Let me call on Senator
Murkowski for her additional questions.
Senator Murkowski. Thank you, Mr. Chairman. Secretary Chu I
wanted to follow up with the question that we were discussing
about the RAS and what is happening out in the respective
States. I think the word that you used was that the States are
good laboratories. I would certainly agree with that.
They look to their resources. They figure out what is
possible within their areas. Many of these States have moved
forward with setting their own standards and working toward
them.
But we recognize that all sources of energy in terms of
their location are not equal. In my State we're about 20,
almost 25 percent renewable if we're allowed to count the
definition of hydro. So, so much of this comes down to the
definitions.
I just received a letter, actually the Chairman and I
received a letter signed by 13 members here, 11 of them
Democrats urging us as we look toward a national renewable
electricity standard to expand the definition to include ways
to energy. As we debate how we define renewables can you give
me some of what you consider to be the parameters? I have a
difficult time understanding why we would not include hydro as
renewable.
I have a difficult time understanding why if our goal with
an RES is to move toward reduced emissions why we would not
include nuclear in the definition. So could you just speak to
that issue because I think it is incredibly important as we
discuss the RES? Then if you could also address the concept, if
you will, of regional standards as opposed to a national
standard?
I understand that what we have in the Northwest is entirely
different than what we have in the Southeast. Can you address
both of those, please?
Secretary Chu. I was not part of the discussion of the
definitions of renewable.
Senator Murkowski. I understand that.
Secretary Chu. I would certainly work with this committee
to look at it. I agree that anything which greatly reduces
carbon emissions is something that we should nurture. Anything
that would increase the reduction of carbon emissions, new
hydro is something we should nurture. But I will be perfectly
happy in wanting to work with the committee in looking at how
these things are defined.
Senator Murkowski. Can you speak a little about just a
regional concept as opposed to a national standard and where
you might fall on that?
Secretary Chu. I certainly know, again I agree with you
that the amounts of renewable energy, like wind and solar, vary
greatly in different regions. So again one could look at that.
The Southeast does not have one resource it has biofuel
resources, but not wind resources. One has to look at this with
a finer eye to really see what are going to be the
consequences.
Again I will be working with the committee on this.
Senator Murkowski. We do want to work with you on this. It
is an issue that one thing I've determined it's not partisan.
It really is much more regional issue.
Those parts of the country that aren't blessed with
sufficient renewable resources are looking at this and saying
this is troubling to us because what it will be for all intense
and purposes is a tax on us. Because we're not blessed with as
much as the East has or the North has. It is something that I
think we've got to really focus, not only on the definition but
what the goal is.
If our goal is reduced emissions than we need to be making
sure that what we are doing is encouraging just that. If our
goal is to get more wind turbines erected, if our goal is to
get more solar panels up, than that's completely different than
the goal of working to reduce our emissions. So we want to work
with you on this to make sure that we're not unduly hampering
efforts in certain parts of the country or challenging them in
a way that is going to financially unfair.
Thank you, Mr. Chairman.
The Chairman. Senator Udall, did you have additional
questions?
Senator Udall. Mr. Chairman, I do have a brief final
question. I'm reluctant to have the last word here. So I hope
you and Senator Murkowski will feel if you need to say more you
can and should.
I've been listening with real interest to Senator
Murkowski's points that she's making. I think we are
undertaking a challenging process here, one where in the end we
perhaps arrive at a hybrid energy policy much like we want us
to develop a series of hybrid energy systems all over the
country. I think we do have a dual goal, Senator, which is to
promote renewable energy technologies that have emerged over
the last 10 years but also to reduce carbon emissions.
All of these technologies perhaps are at worse distant
cousins of each other and perhaps are siblings. But I take
seriously your concerns in the important questions that you're
raising here today. In that spirit, Dr. Chu, I'll submit for
the record a question about the hydrogen R and D.
I feel like I've been, some cases whip sawed by the
excitement about hydrogen and then those who say that's not
realistic. I do know you have, I think, a billion dollars plus
in your budget to do R and D. There's some recent reports that
suggest we should refocus on hydrogen, not in the short term,
perhaps not even the medium term, but in the long run that may
be where we land in 50 to 75 to 100 years. So if I might, I'd
submit that question about the use of those dollars and what
you foresee.
One final comment. I listened with interest to Senator
McCain's questions about solar. One of the dynamics here that
we should acknowledge is that there may be and this is an
overused term these days, but it's effective term and there may
be game changers. As you note in your statement if you develop
photovoltaic solar power that is five times cheaper than
today's technology and more efficient as well if we raise the
efficiency levels from 12, 13 percent to 18 or 19 or 20 you get
exponential gains.
That technology may well be much more deployable, much less
expensive and therefore make up a bigger portion of our energy
needs. So I just want to note that for the record as well that
there are advances that we can't even foresee. I believe that
when we make this investment at the Federal level, make this
investment internationally and this is why this is such an
exciting field. It is why I'm so excited that you're leading
the Department of Energy at this important time in our history.
Thank you, Mr. Chairman.
The Chairman. Thank you very much. Secretary Chu, thank you
for spending this time with us. We will stay in close touch as
we try to proceed to develop some legislation in this area.
Why don't we excuse you and bring forward the second panel?
Secretary Chu. Thank you.
The Chairman. Thank you.
On our second panel let me just introduce folks as they are
taking their seats at the table here.
Dr. George Crabtree is a Senior Scientist and Associate
Division Director at Argonne National Laboratory in Illinois.
We appreciate him being here.
Mr. Bob Fri is a visiting scholar with the Resources for
the Future. Thank you for being here.
Dr. Jim Bartis is Senior Policy Researcher with RAND
Corporation. Thank you.
Ms. Deborah Wince-Smith is President of the Council on
Competitiveness.
Professor Mike Corradini is Director of the Wisconsin
Institute of Nuclear Systems. Originally hails from Albuquerque
which we wanted to note for the record. But he's at the
University of Wisconsin in Madison.
So why don't we just take--if each of you would take maybe
about 5 minutes and tell us the main points you think we need
to be aware of on this set of issues. We will include a full
statement, any full statement you have in the record as if
read. But Dr. Crabtree why don't you start and we'll hear from
all of you. Then we'll have some additional questions.
STATEMENT OF GEORGE W. CRABTREE, SENIOR SCIENTIST, ASSOCIATE
DIVISION DIRECTOR and DISTINGUISHED FELLOW, MATERIALS SCIENCE
DIVISION, ARGONNE NATIONAL LABORATORY, ARGONNE, IL
Mr. Crabtree. Chairman Bingaman, Ranking Member Murkowski
and members of the Energy and Natural Resources Committee, I'm
grateful for the opportunity to contribute to the national
discussion on the role of science and technology in meeting
America's energy, environmental and economic challenges. Let me
begin by expressing my thanks to the members of the Senate
present today and to the entire Congress for their strong
support of basic science and technology. The crises we face
today are a perfect storm of unpredictable energy supply,
global warming and severe economic recession.
Translational basic science and technology are essential to
meet these demands. A single number captures the magnitude of
the energy challenge, $700 billion per year. That's the cost of
imported oil at last summer's peak prices. That money is
removed from the United States economy where it cannot turn
over and stimulate additional economic activity.
Even at today's prices imported oil will remove about $200
billion a year from the United States Beyond cost however, lies
a serious security threat. We import nearly 60 percent of our
oil making us vulnerable to interruption caused by natural
disasters, terrorist acts or interim political decisions in
producer countries.
Carbon dioxide emissions are an equally serious threat. The
evidence for global warming is unequivocal. The United States
is the second largest carbon dioxide emitter behind China. We
need to regain international leadership in tackling this
important global threat.
There's an opportunity hidden in these challenges. Next
generation energy technologies will not only solve our own
energy and environmental problems but also create a new export
market of enormous capacity and enduring strength. The world
faces the same energy and economic and environmental challenges
that we do. Meeting these global needs with next generation
technologies exported by U.S. companies will generate long term
economic growth that can protect the economy from stagnation or
recession and reverse the drain of imported oil.
Next generation energy technologies are an unprecedented,
global economic opportunity. The question for us is whether the
United States will be buying them or selling them. The report
the New Science for a Secure and Sustainable Energy Future here
issued recently by the Department of Energy's Basic Energy
Sciences Advisory Committee outlines the transformational
opportunities to address these challenges and recommends a path
forward.
We know what many of the next generation sustainable energy
technologies will be carbon sequestration, high efficiency coal
and nuclear electricity, renewable solar, wind and geothermal
power generation, solar fuels and biofuels, solid state
lighting, energy storage and high temperature superconductivity
for a 21st century electric grid. Why have we not deployed
these technologies? The answer is simple. The current versions
of these technologies do not perform well enough to compete
with conventional fossil energy alternatives.
The performance road blocks to next generation sustainable
technologies are extremely challenging. Otherwise they would
have been solved by the extensive research and development
already devoted to the energy sector. Some of the most
important challenges are inexpensive catalyst ten times more
active than platinum, electrodes for batteries that accept and
release large quantities of lithium to increase the energy
density, new superconductors that operate at twice the
temperature of the current generation for long distance
transmission with solar and wind electricity.
The materials and chemistry that overcome these performance
road blocks will be much more complex than those in use today.
High temperature superconductors contain four or five elements
instead of the usual one or two for conventional
superconductors. The best battery electrodes have intricately
nanostructured surfaces that promote the injection and release
of lithium.
The catalytic activity of platinum can be increased by a
factor of ten by altering its subsurface composition in subtle
and still largely unexplored ways. The lesson of the last 10
years of materials in nanoscience research is clear. Greater
complexity enables higher performance.
Thomas Edison gave us a wonderful model when he said,
Genius is 2 percent inspiration and 98 percent perspiration.''
These words motivated the technology of his day and described
his remarkable success with the light bulb, the phonograph and
the movie camera. The complexity of today's materials in
chemistry however, is much greater than it was in Edison's
time.
It's no longer possible to try one variation after another
and eventually hit the jackpot. Instead we need to raise the
inspiration quotient significantly. Instead of 2 percent
inspiration we need at least 50 percent inspiration to
dramatically reduce the perspiration of perfecting the new
energy technologies.
This inspiration can come only from basic science. We need
to understand the why and how of materials. Why they do what
they do at nano scale dimension and ultra fast time scales that
are beyond the reach of the human eye. This knowledge of how
and why is the tipping point for creating new materials and
chemistries that will change the performance equation of
sustainable energy.
What are the basic science challenges we need to solve?
They're laid out in 12 basic research needs workshop reports
and summarized by this new science report. They provide the
road map for investments in inspirational basic science that
will transform the energy game.
The energy frontier research centers proposed by the DOE
Office of Basic Energy Sciences are a first step in promoting a
new level of inspiration. These centers will launch dream teams
of the best scientists drawn from diverse institutions working
in interdisciplinary teams, using the most advanced tools and
focused on the most important problems outlined in the Basic
Research Needs workshops and the New Science Report. These
dream teams are a new concept on the energy research landscape
representing not only the will but also the critical mass to
overcome the materials and chemistry road blocks to competitive
sustainable energy performance.
But the Department of Energy must do more than establish
dream teams and EFRCs. It must recruit the next generation of
talented scientists, post docs and early career scientists to
inspire them to become tomorrow's energy innovators. The
challenges we face dependence on imported oil, carbon dioxide
emissions and growing ourselves out of the recession are among
the most serious that we have faced in 6 decades. The solution
will require basic science inspiration on a grand scale and a
new generation of energy scientists to achieve it.
Thank you again for the opportunity to provide testimony.
I'll be pleased to answer questions at the right time.
[The prepared statement of Mr. Crabtree follows:]
Statement of George W. Crabtree, Senior Scientist, Associate Division
Director and Distinguished Fellow, Materials Sciences Division, Argonne
National Laboratory Argonne, IL
Chairman Bingaman, Ranking Member Murkowski, and members of the
Energy and Natural Resources Committee. I am grateful for the
opportunity to contribute to the national discussion of the role of
science and technology in meeting America's energy, environmental and
economic challenges.
Let me begin by expressing my thanks to the members of the Senate
present today and to Congress for their strong support of basic science
and technology. Basic science and technology have given us remarkable
innovations that have dramatically raised the quality of our personal
lives, increased the productivity of our businesses, and created long
term economic growth. However, the combined challenges of energy,
environment and the economy that we face today are greater perhaps than
at any time in the last six decades. They will require a new generation
of inspirational breakthroughs from basic science to replace the
economic recession with economic growth, to replace uncertain and
costly imported oil with a secure and sustainable energy supply, and to
reduce carbon dioxide emissions that threaten global climate.
Congress has taken a bold step toward meeting these economic,
energy and climate challenges with the recent passage of the American
Recovery and Reinvestment Act. Along with the pending FY09 Omnibus
Appropriations Act, these acts have the power to transform science and
technology into the vibrant and aggressive engines of change envisioned
by the America COMPETES Act passed by Congress in 2007.
But such daunting goals cannot be achieved in a year. A sustained
and aggressive investment in basic scientific research, manpower and
infrastructure is needed, like that triggered by Sputnik or devoted to
the Manhattan project. Today's combination of energy, environment and
economic challenges is much greater than either of these landmark
historical events.
Energy and Environmental Challenges
A single number captures the magnitude of the energy challenge:
$700 billion/yr, the cost of imported oil at last summer's peak prices.
That money is removed from the U.S. economy, where it cannot turn over
and stimulate additional economic activity. Even at today's prices,
imported oil will remove about $200 billion/yr from the U.S. economy, a
significant drain on the economic recovery. Last year we imported
nearly 60% of our oil, used primarily to power our cars and trucks.
Imported oil has become the lifeblood of our transportation system,
making us vulnerable to interruptions caused by natural disasters,
terrorist acts or internal political decisions in producer countries.
Our energy security requires markedly reducing this dependence on
imported oil.
Carbon dioxide emissions are an equally serious threat. The
evidence for global warming cited by the Intergovernmental Panel on
Climate Change is unequivocal: rising average temperatures and sea
levels, shrinking polar ice and snow cover in the northern hemisphere,
and pole-ward migrations of animals and plants to maintain their
preferred habitat. The U.S. is the second largest carbon dioxide
emitter behind China, but we have remained remarkably passive in
addressing this issue. We need to regain international leadership by
tackling this global threat.
There is a transformative opportunity hidden in these challenges.
Next-generation energy technologies not only solve our own energy and
environmental problems, but also create a new export market of enormous
capacity and enduring strength. The world's energy and environmental
problems reflect our own--a reliance on uncertain imported oil and the
threat of climate change. Meeting these global needs with next-
generation technologies exported by U.S. companies generates long term
economic growth that can protect the economy from stagnation or
recession and reverse the drain of imported oil. Next-generation energy
technologies will be developed--the question is whether the U.S. will
be buying or selling them.
The Path Forward
The report New Science for a Secure and Sustainable Energy Future*,
issued recently by the Department of Energy's Basic Energy Sciences
Advisory Committee, outlines the opportunities to address these
challenges and recommends a path forward. We know what many of the
next-generation sustainable energy technologies are: carbon capture and
sequestration; high-efficiency coal and nuclear electricity; renewable
solar, wind and geothermal power generation; solar fuels and biofuels;
solid state lighting; energy storage for plug-in hybrid and battery
electric cars, and high-temperature superconductivity for a 21st
century electric grid. Many of these technologies have been proven in
principle in the laboratory or in small scale demonstrations. Why have
we not deployed them? The answer is remarkably simple and universal:
the current versions of these technologies do not perform well enough
to compete with conventional fossil energy technologies.
---------------------------------------------------------------------------
* See Appendix II
---------------------------------------------------------------------------
The performance roadblocks to next-generation sustainable
technologies are extremely challenging--otherwise they would have been
solved by the extensive research and development already devoted to the
energy sector. Inexpensive catalysts ten times more active than
platinum are needed for producing electricity in hydrogen fuel cells
that operate without emitting pollutants or carbon dioxide. Electrodes
that accept and release large quantities of lithium are needed for high
energy density batteries to enable plug-in hybrids and all-electric
vehicles. New superconductors that carry high current at low loss are
needed for long-distance transmission of solar and wind electricity
from remote generation sites to population centers.
The materials and chemistry that will overcome these performance
roadblocks will be much more complex than those in use today. High-
temperature superconductors contain four or five elements instead of
the one or two of conventional superconductors. The best battery
electrodes have intricately nanostructured surfaces that promote
injection and release of lithium. The catalytic activity of platinum
can be increased by a factor of ten, by altering its sub-surface
composition in subtle and still unexplored ways. The lesson of the last
ten years of materials and nanoscience research is clear: greater
complexity enables higher performance.
The complexity demanded of next-generation materials is so great
that conventional trial and error approaches to their discovery and
development are failing. Edison gave us a wonderful model when he said
``Genius is 2% inspiration and 98% perspiration.'' These words
motivated the technology of his day--and described his remarkable
success with the light bulb, the phonograph and the movie camera. The
complexity of today's materials and chemistry, however, is much greater
than in Edison's time. The number of possible variations is enormous.
It is no longer possible to try one variation after another and
eventually hit the jackpot. Instead, we need to raise the inspiration
quotient. Instead of 2% inspiration we need at least 50% inspiration to
dramatically reduce the perspiration of perfecting new energy
technologies. This inspiration comes from basic science. We need to
understand why and how materials do what they do, at nanoscale
dimensions and ultrafast time scales beyond the reach of the human eye.
The basic science of how and why materials behave as they do is the
inspiration for developing new materials and chemistries that will
change the performance equation of sustainable energy.
The Basic Science Solutions
What are the basic science challenges we need to solve for next-
generation energy technologies? They are laid out with remarkable
clarity and detail in the twelve Basic Research Needs Workshop reports
that are summarized by the ``New Science'' report. Each of these
workshops selected a sustainable energy challenge such as electrical
energy storage, solar energy, advanced nuclear power,
superconductivity, solid state lighting, or catalysts for energy. Each
workshop then convened a group of 100 or more experts drawn from
universities, national laboratories, industry and foreign countries to
identify the materials and chemistry challenges in the selected field
and the promising research directions to overcome them. These workshops
and reports are textbooks for next-generation sustainable energy
technologies. They provide the roadmap for investments in inspirational
basic science that will change the energy game.
The importance of basic science inspiration for next-generation
sustainable energy technologies cannot be overemphasized. History has
shown that breakthrough materials and chemistries, once found, are
quickly snatched up by entrepreneurs looking for a competitive
opportunity. The laser, digital electronics, and fiber optics
communication are all examples of materials advances spawning new
technologies. These technologies flowed from basic research. Try to
imagine, for example, the information revolution based on vacuum tubes.
In the rush to do something about the daunting problems of imported
oil and carbon dioxide, we often emulate Edison's emphasis on
perspiration--redoubling our efforts on technologies based on existing
materials and chemistry. These efforts often improve technologies
incrementally, but just as often they miss the opportunity for game-
changing breakthroughs to an entirely new material or chemistry that
dwarfs the old approaches. The big solutions come from high risk-high
payoff basic science on new materials and chemistries--catalysts for
fuel cells, electrode materials for batteries, superconductors for
electricity transmission. These basic science inspirations are the
tipping points that create the next-generation energy technologies that
will replace imported oil, reduce carbon dioxide emissions, and grow us
out of the recession. To have the biggest effect, we must go after the
biggest challenges, and that means investing in basic science.
Energy Frontier Research Centers
The Energy Frontier Research Centers (EFRC) proposed by the DOE
Office of Basic Energy Sciences are a model for promoting inspiration.
These centers will create ``dream teams'' of the best scientists,
working with the best tools and focused on the most important problems
outlined in the Basic Research Needs Workshops and the ``New Science''
report. The EFRCs are basic science inspiration machines, examining how
complex materials and chemistry work at nanometer length scales and
ultrafast time scales. The scientific knowledge and understanding they
generate will be the basis for overcoming the materials and chemistry
roadblocks to next-generation sustainable energy technologies.
The scientific community has responded enthusiastically to the
concept and opportunity of EFRCs. The Office of Basic Energy Sciences
has received approximately 260 proposals representing 3800 senior
investigators from 385 research institutions in 41 States and the
District of Columbia. The proposals reflect an unusually high degree of
interdisciplinary cooperation--the average proposal has nearly 15
senior investigators from 4.8 institutions. The EFRCs will deliver the
``dream teams'' needed to overcome the challenging performance
roadblocks to next-generation sustainable energy technologies.
The Department of Energy must do more than establish ``dream
teams'' and EFRCs. It must recruit the next-generation of talented
early career scientists and inspire them to become tomorrow's energy
innovators. The challenges we face--dependence on imported oil, carbon
dioxide emissions that accelerate global warming, and growing ourselves
out of the recession--are the biggest we have faced in six decades. The
solution will require basic science inspiration on a grand scale--and a
new generation of energy scientists to achieve it.
Thank you again for the opportunity to provide this testimony and I
will be pleased to answer any questions.
The Chairman. Thank you very much.
Mr. Fri.
STATEMENT OF ROBERT M. FRI, VISITING SCHOLAR, RESOURCES FOR THE
FUTURE
Mr. Fri. Thank you, Mr. Chairman, Senator Murkowski.
Although I'm a visiting scholar Resources for the Future,
I'm here today representing the National Research Council where
I participated in a number of energy studies and served as the
vice chair of the Council's Board on Energy and Environmental
Systems. As you know the Council is nearing the end of its
major energy project, America's Energy Future and reports from
the first phase of that study will soon be available to the
Congress. But for today's purposes I'm going to draw on some
background of a series of energy R and D studies we have
conducted over the years together with the first product of the
America's Energy Future project, a summary of the National
Academy's Summit on America's Energy Future held a year ago.
Now my task today, as I understand it is to try to distill
from these reports and my own experience some lessons that may
be useful as you consider the programs that you are in the
process of reauthorizing. In that regard I only want to make 3
points.
The first is a familiar one. Taken together all of these
studies forcefully remind us that it is still too early to pick
winners in our search for energy technologies that will
adequately address the challenges of energy security, economic
viability and climate change. For this reason the fundamental
objective for the research programs that this committee is
considering remains the same. To sustain and advance a
portfolio of technology options from which the Nation can
ultimately select those that best meet our energy goals.
Now, and this is the second point. Although the importance
of a broad energy portfolio is a familiar observation, these
Council reports also strike a new theme that the Nation is
getting closer to the point at which we can, in fact,
distinguish a few winners and losers. For the essential next
step in several key fossil, nuclear and electric grid
technologies is to build them at a scale that will demonstrate
their cost and performance for commercial deployment.
Integrated gasification combined cycle plants, carbon capture
and storage, the next generation of nuclear plants and the so
called SMART grid are at this point in their development.
Now the Summit report also underscores the importance of
getting on with these programs with a real sense of urgency.
Many speakers asked whether the urgency being expressed by the
public and by policymakers is sufficient. Now in my view the
year since the Summit has seen our collective sense of urgency
grow substantially.
Nevertheless it is important to realize that there is no
benefit in delaying the demonstration of these key
technologies. We need to know. Industry needs to know how these
new fossil, nuclear and grid technologies perform and an
especially important target for research, we need to get them
on the experience curve of continuing efficiency improvement.
Waiting will not answer these questions. It will only make more
difficult applying the answers when we finally get them.
Finally as important as these first commercial projects are
they will not be the final answers to our energy problems. We
will depend, as the Secretary has said, as Dr. Crabtree has
said, on innovations as yet unknown to create technologies that
are even more efficient and environmentally friendly. My own
analysis of technology innovation convinces me that basic
research is the foundational source of this needed innovation.
Moreover basic research is the conical example of a public
good that won't get done unless government does it. A vigorous
basic research program is an essential part of an energy
research portfolio. I applaud the committee's support of this
crucial program.
Those are my brief remarks, Mr. Chairman. I'd be happy to
answer your questions later.
[The prepared statement of Mr. Fri follows:]
Statement of Robert M. Fri, Visiting Scholar, Resources for the Future
Good morning, Mr. Chairman and members of the committee. I am
Robert Fri, a Visiting Scholar at Resources for the Future. Today,
however, I am representing the National Research Council, where I have
been active in a succession of Council studies of energy and energy R&D
over the last decade. I currently serve as vice-chair of the Council's
Board on Energy and Environmental Systems.
As you know, the National Research Council is nearing the end of a
major energy project, America's Energy Future. Reports from the first
phase of that study will soon be available to the Congress. For
purposes of today's discussion, however, I want to draw on three other
Council projects--our retrospective and prospective assessments of the
benefits of fossil fuel and energy efficiency R&D programs at the
Department of Energy; an evaluation of the nuclear energy research
program at DoE; and the first product of the America's Energy Future
project, the summary of the National Academies Summit on America's
Energy Future held a year ago. Thank you, Mr. Chairman, for joining us
at the Summit last March. For the record I have included summaries of
these three reports.
My task today is to distill from these reports, and from my own
experience with energy research and development, some lessons that may
be useful as you consider the programs that your committee is in the
process of reauthorizing.
The first lesson is a familiar one. Taken together, all of these
studies forcefully remind us that it's still too soon to pick the
winners in our search for energy technologies that will adequately
address the challenges of energy security, economic stability, and
climate change. For this reason, the fundamental objective for the
research programs this committee is considering remains the same--to
sustain and advance a portfolio of technology options from which the
nation can ultimately select those that best meet our energy goals.
Although the importance of a broad research portfolio is a familiar
observation, these Council reports also strike a new theme--that the
nation is getting closer to the point at which we can in fact
distinguish a few winners and losers. For the essential next step in
several key fossil, nuclear, and electric grid technologies is to build
them at a scale that will demonstrate their cost and performance for
commercial deployment. Integrated gasification combined cycle (IGCC)
coal-fired power plants, carbon capture and storage (CCS) technology,
the next generation of nuclear power plants, and so-called smart grid
technology are at this point in their development.
The Council's analyses of prospective benefits of the IGCC and CCS
technologies suggest that the benefits of government investment in
critical research areas greatly outweigh the costs. Specifically:
Our assessment of gasification technology suggests that
federal investment in research to improve the efficiency of the
process--especially of the carbon capture step--would yield on
the order of $4-7 billion in net present value of economic
benefit under almost any scenario of deployment. If natural gas
prices rise, this benefit could be several times larger.
Similarly, federal investment in the development of carbon
sequestration technology could yield discounted economic
benefits on the order of $2-4 billion. This result assumes only
a modest acceleration of the availability of the technology,
recognizing that the private sector would have a strong
incentive to develop carbon sequestration in the event of a
national policy to reduce net carbon emissions. Under some
scenarios, the benefit could be much larger.
In addition, the Council's evaluation of the DoE nuclear R&D
program assigns the highest budget priority to the NP2010 program and
to research in support of the commercial fleet of nuclear power plants.
The report on the Summit on America's Energy Future is one of several
sources stressing the centrality of the electric grid in delivering
economic and reliable electricity. Furthermore, the so-called ``smart
grid'' is essential to realizing the potential for energy efficiency,
to bring renewable energy on line, and to managing carbon and other
emissions.
The Summit report also underscores the importance of getting on
with these programs with a real sense of urgency. To quote the Summit
report, ``many speakers . . . asked whether the urgency being expressed
by the public and by policymakers is sufficient''. In my view, the year
since the Summit has seen our collective sense of urgency grow
substantially. Nevertheless, it is important to realize that there is
no benefit in delaying the demonstration of these key technologies. We
need to know how new fossil, nuclear, and grid technologies perform,
and we need to get them on the experience curve of continuing
efficiency improvement. Waiting will not answer these crucial
questions, only make more difficult applying the answers when we
finally get them.
But as important as these first commercial projects are, they will
not be the final answers to our energy problems. We will depend on
innovations yet unknown to create technologies that are even more
efficient and environmentally friendly. My own analysis of technology
innovation convinces me that basic research is the foundational source
of this needed innovation. Moreover, basic research is the canonical
example of a public good that won't get done unless government supports
it. A vigorous basic research program is an essential part of the
energy research portfolio, and I applaud committee's support of this
essential program.
Finally, the Council's research, and especially our retrospective
study of DOE's energy R&D programs, provides some insight into managing
the energy research enterprise successfully.\1\
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\1\ The discussion of managing DOE's energy research is based on
views I have developed from Council studies and other research. A more
complete summary of my conclusions is available in the Fall 2006 issue
of Issues in Science and Technology (http://www.issues.org/23.1/
fri.html)
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As noted earlier, fossil, nuclear, and grid technologies are at the
point of conducting demonstration that will provide information that
the private sector needs to invest in commercial plants. As such,
government research needs to be surgically targeted on removing market
failures that inhibit private sector investment. As an example,
consider the large benefits that our studies assigned to research into
carbon capture technologies. The major reason is that the private
sector does not now have a strong incentive to develop this technology,
and will not until a carbon price is established. Yet current IGCC
technology pays a stiff economic premium because of the inefficiency of
the carbon capture step. Federal investment can accelerate improvements
in this very specific process step that, in turn, will make the IGCC
technology more affordable sooner when a carbon control regime is
finally established.
The history of energy research developed in our retrospective study
shows that government programs with clearly focused goals can yield
substantial benefits. The converse is true, as well; a lack of focus is
often associated with lackluster results. While in its early days, DOE
programs often lacked this focus, in my opinion it has improved
greatly. I commend the Climate Change Technology Program strategic plan
as an excellent roadmap for actions that DOE and other departments can
constructively take.
Managing basic research is an entirely different matter, of course.
Unlike the applied research discussed above, basic research cannot be
tied to specific technologies. On the other hand, it has to have some
relevance to national energy goals. A good way to walk this line is to
identify the physical limits that must be overcome to create
technologies that are more efficient and less polluting than exist
today. The report of DOE's Basic Energy Sciences Advisory Committee New
Science for a Secure and Sustainable Energy Future is an admirable
example of this kind of thinking. Similar thinking should be extended
to the application to energy issues of scientific disciplines not
usually thought of as energy research. The committee's consideration of
the Grand Challenges Research Initiative seems to be in this spirit.
That conclude my remarks, Mr. Chairman, and I would be happy to
respond to the committee's questions.
The Chairman. Thank you very much.
Dr. Bartis, go right ahead.
STATEMENT OF JAMES T. BARTIS, SENIOR POLICY RESEARCHER, RAND
CORPORATION, ARLINGTON, VA
Mr. Bartis. Mr. Chairman, distinguished members, thank you
for inviting me to testify on the future of fossil energy R and
D and the challenges that must be addressed. My remarks today
are based on my own experience in energy policy and technology
development including some recent research carried out by the
RAND Corporation.
In shaping the overall energy R and D program the greatest
emphasis is now being given to reducing greenhouse gas
emissions. Fossil fuels, namely petroleum, coal and natural gas
are associated with about 90 percent of the greenhouse gas
emissions of the United States. The magnitude of the energy
transformation that we are about to embark on is enormous. As
we go forward with this transformation enhanced support to R
and D directed at how we produce and use fossil fuels is
crucial to maintaining our goals for reducing greenhouse gas
emissions while at the same time assuring our national security
and economic well being.
If the only option available to reduce greenhouse gas
emissions is to eliminate coal use and turn our backs on this
energy resource, consumers in the United States will pay a
heavy price. Not only will our electricity rates rise much
higher than they would otherwise, but also the price of natural
gas will rise dramatically. These higher prices will affect all
users including residential and commercial customers. High
natural gas prices will also cause certain industries to move
production to outside the United States.
In my written testimony I have provided the committee with
13 areas where in my judgment R and D in fossil energy
addresses essential national needs. I give highest priority to
establishing the technology base so that we can use fossil
fuels for electricity generation and greatly reduce greenhouse
gas emissions. Most important is enhanced funding and staffing
for large and long duration demonstrations of the geologic
sequestration of carbon dioxide.
Additionally for both new and existing power plants, R and
D needs to be directed at advanced approaches that enable
simultaneously carbon dioxide capture and high efficiency
electricity production. Considering both research and
demonstration needs of the next 10 years. In my judgment, at
least two billion dollars per year is a prudent estimate for
the annual Federal investment directed at the future of fossil
powered generation.
Next I would like to say a few words about a resource that
could fundamentally change the game for the United States.
Under elevated pressures and low temperatures natural gas forms
a solid complex with water known as a methane hydrate. These
conditions of pressure and temperature occur off shore and in
the Arctic regions including Alaska.
We don't know much about this resource, but we should.
Because some of the estimates of the United States resource
base are enormous, enough to supply the United States with
natural gas for hundreds of years if not longer. If R and D can
successfully show the way to develop methane hydrates the
national benefits are overwhelming. Greenhouse gas control
costs in the power sector would likely be reduced by more than
50 percent.
For energy security both oil shale and coal derived liquids
offer the opportunity to significantly enhance our posture
without increasing and more likely decreasing greenhouse gas
emission as compared to importing crude oil. But this
opportunity can, of course, can only be realized if carbon
dioxide sequestration can be demonstrated to be commercially
and environmentally viable highlighting again, the importance
of Federal support for early, long term, long duration
demonstration. We have in the United States an enormous oil
shale resource, roughly 800 billion barrels. But moving forward
with commercial development requires research directed at
understanding and mitigating or preventing adverse
environmental impacts.
Coal derived transportation fuels are another important
opportunity for energy security. RAND's recent work in this
area shows that with carbon dioxide capture and sequestration
hybrid systems, they use a combination of coal and biomass,
offer very large reductions in greenhouse gas emissions at
costs that are much lower than using only biomass. For coal
derived liquids R and D priorities should center on gaining
early, albeit limited, commercial experience. Furthering the
technology base for coal biomass hybrid systems is another
important research opportunity.
In my written testimony I've also highlighted the
importance of strengthening the management of energy technology
development providing a stronger role for our research
universities in establishing an overall framework that promotes
private sector investment in energy R and D. This concludes my
remarks. I'd be pleased to answer any questions that you might
have.
[The prepared testimony of Mr. Bartis follows:]
Prepared Statement of James T. Bartis\1\, Senior Policy Researcher,
RAND Corporation, Arlington, VA
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\1\ The opinions and conclusions expressed in this testimony are
the author's alone and should not be interpreted as representing those
of RAND or any of the sponsors of its research. This product is part of
the RAND Corporation testimony series. RAND testimonies record
testimony presented by RAND associates to federal, state, or local
legislative committees; government-appointed commissions and panels;
and private review and oversight bodies. The RAND Corporation is a
nonprofit research organization providing objective analysis and
effective solutions that address the challenges facing the public and
private sectors around the world. RAND's publications do not
necessarily reflect the opinions of its research clients and sponsors.
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research priorities for fossil fuels\2\
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\2\ This testimony is available for free download at http://
www.rand.org/pubs/testimonies/CT319/.
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Mr. Chairman and distinguished Members: Thank you for once again
inviting me to testify before this committee, on this occasion to
address critical research and development (R&D) needs and opportunities
associated with fossil energy. I am a Senior Policy Researcher at the
RAND Corporation and specialize in energy technology and policy issues.
My doctoral degree is in chemical physics, granted by MIT.
When I joined the U.S. Department of Energy 31 years ago, the
challenge was energy security. Although energy security remains an
important problem, we now also have a compelling need to reduce
greenhouse gas emissions. Each year, the United States releases the
greenhouse gas equivalent of over 7 billion metric tons of carbon
dioxide. Almost 90 percent of these emissions are associated with the
production and use of petroleum, coal, and natural gas, in order of
decreasing contribution. So, of course, there is a clear need for
research on technologies that allow us to use less of these three
fossil fuels, as well as research on other energy sources, such as
solar and nuclear energy, that lessen our dependence on fossil fuels.
We all hope for a future in which we will depend much less on fossil
fuels while simultaneously maintaining our goals for national security
and economic well-being. My goal today is to make the case that the
path to that future crucially depends on enhanced federal support to
research and technology development directed at how we produce and use
fossil fuels.
Currently, over 77 percent of the nation's electric generating
capacity is based on fossil fuels. Coal plants alone meet nearly 50
percent of our electricity demand. The good news is that we have plenty
of coal, more than any other nation. We also have reasonable amounts of
natural gas. From an energy security perspective, the electric power
sector is today in fairly good shape. From an economic perspective, the
costs of generating power from coal and natural gas are quite
attractive. But the bad news is that these fossil-fuel power plants
account for almost a third of the greenhouse gas emissions released
within the United States. If the only option available to reduce
greenhouse gas emissions is to eliminate coal use and turn our backs on
this energy resource, consumers in the United States will pay a heavy
price. Not only will electricity rates rise higher than they would
otherwise, but also the price of natural gas will rise dramatically and
these higher prices will affect all users, including residential and
commercial customers, and will cause industries that depend on natural
gas to build plants outside the United States.
Highest Priority: Low-GHG Power Production
For these reasons, our highest priority in fossil energy R&D should
be to establish a technology base so that we can use fossil fuels for
power production at greatly reduced greenhouse gas emission levels.
Such a program needs to be directed at four major goals:
1. Establish the technical, environmental, and commercial
viability of geologic sequestration of carbon dioxide in United
States, as well as public acceptance of it. The fundamental
challenge is developing the knowledge base required to
confidently select underground locations that will store large
amounts of carbon dioxide for many hundreds of years. This is a
daunting challenge. The U.S. Department of Energy has underway
an R&D and demonstration program to capture and sequester
carbon dioxide emitted by new and existing power plants. In my
view, this program has been grossly underfunded at every level
of research, from basic studies to demonstration. While
considerable progress has been achieved, the planned tests are
neither large enough nor of long enough duration sufficient to
establish the viability of geologic sequestration. If this
program is shortchanged, either with regard to funds or
staffing, there is a real possibility that the public will
neither gain confidence in the technology nor trust the
Department to execute sequestration projects competently. We
cannot afford to have the Department's efforts in geologic
sequestration of carbon dioxide follow the path the Department
took with Yucca Mountain.
2. Develop advanced power-generation technology that enables
both carbon dioxide capture and highly-efficient power
production from new power plants. We have a problem with
current technology, including even our advanced combined-cycle
systems. Capturing carbon dioxide and preparing it for
transport drains energy from the power plant, increasing coal
or natural gas requirements, raising power costs, and
increasing the amount of carbon dioxide requiring geologic
sequestration. Expanded federal R&D efforts should be
considered, especially R&D directed at high-risk, high-payoff
opportunities for cost reduction and improved efficiency and
environmental performance. Fruitful areas for longer term R&D
include advanced high-temperature fuel cells, oxygen production
at reduced energy consumption, improved gas-gas separation
technologies, higher temperature gas-purification systems, and
reduced or eliminated oxygen demand during gasification.
3. Develop carbon capture technology that can be retrofitted
onto existing power plants. About 800 GigaWatts of electric
generating plants powered by fossil fuels currently operate in
the United States. Representing over 77 percent of total
electric generating capacity, these are the plants responsible
for about a third of U.S. greenhouse gas emissions. Replacing
these existing plants will require an investment of many
trillions of dollars. Approaches are available for capturing
the greenhouse gas emissions from these plants. The R&D
challenge is to discover and bring to the market carbon dioxide
capture systems that drain less power from the plant and cost
less to install and operate.
4. Develop new markets and uses for captured carbon dioxide.
If we are going to capture carbon dioxide, it would preferable
to put it to some good use. One opportunity already exists,
namely, using carbon dioxide to extract crude oil that remains
in place after normal petroleum pumping operations cease.
Considering advanced methods for enhanced oil recovery, one
recent study sponsored by the Department of Energy suggests
that as much as 200 billion barrels of petroleum might be
recoverable while simultaneously sequestering billions of tons
of carbon dioxide. A longer term option is to use captured
carbon dioxide to support the production of renewable liquid
fuels from sunlight. For example, carbon dioxide can be used to
promote rapid growth of algae that is genetically engineered
for high-yield oil production.
Increasing Natural Gas Supplies
When it comes to greenhouse gas emissions, not all fossil fuels are
equal. When burned, coal yields the greatest amount of carbon dioxide
per unit of energy released, while natural gas yields the least. In
particular, for the same amount of energy, natural gas releases about
56 percent of the carbon dioxide that would be released using coal.
Moreover, because natural gas is an ashfree fuel, it can be used at
much higher energy efficiencies than coal. The bottom line:
Substituting natural gas for coal generally will halve greenhouse gas
emissions. But it would be shortsighted to believe that natural gas can
displace coal in power generation without serious adverse economic
consequences, unless technology development efforts can greatly expand
the amount of natural gas supply resources that can be recovered in
North America. Under higher pressures and lower temperatures, natural
gas forms a solid complex with water that is known as a methane
hydrate. These conditions of pressure and temperature commonly occur
offshore and in the arctic regions of North America, including Alaska.
At present, we do not have a good understanding of how much natural gas
is available to us in the form of these methane hydrates. But we ought
to, because some of the estimates of the U.S. resource are enormous,
enough to supply the United States for thousands of years.
The National Methane Research and Development Act of 2000
authorizes a federal research program to determine the potential of
this resource to contribute to our energy needs. Equally important,
that Act also provides the basis for research directed at the potential
adverse environmental consequences of these resources. Although the
intent of that Act was reconfirmed in the Energy Policy Act of 2005,
this research area has never seen adequate funding. In 2007, the
Federal Methane Hydrate Advisory Committee reported its findings to
Congress.\3\ They emphasized the ``critical need for more funding'' and
the detrimental effects of the current level of funding (about $10
million per year) on R&D progress. I fully concur with this finding, as
well as with their recommendations for program emphasis, which I quote
directly:
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\3\ Federal Methane Hydrate Advisory Committee, ``Report to
Congress, An Assessment of the Methane Hydrate Research Program and an
Assessment of the 5-Year Research Plan of the Department of Energy,''
June 2007
5. ``Field testing of concepts and technologies for producing
hydrates economically.'' Production tests are essential for
developing data required for further scientific progress. Here
we have an opportunity to build on promising work occurring
abroad, especially work done under the support of the
government of Japan.
6. ``An accurate assessment of the economic viability of
marine hydrates, which exceeds the permafrost resource by
several orders of magnitude.'' Present estimates are extremely
speculative. Better estimates are required, especially so we
can understand whether this resource can provide the United
States and other Nations with a means of deeply cutting
greenhouse gas emissions at much lower costs than would
otherwise be the case.
7. ``A quantifiable assessment of the environmental impact of
possible leakage of methane from uncontrolled hydrate
decomposition.'' Compared to carbon dioxide, methane has a
twenty-fold greater greenhouse gas effect. Understanding
mechanisms that lead to methane leakage, especially from
permafrost, must be a high priority research topic, especially
in light of recent observations of methane releases in Arctic
regions.
One of the reasons methane hydrate research has not been adequately
funded in the United States is the view that any research in this area
should be fully carried out and funded by the oil and gas industry.
While the oil and gas industry is participating and making R&D
investments in methane hydrate research, their investment levels are
small, as they should be, given the high risks of success, the
uncertainties of obtaining access to the resource, and the long time
span required to realize profits. Methane hydrate research should not
be viewed as a subsidy to fossil fuel production, but rather as an
integral part of the federal strategy to reduce dramatically greenhouse
gas emissions.
The Department of Energy also has underway research directed at
extracting natural gas from unconventional formations. However, I have
not recently had the opportunity to familiarize myself with the details
of this program, and therefore suggest that the committee turn to
another expert qualified to make a recommendation about critical R&D
opportunities or needs in this area.
For Energy Security: Unconventional Liquid Fuels
Over the past few years, RAND has examined opportunities for the
United States to produce liquid transportation-quality fuels from
abundant domestic resources, in particular oil shale and coal. If
carbon dioxide sequestration can be demonstrated as commercially and
environmentally viable, our findings indicate that the very large oil
shale and coal resources located within the United States offer the
potential to produce strategically significant amounts of liquid fuels
while not increasing, and more likely decreasing, greenhouse gas
emissions as compared to fuels produced from imported crude oil.
Oil Shale.--RAND's work on oil shale was supported by the National
Energy Technology Laboratory. The largest known oil shale deposits in
the world are located in the Green River Formation, which covers
portions of Colorado, Utah, and Wyoming. We estimate that this resource
base may eventually yield between 500 billion and 1.1 trillion barrels
of useful fuels. The mid-point of this range is 800 billion barrels,
which is more than triple the oil reserves of Saudi Arabia.\4\ The
richest and thickest oil shale deposits are on Federal lands.
Protecting the public interest in these oil shale lands is important,
considering both environmental issues as well as the potentially
profound impact on federal revenues and energy security. Oil shale
development falls squarely on the dual purview of this committee:
Energy and Natural Resources.
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\4\ For further information, see James T. Bartis, Tom LaTourrette,
Lloyd Dixon, D.J. Peterson, and Gary Cecchine, Oil Shale Development in
the United States: Prospects and Policy Issues, Santa Monica, Calif.:
RAND Corporation, MG-414-NETL, 2005.
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Two weeks ago, the prospects for successful development of oil
shale in the United States increased as a consequence of the
announcement by the Department of the Interior of a second round of
research, development and demonstration leases. This will allow
additional small tracts of federal lands to be made available for
developing and demonstrating advanced oil shale extraction
technologies. The private sector is clearly willing to invest in
research directed at the economic extraction of oil shale. For this
reason, it is important that any government-supported R&D be directed
at areas where the public stake is highest. For these reasons, our
recommended priorities for federally sponsored oil shale research are
as follows:
8. Conduct research required to understand and mitigate or
prevent the adverse impacts of oil shale development. This
includes research directed at better understanding of the
subsurface environment, assuring safe disposal of spent shale,
reducing the uncertainties associated with ecological
restoration, protecting water supplies, demonstrating carbon
dioxide sequestration in the vicinity of the Green River
Formation, and promoting higher recovery yields.
9. Develop the information base required for a federal
leasing strategy. This includes regional air quality
monitoring, assessments of water availability and quality, and
evaluation of governance mechanisms for managing federal lands
and meeting infrastructure requirements in anticipation of
large industrial development.
10. Provide federal incentives for early commercial
experience. The most promising oil shale technologies are not
yet ready for large-scale commercial development. Advancing any
one of them will require technology development and
demonstration efforts costing in the range of hundreds of
millions of dollars. While the terms of accessibility to
federal lands is important, there are many other instruments,
such as investment tax credits for first-of-akind commercial
plants, that the federal government should consider to
encourage continued private sector investment in advanced oil
shale technologies.
Oil shale development is an area where continued policy analysis is
required to protect the public interest. At present, oil shale
resources have little value. The key to monetizing this publicly owned
asset requires that the government put in place a federal land leasing
and management framework, and possibly an investment incentive system,
that assures that private firms that successfully develop commercially
and environmentally viable oil shale technologies be rewarded
commensurate with the considerable risk and expense of their efforts.
Coal-derived liquids.--As is the case oil shale, the United States
leads the world in the quality and quantity of its coal resources.
Dedicating only 15 percent of recoverable coal reserves would yield
roughly 100 billion barrels of liquid transportation fuels, enough to
sustain three million barrels per day of fuel production for over 90
years.
A few months ago, RAND published its findings on a comprehensive
examination of the prospects and policy issues associated with
producing liquid fuels from coal in the United States.\5\ This work was
supported by the National Energy Technology Laboratory and the Air
Force. The study showed that coal-to-liquid (CTL) production facilities
would emit very large volumes of carbon dioxide and that the viability
of a CTL industry in the United States depends crucially on the
successful demonstration that carbon dioxide can be sequestered in
multiple locations in the United States. Our results show that for CTL
facilities, capture and sequestration of carbon dioxide does not add
significantly to liquid fuel production costs.
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\5\ James T. Bartis, Frank Camm, and David S. Ortiz, Producing
Liquid Fuels from Coal: Prospects and Policy Issues, Santa Monica,
Calif.: RAND Corporation, MG-754-AF/NETL, 2008.
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Another important finding of RAND's work on CTL is that liquid
fuels produced using a combination of coal and biomass, when combined
with capture and sequestration of carbon dioxide emissions, yield
lifecycle greenhouse gas emissions that are much lower than those
associated with conventional petroleum-based fuels. For example, we
found lifecycle greenhouse gas emissions using a transportation fuel
from a production facility using 75 percent coal and 25 percent biomass
(on an energy input basis) would be roughly 60 percent less than the
same fuel derived from conventional petroleum.
These considerations support the following recommendations for
research in coal-derived liquids:
11. Promote early, but limited commercial operating
experience. Modern CTL technology is ready for initial use in
commercial production facilities. The government should
consider subsidizing early production experience from a limited
number of CTL plants. These early plants should include
approaches for managing greenhouse gases. Gaining early
experience will facilitate post-production cost improvements,
and posture the private sector for the possible rapid expansion
of a more economically competitive CTL industry.
12. Develop the technology for combined gasification of coal
and biomass. At present the design base for combined use of
coal and biomass is weak. Here we are recommending a short
duration (roughly, five years) engineering development program
involving materials testing and the design, construction, and
operation of a few test rigs.
If the United States government decides to promote early investment
in CTL production, it should also consider expanding long-term R&D
efforts directed at advanced technologies for producing liquids from a
combination of coal and biomass. In my judgment, the most fruitful of
the R&D opportunities for advancing liquids production are the very
same ones that are appropriate for advanced power production, namely
lower cost and more energy-efficient means of gasifying coal and
biomass, as listed in my second recommendation dealing with low-GHG
power production.
Leading the Transition: Hybrid Systems
For automobiles, the concept of a plug-in hybrid vehicle provides a
path by which advances in electric vehicle and battery development can
immediately be put to use; so also may be the case with power
generation. Specifically, the combined use of fossil and solar or
nuclear technologies may make for cost-effective and environmentally
superior approaches.
For example, one approach to making electricity from sunlight
involves building an array of parabolic troughs that heat a working
fluid to about 750 degrees F. That working fluid is pumped through a
heat exchanger that makes steam in the range of 650 to 700 degrees.
This steam drives a steam turbine with the result being electric power.
There are two problems with this system. First, the sun isn't always
shining. Second, the steam cycle is inefficient because the steam
temperature is too low. A possible solution is to use a combination of
a solar and fossil energy. In this hybrid concept, the fossil fuel, say
natural gas, would be used to raise the temperature of the steam to
about 1000 degrees F, which allows much greater efficiency at possibly
much lower overall costs.
Another example is nuclear energy. The Department of Energy does
not know whether hybrid plants that include both nuclear and fossil
technologies can lead to lower cost, more efficient power production.
It doesn't know this because of the way that the Department separates
and isolates its various technology development efforts. This leads to
my final technical recommendation.
13. Fossil energy R&D should include exploiting opportunities
that promote renewable and nuclear power generation. This area
of research is especially appropriate as the amount of
intermittent power entering the electric transmission and
distribution grid increases.
Strengthening the Management of Energy Technology Development
The foundation of a successful national energy R&D program requires
more than sound goals and a financial commitment from Congress.
Measures need to be taken to strengthen the management of federal
energy technology development efforts.
In the past, the Department of Energy has shown a tendency to
downplay the scientific challenges associated with technology
development efforts. Congress, the public, and the senior leadership in
the Department itself are often provided with program plans with
schedules that are too fast, with unrealistically low funding
requirements, and with unduly optimistic technology development goals.
A consequence of this tendency is that R&D funds are too often directed
at large projects that are more ``show and tell'' than dedicated to
advancing technical progress. Quick engineering fixes are attempted
while the important research necessary for progress, such as materials
research and applied research dedicated to truly understanding problems
and developing sound solutions, is left under funded, or in many cases,
unfunded.
To remedy this problem, I urge the committee to consider steps to
assure that the Department has adequate scientific and technical talent
at all levels involving the management or oversight of R&D and
technology development. Further, all technology development programs
should be required to demonstrate that they are sufficiently addressing
the fundamental research issues and materials development issues
associated with their efforts.
Our energy technology managers also need to be aware of extensive
R&D efforts underway in other nations. In some cases, cost-shared
efforts may be highly cost effective and productive. But to bring this
wealth of information back to the United States and to afford
technology transfer to our firms, Department of Energy technology
managers must be able to travel internationally when R&D program needs
so dictate.
Strengthening the Institutional Framework for Energy Technology
Development
I would like to address briefly the important role that our
research universities should have in energy technology development. In
my judgment, not enough of the technology development budget has
supported university-based research. Moreover, much of the funding that
universities do receive is through contractual instruments that
undercut the main values that universities offer to the program:
creativity, scientific and engineering excellence, and education.
The main reason so little funding goes to universities is that so
little of the technology development program funds are devoted to
fundamental research issues, as I have previously discussed. Taking
care of this problem should move more funding towards our research
universities. But to get the most of those funds, energy R&D program
managers must take the longer view and build their relationships on
grants and other flexible contractual instruments. I urge this
committee to take measures so that the energy technology development
programs are empowered to and expected to interact with our research
universities in this more productive manner.
The central pillar is, of course, the private sector. It will be
private firms that will be responsible for manufacturing, distributing,
selling, and maintaining the energy systems that will emerge from our
national investment in energy R&D. Their participation in the federal
program has always been important, but it will be stronger and more
focused the sooner the Federal government clearly signals whether or
not there will be a price on emitting greenhouse gas emissions, and if
so how much; and whether or not the price of automotive fuels will
include costs that reflect infrastructure requirements and energy
security.
In closing, I thank the committee for inviting me to testify today.
The Chairman. Thank you very much.
Ms. Wince-Smith, go right ahead.
STATEMENT OF DEBORAH WINCE-SMITH, PRESIDENT, COUNCIL ON
COMPETITIVENESS
Ms. Wince-Smith. Chairman Bingaman, Senator Murkowski and
members of the committee, thank you for inviting me to testify
on the critical importance of research and development to
addressing America's energy and climate challenge, change,
responsibilities and opportunities. The Council on
Competitiveness is the only group of corporate CEOs, university
presidents and labor leaders committed to achieving United
States competitiveness in the global economy. For the past 18
months we have focused on the dual challenges of energy
security and sustainability called out in our National
Innovation Initiative over 4 years ago.
Even as a Nation with an immense wealth of natural
resources we face soaring energy demand, price volatility and
supply instability. At the same time pressure is mounting
around the world to mitigate greenhouse gas emissions from
fossil fuels with the prospect of a 45 percent increase by 2030
driven almost entirely by demand in developing countries. The
current trajectory of global energy trends is unsustainable,
environmentally, socially and economically.
We know energy and its efficient use is at the heart of
industrial production, global supply chains, transportation
modes and how we build and use the constructed environment. For
this reason the Council launched an ambitious Energy Security
Innovation in Sustainability Initiative. Our goal is to shape a
private sector/public sector partnership for sustainable energy
solutions while supporting the creation of new industries,
global markets and skilled jobs here in America.
This work is led by the CEO of Caterpillar, James Owens,
the President of Rensselaer, Shirley Ann Jackson and the
President of the United Workers of the Utility Union of
America, Mike Langford with the steering committee of over 40
leaders from industry, academia and labor. We're very honored
that Secretary Chu served on this committee during his tenure
at LBL. Our initiative has asked these questions.
What enabling conditions are needed to spur private sector,
demand driven innovation in investment?
In essence what is the business case for energy
transformation and sustainability?
In September the Council released 100 day Energy Action
Plan for the next President named, Prioritize. A copy of which
is appended to my testimony. We've outlined a set of
interrelated recommendations from energy efficiency, supply
diversification, regulatory reform, R and D and work force
investments at the frontier. I will focus on the one central to
our hearing today that we must spur technological innovation
and entrepreneurship by ramping up R and D in its
commercialization.
One of the areas that we strongly support are creating
regionally based R and D test beds and large scale commercial
pilots for deploying new energy technologies and systems. These
test beds must address issues from the knowledge and
application continuum all the way to industrial process of
scale and scope. We want to solve the big game changing
problems, next generation storage, battery density, carbon
capture sequestration, solving clean coal and nuclear waste and
storage.
These test beds should be multidisciplinary, stakeholder
and really be focused at the region. We have to be ready. Be
poised to deploy innovations.
Now we know of course that America is famous for being the
laboratory to the world but we also want to be the place that
captures the manufacturing of these new innovations. We
remember how in the 1970s through the 1990s we lost our flat
panel display market while we created all the underlying
technologies. We certainly don't want that to happen in our
energy transformation.
Manufacturing right now is on the cusp of a tremendous
transformation. Manufacturing and services are emerging. We
have production and distribution networks spanning the globe,
digitally infused manufacturing operations and science based
manufacturing. Clearly we want to ensure that we use the tools
of science and the tools of technology that support these
challenges.
So the graph I've put up really shows the critical
importance of our government's high performance computing
capabilities that support our research, our government missions
and industrial competitiveness. We know that high performance
computing presents a huge, competitive advantage to our
companies as well as to solving these problems, the Nation that
out computes will out compete. Other nations are rapidly using
these capabilities but still the United States and Japan are
the leaders in both the production of HP systems and using them
for competitive advantage.
So I would urge the committee as we go forward to really
invest in the R and D. That we accelerate our high performance
computing tools, we use this to solve these problems and we
ensure that America will be, not only the R and D leader, but
the manufacturing powerhouse of the world in the energy
transformation. Thank you very much. I'm pleased to answer
questions.
[The prepared statement of Ms. Wince-Smith follows:]
Prepared Statement of Deborah L. Wince-Smith, President, Council
on Competitiveness
Chairman Bingaman, Senator Murkowski and members of the committee,
thank you for inviting me to testify today on the critical importance
of research and development to addressing America's energy and climate
change challenges.
I'd like to start by providing a little background about the
Council on Competitiveness--who we are, and how we operate--and on our
Energy Security, Innovation & Sustainability Initiative, a top Council
priority. The Council on Competitiveness is the only group of corporate
CEOs, university presidents, and labor leaders committed to enhancing
U.S. competitiveness in the global economy. Our scope of issues
reflects many factors that affect a nation's ability to compete--
ranging from the business environment for innovation and advancing key
enabling technologies, to building a world-class workforce and igniting
regional innovation through entrepreneurship.
We have been fortunate to have some of America's best executives as
Council leaders. Our current chairman is Chad Holliday, chairman of
DuPont. The Council carries out its agenda, and shapes the debate
through several mechanisms:
We analyze emerging challenges.
We convene leaders who can envision and implement solutions.
We catalyze and organize action.
We strive to represent the voice of competitiveness and innovation
in a wide range of technology, economic, trade, education, and
international decision-making fora. For the past 18 months, we have
focused this voice on the dual challenges of energy security and
sustainability. These challenges were called out in the Council's
National Innovation Initiative four years ago and the urgency for
action has only grown in that time.
energy security, innovation and sustainability
The Council believes that energy security and sustainability are
two of the defining and intertwined challenges of our time. For
virtually every country, access to affordable energy is a basic need
for economic growth, social development, improved standards of living,
and increasingly for national security. However, neither an affordable
nor a reliable supply of energy is a given for any country. As
committee members well know, even as a nation with an immense wealth of
natural resources, we face soaring energy demand, price volatility, and
supply instability. At the same time, pressure is mounting around the
world to mitigate greenhouse gas emissions from fossil fuels--with the
prospect of a 45% increase in emissions by 2030, driven almost entirely
by developing countries.\1\
---------------------------------------------------------------------------
\1\ International Energy Agency, World Energy Outlook 2008, IEA/
OECD, Paris (2008).
---------------------------------------------------------------------------
Without access to cost-effective cleaner energy solutions,
developing economies will have no alternative but to increase their
dependence on the most rudimentary fossil-fuel technologies,
contributing significantly to increased pollution and environmental
damage. To summarize, the current trajectory of global energy trends is
unsustainable--environmentally, socially, and economically. They are
impacting:
the fundamental ability of American industry to compete in
the global economy
the political ability of our government to play an
international leadership role
the capacity of our military to carry out its missions
Energy security and sustainability are now first-tier economic,
national security, and competitiveness concerns. It is, therefore,
inevitable that the world will undergo a systems transformation in the
way we use and produce energy. As this country moves toward sustainable
energy policies and programs, the Council does not believe there is an
unavoidable trade-off among economic growth, energy savings, and
environmental interests. Indeed, the pending systems transformation
offers an opportunity to integrate energy security, sustainability, and
competitiveness.
For this very reason, the Council has launched an ambitious Energy
Security, Innovation & Sustainability (ESIS) Initiative. Our goal is to
shape an action agenda to drive private sector demand for sustainable
energy solutions, while supporting the creation of new industries,
markets, and jobs. This initiative is led by James Owens, CEO of
Caterpillar; Shirley Ann Jackson, President of Rensselaer Polytechnic
Institute and Vice Chair of the Council on Competitiveness; Mike
Langford, President of the Utility Workers Union of America; and a
steering committee of 40 CEOs, university presidents, labor leaders and
national lab directors, the ESIS is focused on:
The critical link between energy security and national
competitiveness
Identifying drivers of private sector investment in
sustainable energy
Clarifying and publicizing the business case for changing
how the private sector thinks about and uses energy
Examining what leading companies are doing to integrate
energy security and carbon issues into their business
strategies for productivity and competitive advantage
Most importantly for today's discussion,
developing a policy and regulatory framework that will
unleash American investment and innovation across all sectors
of the economy
We know:
here is no ``silver bullet''
There is no single technology that can solve the problem
There is no one policy or regulatory measure that will
transform our energy system, protect the environment and
mitigate climate change
We will need every resource we have--coal, oil, gas,
nuclear, solar, wind, biomass, ocean and hydropower--AND
increased energy efficiency to meet future energy demand.
We also know that we have a tremendous opportunity before us. In
fact, these challenges have created a perfect storm for innovation. We
can move to a new era of technological advances, market opportunity,
and industrial transformation if we can successfully unleash the
investment and innovation potential of the private sector to meet the
challenges and seize the opportunities arising from these new public-
private partnerships.
The ESIS initiative has engaged over 200 of the nation's leading
experts from a wide range of perspectives and asked them what enabling
conditions are needed to exist to spur private sector innovation and
investment. This work led to the September release of the Council's
100-Day Energy Action Plan for the next President and Congress named
Prioritize, a copy of which is appended to my testimony.
Prioritize includes 18 specific recommendations, many of which are
relevant to this committee's jurisdiction, but I will focus on one that
is central to today's hearing: America must spur technological
innovation and entrepreneurship by ramping up investment in energy R&D
and commercialization. This means at least tripling the current federal
investment in basic and applied energy R&D; enhancing public-private
partnerships with baseline federal funding--to be matched by state and
private sector investments--and creating regionally-based R&D test-beds
and large-scale commercial pilots for new energy technologies.
Central to this recommendation is the idea that we must be poised
to deploy new ideas and innovations that come from the significant new
investment in energy research into scalable products, goods and
services. Research must be viewed as encompassing basic, applied,
development and test beds. If we do not have in place the
infrastructure to reap value from our investment, you can rest assured
another country will. When that happens, the jobs and intellectual
property will be lost; as well as the component subsystems leading to a
hollowing out of the innovation enterprise.
america must not become just the laboratory to the world--renowned for
our ideas, but bleeding away jobs, industries and opportunity.
As we enter a new era of technological innovation, driven by the
twin challenges of energy security and climate change, we must be
vigilant in ensuring that we support these nascent industries here at
home. We do not want to repeat the errors of our past when despite
having achieved scientific and technology breakthroughs in liquid
crystal, plasma and other flat panel display technologies, we ceded
market leadership to countries like Japan and Korea, as they rapidly
scaled up their high quality manufacturing ability and captured the
global display market.
We have learned that we cannot divorce our investments in R&D from
our efforts to support each stage of the manufacturing continuum. We
must design-in manufacturing considerations upfront in the innovation
process. We must ensure that we have the appropriate regulatory and
financing framework in place to allow our entrepreneurs to move agilely
from testing and pilots to manufacturing and large scale system
deployment.
the evolution of manufacturing
As the 20th century drew to a close, rising global competition and
the broad opening of global markets challenged U.S. manufacturers. As a
result, there has been continuing concern about the offshoring U.S.
manufacturing and the loss of U.S. manufacturing jobs.
With the growing strength of newly-developing low-cost competitors
such as China, there are many who fear that U.S. manufacturing will
spiral into further decline. It is becoming increasingly clear that the
United States cannot compete with commodity products and low-wage mass
production systems.
Nevertheless, I believe we must put aside the growing perception
that America will inevitably lose its manufacturing edge. Instead,
prepare for a shift in manufacturing that embraces:
production and distribution networks that span the globe
digitally-infused manufacturing operations, and
science-based manufacturing
These could form a new foundation to support a revitalized
manufacturing base, and U.S. competitiveness in the very highest-value
production activities.
Long-term national and economic security in the United States
critically depends on our having innovative and agile manufacturing
capabilities. Current economic conditions and energy security
challenges have only heightened the need to accelerate competitive
advantages for U.S. manufacturing companies in the global marketplace.
Manufacturers can maintain their global leadership position only
through technological differentiation, not through labor cost
advantage.
While energy-saving investments must compete for scare capital
often against near-term priorities, the potential for substantial
returns over the long run is real--lower production costs, lower
environmental compliance costs, reduced waste, and improved
productivity when production inefficiencies are eliminated.
Then there are the rewards of helping customers control their own
costs by redesigning products to reduce the energy they consume
Revenues from GE's Ecomagination line of energy efficient,
environmentally-friendly products and services have grown to $17
billion (in 2008) since it was launched 2005. The company invested $1.4
billion in cleaner technology research and development in 2008 and
recently reported that its portfolio of 70 Ecomagination-certified
products is four times the number of products it offered in 2005.
Still, too many U.S. companies remain underinvested in energy
efficiency, and few have adopted strategies that treat energy as a
vital dimension of business.\2\
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\2\ ``GE's 2008 Ecomagination Revenues to Rise 21%, Cross $17
Billion,'' GE News Center, October 21, 2008. http://
www.genewscenter.com/content/Detail.asp?ReleaseID=4266&NewsAreaID=2
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Wal-Mart launched a new green-packaging scorecard in February 2008.
By August of last year, the scorecard software system included over
8,000 vendors and more than 170,000 products. Because Wal-Mart is one
of the most powerful forces in the world's supply chains, this
initiative is a potential game changer in the design of packaging.\3\
---------------------------------------------------------------------------
\3\ Connolly, Kate Bertrand. ``Wal-Mart's Scorecard Drives
Sustainable Packaging,'' FoodProcessing.com, August 2008. http://
www.foodprocessing.com/articles/2008/371.html
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Yet, conventional wisdom holds that manufacturing is characterized
by the four D's--dirty, dumb, dangerous and disappearing. Nothing could
be further from the truth. Modern American manufacturing, which has
dramatically changed from its earlier definition, is growing--in size,
complexity and market importance. For the past 50 years, the value of
manufacturing output has increased by 3.7 percent per year.\4\ Modern
American manufacturing profits have outperformed those of other sectors
and manufacturing productivity increased faster than the national
average.\5\ In other words, a great many American manufacturers have
made major adjustments to the changing needs of the marketplace and are
doing very well. But they cannot do it alone.
---------------------------------------------------------------------------
\4\ Strauss, William A. ``Is the U.S. Losing Its Manufacturing
Base?'' Presentation at 61st Annual Meeting of the Midwestern
Legislative Conference, Chicago, IL, August 21, 2006.
\5\ Ibid.
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American public officials, opinion leaders and investors also need
to understand and vigorously support these changes if we are to regain
and retain our international leadership position. If America fails to
adapt, we risk losing this critical underpinning of our economy and
failing to reap the value from the investments in next generation
energy technologies. America's edge lies with forward looking, high-
value manufacturing that looks well beyond traditional assembly and
fabrication of products. Consider the new paradigms of manufacturing:
Mass Production has evolved to Mass Customization.--As more
countries enter the global marketplace, the competition has shifted
rapidly to new kinds of added value that require new kinds of skills.
Just as basic product design has moved beyond the work of draftsmen
with pencils and T-Squares to highly sophisticated computer driven Cad-
Cam programs, more of the value-add within manufacturing began to come
from the activities integrally associated with production: marketing,
financing, customer service and managing quality, variety,
customization, innovation, convenience, novelty and speeded operations.
Each of those affects not only the quality of the product being made
and its competitive price, but its value to customers as well. All of
which are key elements in the process of modern manufacturing.
Services and Manufacturing have merged.--The Council's National
Innovation Initiative highlighted this convergence. Surveys by Deloitte
Research found that the average profitability of service operations is
more than 75 percent higher than overall business unit profitability.
The most profitable service businesses (the top 25 percent) are more
than three times as profitable as the average business unit. Across the
manufacturing companies that were studied, what have traditionally been
considered service revenues average just over a quarter of total
revenues but deliver 46 percent of the profits.\6\ For many producers,
there would be little or no profitability without the so-called service
business. In other words, modern manufacturers have actually integrated
elements of the service sector into the manufacturing process in order
to maximize their competitiveness, and public policy must recognize and
encourage that process.
---------------------------------------------------------------------------
\6\ Koudal, Peter. The Service Revolution in Global Manufacturing
Industries, A Deloitte Research Global Manufacturing Study, (2006).
www.deloitte.com
---------------------------------------------------------------------------
High Value Jobs.--Another way to look at this change is that
approximately 75 percent of jobs in the United States are classified as
service sector jobs, but a significant portion of these jobs, in
reality, remain part of the extended manufacturing enterprise.\7\ As
manufacturing companies restructured--outsourcing (not offshoring)
functions that could be provided most cost-effectively outside the
company--many jobs that did not directly deal with fabrication were
simply reclassified as service jobs even though they remained as
essential parts of the modern manufacturing process. It is also
essential to note that in different areas of the country new jobs in
the modern manufacturing sector have been created as new small and
medium-sized companies are established to fill continuing and growing
needs. America's data collection systems, a relic of an industrial
economy, simply do not capture or reflect this integration of services
and manufacturing. Knowing the importance and the changed nature of
manufacturing are critical steps for policymakers, but not the whole
story. As we stand ready to tackle the challenges of energy security
and sustainability, we must ensure that America's federal investments
in research and development and America's premier research capabilities
are leveraged to provide the strongest possible outcomes. A primary
example of this is the U.S. Government's high performance computing
(HPC) capabilities.
---------------------------------------------------------------------------
\7\ Council on Competitiveness, Thrive: The Skills Imperative,
Washington, D.C. (2008).
---------------------------------------------------------------------------
the critical and transformational role of hpc in manufacturing
The use of high performance computing for modeling, simulation, and
analysis has already provided a competitive advantage for many of the
manufacturing Fortune 50. These companies employ in-house advanced
computing and have access to high performance computing hardware,
software, and technical resources through partnerships with national
laboratories. Many of these companies recommend that adoption of
modeling, simulation, and advanced computing be accelerated throughout
the U.S. manufacturing sector. For example, Pioneer Hi-Bred, a DuPont
company, uses HPC to manage and analyze massive amounts of molecular,
plant, environmental and farm management data, allowing them to make
product development decisions much faster than by using traditional
experiments and testing alone. For Pioneer, the result has been faster
improvement in new seed products, staying ahead of the competition, a
major jump in innovation and productivity, and the ability to help meet
some of the world's most pressing demands regarding the availability of
food, feed, fuel, and materials.\8\
---------------------------------------------------------------------------
\8\ 9 Interviewed Mark Cooper, Pioneer Hi-Bred International, Inc.,
and Lane Arthur, DuPont, in June 2008.
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The Transition to ``Simulation-Based Manufacturing''.--A
substantial effort toward wider adoption of modeling and simulation
requires the commitment of intellectual capital, computer hardware and
software for complex problem solving, and other resources from among
the diverse advanced computing assets spread across the nation's
regions, States, and advanced computing centers. This truly successful
national initiative will leverage these vital resources from a new
public-private partnership to bolster the U.S. manufacturing sector.
New Manufacturing ``Call to Action'' on the 21st Century
Manufacturing Enterprise.--To these ends, the federal government should
issue a ``call to action'' to U.S. manufacturing sector leaders and
create a national manufacturing initiative enabled by advanced
computing. These leaders in advanced computer-enabled design and
manufacturing should be asked to leverage their expertise in modeling,
simulation, and analysis and partner with the federal government to
improve U.S. manufacturing competitiveness. The outcome of this call to
action will be to accelerate and broaden the use of modeling and
simulation, to increase penetration of these tools into smaller
companies (pushing these tools further down into the supply chain), to
solve the biggest complex problems with the latest techniques, and
compete through innovation.
Through the national laboratory system, the federal government
offers the greatest scientific and engineering resources, computer
assets, and research software to be deployed for the initiative.
Importantly, the United States and Japan are the only significant
manufacturers of HPC machines--an incredible advantage that must be
utilized for economic growth. To succeed, the initiative should also
call upon, bring together, and leverage (all of) the nation's most
advanced computing resources--state to state, region to region, center
to center.
committee draft legislation
Thank you also for the opportunity to comment of the draft
legislation on Energy Research and Development. We strongly endorse the
proposal to double funding for applied energy research and development.
The Council further urges the committee to act upon the recommendations
made in Prioritize to triple both basic and applied energy research and
development.
The Council applauds the energy workforce development provisions as
proposed by the committee, as they also are closely aligned with the
intent of our recommendations in Prioritize. We urge the Committee/
Congress to go further by adopting the Council's recommendations to
create a $300 million Clean Energy Workforce Readiness Program. This
program should be specifically designed to foster partnerships between
the energy industry, universities, community colleges, workforce
boards, technical schools, labor unions, and the U.S. military, with
the goal of attracting, training, and retaining the full range of
skilled workers for America's clean energy industries.
At the very least, the Department of Labor should be required to
assess, classify and widely publicize the demand-driven needs for
energy-related occupations. It should also be required to align federal
workforce investment programs and state-directed resources to support
skills training and career path development in energy fields for
American citizens.
With regard to the scholarships and fellowships proposed, the
Council would urge the committee to consider making these portable
(controlled by the student) to ensure the maximum flexibility for the
students to follow the most current thinking and technologies in these
areas.
Under the section on Grand Challenges Research Initiative, the
Council would propose that a requirement for small businesses
representation in the consortia be included.
conclusion
Thank you again for this opportunity to provide testimony on this
important topic for American competitiveness. The committee's support
for research and development, including the enactment of the America
COMPETES Act and recent increases in the stimulus package speaks to the
forward-looking vision of the Senators sitting on the dais. I would
only urge that you dedicate the same passion to ensuring the
infrastructure exists and is utilized to generate value in the form of
jobs, new businesses and new opportunities from these critical
investments.
The Chairman. Thank you very much.
Professor Corradini.
STATEMENT OF MICHAEL L. CORRADINI, CHAIR, NUCLEAR ENGINEERING
AND ENGINEERING PHYSICS, UNIVERSITY OF WISCONSIN, MADISON, WI
Mr. Corradini. Thank you, Mr. Chairman and members of the
committee for inviting me today. I'm currently chair of Nuclear
Engineering Program at University of Wisconsin, Madison. I am
from New Mexico originally, so thanks for remembering.
In 2007 I was a member of the National Academy's review of
the DOE's Office of Nuclear Energy and recommendations for
future R and D activities. So today I'd like to address the
committee on this particular issue. I'll note that Bob Fri was
the chairman of the committee. So if I do it wrong, he'll tell
me.
Growing energy demands, emerging concerns about carbon
dioxide emissions in a sustained period of successful operation
of the existing fleet of nuclear power plants really have
gained a renewal of interest in nuclear power in the United
States. Clearly I think nuclear energy can be an important
component in addressing these issues. But we have to ensure
that our nuclear R and D investments are aligned to the
technological challenge associated with deploying new plans and
developing a sustainable nuclear fuel cycle.
The Office of Nuclear Energy in the United States DOE has
been the major agent of the government's responsibility for
advancing nuclear power. Parenthetically if you look back 10
years ago, it was zero in terms of R and D research. Now we're
sitting at about 400 million in the current, pending Omnibus
Appropriations bill.
In FY2006, the President's budget requested that funds be
set aside for a study by the National Academy to conduct a
review of nuclear energy and to recommend priorities among the
programs given constrained budget levels. The programs to be
evaluated were NP 2010 or Nuclear Power 2010, the Gen IV
Reactor Development program, Nuclear Hydrogen Initiative and
the Advanced Fuel Cycle Initiatives as well as Idaho National
Labs facilities. I believe its recommendations are still very
relevant in the prioritization and phasing of nuclear R and D
investments. I'd like to review some of these and give you some
personal comments.
First, NP 2010, the Nuclear Power 2010 program was
established by the United States DOE in 2002 to support the
near term deployment of new nuclear power plants. NP 2010 is a
joint government industry 50-50 cost share with very clear
objectives. It's actually achieved a very good working
relationship between DOE and industry.
The selection of the projects funded is really
appropriately market driven. There's really a strong focus on
demonstrating a regulatory process, finalizing and
standardizing the advance LWR reactor designs and implementing
the 2005 Energy Policy Act Standby Support Divisions. This has
lead to a large number of combined license submittals to the
NRC.
Our committee concluded that successful completion of the
NP 2010 program should be the Office of Nuclear Energy's
highest priority. I'd only emphasize that very strongly. We
need to continue success in the present to guarantee success in
the future of nuclear power.
DOE has also begun to evaluate the need for a reinvigorated
R and D program to improve the performance of existing and
advanced light water reactor power plants. The National Academy
Study supports such an R and D program as a shared cost effort
separate from NP 2010. For example, the life after fifty focus
for plant life extension is a good example of a research focus.
For Gen IV, DOE has engaged in other government wide
ranging efforts to develop advanced, next generation nuclear
energy systems, so called generation IV or Gen IV systems.
During 2002 to 2005 time period, the Gen IV program's primary
goal was to develop the next generation nuclear plant which
focused on high temperature process heat, an innovative
approach as to produce energy products that might benefit the
transportation and chemical industry. I included a figure.
I don't have a chart, but you have a figure in the
testimony that actually identifies in detail the gas cooled,
graphite moderated reactor concept. Both the reactor at the
plant and the advanced fuel is being considered. The NGNP
program has well established goals, decision points and
technical alternatives.
The program requires predictable and steady funding. Our
committee recommended that the nuclear energy sustain a
balanced R and D portfolio beyond just the NGNP, but for other
advanced concepts. Again, I included a figure. For example,
funding and prioritization for grid appropriate reactors, that
is smaller reactors that could be in various other markets both
in the United States and abroad.
Since 2002 the United States has also been conducting a
program of spent fuel reprocessing R and D in a program called
the Advanced Fuel Cycle Initiative or AFCI. In 2006, the
National Academies Committee was established. DOE at the same
time, about, unveiled GNEP, the Global Nuclear Energy
Partnership as a broad initiative to facilitate worldwide
expansion. The AFCI Research Program was absorbed into GNEP
with an additional component of rapid deployment of commercial
reprocessing/recycling facilities.
The overall concept has many positive features especially
in the international arena at a time when many nations are
actively considering expanded their nuclear energy portfolio.
However the committee was not persuaded that the GNEP was worth
pursuing as presented to the committee at that time. We felt
the program was premised on an accelerated deployment strategy
creating large technical and financial risks and premature
narrowing of technical options. Also we felt there was
insufficient external input and peer review.
Nonetheless the committee believes and I continue to
believe that the program similar to the original AFCI research
program is very worth pursuing. Such a program should be paced
by national needs including economics, technological readiness,
energy security and other factors. The committee recommended a
more modest, long term program where engineering efforts
including new research scale experimental capabilities that can
reveal innovative approaches to nuclear fuels, materials,
modeling. We had others on the panel even mentioning high
performance computing, power systems and reprocessing.
Finally to end off let me talk about the human
infrastructure. Our success in addressing all of these
challenges will ultimately be predicated on our ability to
educate and train the next generation of nuclear scientists,
engineers and nuclear related technicians. There's good news.
Undergraduate enrollments continue to increase in several new
programs.
In my third figure I gave you essentially a little
histogram of how we've grown substantially in nuclear
engineering related fields, both at the undergraduate and
graduate level and a growth in nuclear engineering departments
around the country. A good half dozen have started in the last
few years. However the Federal funding from a Federal funding
standpoint, the last few years have been a period of
significant uncertainty.
DOE, in 2006, completely eliminated the Nuclear University
Research Programs. Since that time Congress has added back
funding in the Appropriations process and ultimately shifted a
significant portion to the Nuclear Regulatory Commission. I
parenthetically say that's primarily with the support of many
of the members on this committee, including you Mr. Chairman.
Last year DOE committed to allocate 20 percent of its R and
D funding for work to be performed at universities. Most
recently in the pending Omnibus Appropriations bill, the
integrated university program structure has been created which
provides DOE, NNSA and NRC to collaborate in funding both
mission directed research, jointly coordinated programs that
support the overall discipline as well as infrastructure such
as research reactors. This--I really feel that Congress should
continue this structure and support stable funding portfolio.
So in closing let me just say that the programmatic
building blocks already exist for a strong, relevant portfolio
of research, investment in nuclear R and D. Congress should
build on these existing programs in a stable, predictable
manner and hopefully avoiding precipitous changes in funding.
Ultimately no matter what one's position is on the issue, the
fact is in my view and it's a strong view that nuclear energy
will be a prominent fixture of our energy, environmental and
national security activities for the foreseeable future.
So I'm open to questions as you see fit.
[The prepared testimony of Mr. Corradini follows:]
Prepared Statement of Michael L. Corradini, Chair, Nuclear Engineering
and Engineering Physics, University of Wisconsin, Madison WI
Good morning, Mr. Chairman and members of the committee. Thank you
for inviting me here today. I am currently chair of the Nuclear
Engineering and Engineering Physics program at the University of
Wisconsin, Madison. I am also involved in a number of national
activities in nuclear energy for the National Academies, the Department
of Energy and the Nuclear Regulatory Commission. In 2007, I was a
member of the National Academies review of the DOE Office of Nuclear
Energy and recommendations for future R&D activities in nuclear energy.
Today, I would like to address the committee on this particular issue
of nuclear energy R&D as well as human resources related to nuclear
science & engineering.
Growing energy demands, emerging concerns about carbon-dioxide
emissions from fossil fuel combustion, and a sustained period of
successful operation of the existing fleet of nuclear power plants have
resulted in a renewal of interest in nuclear power in the United
States. Clearly, nuclear energy can be an important component in
addressing these issues. However, we must ensure that our nuclear R&D
investments are aligned to the technological challenges associated with
deploying new plants and developing a nuclear fuel cycle that is
sustainable as well as proliferation-resistant.
The Office of Nuclear Energy (NE) of the U.S. Department of Energy
(DOE) has been the major agent of the government's responsibility for
advancing nuclear power. One consequence of the renewed interest in
nuclear power has been rapid growth in the NE research budget. NE R&D
funding has increased from less than $5 million in Fiscal Year 1998 to
almost $400 million in the pending FY 2009 Omnibus Appropriations Bill.
In FY 2006 the President's Budget requested that funds be set aside
for a study by the National Academy of Sciences to conduct a review of
the Nuclear Energy research programs and budget, and to recommend
priorities among the programs given the likelihood of constrained
budget levels in the future. The programs to be evaluated were Nuclear
Power 2010, the Generation IV reactor development program, the Nuclear
Hydrogen Initiative, the Advanced Fuel Cycle Initiative (which
temporarily evolved into the Global Nuclear Energy Partnership--GNEP),
and the Idaho National Laboratory facilities program. I served as a
member of this committee and I believe its recommendations are still
very relevant in the prioritization and phasing of our future nuclear
R&D investments.
np 2010 program
The Nuclear Power 2010 (NP 2010) program was established by the
U.S. Department of Energy (DOE) in 2002 to support the near term
deployment of new nuclear plants. NP 2010 is a joint government--
industry 50/50 cost-shared effort with clear objectives. A good working
relationship exists between DOE and industry. The selection of the
projects funded is appropriately market driven and there is strong
focus on demonstrating the regulatory processes, finalizing and
standardizing the advanced reactor designs, and implementing the 2005
EPACT standby support provisions, all of which are essential activities
and have led to a large number of Combined License submittals to the
NRC. Our committee concluded that successful completion of the NP 2010
program should be the Office of Nuclear Energy's highest priority. DOE
should also immediately initiate a cooperative project with industry to
identify problems that experience shows can arise in actual
construction and startup of new plants and define best practices for
use by the industry.
Recently, DOE has also begun to evaluate the need for a
reinvigorated R&D program to improve the performance of existing
nuclear plants. The NAS study supports such an R&D program in a cost-
shared effort separate from NP 2010.
generation iv program
DOE has engaged other governments, in a wide-ranging effort for the
development of advanced next generation nuclear energy systems, known
collectively as ``Generation IV'' (or Gen IV). The goals of Gen IV are
to widen the applications of nuclear energy; enhance the economics,
safety and physical protection of new reactors; and improve the fuel
cycle waste management capability and proliferation resistance in the
coming decades.
During the 2002 to 2005 time period, the Gen IV program's primary
goal was to develop the Next Generation Nuclear Reactor (NGNP) focusing
on high-temperature process heat and innovative approaches to produce
energy products that might benefit the transportation and chemical
industry, such as hydrogen. The current design focuses on a gas-cooled
and graphite-moderated reactor. (Figure 1)*
---------------------------------------------------------------------------
* Figures 1-3 have been retained in committee files.
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The NGNP program has well-established goals, decision points and
technical alternatives. The 2005 EPACT identified two key decision NGNP
points; licensing by the NRC and plant operation no later than 2021. A
major risk in this program is that the current business plan does not
match government funding. The program requires predictable and steady
funding, and its goals and timetable should be in harmony with
available funding.
Our committee also recommend that NE sustain a balanced R&D
portfolio in new Gen IV advanced reactor development concepts; e.g.,
funding and prioritization for grid-appropriate reactors (Fig. 2).
advanced fuel cycle initiative and gnep
Since 2002, the United States has been conducting a program of
spent fuel reprocessing research and development in a program called
the Advanced Fuel Cycle Initiative (AFCI). In March 2006, after the
National Academies committee was established, DOE unveiled GNEP, a
broad initiative intended to facilitate a worldwide expansion of
nuclear energy while minimizing the risks of proliferation. GNEP would
require the US to be an active participant in the community of nations
that recycle fuel in order to meet the fuel and waste disposal needs of
other ``user'' nations.
Thus, the AFCI research program was absorbed in GNEP along with
rapid deployment of commercial reprocessing, recycle facilities and
fast reactors. The overall concept has many positive features,
especially in the international arena. At a time when many countries
are actively expanding their nuclear energy portfolio, there are strong
energy and national security arguments for continued U.S. leadership in
the field. However, the committee was not persuaded that the GNEP
program was worth pursuing, as presented to the committee by DOE. We
felt the program was premised on an accelerated deployment strategy,
creating large technical and financial risk, and premature narrowing of
technical options. Also, there was insufficient external input and
independent peer review.
Nonetheless, the committee believes that a program, similar to the
original AFCI research program, is worth pursuing. Such a program
should be paced by national needs, including economics, technological
readiness, national security, energy security, and other factors. It
should not include construction of large demonstration or commercial
scale facilities. Rather, the committee recommended a more modest and
longer term program of applied research and engineering effort
including new research-scale experimental capabilities that reveal
innovative approaches for fuels, materials, modeling, power systems and
reprocessing.
university nuclear science and engineering infrastructure
Our success in addressing U.S. nuclear R&D challenges--whether its
nuclear energy, nonproliferation, or detection-will ultimately be
predicated on our ability to educate and train the next generation of
nuclear scientist, engineers.
There is good news--undergraduate enrollments continue to increase
and several new programs have been created (Figure 3). However, from a
federal funding standpoint, the last few years have been a period of
significant uncertainty. In 2006, DOE proposed the complete elimination
of nuclear university programs. Since that time, Congress has added
back funding in the appropriations process (with the support of many
members of this committee, including you, Mr. Chairman), and ultimately
shifted a significant portion of the program to NRC. Last year, DOE
committed to allocate 20 percent of its R&D funding for work to be
performed at universities. Most recently, in the pending Omnibus
Appropriations Bill, an Integrated University Program structure has
been created, which provides DOE, NNSA, and NRC with funding to support
both mission-directed research, and a jointly coordinated program that
supports the overall discipline and infrastructure such as research
reactors. The Omnibus language, combined with DOE's ``20% Solution,''
is a strong package of on-going stewardship. Congress should continue
this structure, with stable funding portfolio.
oversight
As a counterbalance to the short-term nature of the budget process,
we also recommended that DOE adopt an oversight process for evaluating
the adequacy of program plans, evaluating progress against these plans,
and adjusting resource allocations as planned decision points are
reached. The senior advisory body for NE was the Nuclear Energy
Advisory Committee, and a modified committee seems the obvious starting
point for reestablishing proper oversight; to ensure its independence,
transparency, strategic issues.
The Chairman. Thank you all very much for your excellent
testimony. I'll ask a few here. I'm sure the others will as
well.
Dr. Crabtree, let me start with you. You talk in your
testimony about this energy research frontier centers as a way
to bring together industry and universities and national
laboratories to address fundamental energy research hurdles.
Could you describe what you think is needed there?
I mean, we've got work, for example in the area of solid
state lighting. We've got work going on I know at Sandia
National Laboratory. I'm sure they're probably going on at
other national laboratories as well and in universities.
What more do you see that would be useful for us to do in
that area or any of the other areas you're focused on here?
Mr. Crabtree. So that's actually an excellent question and
an excellent topic, solid state lighting. You may know that the
incandescent light is 5 percent efficient, fluorescents are 20
percent efficient and solid state lights can be 50 or even 70
percent efficient. So the payback in terms of energy efficiency
is huge.
The--when you consider that 22 percent of electricity goes
for lighting, you see that the amount is huge. The impact may
be very, very large. The road blocks to solid state lighting
are really to produce white solid state light.
So we can already produce red solid state lights with 75
percent efficiency. The trick is to make it white. To make it
white you have to add three colors together, red, blue and
green.
So we have to develop the blue and the green solid state
lighting. That's mainly a matter of adjusting the composition
of semiconductors with up to, say, four or even five elements
present to make the band gaps correct for emitting these red--
the blue and the green light. You have to do this without
sacrificing the structural perfection and the electron mobility
which leads to the high efficiency. So that's why it's such a
difficult problem.
But there are also engineering problems associated with
that as well. You have to make a package in which all three of
these semiconductor elements can be put in the same package and
extract the light in the right ratios to make white light. Now
that's a very practical engineering point of problem.
So it's a challenge that really lends itself to basic
materials research to understand the structure in band gaps.
Also to engineering research to make the package that includes
all three of these semiconductor elements and allows the light
to come out. There's an industrial side, of course. You have to
bring it to market.
So the EFRCs in that example could combine these three
sectors of research. So the basic research which could come
from universities and national labs, engineering which could
come from national labs and industry and industry to do the
deployment to really solve the problem. It's within reach. The
progress has been dramatic in the last 10 years. I think with
continued effort it will certainly yield.
The Chairman. Very good. Mr. Fri, let me ask you. As you
point out you're involved in this current study which is being
done about our energy needs, our energy challenges at the
National Academy.
Do you see that study as concluding significant changes in
policy that we ought to consider adopting here in Congress or
are these--is this just much more a prioritizing of funding
areas or what do you see coming out of that study? We're in the
awkward circumstance of getting ready to write an energy bill.
In the process of trying to write an energy bill and not
knowing whether or not it's going to be in sync with what the
National Academy thinks ought to be happening in this area.
Mr. Fri. Mr. Chairman, the study has two phases. The first
phase is the one that is about--is in the final throws of being
completed and made available. The first phase is what you might
just call a truth telling phase.
To look at all of the range of technologies, to understand
on a comparable basis their cost performance and reasonable
expectations for deployment over two time periods, a near term
time period, the next 10 years or so and then a 10 or 15 year
time period after that. So it provides, I think, a framework of
reasonable expectations for technology around which a research
program and a deployment program can be built. The key policy
issues are meant to be addressed in the second phase of the
study which so far as I know has not been fully put together
yet.
But the kinds of questions that the Congress may have are,
in part at least, intended to be addressed.
The Chairman. What is the timing on that second phase? When
would that be completed?
Mr. Fri. I don't think it's--I don't know is the answer to
that question.
The Chairman. Alright. We have a very impatient President.
I just thought I'd mention that. I have noticed that, myself.
Mr. Fri. We've noticed that.
The Chairman. Yes.
Mr. Fri. I know that Dr. Blair who is sitting behind me is
very sensitive to the need for expedition in this regard. On
the other hand those of us who've done this business for a long
time also know that if you get some decent facts on the table
and some careful analysis it will be always valuable. That's
what the Academies are trying to do.
The Chairman. I agree with that. Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. Dr. Bartis and
Professor Corradini, this is probably directed toward you. As
we think about how we encourage young people to go into
different fields and get them excited.
It was encouraging to hear Secretary Chu say that there is
a real level of enthusiasm for the jobs that are being created,
the new green jobs. I think that the term he used was, you
know, they're joining the service. That's great. It's
important. It has to happen.
But do you have concerns, whether it's in nuclear or
whether the oil and gas industry that while the excitement to
join, kind of, the energy of the future, the renewables, the
greens, is going to leave nuclear behind? It's going to
jeopardize our ability to get the clean coal technology, the
carbon sequestration because it will be viewed as those dying
fields or those areas where you've suggested Professor
Corradini that university nuclear research programs are cutting
back in there. If we're not sending the right signals from on
high from the government that these are areas that we want to
encourage our best and our brightest.
We want our engineers to go there. Are we going to lose the
energy, the enthusiasm in these particular areas? I know that
when I was out a year or so in California looking at some wind
turbine operations we were talking about well, is it difficult
to recruit and retain?
They said, well basically we're taking all the engineers
from the petroleum engineers. I'm going up North and the folks
up there are saying we can't get people to do the engineering
work that we need here. Are we seeing this shifting and leaving
behind in certain energy sectors?
Mr. Corradini. Do you want to go first or do you want me?
Ok. So, I'll give it a shot.
I guess my--so a little history. I was actually in front of
this committee in 2000 I think. I talked about actually the
human infrastructure there about nuclear engineering.
At the time all the numbers were about one fifth the size
that I show you on the graph. In fact I actually went all the
way back to that time period. So we've seen a tremendous
growth, a factor of four or five in terms of enrollments in the
discipline.
But I think in some sense we're a leading indicator in that
power engineering, energy engineering in general, has been at a
very low ebb. We're seeing now growth in all areas. So I think
that if the--and I'll--so that's observation one.
Observation two is young people are really smart.
Senator Murkowski. Yes.
Mr. Corradini. They don't need me to tell them what to do.
They ignore me most of the time when I'm in the classroom. So
there's no point in--so I think that if signals are given and
they are not thought through carefully, you could get a problem
exactly as you've characterized.
I do hope and if they listen a little bit, I try to explain
to them the underlying fundamentals of physical sciences and
engineering kind of cross boundaries. As well, if they're well
trained and educated they can move with it. So that's part of
the reason when you noted that some people hire here and they
then shift over here, always occurs.
But I do think that we have to be careful. That's the
reason that I emphasize the need to continue without and I'll
pardon the expression, in a herkey, jerkey, up and down, up and
down that we continually support at a broad level all areas of
energy engineering. So that's kind of a quick answer to your
question.
Senator Murkowski. I appreciate that. Dr. Bartis.
Mr. Bartis. I think you have raised a very important point.
First I'd like to just comment on your geosciences initiative.
I think that's really a very appropriate direction.
I've been very concerned over the last couple of decades
about what's been going on in our mining schools. Safety is
such an important aspect of mining. You really need people to
be able to see the whole picture there in mining. So I think
your geosciences initiative is going very much in the right
direction. Of course that adds on to the importance of geologic
sequestration, better petroleum recovery here at home.
My overall view is that the Department of Energy hasn't
given adequate funding and the right kind of funding to
universities. I'm hoping that your committee could rectify
this. I think the university funding levels have not been as
high as they should be, especially from the technology
development programs.
They need to be investing in university research to make
sure that they have that level of wisdom that they can call on.
That level of expertise that they can call on because these
programs generally do have problems. Other than that I think a
good scientific education, a good engineering education does
allow all of our students to have that flexibility to move
during their careers to other fields of endeavor.
I mean we can't predict the future. So it's that solid
engineering and science background that's essential here. But
again it takes Federal support.
Senator Murkowski. Thank you.
The Chairman. Senator Udall.
Senator Udall. Thank you, Mr. Chairman. I do think the
Senator from Alaska makes a very good point. It relates to the
overall energy policy that I think the Chairman has proposed
and advocated for as has the Senator from Alaska which is, we
have to throw the kitchen sink at this.
We need a comprehensive energy proposal. Somebody quipped
to me, Mr. Chairman, that there's no silver bullet. Maybe
there's a lot of silver buckshot and it includes renewables,
includes efficiency, includes the traditional fossil fuel
technologies. We have to do it all including nuclear as well.
Dr. Crabtree if I might turn to you. You talked about some
of the overarching challenges with next generation sustainable
fuels. Many of these technologies work in the labs, but they're
not economical on a larger scale.
Beyond increasing the funding for such programs what are
other policy actions that the Congress could take to encourage,
not just the development, but the deployment of these
technologies?
Mr. Crabtree. So that's a very broad question because you
have, certainly have to have before you're ready to deploy, you
have to have a workable, sort of demonstrated and viable
technology. I think the reason that a lot of the technologies
haven't hit the target and been deployable is simply that they
don't look economically attractive. That's a performance
question.
That performance question is--the solution to that
performance question lies really in the materials and the
chemistries of these sustainable energy technologies. So we've
talked a lot actually about solar. It was mentioned earlier in
this hearing that when Secretary Chu was here, that we need to
get the cost down by a factor of 5.
That's the thing that I think will induce the commercial
side to invest and to deploy solar. Getting the cost down, but
getting that cost down is really a scientific issue. We have to
understand why semiconductors do what they do and what's
limiting the efficiency.
I just returned earlier this week from Japan, a meeting on
innovative solar energy, photovoltaics. They're looking at
efficiency as 50 percent or more, nothing less. That's the
intended goal of their program. It's a 5-year program.
That's the kind of innovation that is going to get the
price down, cost of electricity down, solar electricity and
make it deployable. So in my view the issues really are
fundamental at the materials and chemistry level. We need to
understand that and do those things better. The rest will come.
It will be a sort of tipping point when it finally becomes
competitive with let's say coal to electricity, it will happen.
I'm not sure that it's wise to force it to happen before that
time. We really should concentrate on the fundamentals.
Senator Udall. Any other members of the panel care to
comment. Particularly on sustainable fuels, alternative liquid
fuels and what more we might do to encourage the development
and deployment of these technologies. I've read increasingly
that many scientists think this is where you may see
developments that we can't even predict today, with all due
respect to the exciting potential news about PV technology.
But in the alternative liquid fuels arena we don't
necessarily know what feed stocks might work. There's a lot
going on. There are those who think this really could see
developments that we can't forecast here today.
Anybody else care to comment?
Ms. Wince-Smith.
Ms. Wince-Smith. I'll just add to the comments also on the
deployment issues. You know in addition to refining and
understanding some of the underlying science we really have to
look at the whole risk/reward continuum of the investment both
on the debt and equity side. The built in infrastructure that
often acts as a barrier for the deployment of these new systems
and the replacement cost.
In the case of the liquid fuels area you know one of the
other partners for collaboration was the Department of Energy.
I think the new Secretary and the new Administration is going
to really look at these activities in a systemic way is the
Department of Defense. They're already working very
aggressively to try and develop, you know, alternative liquid
fuels for of course, military applications.
The extent of which we can really mirror both the
industrial as well as the defense as we've done in other very
important game changing technologies that changed the world.
That's another very, very critical path on deployment.
Senator Udall. Others?
Mr. Fri.
Mr. Fri. The short answer is put a price on carbon. Not
just because of the usual reasons. But the innovation process
in this country is a messy, recursive process. It's not some
sort of linear, start here and get there.
So the way it works best is to get a lot of people working
on it. The way you get a lot of people working on it is put a
price out there that incents them to go work on it. I know
that's a very difficult thing to do. But at the end of the day
that's the thing that will really stimulate the innovation
process.
Senator Udall. Dr. Bartis.
Mr. Bartis. I want to--I certainly agree with that, putting
a price on carbon. Unfortunately the Department of Energy in
its program has tried to narrow prematurely. I think you talked
about the problem of narrowing prematurely its choices on
biofuels.
This is a program that should be--have a very broad scope.
It needs to be looking at lots of different opportunities out
there. The focus on cellulosic alcohol, it may be ready for
some scale up, but it should not be done at the expense of all
these other opportunities, these longer term, much higher pay
off potentially, opportunities.
The place to do that research is in the national labs and
the universities. It's fairly basic stuff that has to be
investigated.
Senator Udall. Mr. Chairman, thank you. I think we may be
coming to the end of the hearing. But if I might I'd like to
direct some additional questions to the panel for the record on
coal to liquid technology, on oil shale which Dr. Bartis you've
written at great length. I think in a compelling and thoughtful
and rational way.
So thank you Mr. Chairman, for this important hearing.
The Chairman. Alright. Thank you very much. I think Senator
Murkowski had another question.
Senator Murkowski. Just very quickly Ms. Wince-Smith. You
mentioned just the investment and recognizing that the current
investment markets are in pretty tough shape. I guess the
question that I would have of you.
Are we seeing the government become the main source of long
term technology investment? Is this a good thing, a bad thing?
Is it healthy? Is it sustainable? Does it hinder us in any way
as we move forward on R and D?
Ms. Wince-Smith. I certainly think that the government's
primary role in supporting the underlying, basic research, the
frontier research, through the applied continuum is very
important. You know we've all worked so hard to get the
American Competes Act that's just at the heart of that. But
having said that, you know, as we move to really, for instance,
be the place in the world that solves and commercializes some
of these battery storage challenges that R and D barriers.
We have to involve industry right there in the process. We
have to have financing mechanisms that are sustainable and long
term. Quite frankly a lot of people think that the venture
capital world, you know, will be the place that will finance
the startups that who knows where they will go.
But the scale is so big that there has to be a way to pool
these different investment sources together. One of the
initiatives that the Council on Competitiveness pushed very
early, it's in our Prioritize. We're very pleased it's being
addressed by this committee and the Congress is the Clean
Energy Bank.
I mean, XM is still financing and accessing capital markets
for United States products, innovative products, to be sold
overseas. What about having those capabilities and resources
and guarantees to deploy and develop them here in the United
States as well? So I think the financing area with loan
guarantees, debt networks, is a very, very critical area that
will supplement and add to what the government's core role is
in the basic applied and some of the demonstration products.
You have to have both of those together.
Senator Murkowski. I agree. Appreciate that statement.
The Chairman. thank you all very much. I think it's been
useful testimony. We appreciate it. That will conclude our
hearing.
[Whereupon, at 11:39 a.m. the hearing was adjourned.]
APPENDIXES
----------
Appendix I
Responses to Additional Questions
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Response of Robert M. Fri to Question From Senator Bingaman
Question 1a. Given that any new energy technologies that are
developed must be accepted and adopted by an already well-established
energy industry, what role should these industries play in public-
private R&D partnerships?
Answer. The most efficient role for industry in public-private R&D
partnerships depends on a variety of factors, such as the relative
maturity of the technology on its path to widespread commercial
viability, the unit scale of its likely ultimate deployment, or the
accompanying maturity of so-called ``balance of system'' features
necessary to demonstrate the technology at commercial scale. For
example, it is less important for industry to be leading early stage
investigations of fundamentally new areas of inquiry, e.g., novel solar
cell concepts, such as high-efficiency organic and polymer solar cells
or nano-particle devices (distributed junction solar cells) that use
different nanostructures for solar conversion. But for technologies
closer to commercial scale development, industry leadership is
essential, such as in demonstrating at commercial scale carbon capture
and sequestration or next generation nuclear power generation.
Question 1b. For example, ARPA-E: Should these research teams be
industry led? ''University led with significant industry input?
Answer. If ARPA-E is to be true to its model-the ``old'' DARPA-the
the leadership should be guided by the problem and the necessary
expertise, which could be either industry or academic teams depending
on the project. In introducing the idea in 2006 following the release
of the Academy report, Rising Above the Gathering Storm, Steven Chu,
who served on the Academy Committee that prepared the report, expressed
the committee's view as ``ARPA-E could fund research at universities
start-ups, established firms and national laboratories for similar
focused goals. ARPA-E may be especially useful in funding projects
whose success will require coordinated efforts from several fields of
science. It would also meet the nation's need for transformational,
high-risk, high payoff R&D that would be a challenge for today's
electric utilities, petroleum companies, and large energy equipment
manufacturers to address and which are not very attractive to the
entrepreneurial world . . . Anyone could compete for funding from ARPA-
E including universities, industry, businesses, and national
laboratories or ideally, a consortia of these organizations. Those
managing the process would need to be very independent and not favor
one group over another.''
Question 1c. Within these partnerships, how do we balance
industry's inherent need for short-term results with the longer
timeframe often required to achieve scientific breakthroughs?
Answer. ARPA-E is but one component in the portfolio of R&D
mechanisms. ARPA-E is designed to focus on ``for transformational,
high-risk, high payoff R&D'' that has been underserved by other
government funding mechanisms. Yet results from ARPA-E could serve
either short-or long-term R&D objectives.
Responses of Robert M. Fri to Questions From Senator Murkowski
Question 1. Congress tends to authorize a large number of programs,
but we are not as successful in deauthorizing programs that are no
longer needed, or are ineffective.
As we are looking at doubling the authorization level for energy
research and development programs, are there some programs that could
be deauthorized?
Answer. As technologies are commercially demonstrated the need for
a government role becomes less and less important, but it is sometimes
difficult to make the determination that government support is no
longer needed. The clear signals are in the measurement of scale and
scope of R&D progress and as demonstrated benefits become marginal and
incremental it is time to move on. We have not assessed the current
portfolio, but, as an example, one of the Academy reports I referred to
in my testimony, Energy Research at DOE: Was It Worth It?, concluded
that magnetohydrodynamic electricity production, a technology that was
identified as a potentially efficient method for generating electricity
from domestic coal, continued to be funded long after the technology
was found to be too costly and complex for widespread use. A systematic
review of the portfolio today along the lines of that report's analysis
would likely yield similar examples.
Question 2. As we work to grow our future energy workforce needs, I
am reminded that multinational companies are global shoppers of talent-
there is no such thing as a monopoly on good ideas.
What energy education and workforce development programs are there
overseas that we might be able to emulate?
Answer. Higher education in the United States, especially the
graduate schools, remains generally the envy of the world. U.S.
Technical training in trade schools and, of course, at K-12 level
science and mathematics is not so envied and indeed lags other nations
by a considerable margin. We have not analyzed the energy education and
workforce programs in the U.S. and overseas per se, but there may be
applicable lessons from more general analyses. I refer you to Academy
studies such as Science Professionals:
Master's Education for a Competitive World (2008), Policy
Implications of International Graduate Students and Postdoctoral
Scholars in the United States (2005), Enhancing the Community College
Pathway to Engineering Careers (2005), or Preparing Chemists and
Chemical Engineers for a Globally Oriented Workforce - A Workshop
Report to the Chemical Sciences Roundtable (2004).
Question 3. Yesterday, the National Association for Colleges and
Employers reported that 66% of companies surveyed are either hiring
fewer new college graduates in the Spring, or not hiring at all. The
report also shows a 37% decline in hiring of professional services,
which includes engineering. At the same time, large segments of the
energy industry workforce are nearing retirement and will need to be
replaced.
What role should Congress and the Department of Energy play in
highlighting energy workforce needs for college students?
Answer. Many universities and colleges are reporting renewed
student interest in energy-related disciplines by students. If the
stimulus package reflected in the American Recovery and Reinvestment
Act of 2009 is implemented successfully and expanded investments in
energy technology research, development and deployment, as reflected in
the FY09 appropriations bill just passed, take shape quickly, demand
for skills in energy related fields will gain momentum relatively
quickly as well. However, we are in the midst of a deep and likely
prolonged recession and industry may be conservative in making
decisions to build the skill base to implement those activities. As
examples, Congress and the Department of Energy could play at least two
roles in overcoming industry reluctance: (1) support for university
programs that are tuned to the needs of industry, i.e., ``impedance
matching'' the skills needed with the skills delivered by universities
and (2) expansion of support for ``work study'' programs that build
student relationships with industry as early as possible.
Question 4. In the health care field, many medical students turn to
a specialty practice rather than general healthcare, where there is a
huge need, because overwhelming student loans require the higher pay
found in specialty care.
As we look to grow the energy workforce, does the burden of student
loans move students toward one particular field over another?
Answer. If you mean within energy fields, I'm not sure student
loans alone would explain major shifts among fields, since other
considerations would likely dominate, such as perceived job market
considerations. Perhaps they have an effect on the margin. Nonetheless,
in the current economic conditions the burden of student loans or,
perhaps the lack thereof or of alternative sources of support, will
likely contribute to the trends observed recently in student decisions
among institutions, such as decisions less expensive public rather than
private colleges and universities, which regionally could have an
equivalent effect of selecting among fields. In graduate education,
research assistantship support (perhaps sometimes combined with loans)
is crucial for maintaining a healthy pipeline and if such support is
plentiful in one field over another and job market conditions are
similar, the market will, of course, favor the funded field.
Question 5. We tend to live in society that expects and demands
instantaneous results and action--from instant messaging and the
internet, to being reachable electronically around the globe 24-hours a
day, seven days a week. Yet most research and development takes years
to achieve results and even then it may not be a marketable product.
In today's economy, what are the challenges to demonstrating the
long-term applicability and economic viability of energy research and
development programs?
Answer. I think the answer can be illustrated with the historical
experience of the energy R&D portfolio. For example, I referred in my
testimony to the Academy report, Energy Research at DOE: Was It Worth
It?, which, in looking back as far as 1978, examined 17 DOE R&D
programs in energy efficiency and 22 programs in fossil energy and
found that those programs yielded economic returns of an estimated $40
billion from an investment of $13 billion. Perhaps more importantly,
however, the study found that a few key programs delivered benefits
many times over the total amount invested, but that it was essentially
impossible to predict a priori which part of the portfolio would yield
the most important benefits. To demonstrate economic viability the
portfolio must be held accountable for producing results. However, the
challenge is striking the right balance between high risk and
potentially high benefit options and options with lower risk but more
likely more incremental benefit.
______
Response of James T. Bartis to Question From Senator Bingaman
Question 1. Given that any new energy technologies that are
developed must be accepted and adopted by an already well-established
energy industry, what role should these industries play in public-
private R&D partnerships?
For example, ARPA-E: Should these research teams be industry led?
University led with significant industry input?
Within these partnerships, how do we balance industry's inherent
need for short-term results with the longer timeframe often required to
achieve scientific breakthroughs?
Answer. If the objective of the effort is short term and directed
at the development of a new product, such as a lower-cost PV panel, the
effort should be industry led and include significant cost-sharing by
industry. If the objective of the effort is to advance technical
progress more broadly, combined teams involving universities, national
laboratories, and industry are appropriate. In this case, it may be
highly appropriate that the overall effort, or significant components
of the effort, be university led.
More generally, I recommend that all major energy research programs
should be implemented through a process that involves broader
participation of the public, the scientific and technical community,
and industry. By this means, universities, national laboratories, non-
governmental organizations, and industry can collectively contribute to
the formulation of research plans.
The greater the level of industry cost-sharing, the greater will be
industry's need for short term results. To promote industry
participation in programs that involve longer-term efforts, I suggest
that Congress reduce the requirements for industry cost-sharing.
Responses of James T. Bartis to Questions From Senator Murkowski
Question 1. Congress tends to authorize a large number of programs,
but we are not as successful in deauthorizing programs that are no
longer needed, or are ineffective.As we are looking at doubling the
authorization level for energy research and development programs, are
there some programs that could be deauthorized?
Answer. This is an excellent question, and one that is too
infrequently asked. I assume that the question concerns technology
development efforts, as opposed to basic research. With that
assumption, I suggest focusing on technologies that are well-
established in the private sector and where government efforts to
introduce improved systems might weaken private initiative. For
example, technology for enhanced petroleum recovery is well-established
within the private sector. Unless the main purpose is carbon dioxide
sequestration, I suggest low priority for technology development (but
not basic/fundamental research) on this topic. Likewise, the private
sector has extremely strong financial motivations to develop advanced
batteries and is investing in this area. Portable computers and hybrid
vehicles are two applications that clearly indicate the value of
successful product development. Again, government-sponsored R&D should
be limited to fundamental and basic studies; otherwise, the government
will simply be de-motivating private investment. A third example might
be wind energy systems. Considering the number of firms active in wind
power development, sponsoring the development of an advanced wind
system is likely to be counterproductive. More relevant would be
research on advanced materials and fabrication systems.
Question 2. As we work to grow our future energy workforce needs, I
am reminded that multinational companies are global shoppers of
talent--there is no such thing as a monopoly on good ideas.
What energy education and workforce development programs are there
overseas that we might be able to emulate?
Answer. I am not familiar with this topic and regretfully am unable
to provide you with an informed judgment on this question.
Question 3. Yesterday, the National Association for Colleges and
Employers reported that 66% of companies surveyed are either hiring
fewer new college graduates in the Spring, or not hiring at all. The
report also shows a 37% decline in hiring of professional services,
which includes engineering. At the same time, large segments of the
energy industry workforce are nearing retirement and will need to be
replaced.
What role should Congress and the Department of Energy play in
highlighting energy workforce needs for college students?
Answer. In my judgment, an important goal of a college education is
to provide students with the flexibility to respond to future
employment opportunities. The marketplace already provides clear
signals--through hiring and compensation--as to where those
opportunities are. Government efforts to promote college graduates to
enter the energy workforce independent of these marketplace signals
could lead to an oversupply and lower salaries, which would simply
negate the intended benefits.
That being said, there is a role for continued improvements in K-12
education and, in particular, science and technology (S&T) education.
Any efforts to improve S&T education should increase the potential
labor pool for college-trained persons capable of entering the energy
workforce.
Question 4. In the health care field, many medical students turn to
a specialty practice rather than general healthcare, where there is a
huge need, because overwhelming student loans require the higher pay
found in specialty care.
As we look to grow the energy workforce, does the burden of student
loans move students toward one particular field over another?
Answer. This issue is outside my area of expertise. I have no basis
by which I can provide you with an informed answer to the question.
Question 5. You mentioned in your testimony that retrofitting
existing plants with carbon capture technology represents a parasitic
load on those plants. To replace that lost energy we will need to build
more plants or burn more fuel. Certainly carbon capture technologies
would not be deployed if there were a net increase in emissions but it
does bring up the impact of plant efficiency.
Could you comment on the relative benefits of research and
development directed at improving plant efficiency overall and how that
would compare to the expenditures needed for carbon capture and
sequestration to have an equivalent impact?
Answer. In my spoken remarks before the committee, I suggested that
at least $2 billion per year over the next 10 years is required so that
we can use fossil fuels for power generation at greatly reduced
greenhouse gas emissions. While my highest priority is multiple early
demonstrations of carbon dioxide sequestration in the United States,
the funding for such demonstrations should represent well below half of
the $20 billion minimum funding level that I suggested.
In my judgment, the majority of these funds should be directed at
developing advanced power-generation technology that enables both
carbon dioxide capture and highly efficient power generation from new
plants. Significant funding is also required to develop technology that
might allow carbon dioxide capture from existing generating units.
A number of older power plants operate at energy efficiencies in
the 30 percent range. Technology is available to upgrade these plants.
For example, if these plants are upgraded (or replaced) with plants
operating at the current state of the art (about 40 percent for coal),
fuel use and greenhouse gas emissions would decline by 25 percent.
For three reasons, however, I do not recommend government support
of research that would raise generating plant efficiency but not allow
carbon capture. First, technology is already available for upgrading
the efficiency of power plants. This upgrade technology is not being
applied in the United States because the current economic benefits--
lower coal costs--of improving efficiency do not support the required
investment costs. If Congress passes legislation that places a price on
emitting carbon, power plant operators may opt for efficiency
improvements. Second, a collateral consequence of progress in
developing advanced power generation cycles for new plants will likely
be efficiency-enhancing technology that might be retrofitted onto
existing plants. Third, considering the magnitude of the reduction in
greenhouse gas emissions that appears to be needed over the next 40 to
50 years, a 25 percent reduction from power plants is not sufficient.
Responses of James T. Bartis to Questions From Senator Udall
Question 1. Two years ago you testified before this committee on
the topic of oil shale development. In your statement, you said at the
time, ``In my judgment, establishing a broad-based commercial leasing
program within the next five years is not necessary and, in fact, may
be detrimental to oil shale development.'' You also made the following
recommendation:
Rescind the requirement to establish final regulations for a
commercial leasing program within six months of completing the
programmatic EIS. As discussed above, within the next few
years, it is unlikely that adequate technical, economic, and
environmental information will be available to formulate fair
and equitable leasing regulations.
Late last year the Bush Administration finalized a commercial
leasing program, which has been criticized by many, including myself,
for having a host of deficiencies.
Has anything changed in the intervening two years to change your
views as expressed in your statement of April, 2007?
Answer. No. To the contrary, the actions by Department of the
Interior over the past two years to establish a commercial leasing
program have strengthened my conviction that insufficient information
is available to formulate fair and equitable leasing regulations. In
particular, the ``programmatic'' EIS published in September of 2008
clearly illustrates how little information is available on the
environmental performance of prospective technologies for commercial
development of oil shale. Likewise, lack of information on the
economics of prospective oil shale technologies resulted in rules for
royalty rates and diligence requirements that do not take into account
the public stake in the prudent development of oil shale resources.
Rather than a ``commercial'' leasing program, I suggest
consideration of an oil shale leasing program that is specifically
designed to encourage private investment in advanced oil shale
technology development and demonstration. I refer to this alternative
as a ``pioneer'' oil shale leasing program, since it is directed at the
small number of firms that are pioneering new and better (economically
and environmentally) oil shale technology. The low-cost leasing of
small parcels for RD& D can be viewed as one component of such a
pioneer leasing program. But firms will not make the $100 million plus
investments required for oil shale technology development and
demonstration unless they are confident that success will reap rewards
commensurate with the size and risks of investing in RD&D. Basically,
they need to know that if they pass environmental muster, they will be
able to build a pioneer commercial facility on public lands and pay
fairly low royalty rates for the initial operating period of that
commercial facility.
Given the richness of the oil shale resources that are of greatest
commercial interest, access to a fairly small amount of public land for
a commercial operation may be more than adequate to incentivize private
investment. Considering the risks of building pioneer production
facilities and the vicissitudes of the world oil market, it may be
appropriate for the Department of the Interior to be highly flexible
regarding royalties, including the option of foregoing royalties for
the first 10 or 15 operating years of a pioneer oil shale operation.
These special considerations would be limited to the few pioneer
facilities that might be candidates for commercial production over the
next 10 to 15 years. The design and operating experience from these
pioneer facilities would form the basis of formulating a broader-scale
commercial leasing program that could be put in place in the 2020 to
2025 timeframe.
Question 2. Secretary Salazar last week announced that he was
halting the Bush Administration's solicitation for a new round of oil
shale research, development and demonstration (RD&D) leases. He also
stated that he planned to offer a new round of solicitations after he
had heard from the public and had an opportunity to review the program.
In your statement two years ago, you suggested that, ``the federal
government direct its efforts at a list of ``early actions'' listed in
the RAND oil shale report, viewing those actions as priority measures
for developing oil shale as a strategic resource for the United
States.'' Your recommendations included additional research on the
impact of oil shale development on climate change and our environment,
as well as development of technology.
Would you make the same suggestions to the Interior Department for
its next round of RD&D leases, and would you add any issue areas that
you think need to be explored before we venture off into a commercial
development program?
Answer. In my written testimony submitted on March 5, I repeated my
recommendation that the government support research required to
understand and mitigate or prevent the adverse impacts of oil shale
development. I also highlighted the importance of research directed at
establishing the information base required to prepare a federal leasing
strategy. Since publication of the RAND report on oil shale development
in 2005, it is my understanding that negligible, if any, federal R&D
funding has been directed at these issues. While industry may be
conducting important work in certain environmental areas, the public
interest requires that non-interested researchers also be involved.
Moreover, environmental issues that are critically important to a
sustainable oil shale industry, as opposed to a single facility, are
not being addressed. These include infrastructure requirements, water
requirements and availability, potential air quality impacts, and
disposition of greenhouse gases.
A forthcoming round of RD&D leases provides the government with an
opportunity to rectify the inadequate federal funding directed at
protecting the public interest in oil shale development. Moreover, if
demonstration facilities are built, they will provide an important
opportunity for independent researchers to gather important
environmental information such as how the subsurface environment
responds to chemical and physical changes induced during in-situ
retorting. To allow this research, the RD&D lease provisions should
allow for the government to secure limited site access by independent
researchers, along with provisions to protect company proprietary
information.
If a federally-sponsored oil shale research program is to be
established, I recommend that the implementing agency take steps to
assure broader participation in the formulation of research priorities
and in the overall oversight of the program. Since the results of this
research will weigh on future decisions regarding the governance of oil
shale development, it is important that interested parties, especially
the state of Colorado, local governments in the vicinity of the
Piceance Basin, non-governmental organizations, and industry, be
consulted.
Question 3. I know you authored a RAND report on coal-to-liquid
fuels last year. What are your thoughts on the water needs for CTL
refineries and the limitations that might put on wide scale development
of this technology?
Answer. Water is an important issue for CTL development in the
Mountain States, particularly Wyoming, Montana, Colorado, and New
Mexico. For CTL production facilities built in locations with abundant
water supplies, between 200 and 400 gallons of water will likely be
consumed for each barrel of transportation fuel produced. CTL plants
can be designed to use much less water, possibly as low as 65 gallons
per barrel of fuel produced. Moreover, CTL plants might be able to use
water sources that are unsuitable for other purposes, such as
agriculture. But given the CTL design information that is publicly
available, the cost implications of such low-water designs is highly
uncertain.
Overall, I anticipate that water limitations will not seriously
impede CTL development in the Midwest and Appalachian regions. The
extent that water limitations will impede CTL development in the
Mountain States remains an open issue. Early commercial operating
experience in CTL plants built in the Mountain States should provide
important insights into this problem.
______
Response of George W. Crabtree to Question From Senator Bingaman
Chairman Bingaman, Ranking Member Murkowski, Senator Stabenow and
members of the committee: thank you for the opportunity to respond to
these questions concerning my testimony before the Senate Energy and
Natural Resources Committee. Please find my responses below. I will be
happy to supply more information on these or other questions at your
convenience. I would appreciate your inserting your questions and my
responses into the formal record.
Question 1. Dr. Crabtree, in your testimony you support the
formation of Energy Frontier Research Centers (EFRC's) that are focused
towards making fundamental scientific breakthroughs to enable the
development of competitive and sustainable energy technologies. We have
seen several other proposals for `innovative' R&D models to enable the
development of breakthrough technologies: ARPA-E, the Brookings
proposal of Energy Discovery-Innovation Institutes, and, as I have just
put forth--a Grand Challenges Research Initiative.
What are your thoughts on the ability of each of these models to
achieve the technological breakthroughs that we need? Do we need more
than one of these models? How would you envision these models
complementing one another?
Answer. These are important questions and I will answer at some
length. The energy, environmental and economic challenges we face can
be captured by a few simple objectives: we must reduce our dependence
on imported oil and other fossil fuels, reduce our carbon dioxide
emissions to slow climate change, and create and export next generation
sustainable energy technologies to grow our way out of the recession.
The routes to achieving these objectives, however, are considerably
richer and more diverse than the simple statement of the challenges
suggests. The solutions include, for example, sequestering carbon
dioxide in geologic formations, generating electricity in coal and
nuclear power plants at twice their current efficiencies, producing
power from renewable solar, wind and geothermal sources, replacing oil
and gasoline with biofuels and solar chemical fuels, electrifying
transportation through increased use of plug-in hybrids and battery
electric vehicles, and replacing fossil fuels with hydrogen produced by
splitting water renewably. Many of these more sustainable energy
technologies require a 21st century electricity grid with the capacity,
reliability and efficiency to move energy long distances, and efficient
methods to store electrical energy to accommodate the intermittent
production of wind and solar electricity.
The roadblocks to these sustainable energy technologies are severe,
otherwise they would have been solved by the significant resources
already devoted to the applied energy sector. They cannot be overcome
by incremental improvements of present energy technologies.
Transformational change is needed if we are to reduce our dependence on
imported oil and other fossil fuels and lower our carbon dioxide
emissions sufficiently to slow climate change.
Basic and Applied Science Challenges.--To achieve viability of
sustainable energy technologies, transformational breakthroughs are
needed at many points along the research and development chain.
Serendipitous discovery of new phenomena has always played a key role
in generating new technologies, by creating qualitatively new
opportunities where none previously existed. The record-shattering
discovery in 1986 of superconductivity at temperatures ten times higher
than ever observed before is in this serendipitous category, allowing
transformational change of the capacity, reliability, and efficiency of
the electricity grid that have now been demonstrated and are beginning
to be exploited.
Equally important as serendipitous discovery is use-inspired basic
research to understand and control known but unexplained phenomena,
such as how plants use sunlight to transform water and carbon dioxide
into fuel, or how catalysts increase the rates of targeted chemical
reactions by factors of one million or more. Understanding these
mysteries of nature requires the steady development of theoretical
insights and observational tools, often at ultra small length and
ultrafast time scales that are beyond the reach of the human eye and
beyond our present capability. Once understood and controlled, these
phenomena can be applied to create new energy technologies such as
recycling waste carbon dioxide to produce fuel using sunlight, or
transforming the high density energy of chemical bonds to useful
electricity by electrochemical conversion without combustion.
Understanding known phenomena like photosynthesis and catalysis for
energy are challenges that respond to strategic scientific research.
These two challenges, for example, have been examined by Basic Research
Needs workshops convened by DOE's Office of Basic Energy Science
(http://www.sc.doe.gov/bes/reports/list.html). The workshop reports on
Solar Energy Utilization and on Catalysis for Energy outline the
current status of each field, the scientific roadblocks to sustainable
energy applications, and the promising research directions for
overcoming the roadblocks. Understanding and controlling these
phenomena are basic science challenges that will produce the necessary
transformational energy technologies. Like other basic science
challenges, they will be solved by creative, out-of-the-box thinking,
bottom-up idea generation, and by following promising research
directions wherever they lead.
Beyond basic science challenges, there are a host of applied
science and technology development challenges that also require
transformational change to overcome. Unlike basic science challenges,
these applied science challenges exploit phenomena that are largely
understood, connecting them together to produce a complete energy
chain, such as plug-in hybrid cars or wind farms to produce
electricity. These are primarily engineering challenges, with the same
richness, creativity and transformational potential as basic science.
Unlike basic science challenges, however, applied science and
technology development challenges respond to top-down management, a
focus on performance, and on meeting pre-set milestones needed to make
the technology viable.Energy Frontier Research Centers.--Because the
transformational challenges needed for next generation energy
technologies lie along the entire research and development spectrum,
more than one kind of program is needed to meet them. Energy Frontier
Research Centers (EFRCs) meet the basic science transformational
challenges, overcoming roadblocks in understanding and controlling the
basic phenomena of sustainable energy. EFRCs will operate as basic
science research consortia at the $5M level, creating dream teams of
the best scientists from multiple institutions to work in
interdisciplinary collaboration using the most advanced tools and
focused on the most critical and basic obstacles. EFRCs are designed to
solve the scientific challenges in understanding and controlling the
phenomena of sustainable energy. Despite the high impact of EFRCs in
solving major scientific roadblocks to sustainable energy development,
their cost is relatively small compared to the cost of applied energy
programs.
EFRCs offer an approach to basic science energy research that is
tuned to the level of the challenge--bigger and broader than individual
investigators but small enough to be scientifically nimble and
responsive to new opportunities created by scientific discovery. Many
of the challenges outlined by the twelve Basic Research Needs workshops
and reports issued by the Office of Basic Energy Sciences require this
level of effort. EFRCs provide interdisciplinary coordination among top
scientists using resources from different institutions but do not add
the layers of administration and management that technology development
requires. Many of the most serious roadblocks to sustainable energy are
knowledge based--we need to understand and control the fundamental
phenomena of sustainable energy production, storage and use. EFRCs are
designed to build the required knowledge base quickly.
ARPA-E presents another model, locking onto specific high-risk
high-payoff ideas that, if successful, will enable specific
transformative changes in energy technologies. The concept of DARPA, on
which ARPA-E is modeled, is to act quickly, usually within 18 months or
3 years, to decide if a particular high risk idea is close enough to
fruition to pay off in the near term. If not, the idea is dropped and
attention is diverted to the next idea. The ARPA-E concept works well
for ideas that face near term technical roadblocks that can be overcome
in less than three years and that are not being considered seriously by
industry because the risk is too high. ARPA-E would assume the risk
and, if possible, bring these projects within industry's development
horizon. The rapid development of specific transformational changes for
sustainable energy through ARPA-E would build on the basic science
foundation produced by EFRCs. The two programs are highly
complementary.
Energy Discovery Innovation Institutes.--The Brookings
Institution's Energy Discovery Innovation Institutes offer a much
grander vision (http://www.brookings.edu/reports/2009/
0209_energy_innovation_muro.aspx). The Brookings report takes the bold
step of looking at the entire energy enterprise, not just within DOE
but also across the national landscape, including all agencies of the
government, research universities and industry. Many of their
observations are on target: the problems of energy and climate are
severe, long term, and require transformational change in our national
way of doing business; solutions will be interdisciplinary across
research fields and require coordination of science and engineering
internal and external to DOE; an interagency approach is needed to
coordinate energy research across the federal government; and the
magnitude of the total investment in energy research from government
and industry must increase significantly, by as much as a factor of
four or five.
While the Brookings analysis of the energy landscape frames many of
the issues at an appropriately large scale, its plan for Energy
Discovery Innovation Institutes requires much further study before it
can be accepted for action. The largest institutes would be led by
universities or national labs, but on strictly separate tracks--a
feature that discourages, rather than encourages, close cooperation
among these two pillars of energy research. The size of the largest
Energy Discovery Innovation Institutes is recommended to be $200M/year,
much larger than many other energy research organizations. Although a
commitment of this size can be justified (as the Brookings report does
well), the structure, management style, and scope of these institutes
are much less well examined. A bottom up approach is needed for basic
science, a top down approach for applied science and technology
development. Experience shows that it is challenging--there may be no
successful examples at this scale--to combine management, scientists
and engineers embodying both world-class basic science and world-class
applied science and technology development in one organization. We need
to gain experience at managing basic and applied research in a single
structure, such as with the Helios program at Berkeley, before
launching much larger initiatives on all fronts.
The Brookings study recommends NSF as the lead agency for the
Energy Discovery Innovation Institutes, yet NSF has little experience
at managing large projects and no intellectual foundation in energy
research. DOE has the required management and oversight experience
through its strategic network of scientific user facilities such as the
Spallation Neutron Source, the four light sources, the Electron Beam
Characterization Centers and the five Nanoscale Science Research
Centers--over $800M/year in operations management--and it has a strong
and unique intellectual foundation in energy through its series of
twelve Basic Research Needs workshops and related reports issued since
2002.
At the scale envisioned in the Brookings report the Energy
Discovery Innovation Institutes would be the dominant energy research
organizations in the country. They would consume much more than all of
the projected growth in federal spending on energy. To create a new
structure of unprecedented size and scope to manage such a large
investment that duplicates or supersedes much of the energy structure
and intellectual momentum already in place is very likely to be unwise.
We need to build on what we have, perhaps refining it to better meet
the monumental challenges of energy, environment and economy that we
now recognize; we should not duplicate, or worse, relegate to the side
lines the present energy structure. Given the depth of the financial
crisis, we need to make the best use of the resources we have, not
create new ones that bring parallel and possibly competing strategic,
administrative and funding structures into existence.
Grand Challenges Research Initiative.--The Grand Challenges
Research Initiative proposed in the draft legislation of the Senate
Energy and Natural Resources Committee has many admirable features that
could address the twin challenges of energy and environment. The draft
legislation captures key elements needed for a successful program,
including consortia addressing the grand scientific and energy
challenges described in the twelve Basic Research Needs workshop and
related reports issued by the Office of Basic Energy Sciences or in the
Grand Challenges for Engineering report issued by the National Academy
of Engineering, coordinating basic and applied science, and
contributing to scientific understanding. There are, however, a few
features of concern in the proposed initiative that are briefly
mentioned below.
Page 44, line 22 of the draft legislation refers to `` . . . the
Challenges described in the Grand Challenges report of the Basic Energy
Sciences Advisory Committee of the Department of Energy . . . ''. The
Grand Challenges report is just one of twelve reports describing the
basic science energy challenges. The text should be revised to
specifically include ``the Basic Research Needs and Grand Challenges
reports issued by the Office of Basic Energy Sciences.''
Page 46, line 22 of the draft legislation refers to `` . . .
assisting industry in overcoming the Grand Challenges described in
subsection (c).'' Industry is an important component in developing new
technologies, but the strong focus on industry leadership is too
restrictive. Industry is generally too risk-averse to aggressively
pursue solutions to grand energy challenges. Because most industry
decisions are driven by obtaining financial gain in the short-term and
capturing the exclusive use of the intellectual knowledge base they
produce, they would not likely be interested in working on the big
picture grand challenges. Most of the grand challenges blocking
sustainable energy are so high risk, so generic and require such a
long-term commitment that their payoffs are beyond industry's planning
horizon. In many (even most) cases, the initiative and the leadership
of tackling grand challenges should reside with the basic science
partner, namely national laboratories and universities. Industrial
participation may be a crucial element for eventual success, but
requiring industrial leadership in all instances is likely to leave
many of the grand challenges on the table and unaddressed by this
program.
Industry will lead when a solution to a grand challenge emerges as
promising. Before reaching that point, the risk is too high and the
guaranteed payoff too low for industry to take a leading role. The
grand challenges described in the twelve BES Basic Research Needs
workshop reports and many of those called out in the Committee's Grand
Challenges Research Initiative are in the realm of basic science, and
require dream teams of the most creative and energetic scientific
talent to succeed. The leadership of these grand challenges should
reside in basic research organizations including universities and
national laboratories.
Page 48, line 8 of the draft legislation states that ``The amount
of an award provided to a consortium selected by the Secretary under
this subtitle shall be not less than $50,000,000 for each fiscal
year.'' A consortium funded at this level must have considerable
administrative structure, diluting the research funds available to
actually solve the grand challenges. This size is larger than most
national laboratory divisions and university departments, and it would
require the overhead costs and structures appropriate to a large
organization, typically as much as 50% of the total funding. To be
effective, such an organization would ordinarily require a building, an
issue not addressed in the legislation. The legislation should address
how the funding will be spent, whether it would create a stand-alone
organization with administrative and physical structures, or whether it
would leverage the administrative and physical structures of existing
research organizations.
At the proposed level of funding, $50,000,000 or more per
consortia, the Grand Challenges Research Initiative would require
adding several hundred million dollars to energy spending for promoting
applications and technology deployment. The cost of this program,
however, could diminish the basic science resources needed to solve the
fundamental problems blocking sustainable energy development.
Investments in the basic science of sustainable energy, through EFRCs
and other mechanisms, must be enhanced if we are to produce a more
sustainable energy landscape. The cost of the proposed legislation
should not come at the expense of reducing the doubling of basic
physical sciences funding laid out in the America COMPETES Act. For
example, funding only six centers of the Grand Challenges Research
Initiative at the minimum $50 million a year would require an
additional $300 million a year--more than the proposed increase in the
Office of Science budget and 7% of the Office of Science's total
funding in FY08.
Page 50, line 5 of the draft legislation seems to allow non-
competitive awards of $50M or more to consortia. If a non-competitive
approach is intended, this approach is fraught with problems. It would
not be in keeping with the transparency of the scientific enterprise,
and experience shows that non-competitively awarded consortia typically
perform well below the level of competitively awarded consortia. The
non-competitive aspects of the legislation should be re-examined and
excluded.
Page 50, line 20 of the draft legislation seems to allow
information produced under this funding to be embargoed from
publication for five years. Such a restriction will severely limit the
participation of academic and national laboratory scientists whose
careers depend on publication of their research results in peer
reviewed journals. This provision should be eliminated or severely
revised to include specific protections of the right to publish in
those consortia that are solving pre-competitive scientific grand
challenges. Most of the grand challenges outlined in the twelve Basic
Research Needs workshop reports fall in this category. The American
public benefits when research discoveries are openly disseminated. This
not only furthers a basic principle of the scientific enterprise of
sharing information, but also greatly increases the likelihood that the
research will be developed and commercialized.
Responses of George W. Crabtree to Questions From Senator Murkowski
Question 1. Congress tends to authorize a large number of programs,
but we are not as successful in deauthorizing programs that are no
longer needed, or are ineffective.
As we are looking at doubling the authorization level for energy
research and development programs, are there some programs that could
be deauthorized?
Answer. Peer review, the lifeblood of science, maintains the
quality of the scientific enterprise. The scientific community
rigorously reviews the scientific papers published in its journals. The
more prestigious journals that carry highly cited papers and are the
most important for career advancement impose the most severe reviewing
requirements. This is evident in their rejection rates: Physical Review
Letters, the pre-eminent physics journal, rejects 65% of the papers it
receives, Nature and Science, interdisciplinary science journals,
reject over 90% of the papers they receive.
The standards of scientific peer review apply equally to research
grants: rejection rates for Office of Science and NSF new proposals
approach or exceed 90%. Initial grants in the $100 K range are
scrutinized by up to eight reviewers, collaborative grants of $2-5M
receive mail reviews and in-person site visits by teams of six to
twelve reviewers. The full review process is repeated every three
years, so that high performance must be maintained continuously or
funding will be cut. Phasing out research grants is common, it is the
primary mechanism by which new talent is brought into the scientific
community. The scientific funding agencies are themselves regularly
reviewed by ``Committees of Visitors'' whose task is to evaluate their
performance in funding the highest quality proposals and phasing out
those whose quality no longer meets the standard.
Using the above procedures, the scientific community takes a pro-
active role in phasing out scientific programs that no longer meet the
quality mark. Additional funding allocated to science and administered
through competitive grants will normally maintain its quality and its
usefulness indefinitely. Individual projects and principle
investigators will change frequently to keep the funding focused on the
frontier of research and to insure that only the highest quality
projects are active.
Question 2. As we work to grow our future energy workforce needs, I
am reminded that multinational companies are global shoppers of
talent--there is no such thing as a monopoly on good ideas.
What energy education and workforce development programs are there
overseas that we might be able to emulate?
Answer. Other countries are not standing still. Europe and Asia
have dramatically increased the quality and effectiveness of their
science enterprises in the last two decades, to the point that the U.S.
can no longer assume with confidence that it is the pre-eminent
scientific leader in the world. Germany reorganized its national
laboratory system under the new name Helmholtz Association in 2001,
with national strategic planning and coordinated funding across all
laboratories replacing the former fragmented and laboratory-centric
system. In energy research, this has been a sweeping change, bringing
coordination among basic and applied components and across formerly
independent research laboratories, and review at the highest strategic
levels by foreign scientists. The impact of the reorganization in
preparing Germany to solve its energy challenges and market next
generation energy technologies to the rest of the world (one of their
stated strategic goals) has been significant. In implementing this
reorganization, training of graduate students in national laboratory
settings is a major new component.
Japan is looking well beyond incremental advances in energy
research to, for example, efficiencies greater than 50% in innovative
multi-junction solar cells. Their program, launched in 2008 and called
Solar Quest, coordinates four teams of scientists from three
institutions with international collaborators to design and create the
complex semiconductor materials and architectures that will deliver
high efficiency solar electricity at competitive cost. This program is
advanced basic science, well beyond the risk limit of industry but well
within the reach of sophisticated materials science. This consortium
will build on the new world record for solar cell efficiency
established in January 2009 by the German Fraunhofer Institute of Solar
Energy Systems, 41.1%.
Workforce issues are critical to the future US competitiveness in
science and technology, and especially in energy. Training the next
generation of innovators in energy is key to our future national
health. The response to the question below elaborates this theme.
Question 3. Yesterday, the National Association for Colleges and
Employers reported that 66% of companies surveyed are either hiring
fewer new college graduates in the Spring, or not hiring at all. The
report also shows a 37% decline in hiring of professional services,
which includes engineering. At the same time, large segments of the
energy industry workforce are nearing retirement and will need to be
replaced.
What role should Congress and the Department of Energy play in
highlighting energy workforce needs for college students?
Answer. The energy and environmental challenges have captured the
imagination of students and early career scientists across many
disciplines. For the last two years, the American Physical Society has
held a one-day Energy Research Workshop on the Sunday before its March
meeting, limited to 65 participants and presented by leading basic
energy researchers. The response has been overwhelming--in each of the
two years, the Workshop has been oversubscribed by a factor of two. The
``energy'' at the workshop was palpable-lively and creative questions
from the participants, intense informal exchanges among students and
lecturers during breaks and at lunch and a buffet dinner. The same
interest is seen at other major energy events, such as the MRS Energy
Forum, a one-day event before the annual Spring meeting of the
Materials Research Society in 2008. Over 300 participants filled a room
designed for 150, mostly students and early career scientists, sitting
on the floor in the aisles and along the walls.
There is an overwhelming interest among students and early careers
scientists in energy, an unusual situation that we as a nation can use
to our strong advantage. Young scientists are eager to attack the
energy and climate challenges, driven in part by the desire to use
their scientific talents to solve societal problems. The best and the
brightest of the students know that energy is the place to be,
expecting career-building opportunities like those of information
technology in the last two decades and nanoscience in the last ten
years.
We are not equipped to accept, guide and mentor this eager flood of
budding energy research scientists. We need major new graduate
fellowship programs, five year early career energy research awards, an
organized program of regional and national symposia on energy to
promote networking across traditional disciplinary boundaries for early
career energy scientists, and a set of senior mentors to advise
technically and professionally the coming generation of energy
scientists. Their careers will be unlike any others, because energy
requires much more interdisciplinary research than any other field.
There is no ``department of energy'' in universities; instead energy is
diffused over physics, chemistry, biology, materials, engineering,
economics and sociology. We need to give the next generation of energy
scientists a much broader base and much wider vision than we were
given; we are not currently prepared to do this.
The resources of the national labs, working collaboratively with
university partners, offer a scale and dimension to energy workforce
training that anticipates conditions in the larger community. These
experiences for students, postdocs and early career scientists can be
major components in their training.
Consistent, sustained and balanced funding for research is critical
for workforce development. Students who see faculty continuously
stressed over funding will not be encouraged to proceed with energy
research careers. Funding should support scientific research generally,
rather than try to pick winners and losers. Funding bubbles that
encourage a temporary overproduction of workers in a particular area
are not helpful to the long-term needs of science, engineering or the
economy.
Question 4. In the health care field, many medical students turn to
a specialty practice rather than general healthcare, where there is a
huge need, because overwhelming student loans require the higher pay
found in specialty care.
As we look to grow the energy workforce, does the burden of student
loans move students toward one particular field over another?
Answer. Unlike in health care, graduate education in the physical
sciences, biology and engineering is supported by fellowships that make
it possible to earn a graduate degree without going heavily into debt.
This removes some of the incentive to steer energy research careers to
the highest paying areas. We should strive to maintain this positive
feature of energy education.
Question 5. I am struck by your note that the cost of imported oil
at last summer's prices would be $700 billion/year. That's pretty close
to what the President and Congress just spent on an economic stimulus
plan. At a time when we are racking up record levels of debt that will
be passed on to future generations, concern about spending fatigue
needs to be kept in mind.
The proposal before us would double energy research and development
funding. Is this justifiable?
Answer. Federal spending on energy research and development is far
smaller than the stimulus bill or the cost of imported oil. In FY2007,
the federal expenditure for energy research and development was
approximately $2B\1\, 0.25% of the $787B spent on the stimulus bill in
2009.
---------------------------------------------------------------------------
\1\ Federal R&D Funding by Budget Function: 2007-09, NSF, http://
www.nsf.gov/statistics/nsf08315/
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Today's federal spending on energy R&D is one fifth of the
expenditure on energy R&D of the early 1980s (in constant dollars).
Including approximately $2.4B spent by industry on energy R&D, the
total energy R&D spending is $4.4B, approximately 0.35% of the $1300B
gross output of the energy sector in the U.S. By contrast, the health
sector spends 2% of its gross output on health R&D, and agriculture
spends 2.3% of its gross output on agricultural R&D. Across all
sectors, R&D spending is 2.7% of GDP.
Given the magnitude of the energy and environmental challenges and
the transformational change needed to meet them, many experts in and
out of government conclude that the U.S. is significantly underfunding
energy R&D.\2\ Even a doubling would not bring energy R&D spending to
near the average intensity of R&D spending for other sectors.
---------------------------------------------------------------------------
\2\ International Energy Agency, ``Energy Technology Perspectives
2008;'' President's Council of Advisors on Science and Technology
(PCAST), ``The Energy Imperative: Technology and the Role of Emerging
Companies'' (Washington: Executive Office of the President, 2006);
National Academy of Engineering, Engineering Research and America's
Future; National Academies, ``America's Energy Future: Technology
Opportunities, Risks and Tradeoffs'' (Washington: National Academies
Press, 2008).
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There is an important return on energy R&D expenditures that must
be considered when we calculate the cost: the outcome of some of this
spending is a reduction in the cost of imported oil. If energy R&D
spending produces a 10% gain in the efficiency of automobiles (a goal
that everyone, even auto manufacturers, agrees is within reach) we cut
the cost of imported oil by $20B/year--$70B/year. The payback to the
U.S. economy in one year is much more than the total cost of the R&D to
achieve it.
Innovation is what drives our economy. The only way to recovery
from the economic downturn we currently face is to grow and innovate
our way out of it. That requires investment in basic science, and now
is the critical time to increase those investments. Other nations are
investing in the development of energy technologies. If the US does not
keep pace we will become the consumers of these foreign-developed and
produced energy technologies instead of the sellers.
Question 6. You describe in your testimony the magnitude of the
energy R&D challenge before our country in terms of the Manhattan
project or the Saturn program. I am glad to see that you also refer to
an important barrier to adoption of new developments--economics.
Economic competitiveness is a challenge that neither of these earlier
programs faced.
While we focus on the need for basic energy R&D what do we need to
do to foster the engineering development needed to promote the
commercial adoption of promising new discoveries? This wouldn't be a
role of the DOE's energy frontier research centers would it?
Answer. A primary strength of the U.S. economic system is its
entrepreneurial nature. When new opportunities arise, entrepreneurs are
quick to take the opportunity to market. The market for sustainable
energy in the U.S. and the world is obvious, and the profit motive is
as robust as ever. The bottleneck for entrepreneurial commercialization
of sustainable energy is the fundamental science roadblocks to
competitive performance. These roadblocks are not new, they have been
known for years or, in some cases, decades. The fact that they have not
been solved despite the resources and efforts of the entrepreneurial
community shows that they require breakthroughs in understanding and
control of complex materials and chemical phenomena that can only come
from basic science. The required breakthroughs, and the promising basic
science research directions to achieve them, have been outlined in the
twelve Basic Research Needs workshops and reports organized by DOE's
Office of Basic Energy Science. Once basic science provides the
understanding and control of these phenomena, often using nanoscale
techniques, entrepreneurs can translate the opportunities to the
marketplace as competitive next generation energy technologies.
This system worked well for Bill Gates and Steve Jobs, two towering
entrepreneurial figures who capitalized on new ideas and opportunities
enabled by faster, smaller, cheaper semiconductor electronics. Similar
opportunities await on the sustainable energy frontier, as basic
science develops the understanding and control of sustainable energy
materials and chemical phenomena. Entrepreneurs need a new opportunity,
the basic science of sustainable energy materials and chemistry
provides the opportunity.
Although Energy Frontier Research Centers are primarily oriented
toward the basic science of sustainable energy, the proposals submitted
include industrial participation, and in some cases leadership by
industrial firms. This close connection of basic research and
industrial development is key to rapid progress in sustainable energy
technology. Industrial partners who participate in the basic research
of materials and chemistry of sustainable energy will be in the best
position to appreciate and exploit new opportunities before they become
widely known. This bridging feature of EFRCs is a key link between
basic and applied research for sustainable energy and an opportunity to
pursue basic to applied translational research.
Responses of George W. Crabtree to Questions From Senator Stabenow
Question 1. Federal Collaboration.--The energy challenges facing my
state of Michigan and others require everyone on deck--not just
engineers and scientists but public policy experts, business leaders
and economists. What steps would you recommend to link public policy
and science at the federal government level? What initiatives could be
shared among agencies--DOE, EPA, Department of Transportation, etc.--to
best address the multiple energy challenges facing our country?
Answer. Energy is a highly interdisciplinary enterprise, spanning
not only science and technology, but also business, economics,
sociology and public policy. An interagency approach is very
appropriate, such as the existing interagency initiatives in
nanoscience, high performance computing, and climate change. Such an
approach will bring many of the major players together and get the most
value from federal resources. It is important to engage the policy
makers in the discussion as well, such as the Secretary of Energy, the
White House coordinator for Energy and Climate Change, the President's
Science Advisor, and the chairs of the President's Council of Advisors
on Science and Technology.
Question 2. Congressional Role.--Besides additional federal
dollars, what is the single greatest action that Congress can take to
stimulate additional energy R&D? What would be most effective in
assisting regions, such as the Midwest, to transition to new industries
built on alternative energy technology?
Answer. Energy and carbon dioxide are monumental, long-term
challenges that need participation from every sector of society-
government at all levels, industry, the science community, and
citizens. The ``reaction time'' of the energy and climate systems is
long, giving time for market forces to play a significant role if they
can be properly motivated. The single biggest factor determining the
course of energy and climate research and development is economics. One
of the reasons we face such monumental problems today is that fossil
fuels have always been relatively cheap and plentiful--there was no
business or economic imperative to develop alternatives or to consider
the cost of cleaning up their environmental and climatic impact.
The same economic factors that created the present energy and
environmental challenges can be turned to our advantage to help meet
the challenges. Consumers of imported oil and other fossil fuels can be
asked to pay the true cost of their use, reflecting not only the price
set by supply and demand, but also the cost of developing sustainable
alternatives, reducing their greenhouse gas emissions, and cleaning up
the pollutants they release into the environment. The effect of raising
the price of fossil fuels has been demonstrated twice, in the oil
crises of 1980 and 2008. In each case, dramatically rising prices
motivated us to use less and to seek lower cost alternatives. This
dynamic operated effectively at all economic levels-businesses and
consumers became creative proponents of finding alternative energy.
Because the price of oil dropped following both crises, the financial
incentives to develop alternatives disappeared, and we resumed business
as usual with fossil fuels.
Congress, however, can change the economic equation going forward.
Finding a way to charge commercial and private consumers the true cost
of fossil fuels gives us financial incentives to find sustainable
alternatives. There are many ways to fold the true cost of fossil fuel
use into their price, through taxes or a system of carbon cap and
trade, for example. Finding the most societally acceptable way of
charging the full cost of fossil fuel consumption is a complicated
political and sociological task that is best achieved by Congressional
negotiation.
______
Responses of Deborah L. Wince-Smith to Questions From Senator Bingaman
Question 1. Given that any new energy technologies that are
developed must be accepted and adopted by an already well-established
energy industry, what role should these industries play in public-
private R&D partnerships? For example, ARPA-E: Should these research
teams be industry led? University led with significant industry input?
Within these partnerships, how do we balance industry's inherent need
for short-term results with the longer timeframe often required to
achieve scientific breakthroughs?
Answer. The Federal government must maintain its traditional role
as the funder of long term basic research but the importance of public/
private sector partnerships is critical if the United States is to meet
the twin challenges of energy security and sustainability. The
Council's Energy Security, Innovation and Sustainability (ESIS)
Initiative is grounded in the belief that the demand-side of the
equation must be adequately addressed since government cannot and
should not mandate new technology adoption. Industry is as a key
reality check and commercializer of new ideas and needs to be at the
table early in the process. But, industry can be a longer term thinker
as demonstrated by the Department of Energy's INCITE program that
grants industry access--on a peer reviewed basis--to the nation's
greatest high performance computing capability in order to tackle some
very fundamental scientific challenges.
Question 2. Could you discuss what you see as the main reasons that
the U.S. often invents but fails to capture the production of
technologies like flat panel displays, photovoltaics, and advanced
batteries?
Answer. As I discussed in my testimony, the United States must be
poised to deploy the new ideas and innovations that arise from our
research enterprise. To do otherwise is to fail to capture value in the
form of new jobs and new industries from the billions of tax dollars we
spend each year on research. The oft-discussed valley of death--where
funding dries up between basic research and commercialization--remains
a significant challenge; as does the perception that we don't ``make
anything'' in America anymore. Overcoming both these challenges means
investing in our advanced manufacturing capacity as well as basic and
applied research. The manufacturing processes of the 21st century--such
as desktop and nano fabrication--are just as cutting edge as the
research they seek to commercialize, but no less complicated or in need
of study.
The other point I would make is that the technology transfer
process in our nations universities and labs remains spotty at best
often suffering from too narrow a focus on licensing fees and/or
patents. The technology transfer process must be viewed appropriately
in its larger regional innovation context where success is measured by
new companies, jobs increases to the tax base and overall regional
economic growth.
Question 3. Throughout your testimony you state that new public-
private partnerships are needed to translate our advances in energy R&D
into a competitive manufacturing and economic advantage for the United
States. Can you comment further on how these public-private
partnerships might be structured? Should we establish and make
available Manufacturing Science Centers at each of our National Labs
that manufacturers could partner with to develop and test new processes
and technologies?
Answer. I am hesitant to suggest that a new research bureaucracy is
necessary to overlay the current federal research enterprise. Rather,
consistent with the recommendations included in the Council's 100-Day
Energy Action Plan, Prioritize, I would urge the committee to explore
better leveraging the federal research assets that currently exist by
creating regionally-based R&D test-beds and large-scale commercial
pilots for new energy technologies.
Question 4. Could you comment on the role that both regulatory and
tax policy can play in driving the establishment of new domestic
manufacturing? For example, both Spain and Germany have become leaders
in solar and wind technology production, respectively--a result that
many believe stems from these countries' aggressive renewable energy
production incentives.
Answer. The Council put forward two recommendations in this area in
its competitiveness agenda released last fall. The first argued that it
is critical to put all energy sources on equal footing with respect to
federal subsidies and regulatory treatment. Secondly, the Council
proposed a series of tax changes to encourage corporate investment in
the United States. These include: a reduction is the corporate tax
rate; a short term allowance for repatriation of foreign earnings; and
making the R&D tax credit permanent.
Question 5. The Federal Government currently has several programs
through NIST, DOE and SBA that aim to increase the competitiveness of
U.S. manufacturers. How can we better leverage and integrate these
programs to reach more manufacturers and enable them to develop high-
value manufacturing?
Answer. The Council first addressed this issue in its Innovate
America report in 2004 when we called for NIST to refocus its
manufacturing work on 21st century advanced manufacturing opportunities
rather than trying to perpetuate the jobs and industries that were not
coming back. I would also reiterate my earlier point regarding better
use of the federal government's HPC capabilities by a broader cross
section of America's industries. Advanced being made in modeling and
simulation will literally transform the way, and at what cost,
innovations are brought to market.
Question 6. In your testimony you make the point that our
classification of what constitutes a manufacturing job is outdated. If
we instead use your classification system, how do the manufacturing
employment trends of the past 10 years change?
Answer. As American firms restructured optimize for efficiency,
manufacturing firms often outsourced (not off-shored) certain functions
to specialty firms: contract research, design or engineering, logistics
and distribution or marketing and branding. Once these jobs were
performed outside the company, the jobs would typically be reclassified
as service jobs--even though they support competitiveness in the
manufacturing sector. Indeed, the fastest growing source of
manufacturing revenues is in associated services that are tied to the
product. Our position is that the current classification misses this
synergy between production and services which is now at the heart of
high-value manufacturing.
Responses of Deborah L.Wince-Smith to Questions From Senator Murkowski
Question 1. Congress tends to authorize a large number of programs,
but we are not as successful in deauthorizing programs that are no
longer needed, or are ineffective. As we are looking at doubling the
authorization level for energy research and development programs, are
there some programs that could be deauthorized?
Answer. The Council has not proposed the specific elimination of
any programs, though as discussed in my testimony, the federal
government must do a better job of leveraging the research assets it
has.
Question 2. As we work to grow our future energy workforce needs, I
am reminded that multinational companies are global shoppers of
talent--there is no such thing as a monopoly on good ideas. What energy
education and workforce development programs are there overseas that we
might be able to emulate?
Answer. I am not personally aware of any such programs.
Question 3. Yesterday, the National Association for Colleges and
Employers reported that 66% of companies surveyed are either hiring
fewer new college graduates in the Spring, or not hiring at all. The
report also shows a 37% decline in hiring of professional services,
which includes engineering. At the same time, large segments of the
energy industry workforce are nearing retirement and will need to be
replaced. What role should Congress and the Department of Energy play
in highlighting energy workforce needs for college students?
Answer. The Council's 100 Day Energy Action Plan calls for:
The Secretary of Labor to create a $300 million ``Clean
Energy Workforce Readiness Program,'' augmented by state and
private sector funding, to foster partnerships between the
energy industry, universities, community colleges, workforce
boards, technical schools, labor unions and the U.S. military
to attract, train and retain the full range of skilled workers
for America's clean energy industries.
All federal agencies to commit 1 percent of their R&D
budgets to competitive, portable undergraduate and graduate
fellowships in energy-related disciplines for American
students.
The Secretary of Labor to assess, classify and widely
publicize the demand-driven needs for energy-related
occupations and align federal workforce investment programs and
state-directed resources to support skills training and career
path development in energy fields for American citizens.
Question 4. In the health care field, many medical students turn to
a specialty practice rather than general healthcare, where there is a
huge need, because overwhelming student loans require the higher pay
found in specialty care. As we look to grow the energy workforce, does
the burden of student loans move students toward one particular field
over another?
Answer. The Council's research confirms both the tremendous need
and opportunity in the energy field for skilled, technically trained
workers. Importantly, many of these high paying jobs do not require a
4-year college degree, so the debt burden could be significantly less.
What is critical is for States, regions, businesses, academic
institutions and labor unions to be better coordinated in matching the
workforce needs of a region to the available education and training.
Responses of Deborah L. Wince-Smith to Questions From Senator Stabenow
Question 1. Federal Collaboration.--The energy challenges facing my
state of Michigan and others require everyone on deck--not just
engineers and scientists but public policy experts, business leaders
and economists. What steps would you recommend to link public policy
and science at the federal government level? What initiatives could be
shared among agencies--DOE, EPA, Department of Transportation, etc.--to
best address the multiple energy challenges facing our country?
Answer. As stated in my testimony, the one federal research asset
that is currently underutilized as a drive of economic growth, cuts
across departments and agencies and is almost the sole purview of the
United States is our high performance computing capacity. If we are
going to address some of the great scientific challenges facing the
public and private sectors in the energy and climate change arenas, HPC
must be brought to bear and diffused further into our economy.
Question 2. Congressional Role.--Besides additional federal
dollars, what is the single greatest action that Congress can take to
stimulate additional energy R&D? What would be most effective in
assisting regions, such as the Midwest, to transition to new industries
built on alternative energy technology?
Answer. The single greatest action beyond additional investment in
research and development is to recognize that this is not enough by
itself. The Council's 100-Day Energy Action plan includes several
recommendations to achieve energy security and sustainability through
the creation of new industries, new innovations and new jobs. Rather
than repeat them here, I would note that the full report was included
in the hearing record and can be found at www.compete.org.
______
Response of Michael L. Corradini to Question From Senator Bingaman
Question 1a. Given that any new energy technologies that are
developed must be accepted and adopted by an already well-established
energy industry, what role should these industries play in public-
private R&D partnerships?
Answer. A team approach in any new energy technology development is
crucial. New technologies are being developed by innovative
individuals, whether at universities or companies, all the time. From
my perspective, the technologies that are successful in taking a new
science/engineering concept and being able to translate them into a new
product and/or process is always a team-effort. I would expect
established industries to be part of a team but not necessarily lead a
team. I am not sure that I have answered your question adequately, but
let me give you some examples (case studies) that show success and
failure of new science/technologies for energy and environmental
issues:
Molten Metal Technology (early 1990's)--waste remediation
Virent (early 2000's)--bioenergy
NuScale (2007)--modular nuclear power plants
Question 1b. For example, ARPA-E: Should these research teams be
industry led? University led with significant industry input?
Answer. Consistent with my comments above, I would allow either
industry or universities to lead a team and let the team of top-notch,
smart and motivated individuals develop the proposals. These motivated,
energetic folks would form themselves in a small business startup and
they would take the risks. I would encourage ARPA-E to be a modified
version of a public Venture Capital company investing in new energy
technologies based on their ability to deliver a new product or process
in a time-scale that is longer (5+yrs compared to 2-3yrs) than private
venture capital companies (like Kosla Ventures or Vulcan Corp or
Vinrock Inc). But I would not change the historically successful model
where individuals form a team based on their own skills and ideas and
the team then makes the proposals to the ARPA-E model. I am not an
expert in these sort of business arrangements, but I would be quite
willing to get you in touch with those that are at VC firms and or
successful small companies.
Question 1c. Within these partnerships, how do we balance
industry's inherent need for short-term results with the longer
timeframe often required to achieve scientific breakthroughs?
Answer. I completely agree with your vision, that timescale is the
important determinant. I firmly believe that ARPA-E should be focused
on shorter-term goals (?5yrs). The normal R&D funding from the DOE
Office of Science would handle the longer term research with scientific
discoveries. Given the Bayh-Dole act of 1980, the discoveries from such
research has a natural avenue to create new businesses.
______
Responses of Michael L. Corradini to Questions From Senator Murkowski
Question 1. Congress tends to authorize a large number of programs,
but we are not as successful in deauthorizing programs that are no
longer needed, or are ineffective.
As we are looking at doubling the authorization level for energy
research and development programs, are there some programs that could
be deauthorized?
Answer. I cannot argue with the idea that certain programs should
have a sunset clause or be ``deauthorized''. However, Energy R&D has
been so severely underfunded for the last two decades, I would have a
hard time giving you immediate examples. This lack of investment has
caused the energy infrastructure to deteriorate and we are suffering
for it now and will for many years. Nuclear Energy R&D is a good
example of this point, and only in recent years has this changed. With
this disclaimer, let me point out that the reorientation of the GNEP
program, back to what it was in 2005, to a more stable and steady R&D
effort is a useful effort.
Question 2. As we work to grow our future energy workforce needs, I
am reminded that multinational companies are global shoppers of
talent--there is no such thing as a monopoly on good ideas.
What energy education and workforce development programs are there
overseas that we might be able to emulate?
Answer. Let me address this question with nuclear science and
engineering as the theme. The Japanese have been very aggressive in
reviewing and reorienting their nuclear science and engineering
programs. The name of the effort is GoNERI and Prof. Y. Oka has been a
real force in reorganizing their educational efforts. That is one good
example. Another example can be found in France, where the CEA is
sponsoring masters programs to bring young people back into the field
from other disciplines.
Question 3. Yesterday, the National Association for Colleges and
Employers reported that 66% of companies surveyed are either hiring
fewer new college graduates in the Spring, or not hiring at all. The
report also shows a 37% decline in hiring of professional services,
which includes engineering. At the same time, large segments of the
energy industry workforce are nearing retirement and will need to be
replaced.
What role should Congress and the Department of Energy play in
highlighting energy workforce needs for college students?
Answer. I have just completed testimony at the Nuclear Regulatory
Commission (NRC) about this particular topic and would be happy to send
you my presentation. The short answer is that the NRC inherited the
former DOE program and their approach to developing the human
infrastructure for nuclear is excellent. John Gutteridge, formerly at
DOE, has developed this program. Because of this success, the DOE is
now working with the NRC and the NNSA to develop a comprehensive
effort. This would be a good model for other energy fields.
Question 4. In the health care field, many medical students turn to
a specialty practice rather than general healthcare, where there is a
huge need, because overwhelming student loans require the higher pay
found in specialty care.
As we look to grow the energy workforce, does the burden of student
loans move students toward one particular field over another?
Answer. No, I have not seen this to be the case.
Question 5. I am glad to hear that you believe pursuing advanced
fuel cycle research is worth pursuing, particularly since the
administration has already announced its intention to abandon our
current spent fuel management strategy. I am concerned though that
spent fuel recycling is often described in terms of long term R&D. In
the past we have seen R&D funding for nuclear technology dwindle to
nothing, as it did during the Clinton administration.
What is the best way to ensure a consistent level of fuel cycle R&D
over what may be several administrations so that we don't find
ourselves without alternatives twenty years from now?
Answer. This is a very difficult question and is more policy than
technology. Continuing fuel-cycle R&D is an easier part of this issue,
in the sense that the more we can learn from R&D the more technology
options we can provide to policy-makers in the future. I think the
harder question is what institutional structure can be created that
would provide stable stewardship of fuel-cycle R&D, spent fuel storage,
recycle, and eventual disposal of some part of the material (something
will have to be geologically disposed of). In my view there is nothing
wrong with Yucca Mountain as a disposal site for high-level waste, but
there is also no rush. This Institutional structure should be the focus
of a ``Blue-Ribbon Panel''.
______
Responses of Hon. Steven Chu to Questions From Senator Bingaman
Question 1. Given that any new energy technologies that are
developed must be accepted and adopted by an already well-established
energy industry, what role should these industries play in public-
private R&D partnerships?
For example, ARPA-E: Should these research teams be industry led?
University led with significant industry input?
Within these partnerships, how do we balance industry's inherent
need for short-term results with the longer timeframe often required to
achieve scientific breakthroughs?
Answer. Public-private R&D partnerships are critical tools to
increase industry engagement in activities that spur energy technology
innovation and the development of entire new industries. The Department
engages with industrial partners through a variety of programs that
focus on different points in the life cycle of technology development,
recognizing that different industrial partners have different needs and
varying tolerances for the risk associated with scientific research.
One example of public-private R&D partnerships occurs through the
Office of Science's Bioenergy Research Centers (BRCs), which provide a
variety of mechanisms for industrial entities to advise and collaborate
in the Centers' research projects. Two of the three BRCs are led by DOE
national laboratories. All of the BRCs have industry representatives on
their advisory boards; all are cultivating close relations with
industry; and two of the three have industrial partners that actually
collaborate in the fundamental research.
Another example occurs through the Office of Energy Efficiency and
Renewable Energy's Photovoltaic Technology Incubator program, which has
awarded funding to a range of small-to-medium sized firms to promote
the development of a diverse set of laboratory-proven photovoltaic
technologies that target a variety of markets, including residential,
commercial, and utility power generation.
Finally, the Office of Fossil Energy's Plains CO2
Reduction (PCOR) Partnership, one of seven regional technology
demonstration partnerships under the Regional Carbon Sequestration
Partnership Program, has brought together more than 80 eighty state,
federal, industrial, and non-profit entities to perform test injections
of carbon dioxide in lignite coal seams in North Dakota. Numerous other
Fossil Energy programs have successfully partnered with industry and
academia on public-private R&D, such as the Advanced Turbine Systems
program, which developed advanced, higher efficiency combustion
turbines, and the Solid State Energy Conversion Alliance (SECA)
program. This focuses industry teams and core technology program
participants on developing low-cost solid state fuel cells.
These examples illustrate a variety of mechanisms to promote
public-private R&D partnerships in energy-relevant technologies and
highlight some of the key roles our national laboratories continue to
play in these types of programs. Our laboratories also play a
significant role in private-public R&D partnerships through their
technology transfer activities with industry, such as cooperative
research and development agreements, reimbursable work for the private
sector, and licensing of laboratory developed technology. The
laboratories can also offer to the public-private partnership model
their knowledge and experience in conducting longer-term research
programs focused on providing scientific breakthroughs.
The Department recognizes that industry is also critical to the
success of ARPA-E. At this early stage in its development, ARPA-E can
be expected to establish teams led by any of the important R&D
sectors--academia, industry, federally funded entities, and other not-
for-profit entities. The Department is not imposing rigid structures on
ARPA-E partnerships, preferring instead to allow flexibility in the
formation of the partnerships and then follow the progress of varying
models closely.
Question 2. How do you intend to execute the contracts that will be
required to be put in place, or modified, to implement the American
Recovery and Reinvestment Act? How will you plan on obtaining the
necessary staffing to implement these increased funds?
Answer. The Recovery Act requires agencies to follow government-
wide procurement laws and regulations for awarding contracts under
which Recovery Act funding will be obligated unless otherwise
authorized by statute. Accordingly, the Department will follow all
applicable legal, regulatory and policy requirements governing the
award and administration of contracts and modifications of contracts
that will be funded with Recovery Act appropriations. Additionally, the
Recovery Act prescribes new requirements that necessitate the inclusion
of special terms and conditions in contracts to ensure added
transparency, reporting, administrative controls and oversight. Pending
the issuance of final government-wide guidance and rulemakings,
including new or amending Federal Acquisition Regulations provisions,
the Department has developed and issued interim terms and conditions
for use in contracts to ensure proper implementation of Recovery Act
requirements. In addition, each Departmental program has developed
contract-specific execution strategies to ensure the expeditious and
proper obligation of funds consistent with the requirements and
objectives of the Recovery Act.
With respect to ensuring that appropriate and qualified staff are
in place to properly obligate and administer Recovery Act funds, the
Department is pursuing both short-term and long-term strategies.
Consistent with the objectives of the Recovery Act to expedite the
obligation of funds, the Department is utilizing its existing
acquisition workforce, including leveraging contracting and program
personnel that support programs that are not directly impacted by the
Act, as well as existing information technology systems that will speed
the solicitation, evaluation, and award of contracts. As necessary and
appropriate, the Department also intends to supplement its existing
acquisition workforce with temporary contractor support. To ensure that
appropriate Federal personnel are in place to manage and oversee the
expenditure of Recovery Act funding, the Department has identified
essential staffing needs, in both acquisition and program. The
Department is pursuing filling those needs through expedited hiring
strategies and approaches, including direct-hire authority, the
Department of Veterans Affairs' Veterans and Disability Program, and
the Reemployed Annuitant program.
Responses of Hon. Steven Chu to Questions From Senator Murkowski
Question 1. Congress tends to authorize a large number of programs,
but we are not as successful in deauthorizing programs that are no
longer needed, or are ineffective.
As we are looking at doubling the authorization level for energy
research and development programs, are there some programs that could
be deauthorized?
Answer. The Department of Energy implements and oversees a wide
range of programs in every stage of energy research and development
(R&D) as well as in energy technology deployment, demonstration, and
technology transfer phases. While the current priority is the
expeditious and responsible disbursement of funds made available by the
American Recovery and Reinvestment Act, the Department will continue to
review existing programs to determine both their effectiveness in
achieving desired objectives and their efficient use of taxpayer money.
Question 2. As we work to grow our future energy workforce needs, I
am reminded that multinational companies are global shoppers of
talent--there is no such thing as a monopoly on good ideas.
What energy education and workforce development programs are there
overseas that we might be able to emulate?
Answer. We certainly must be open to learning from the world's best
practices in developing our future workforce. Working closely with the
National Science Foundation and others, the Department's Office of
Science's Workforce Development for Teachers and Scientists (WDTS)
program is responsible for providing a continuum of opportunities to
our students and teachers of science, technology, engineering and
mathematics. As part of their work, they monitor and interact with
programs around the world including participation in the international
Lindau Nobel Laureates meeting, which annually attracts 600 of the best
graduate students and 30 Nobel Laureates to a week long meeting in
Germany. This year will focus on climate change and renewable energy.
WDTS also works with other DOE offices, including EERE, to monitor
international programs and model exemplary programs from overseas.
Question 3. Yesterday the National Association of Colleges and
Employers reported that 66% of companies surveyed are either hiring
fewer new college graduates in the Spring, or not hiring at all. The
report also shows a 37% decline in hiring of professional services,
which includes engineering. At the same time, large segments of energy
industry workforce are nearing retirement and will need to be replaced.
What role should Congress and the Department of Energy play in
highlighting energy workforce needs for college students?
Answer. The Department of Energy (DOE) is committed to meeting its
workforce needs in energy careers for college students through
recruitment programs tailored at the entry-levels. The Student Career
Experience Program (SCEP), Student Temporary Employment Program (STEP)
and the Federal Career Intern Programs (FCIP) are some of our programs
offering students exposure and hands-on experience in science and
technology.
While some of these students will clearly move on to energy
careers, the main missions of the Department of Energy are focused on
energy and science research and development activities, nuclear
security and environmental cleanup. Inasmuch as the research awards
assist colleges and universities in the education and training of our
next generation of energy workers, the Department of Energy stays
within its mission and contributes to this workforce growth.
In the health care field, many medical students turn to a specialty
practice rather than general healthcare, where there is a huge need,
because overwhelming student loans, require the higher pay found in
specialty care.
Question 4. As we look to grow the energy workforce, does the
burden of student loans move students toward one particular field over
another?
Answer. The Department is not expert in education related matters,
but has not observed any such trend in energy-related fields. That
said, the Department does use recruitment incentives and student loan
repayment flexibilities when appropriate to attract candidates by
helping to minimize their financial burdens. For example, while
engineers, physicists, computer scientists, and mathematicians made up
18 percent of DOE's Federal employee hires last year, this group
accounted for nearly 30 percent of the Department's recruitment
incentives. As the Federal workforce continues to age, we expect to
continue the use of human capital flexibilities like recruitment and
retention incentives and student loan repayment to attract and retain
America's best and brightest scientific professionals.
Question 5. Shortly following the release of the FY2010 Budget Blue
Print, your DOE press office put out a statement which said ``the new
administration is starting the process of finding a better solution for
management of our nuclear waste''. I am happy to hear this since the
administration has been unambiguous in its oppositions to the current
solution in the form of Yucca Mountain.
Since the language we are considering today includes increased
authorizations for nuclear energy R&D, which includes the Advanced Fuel
Cycle Initiative, do you agree that there is a need to increase fuel
cycle R&D to support this process?
For the record, can you provide a more detailed description of the
process the administration plans to follow? What other agencies may be
involved and what is the timeline?
Answer. The President has highlighted the need to address the key
issues of security of nuclear fuel and waste, waste storage, and
proliferation. To this end, the Department will continue to work with
the Department of State, the National Security Council, the
Environmental Protection Agency, and Congress to resolve technical and
policy issues associated with proliferation-resistant technologies.
Question 6. The legislation we are considering today provides top
level authorizations for broad ranges of R&D programs in nuclear,
fossil, and renewable energy and fundamental science. In your testimony
you also list a number of clean energy technology examples in need of
transformational research.
Can you be more specific regarding what transformational research
would be needed in these different areas and how increased R&D funding
would be used?
Answer. The Department needs transformational research to bring a
range of clean energy technologies to the point where the private
sector can pick them up. Some examples include:
Automobile batteries with two times the energy density of
today's Lithium-ion batteries, that can be recharged in
minutes, that can survive 15 years of deep discharges, and that
cost one-third as much as current devices;
Transportation fuels generated in a biorefinery from biomass
feedstock like forest wastes, crop wastes, municipal solid
wastes, algae, and non-food energy crops. In addition,
transformational technologies are needed to reduce the cost of
higher-value bioproducts that can replace petrochemicals in the
chemicals and materials markets;
Photovoltaic solar power that has installed costs of one-
third as much as today's technology;
Advanced materials for building shells (walls, windows,
roofs) and advanced equipment for lighting and heating and
cooling, together with computer-controlled design and
operations tools for commercial and residential buildings to
enable reductions in energy consumption of up to 80 percent and
lower costs of ownership; such technologies, together with
onsite power generation using renewable energy sources like
photovoltaics, will truly provide net-zero energy buildings;
Large scale energy storage systems that will allow
utilities to accept high levels of variable renewable energy
sources such as wind and solar power, with an incremental cost
of just $0.01/kWh to $0.02/kWh
This is not a definitive list, or a hard set of technology goals,
but it gives a sense of the types of technologies and benchmarks for
which DOE should be aiming. The Department will need transformational
research to attain these breakthrough goals. DOE must re-energize its
national laboratories as centers of great science and innovation and at
the same time must reach out to universities, our Federal partners, and
other research entities for collaboration and innovation wherever it
may be.
Transformational research will also be needed to make carbon
capture and sequestration safe, cost-effective, and secure for hundreds
of years. One area of immediate importance is research into potential
technology breakthroughs for carbon capture from the existing fleet of
power plants which will be critical in meeting any greenhouse gas
stabilization scenario.
Question 7. As you know, Congress expanded the Renewable Fuel
Standard to 36 billion gallons in 2007. A submandate of 16 billion
gallons was put in place for cellulosic biofuels, starting with 100
million gallons in Calendar Year 2010. To encourage the development of
these fuels, we've appropriated funds for a wide range of research and
development programs, including the Bioenergy Research Centers you
mentioned in your testimony. But even with those commitments, most
agree there is almost no chance that the submandate for cellulosic
biofuels will be met when it kicks in next year.
Do you believe the biofuels R&D programs we have in place are
adequate, given the volume of biofuels Congress mandated in 2007? In
terms of both supply and demand, are the targets set by Congress
achievable and realistic? Are there any further actions that you would
recommend to facilitate the transition from corn-based ethanol to next
generation biofuels?
Answer. Cellulosic biofuels technologies involve the creation of an
entirely new industry that will produce liquid transportation fuels. As
you know, cellulosic processes must be competitive in a high volume and
highly volatile fuel market. Several factors have led to unanticipated
reductions in the near-term pace of growth of the cellulosic ethanol
industry, including the economic recession, severe oil price drops, and
the reduction of credit available to investors who wish to invest in
these technologies. The Department believes that meeting the 2010
cellulosic biofuel target set by the 2007 Energy Independence and
Security Act (EISA) will be challenging. However, EISA does provide
Environmental Protection Agency (EPA) authority to adjust the
cellulosic targets.
The Department shares your concern that the U.S. needs to
transition from corn-based ethanol to next-generation biofuels. That is
why the DOE Office of Science's Bioenergy Research Centers are
performing fundamental research on next-generation bioenergy crops to
provide the transformational breakthroughs that can contribute towards
more efficient cellulosic biofuel production and development of other
advanced cellulosic biofuels. Moreover, DOE deployment projects focus
mostly on cellulosic or other non-food feedstocks to produce advanced
biofuels. The DOE Biomass Program has developed public-private
partnerships to share the risk of deploying first-of-a-kind cellulosic
biorefineries to produce biofuels. Cellulosic biofuels facilities are
also eligible to apply for loan guarantees under DOE's Title XVII
program.
Question 8. During your confirmation you expressed your support for
nuclear energy and the administration has stated that nuclear energy
will be ``part of the mix''. Yet, in the list of clean energy
technologies you describe in your testimony there is no example of
nuclear energy. Also, in the 2010 budget there is little mention of
nuclear energy outside the reduction in Yucca Mountain funding.
What assurance can you or the administration provide that nuclear
energy will actually receive equitable benefit from increased R&D
funding relative to other clean energy technologies?
Answer. Nuclear power currently supplies nearly 20 percent of the
Nation's electricity and approximately 70 percent of its greenhouse
gas-free electricity. It is unlikely that the U.S. can meet its
aggressive climate goals if nuclear power is eliminated as an option,
but as industry moves forward with expansion, the federal government
must continue to address the key issues of security of nuclear fuel and
waste, waste storage, and proliferation. These priorities are supported
in the administration's FY 2010 budget overview, released February 26,
and will be described further in the forthcoming detailed Congressional
budget request.
Question 9. You mentioned in your statement that you have spent
much of your career in research labs--and I particularly noted you
mentioned your time as a student.
In your opinion, throughout your career in the energy arena--from
student to Secretary of Energy, has the government kept up in helping
to attract students to the energy sector? What could we be doing
better?
Answer. Attracting bright students and inspiring them to devote a
career to tackling our most challenging energy and climate needs are
matters of great importance to me. Energy security and climate
sustainability are priorities not only for the United States but indeed
for the entire global community. For the United States to meet these
challenges and achieve the transformational breakthroughs needed, a
large, highly focused, highly trained technical workforce must be
developed.
Government has achieved some successes in attracting talented
students to the energy sector. DOE programs support undergraduate
researchers, graduate students working toward doctoral degrees, and
post-doctoral researchers. The R&D workforce developed by DOE and its
national laboratories provides scientific talent in areas of
fundamental and applied research and also provides talent for a wide
variety of private technical and industrial sectors. In addition, the
DOE scientific user facilities provide outstanding hands-on research
experience to many young scientists. Thousands of students and post-
doctoral investigators conduct experiments at DOE-supported facilities
each year.
And, building on our achievements, we see this as a time of
increased opportunity. DOE programs complement the changing demands of
the energy workforce through their support of career-intern programs,
research and development opportunities, scholarships, and support for
post-doctoral associates to continue to help them develop advanced
research and management skills. The Department utilizes a variety of
intern programs to attract students to professional and scientific
careers in government. The Federal Career Intern Program, Presidential
Management Fellows Program, Student Career Experience Program, Student
Temporary Employment Program, Student Partnership Program, and DOE
Scholars program all provide professional development to students while
allowing us to build our workforce pipeline. Workforce pipeline
development and talent acquisition strategies are effective when
government has the right people with the right tools to facilitate that
pipeline.
Energy is not an area of fleeting relevance. It will continue to be
essential to our economy, our national security, and our environment
for decades to come. There is huge growth potential in clean,
renewable, sustainable energy as our Nation seeks to overcome
dependence on foreign oil and reduce carbon emissions by improved
conservation measures and the commercial expansion of renewable
technologies. We cannot afford for this potential to be limited by a
labor shortage; however, experience has shown that students are well
aware of the areas where their greatest employment potential lies and
gravitate to those fields. Having an ample workforce with diverse
technical skills is critical to an effective transition in the energy
sector, and the ongoing leadership of the Administration can help
signal that these areas are high potential for new graduates.
Question 10. I applaud the Administration's support for graduate
fellowship programs that will train students in energy-related fields
in the FY2010 budget request. But in order to have successful graduate
programs, there needs to be a pipeline of students interested in
energy-related fields starting in high school and on through
undergraduate programs.
What support will there be for these programs in the FY2010 budget?
Answer. Every year the Department of Energy engages in a variety of
capacity building programs in an effort to maintain the strength and
vitality of the Department's workforce pipeline beginning at the high
school level. In FY 2010, the Department will continue its efforts to
attract both high school and undergraduate participation. DOE has
supported the development and expansion of high school outreach and
pipeline programs for many years. Approximately 91 percent of the
participants in our science, technology, engineering and mathematics
(STEM) related outreach and education programs belong to the K-12
demographic. One of the Department's leading STEM programs is the
National Science Bowl, which DOE has sponsored since 1991. This program
is designed to encourage high school students to excel in science and
math, and was expanded in 2002 to include a separate national
competition for middle school students.
Recognizing the growing diversity of our Nation coupled with the
underutilization of some key segments of the population, DOE has
designed programs to ensure that under-represented high school students
have access to DOE facilities and information. For example, DOE
partnered with non-profit organizations to sponsor a series of seven
Hispanic Youth Symposia across the country. While encouraging students
to pursue higher levels of education, these symposia showcase the
importance of STEM education, research, and careers with DOE while
supporting the Executive Order on Education Excellence for the
Advancement of Hispanic Americans.
At the collegiate level, DOE supports the National Solar Decathlon
and will continue to work in programs that enhance the President's
vision on clean energy and reduced dependence on foreign oil. DOE is
committed to providing opportunities for college students and recent
graduates to experience R&D firsthand through fellowships, internships
and entry-level hiring programs. DOE currently has 38 Presidential
Management Fellows, 166 Federal Career Intern Program interns, and 141
Student Career Experience Program interns hired at the entry-level,
which provide opportunities for conversion to permanent career
positions. DOE also has 277 Student Temporary Employment Program
interns currently on board and is funding 70 DOE Scholars. These are in
addition to the regular cadre of student summer interns which DOE
sponsors annually. This short-term summer intern program provides
participants both a salary to help them stay in school and real hands-
on experience with careers in the Federal Government.
The Department's FY 2010 budget supports graduate fellowship
programs that will train students in energy-related fields. In the
energy sector, recruitment needs to increase three to fourfold in the
years ahead, both to meet increasing demand and also to replace an
aging current workforce. The FY 2010 budget support transformational
research to re-energize our national laboratories as centers of great
science and innovation.
Responses of Hon. Steven Chu to Questions From Senator Stabenow
r&d spending
Question 1. The Recovery Bill in February included $2.5 billion for
Energy Efficiency and Renewable Energy R&D. What are the
Administration's priorities for rolling out grant applications and new
program regulations to fulfill the vision of our Recovery bill R&D
priorities? We are enthusiastic about the opportunities--Michigan we
will be among those first in line to receive such grants, given our
strong research and manufacturing capacity, and our commitment work to
connect researchers, entrepreneurs and industry to bring about a
strong, green economy.
Answer. The Department of Energy's Office of Energy Efficiency and
Renewable Energy (EERE) is working to develop projects as directed by
the Recovery Act. These projects are being closely reviewed to ensure
that they meet the priorities of the Act, the energy priorities of the
Administration, as well as requirements for integrity and transparency.
The Department understands the need to issue Recovery Act funds
quickly and will be making announcements on R&D funding opportunities
that span the energy efficiency and renewable energy industries.
expedited deployment of advanced manufacturing technologies
Question 2. Large turbine component manufacturing is done on the
same tooling machinery that was in use in the 1960's. What can DOE do
to help insure that advanced manufacturing technologies that will speed
production and lower cost are deployed as soon as possible in the U.S.?
For large competitive solicitations that are forthcoming from the DOE,
such as the grants that will be available for battery manufacturing,
how has the DOE prepared (in terms of staffing and operational support)
to respond to the solicitations, and what is the expected turnaround
time for agreements to be announced? Also, under the new processes DOE
has developed, how quickly will contracts to be finalized once
agreements are announced?
Answer. The Department of Energy (DOE) is partnering with the
Department of Commerce to ensure that resources and capabilities
available to both agencies are best targeted to support rapid expansion
of the U.S. wind energy technology supply chain, including support for
development and deployment of advanced manufacturing technologies.
While this partnership is just beginning, DOE is currently supporting
an advanced manufacturing project for wind blades in collaboration with
the state of Iowa. DOE has also received a number of applications for
industry projects in wind technology manufacturing advances through a
solicitation that closed on March 5 and expects to announce selections
in early May. DOE will continue to provide technical expertise and
resources as available to contribute to expanding and speeding
production, retooling for needed industrial capabilities, and lowering
the cost of U.S. wind energy technology manufacturing to keep pace with
the rapidly growing markets for renewable energy.
DOE is assessing staffing and operational support needs. Additional
Federal staff and appropriate support personnel will be acquired to
enable the department to solicit, evaluate, and award agreements for
battery manufacturing. The department has and will continue to issue
vacancy announcements to acquire necessary Federal staff, reassign
existing federal staff from lower priority activities on a limited
basis where possible, and hire support personnel through existing
support contracts. For instance, the Advanced Battery Manufacturing
solicitation was released March 19, 2009 and will be open for 60 days.
The Department expects contracts to be awarded (finalized) by September
30, 2009.
Question 3. Efforts of States. As a general matter, how does the
Department view states' efforts to collaborate with potential
applicants, and will the use of state dollars as non-federal match
provide any preference as the Department awards funding under the
Recovery Act?
Answer. Cost share requirements vary based on particular
solicitations, and applicants' leveraging of Federal funds is highly
encouraged. Direct funding for States is primarily through formula
grants. DOE provides guidance to States that focuses on the principles
that should guide their project planning, including encouraging States
to support programs and projects that will provide substantial,
sustainable and measurable energy savings and that will have job
creation and economic stimulus effects and to give priority to programs
and projects that leverage Federal funds with other public and private
resources.
Response of Hon. Steven Chu to Question From Senator Barrasso
Question 1. What is the Department of Energy's long-term plan to
extend the operation and production of the Rocky Mountain Oilfield
Testing Center and ensure its continued success as a research and
education resource?
Answer. DOE expects production to continue to naturally decline
because NPR-3 is largely comprised of stripper wells--wells whose
production has slowed to 10 barrels a day or less. The President must
authorize continued production every three years, and production is
currently authorized until April 2012. For FY2010, production
activities will continue at NPR-3, while testing activities proceed at
the Rocky Mountain Oilfield Testing Center (RMOTC). DOE is studying
options concerning RMOTC once NPR-3 production operations are no longer
economically feasible, including options for becoming a self-sustaining
user facility.
Responses of Hon. Steven Chu to Questions From Senator Shaheen
recovery act weatherization implementation
Question 1. Continuing with my question from the hearing regarding
the Weatherization program and the funding included in the economic
recovery bill, can you tell me what steps the DOE is taking to ensure
states make best use of these weatherization monies? We have twin goals
of getting this money into our economy quickly while at the same time
achievable the important goal of weatherizing homes and reducing energy
costs for consumers. What guidance are you or will you be giving states
to help guide them through this process? Would the DOE be willing to
hold workshops in various regions, like the Northeast, to bring
together stakeholders to trouble shoot, problem solve and talk through
these issues?
Answer. The Department of Energy (DOE) has made it a priority to
make the funds under the Recovery Act available to the weatherization
grantees as quickly as possible, while making the use of funds
transparent and accountable. DOE published the Funding Opportunity
Announcement (FOA) which contains program guidance regarding the use of
these funds and its programmatic goals to all grantees. This FOA and
Guidance can be read in its entirety at http://apps1.eere.energy.gov/
wip/pdfs/wap_recovery_act_foa.pdf
DOE is taking a number of actions to ensure effective use of the
funds. First, DOE is increasing the level and scope of the evaluation
of state plans submitted as part of the application for funds. Plans
must demonstrate that states and local weatherization agencies have
identified and have satisfactorily planned to meet the need to increase
the number of workers, equipment, auditors, trainers and supervisors.
Second, DOE intends to obligate the Recovery Act funds based on a stage
gate system with progress reviews as follows:
10% of total allocation at time of initial award
40% of total allocation upon DOE approval of a State Plan
(due within 60 days after FOA issuance)
Balance of total allocation (20% to 30% at a time) based on
DOE review of progress of the states in obligating the funds,
complying with all reporting requirements, and creating jobs.
If progress reviews reveal deficiencies, such as funds not
disbursed, jobs not created, insufficient technical monitoring,
or failure to meet reporting requirements, DOE reserves the
right to place a hold on current balances and withhold further
funding until deficiencies are corrected.
Third, DOE will increase the frequency of monitoring and oversight
of the states and local weatherization agencies, including announced
and unannounced visits. The DOE/Energy Efficiency and Renewable Energy
Project Management Center offices in Morgantown, West Virginia and
Golden, Colorado field staff are assigned to conduct oversight
monitoring of state operations. These offices will bring on additional
support to ensure that monitoring will be conducted on a timely and
thorough basis.
DOE headquarters and field management staff conduct weekly
conference calls to address ramp up, obstacles to achieving goals,
funding, and accountability. The 2009 National Training Conference,
scheduled for July 21-23, will work to ensure that the weatherization
network is trained to meet the programmatic goals established under the
Recovery Act. DOE is considering holding regional workshops or using
any other mechanisms to spot and solve problems and discuss issues as
they arise.
recovery act weatherization funding cap
Question 2a. We raised the statutory cap in the Recovery bill from
a maximum of $2,500 worth of weatherization improvements on a single
home to $6,500. Can you please clarify for me, does the cap apply to an
average of homes or a single home?
Answer. The cap applies across all homes weatherized in the state,
not to individual homes.
Question 2b. In my conversations with the New Hampshire Community
Action Association, which actually implements New Hampshire's
weatherization money, they are concerned that $6,500 may not be enough
and are advocating for a $10,000 cap on each home. The thinking goes,
rather than making relatively modest weatherization improvements to
many homes, with a $10,000 cap, they could actually fully weatherize a
lot of homes. Do you have any thoughts on changing the cap to a higher
level?
Answer. The Recovery Act, by statute, changed the program's maximum
average cost per unit from $2,500 to $6,500. Any subsequent changes
would have to be made through statute. Investments in homes are made on
the basis of a cost effectiveness assessment under which the most cost
effective measures are performed first. Each incremental measure is
less cost effective than those that precede it.
Question 2c. In addition, is the DOE considering giving some
flexibility to state agencies, like the New Hampshire Community Action
Association, in administering these dollars and what is prioritized
when improving these homes? More flexibility may help expedite the
expenditure of these funds and help get the money into our economy more
quickly, a key goal of the Recovery bill.
Answer. DOE encourages innovation in program implementation within
the statutory and regulatory framework. Proposed new approaches should
be fully described in the plan that the State submits to allow DOE to
make a thorough and considered review to assess the impact on quality
control, cost effectiveness and other critical program requirements.
Question 3. Of the six Gen IV nuclear power technologies proposed
by the US in 2000, DOE Idaho National Labs have been pursuing two--(1)
high temperature gas-cooled reactors for hydrogen production, and (2)
sodium-cooled fast reactors for waste burning. Separately, liquid-
fluoride thorium reactor research is ongoing at UC Berkeley, MIT,
Redstone Arsenal, and in other countries including France, Japan, and
Canada.
As the Department analyzes advanced reactor designs, can you tell
me if the liquid-fluoride thorium reactors are under consideration?
What are the benefits of liquid-fluoride thorium reactors? What are the
drawbacks or downsides of liquid-fluoride thorium reactors? How does
power generated from liquid-fluoride thorium reactors compare, on a
price per kilowatt hour, with power generated from the current coal
generation fleet in the United States? As we confront our nation's
energy and climate challenges, what role might these types of reactors
play?
Answer. The ``liquid-fluoride thorium reactor,'' otherwise known as
a molten salt reactor (MSR), where molten salts containing fissile
material circulate through the reactor core, is not part of the Office
of Nuclear Energy's research program at this time. Some potential
features of a MSR include smaller reactor size relative to light water
reactors due to the higher heat removal capabilities of the molten
salts and the ability to simplify the fuel manufacturing process, since
the fuel would be dissolved in the molten salt. One significant
drawback of the MSR technology is the corrosive effect of the molten
salts on the structural materials used in the reactor vessel and heat
exchangers; this issue results in the need to develop advanced
corrosion-resistant structural materials and enhanced reactor coolant
chemistry control systems. In addition, operational practices would
have to address the fact that the liquid salts solidify between
temperatures of 300 C to 500 C, thereby requiring the use of special
heating systems when the reactor is not operating. From a non-
proliferation standpoint, thorium-fueled reactors present a unique set
of challenges because they convert thorium-232 into uranium-233 which
is nearly as efficient as plutonium-239 as a weapons material. A cost
per kilowatt hour estimate has not been developed.
Appendix II
Additional Material Submitted for the Record
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Statement of John R. Deal, Chief Executive Officer, Hyperion Power
Generation, Inc.
Hyperion Power Generation is the spin-out and commercialization
vehicle for a small (70 MWt) transportable reactor invented by Dr. Otis
(Pete) Peterson while he was on staff at Los Alamos National
Laboratory.
The Hyperion Power Module has several key attributes that make it a
compelling solution to providing remote, independent, secure power
generation in a variety of applications (see below)*.
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* HPM Report has been retained in committee files.
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A small business, based in Los Alamos New Mexico, Hyperion is
funded entirely by venture capital, and mentored by Technology Ventures
Corporation, a non-profit business assistance and economic development
company. Hyperion is the only privately-owned company commercializing
reactor technology from the U.S. Department of Energy.
Hyperion is exactly the kind of innovative firm doing the ``crazy
stuff'' that American industry and government (according to DOE
Secretary Chu at the hearing on March 5) need to pursue to help provide
cleaner, cheaper, more secure power generation for the nation and the
world at large.
The Hyperion Team has successfully commercialized technologies
invented at DOE facilities for over 15 years. Several on our team
served as Los Alamos staff. Since taking on the commercialization of
the Hyperion reactor technology over two years ago, Hyperion management
and staff have become immersed in U.S. public policy as it relates to
new energy technology, and more specifically, U.S. policy on nuclear
power generation.
We believe the committee can support the expansion of safe, clean,
and secure nuclear energy by enacting a few initiatives. All of these
are consistent with President Obama's commitment to a new energy
economy built on innovation, and also to the committee's charter and
legislative agenda.
1. The U.S. must close its civilian nuclear fuel cycle. This
is a political dilemma, not a technical problem. Although
various attempts have been made, it is critical Congress
provide funding to create definitive methods for recycling
uranium, and securing other fission products and waste in long
term storage. France recycles nuclear fuel. Is the U.S.
incapable of doing something the French take for granted? As
you know, over 90% of so-called ``nuclear waste'' can be
recycled. This valuable fuel can generate massive amounts of
electricity for generations to come. While we support the
overall goals of the Global Nuclear Energy Partnership (GNEP),
we think Congress should focus funding on the recycling and
waste treatment aspects of the U.S. GNEP program instead of on
creating new commercial reactor designs. If a company as small
as Hyperion, and firms as large as Westinghouse, can invent and
manufacture new reactor designs, the U.S. government does not
need to spend taxpayer dollars doing so.
2. If President Obama is sincere about not funding further
development of Yucca Mountain, Congress must enact new
legislation to shut down that project and to put taxpayer
dollars toward finding a new long term storage site. Although
the Yucca Mountain project has been built on solid science, it
has been plagued by bad PR and been mismanaged from a public
policy perspective. To continue the project now, in the face of
Congressional, Administrative, and local opposition, will just
waste additional taxpayer funds. We implore Congress look to a
more remote location, and suggest the U.S. commonwealth of the
Northern Marianna Islands; Tinian comes to mind. The local work
force is accepting of nuclear energy, and the region
desperately needs additional industry. They would welcome such
as project. Transportation to CNMI would be completely safe
since such a repository would be for civilian (non-weapons
grade) waste only.
3. We need a Department of Energy focused on energy. The U.S.
weapons complex has enormous responsibilities. Their focus,
rightly, is on the maintenance and safety of the weapons
stockpile. A smaller, separate, and more efficient weapons
complex would eliminate the conflicts inherent at the DOE labs
and allow the vast majority of personnel to focus on energy
innovations and infrastructure. A Department of Energy focused
on civilian energy innovation is necessary in order to meet our
national challenges.
4. Congress must be pragmatic and intellectually honest and
include nuclear power generation in all so-called ``clean,''
``green,'' and ``renewable'' energy categories. All energy
generation is really energy conversion, and each has a waste
stream. The critical issue is the impact each waste stream has
on the planet. Nuclear energy is the only part of the energy
industries that can truthfully assert it has contained 100% of
its waste stream. The waste streams from all other energy
generation methods are simply diluted into the atmosphere. This
not only poisons the entire planet, but gives citizenry a false
sense of security. It has led many in the U.S. to believe that
solar or wind generation can solve our baseload energy
requirements (they can't) and that a veritable ``free lunch''
exists (it doesn't).
5. Lastly, the committee should see that Congress continues
its support for small businesses, especially those companies
contributing to national energy security, physical homeland
security, and alternative energy technologies. The Small
Business Innovation Research (SBIR) grants should be
streamlined to minimize the time between proposal and funding,
and new methods of technology maturation--outside the
inefficient Laboratory complex-- should be established to get
innovations ``off the bench'' and into the hands of industry as
fast as possible.
I appreciate the committee's interest in our national energy
security and in its commitment to increasing U.S. economic security
through technical innovation and small business development.
______
Statement of George Crabtree, Senior Scientist and Distinguished
Fellow, Materials Science Division, Argonne National LaboratoryArgonne,
IL
New Science for a Secure and Sustainable Energy Future
summary of a report of the doe basic energy sciences advisory committee
The Energy Challenge
For a secure and sustainable energy future, the United States must
reduce its dependence on imported oil, reduce its emissions of carbon
dioxide and other greenhouse gases, and replace the economic drain
ofimported oil with economic growth based on exporting a new generation
of clean energy technologies.
The cost and uncertainty of imported oil ($700B/yr at the peak,
about $200B/yr currently) are major threats to the U.S. economy.
Developing new competitive renewable energy resources will help solve
our energy problems at home and create economic opportunity to market
our solutions to the world.
The Science and Technology Solution
Changing our decades-long dependence on imported oil and unfettered
emission of carbon dioxide requires fundamental changes in the ways we
produce, store and use energy. This report identifies three strategic
goals required to meet these challenges: (1) making fuels from
sunlight, (2) generating electricitywithout carbon dioxide emissions,
and (3) revolutionizing energy efficiency and use.
To meet these strategic challenges, the U.S. will have to create
fundamentally new technologies with performance levels far beyond what
is now possible. Such technologies, for example, may be able toconvert
sunlight to electricity with triple today's efficiency, store
electricity in batteries or supercapacitors at ten times today's
capacity, and produce electricity from coal and nuclear plants at twice
today's efficiency while capturing and sequestering the carbon dioxide
emissions and hazardous radioactive wastes.
Development of these advances will require scientific breakthroughs
that come only with fundamental understanding of new materials and
chemical processes that govern the transfer of energy between light,
electricity, and chemical fuels. Such breakthroughs will require a
major national mobilization of basic energy research. A working
transistor was not developed until the theory of electronic behavior on
semiconductor surfaces was formulated. Lasers could not be developed
until the quantum theory of light emission by materials was understood.
Similar breakthroughs can be achieved for sustainable energy, but only
if we invest in basic research now.
Basic science stands at the dawn of an age in which matter and
energy can be controlled at the electronic, atomic, and molecular
levels. Materials can now be built with atom-by-atom precision, and
advanced theory and computational models can predict the behavior of
materials before they are made--opening new horizons for creating
materials that do not occur in nature and are designed to accomplish
specific tasks. These capabilities, unthinkable only 20 years ago,
create unprecedented opportunities to revolutionize the future of
sustainable energy. Transformational solutions to reducing imported oil
dependency and carbon dioxide emission-from solar fuels, renewable
electricity and carbon sequestration to batteries, solid-state lighting
and fuel cells-require breakthroughs in the fundamental understanding
and control of materials and chemical change.
Recommendations
To achieve these essential breakthroughs we need to fund a bold new
initiative focused on solving the critical scientific roadblocks in
next-generation carbon-free energy technologies. The solutions are
within reach, using advanced materials and chemical phenomena that
control matter and energy at the electronic, atomic and molecular
level. To develop these solutions, we must recruit the best talent
through workforce development and early career programs. We must
establish ``dream teams'' of the best researchers and provide them the
resources to tackle the most challenging problems.
______